Wednesday, July 18, 2012

Eighty years after Hoover, Republicans still cling to hard money

House Republicans pressed the Federal Reserve chairman, Ben S. Bernanke, on Wednesday to forswear additional actions to stimulate growth...

“The truth is, the Federal Reserve cannot rescue Americans from the consequences of failed economic and regulatory policies” the committee chairman, Representative Spencer Bachus of Alabama, said in his opening statement.

Other Republicans cautioned that an expansion of the Fed’s existing efforts could deepen the nation’s financial challenges by postponing a necessary reckoning and eventually accelerating the pace of inflation.
--NYT, 18 July 2012

The House GOP appears to have taken the position that further monetary expansion shouldn’t be pursued because it would postpone a “necessary reckoning”. In other words, weak growth and high unemployment are good because Americans need to be punished for Obama’s failed policies.

One suspects that the GOP is afraid that monetary expansion would spur growth and help the  Democrats on election day. That would be logical and understandable, since unemployment hurts Obama. I can accept short-term disingenuous politics. What I can’t accept is that the Republican House really believes that a day of economic reckoning is a desirable thing.

My concern is not that the Republicans will prevent the Fed from pursuing growth policies before the election; I want the Democrats to lose just as much as the next guy. My concern is that they are stupid enough to pursue hard money policies even after they get control of the government. I want limited government and prosperity. I don’t want another Hoover administration that would set back the cause of liberty for another eighty years. I shudder to think what nutcase could be the next Fed chairman if the hard-money boys get their way.

What the hard-money Republicans don’t understand is that their hard-hearted monetary policies result in soft-hearted liberal policies that only compound the economic damage. The Bush recession gave us ObamaCare; God knows what liberal panacea the Romney recession will give us.

It is remarkable that, after hard money wrecked the Republican party under Hoover, eighty years later the same economic nonsense still haunts the GOP. Williams Jennings Bryan must be looking down with a big smile on his face somewhere up there in Free Silver heaven.

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