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.
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.