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?