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Reid Politicizing the Fed?

The Wall Street Journal caught Harry Reid sounding an odd note on his position on the Fed chair’s upcoming confirmation vote. First Reid announced that Bernanke must “redouble his efforts to ensure families can access the credit they need to buy or keep their home, send their children to college or start a small business.”

The Fed is supposed to be independent, meaning that legislators choose chairmen, not policies. Congress generally respects that rule, so the Journal followed up with Reid’s spokesman seeking clarification. But his spokesman only went further, claiming that Reid was “fighting for his constituents,” and that he was looking for “additional efforts to help homeowners in Nevada” from the “Fed and the federal government.”

Now it’s possible that Reid thinks that Nevada’s housing is key to the overall health of the US housing market as it was one of the hardest hit areas, and that the Fed’s monetary policy affects housing markets and Nevada accordingly. Nevertheless, he should try to avoid even the appearance of playing games with the Fed chair position.

View all comments (2) |

Siegfried X| 1.25.10 @ 10:14AM

Nice catch. However, this is nothing new. Dodd and Schumer did the same thing a year ago, shortly after the Democrats took power. They had a picture taken with Bernanke and talked about all the things they told him to do.

Alan Greenspan wrote that he caved into the politicial branches in his auto-biography.

It seems that the myth of the independent Fed has faded. They are treated like just another government bureau.

Sean| 1.25.10 @ 11:14AM

There is no independent Fed. Let's get Ron Paul's bill to audit the Fed passed. We should know what they are doing.

More Blog Posts by Joseph Lawler

http://spectator.org/blog/2010/01/25/reid-politicizing-the-fed

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