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The Spectacle Blog
Today David Frum takes issue with some Republicans’ “obsession” with inflation, suggesting that it’s a function of key Republican constituencies’ vulnerability to price level increases. Of course this line of critique is nothing new — the familiar haters also see anti-QE2 “inflation hawks” such as Paul Ryan (not to mention Ron Paul) as flirting with crackpot and totally outdated theories in order to coddle investor-class constituents.
Set aside the fact that, far from being a crank, Paul Ryan shares his concerns about monetary policy with eminent Stanford professor John Taylor, for whom the “Taylor Rule,” which describes the Federal Reserve’s interest rate policies, is named.
The real issue is that it’s not obvious that the charges against Ryan and co. have a purpose, except for scoring partisan points. It’s true that the GOP’s anti-easy money stance is the preferred approach of some of its most important supporters. But it’s also the case that we are lucky enough to have an independent central bank. Ben Bernanke determines monetary policy, not Paul Ryan.
It’s true that Ryan, as chair of the Budget Committee, can ask Fed officials some uncomfortable questions. That’s even more true of Ron Paul in his role as the ranking member of the subcommittee that oversees monetary policy. But there’s no reason why Bernanke shouldn’t be made to answer some wrongheaded or unusual questions from time to time, especially when those questions represent the concerns of a significant swath of Americans.
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More Blog Posts by Joseph Lawler
http://spectator.org/blog/2011/02/28/its-ok-to-be-wrong-about-monet
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Sea Cucumber| 2.28.11 @ 7:08PM
The problem with money socialists is that they only see the effects of inflation in the form of rising prices. They completely overlook the issue of malinvestment. Thus, ding-dong David Frum can recommend credit expansion as a cure for unemployment, without realizing that this solution, even if it works in the short term, will only leave the economy in a worse place than before.
axbucxdu| 2.28.11 @ 7:43PM
Yeah, more crack to the crack addict, that should do the trick. I have to wonder though, what Bernanke is thinking, REALLY thinking?
Martin| 2.28.11 @ 8:58PM
Bernanke's a fanatic, a stopped clock. He and his predecessor) have wrecked the US economy by their insane negative real interest rates. Savers have stopped saving, capital has migrated overseas, and commodity prices are heading for the moon.
I am counting the days until inflation inescapably bursts forth, even in the cooked BLS statistics, at which point we need to run an impeachment campaign against Bernanke, and remove both him and his followers from the levers of monetary power.
Debauch the currency, and you debauch the society and the economy. This is the magnitude of the damage Bernanke has caused.
GBinPA| 2.28.11 @ 10:20PM
Anyone who is concerned about inflation is correct. Increasing the money supply can only lead to inflation; and any assertion to the contrary is nonsensical. Bernanke actually claims that the Fed doesn't print money. Informed people aren't buying anymore.
Clint| 2.28.11 @ 11:36PM
Inflation is the great hidden tax.
"Under current law, the Fed has a dual mandate to keep both inflation and unemployment low. "
Jehu| 2.28.11 @ 11:48PM
Well for one thing Frum is a clown. As for inflation, it does impact some people more than others- and that is one of the factors behind the rise of the Tea Parties. But it is ultimately bad for everyone once it increases beyond a manageable rate, which is the path we are headed on.
I think a more basic schism is the main factor though. On one hand are irrational people who believe that inflation is the best method of containing the debt, while on the other are rational people who know that spending cuts are the only effective option.
Math isn't ideological.
Joe the Taxpayer...| 3.1.11 @ 12:34AM
"It's A Flawed Monetary Policy"
It is now be all too clear that we cannot rely upon any Federal Reserve Chairman, to wage the good fight against the "chronic inflation" that has wrecked our savings, distorted our currency, levied hidden redistribution of income and wealth, and brought us devastating booms and busts.
Despite the Establishment propaganda, Greenspan, Bernanke, the Fed, and the private commercial bankers are not the "inflation hawks" they like to label themselves.
The Fed and the banksters are not part of the solution to inflation; they are instead part of the problem. In fact, they are the problem...
The American economy has suffered from chronic inflation, and from destructive booms and busts, because that inflation has been invariably generated by the Fed itself. That role, in fact, is the very purpose of its existence: to cartelize the private commercial banks, and to help them inflate money and credit together, pumping in reserves to the banks, and bailing them out if they get into trouble.
When the Fed was imposed upon the public by the cartel of big banks and their hired economists, they told us that the Fed was needed to provide needed stability to the economic system.
After the Fed was founded, during the 1920s, the Establishment economists and bankers proclaimed that the American economy was now in a marvelous New Era, an era in which the Fed, employing its modern scientific tools, would stabilize the monetary system and eliminate any future business cycles.
The result: it is undeniable that, ever since the Fed was visited upon us in 1914, our inflations have been more intense, and our depressions far deeper, than ever before…