From Matt Yglesias:
Under the circumstances, the Fed doesn’t get to just observe that the economic outlook is darkening. They are making it darker. It is true that central bankers aren’t wizards who can just make anything they want happen. The US economy faces real supply-side constraints.So sometimes a central bankers needs to say “hey, we’re running up against real restraints so unless someone else does something to solve those problems we’re going to need tighter money and slower growth to head off inflation.” But that’s not what Bernanke is saying here. Nor is he offering a forecast. He’s stating a policy preference—namely a preference for a short-term slowdown in demand growth—and members of congress aren’t really challenging him on why that’s his preference. Maybe he really thinks that 8 percent unemployment is a small price to pay for cheap gasoline. Maybe he thinks Mitt Romney being elected president would be better for the long-term health of the country so he’s trying to help out. But whatever he thinks, it’s not that the economy is slowing down and then separately he’s considering what to do about it. Demand growth is slowing because he and his colleagues are refusing to stabilize it.
Matt jumps on this all the time, and yet he rarely mentions that, well, you know, Bernanke is a conservative Republican, and this is what they, you know, do. The guy was the Chairman of GWB’s Council of Economic Advisors, one of the key economic policy making positions in the White House. So, why would anyone be surprised that he prefers to see massive unemployment continue rather than allow a modest uptick in inflation. When has this NOT been the GOP position?
But here is the kicker. Obama had the opportunity to replace Bernanke, but instead he reappointed him in 2009.
Here’s the other kicker. The two biggest failings in the Obama Administration have been the management of the economy, which continues to be sluggish after four years, and the decision to massively expand the war in Afghanistan. The Afghanistan decision was shepherded by then Secretary of Defense Robert Gates… another Republican.
Giving the most important foreign policy post to a Republican is bad enough, entrusting the most important economic post to a Republican borders on madness. But there it is.
UPDATE: Fixed typos. Yeah, I suck. Sorry