The Fed’s new attempt to get the economy moving announced today was, among other things, a complete rebuke to congressional Republican leaders, who had issued a public letter urging them to leave the economy alone. This is no surprise, but raises the question: What were congressional Republican leaders thinking?
As Slate reporter Annie Lowrey tweeted, it seems strange that John Boehner, Mitch McConnell, Eric Cantor and Jon Kyl sent in their letter at the last minute; indeed, it hardly seems like much of a pressure campaign at all. Republicans could have made much more specific threats. That suggests to me at least that it was all for show — as does the very public release of their letter.
What I think the key is to understanding the leaders’ action is to remember at all times the precarious situation McConnell and, especially, Boehner find themselves in: They just aren’t Tea Party true believers, and everyone knows it — which means they are constantly only one step ahead of being labeled RINOs and drummed out of their positions. Not only that, but they constantly find themselves in the unfortunate position of having to agree to pass things — appropriations, the debt-limit increase — that will be signed by the Kenyan socialist in the White House. So, from their point of view, any rhetoric that will play to the crazies while not imposing actual legislative obligations on them is a pure win. Fed-bashing, from this perspective, is a natural fit.
So while I don’t see anything wrong with politicians trying to influence the Fed (indeed, I think Barack Obama probably should be doing a great deal more of it), I don’t think that’s what was going on here. It was just old-fashioned pandering to the base. And I’d expect more Fed-bashing, along with its cousin, court-bashing, over the next year. It’s not intimidation aimed at central bankers; it’s just a (relatively) harmless bit of misdirection aimed at those who love their snake oil served angry.