(UPDATED) The Republicans Slay Yet Another Sacred Cow
In the latest and perhaps most pungent sign that the inmates have taken over the GOP asylum, leading congressional Republicans are demanding that the Federal Reserve butt out and stop trying to fix the economy.
The demand in a letter signed by Senators Mitch McConnell and John Kyl and Representatives John Boehner and Eric Cantor comes as the Fed concludes a two-day meeting during which efforts to lower long-term interest rates to loosen up credit and promote growth were discussed.
“We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy,” reads the letter. “Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers.”
The Fed ignored the meddlers and announced a modest plan to reduce borrowing costs for businesses and consumers in yet another effort to spur economic growth.
The Fed said that it would invest $400 billion in long-term Treasury securities over the next nine months using money raised by selling its holdings of short-term federal debt, in an attempt to drive down interest rates on mortgage loans, corporate bonds and other forms of credit.
The Fed’s policy-making committee said in a statement that it was taking the unconventional action because it saw little prospect that the economy would expand fast enough and soon enough to help the 25 million Americans unable to find full-time work. It also said there was a significant risk that “strains in global financial markets” could further damage prospects for recovery.
Global financial markets reacted with alarm at the Fed’s grim assessment of the economy, while the consensus view of people who are real economists — as opposed to the Republicans to pretend to be — was that the move was necessary but less a stimulus than a nudge.
The GOP has blocked virtually every conceivable avenue for stimulating the economy, so it made sense — to the extent that the party has any sense these days — to go for the coup de grace and tell the Fed to stop doing what it is mandated to do.
The demand is also a serious breach of etiquette. While perhaps not on par with piddling on Queen Elizabeth’s gown or telling the Pope that he needs to get laid, traditionally members of congress do not comment publicly about the Fed because . . . duh, it is important to shield the nation’s central bank from politics.
And so another sacred cow is slain at the altar of the political party that not only is incapable of helping govern, but is working assiduously to impede those who are trying to govern.
Two morsels from the Harper’s Index:
* Seventy-one percent of current U.S. debt was accumulated during Republican presidential administrations.
* Two-thirds of debt-ceiling elevations since 1960 have been signed into law by Republican presidents.
The Pavlovian response of Republicans to President Obama’s call for tax hikes for millionaires comes into sharper focus when you consider this: The number of Americans who are millionaires is about 1 percent of the population. The members of Congress who are millionaires is nearly 50 percent.
Of 535 members of Congress, 261 are millionaires. They include 153 Republicans and 106 Democrats, with that pillar of probity, Republican Representative Daryl Issa of California, who new saw a stimulus or bailout plan that he liked, topping the list with a personal net worth of $303 million.
Well, we know where the Republicans in the Congressional Millionaires Club stand. But how about the Democrats?
Hello? Hello? Anybody home?
59 Responses to “(UPDATED) The Republicans Slay Yet Another Sacred Cow”
Gold and oil is dropping too. It’s all a good sign really. Not bad for the traditional Fall sell-off that happens every year about …yep…September.
The Fed is trying to stave off DEFLATION, which would be devastating to a recovering economy. Deflation is what hit Japan when their real estate bubble broke in 1991. When consumers realized prices went negative on inflation they held off consumer purchases since the price of a car, condo, refrigerator etc would be lower in a month or two. They kept holding off for years on purchases waiting for a price bottom. That yielded Japan’s Lost Decade.
In the US deflation would even be worse since 70% of our economy is consumer purchases.
The only sign of deflation right now is in wages.
Just about, Professor. SteveK’s comments are getting cheaper too.
jdledell-
Consumer Purchase?
What othe kind of “purchase” is there?
Do you mean consumer goods?
Why would I hold off until the milk is spoiled before I buy it?
THE SKY IS FALLING! THE SKY IS FALLING! THE SKY IS FALLING! THE SKY IS FALLING! THE SKY IS FALLING! THE SKY IS FALLING!
It really is…it’s called a Satellite. Now go buy your November call options like good little boys and girls.
Does it matter, Steve? Your comments are unrelenting ad hominems and mean-spirited mischaracterizations. You said yourself on Monday you very seldom try to have a real conversation with anyone on the right. It shows. On this thread alone you’ve called me a nutter and childish and accused me of fearmongering and fraud. What reaction are you hoping for?
hello there all.
Just return to the topic of the post and all will be well. I have new tools for moderation from our IT guy. They will be put in place if any commenter attacks other commenters and/or writers.
It will be most effective to stop jeering, scorning, harrassing, ridiculing, casting aspersions about others personally, and/or imagining one can know about others’ lives and backgrounds. One cannot.
TMV does have rules for civil discussion, as you know. And expects adults to heed them ALL, so ALL can enjoy this space we create here for civil discussion.
Thanks
archangel
/dr.e
First, you have to absolutely believe that spending when you’re in debt works as a means to fix your economy, second you have to believe that if not for the naysayers, spending VAST amounts more on the same tactics that have already been tried by two administrations in the last ten years (since 2007, really), a tactic that failed, will work if you just try it again.
SEcond, you have to absolutely believe that it is government spending, not private sector investment, that generates wealth, and that therefore, moves to block the former and open the latter are jobs-killers.
(here’s a hint: TARP didn’t work. We’d have been out of this mess if it had. Likewise for the GM/Chrysler bailouts, Obamastimulus ’09, etc. etc.-they didn’t work. You got short-term upticks, followed by more decline.)
FACT, now; we’re four years into this, added more than 30% to the National DEBT, not yearly deficit, between two presidents (one outgoing, the other is our current occupant of hte white house), national commitments to entitlements have expanded, but the only time the Unemployment picture appears (illusively) to improve, is when the agencies drop the latest crop of people whose benefits have run out.
Tax revenues are down, the top 5% is rapidly becoming the top 1% and smaller in income available TO tax, the #’s on welfare/foodstamps/assistance are going up, homelessness is going up, joblessness has been going up.
If packages like the ones you libs have been harping on the GOP killing worked, they’d have worked before in this economy. They’re not working, new ones, logically, won’t work either.
The empirical evidence says your theories are not supportable in a real-world environment, that Krugman is wrong, and experience shows that throwing good money after bad generally just runs you out of money to throw.