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Republicans Not Allowed to Say Anything about the Fed

As the Federal Reserve Board gets ready to meet this afternoon—presumably to announce a new trick program to lower interest rates dubbed “the Twist”—pundits are expressing outrage that the four leading Republicans in the House and Senate would send Fed chair Ben Bernanke a letter hitting him on the notion of further easing: “It is our understanding that the Board Members of the Federal Reserve will meet later this week to consider additional monetary stimulus proposals. We write to express our reservations about any such measures.”

A representative item comes from Ezra Klein of the Washington Post, who essentially compares the Republicans to gangsters threatening a hit with an item called “Nice central bank you got here. Shame if something should happen to it.”

The Fed has now spent four years working hand-in-glove with the executive branch on policy questions, in a clear but understandable breach of its legal obligation to remain separate and aloof from political interference. So the executive branch is allowed to coordinate policy with the Fed, but it is illegitimate and gangsterish for elected members of Congress to express their opinions of Fed actions? Klein himself acknowledges that “it is not intrinsically illegitimate for congressional leadership to convey its preferences to the Federal Reserve. The Fed is protected from political interference, not from the opinions of politicians.” Still, members of Congress shouldn’t evidently express their views because, you know, well, Ezra Klein and others just don’t like it.

But he goes on to say that there is an implied threat in the letter from John Boehner and Mitch McConnell—a threat of political interference if their will is not heeded. Well, first of all, the rights and obligations of the Federal Reserve are written in law, not in the Constitution, and lawmakers are free to attempt to change those laws at any time. Indeed, they are obliged to do so if they believe the law in question is injurious to the good working order of the United States. But put that to one side.

This argument is a prime example of the Washington phenomenon of selective outrage—the condition in which you find horrifying activities undertaken by your ideological opponents that don’t bother you in the least when they’re undertaken by your own confreres. Ezra Klein doesn’t mind Geithner and Bernanke making policy together; that’s not political interference, in his eyes, because he likes what they’re doing. But let someone he doesn’t like say something he doesn’t like and the Mrs. Grundy swoons and the reach for smelling salts begin.

We see this same selective outrage at work in the reaction to the current proposal to change the way Pennsylvania apportions its electoral-college vote—by Congressional district rather than statewide. No one who is now screaming their lungs out about it cared a whit when Nebraska did the same thing in 2005, and why? Because Pennsylvania is a swing state that Obama won in 2008 and needs to win in 2012.

None of this is to endorse Fed-bashing of the Ron Paul variety, or to say that Rick Perry’s jocular threat to Ben Bernanke was a sound move. But it is a reminder to be very wary when people start acting shocked, shocked about something.

 

 


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