This letter to Fed Chairman Ben Bernanke is a curious thing. In it, senior Republican politicians ask Ben Bernanke to reconsider doing that thing they think he’s thinking of doing (he didn’t). I readily admit to being completely baffled by the underlying logic.
Now, I understand the political argument that additional quantitative easing, if it works, helps Obama win re-election. Republicans don’t want that. But that puts them in the position of politicians who are both a) meddling with the independence of the central bank, and b) hoping to profit from the misery of Americans. That seems a risky thing to put down in writing.
So that’s the cynical view. On other hand, if the Republicans actually believe that QE is bad for the American economy, then why write the letter? If they are correct, QE will fail and Republicans will ultimately benefit at the polls. Senior Republicans can still position themselves against monetary easing in a very loud and public way. But that is a very different kettle of pike from using your political power to try to influence the decision-making of an independent central bank. Why take that unnecessary risk?
Even if we set aside the shaky economics - is a weak US dollar really bad for the economy guys? really? - and incredibly short-sighted nature of this kind political opportunism, I fail to see where the upside is for Republicans. If someone can think of a good answer, do let me know…