FRONT PAGE CONTRIBUTOR
Time to End Fed’s Dual Mandate of Destruction
Recent economic reports of Obamanomics have shown dismal GDP growth, rising jobless claims, an anemic dollar, and soaring inflation; all indications of stagflation. There are two components to stagflation; high unemployment and high inflation. The unemployment, along with the weak economic growth, is due in large part to Obama’s Keynesian fiscal policy of overtaxing, overspending, over-subsidizing, and over-regulating. While the profligate spending and corporate welfare are also responsible in part for inflation and the devaluation of the dollar, the major culprit is Obama’s Keynesian monetary policy of near-zero interest rates and printing money (QE I and II).
Both reckless spheres of Keynesian economics are supported by corporate cronies on Wall Street who benefit from true “handouts to the rich” to the determent of the rest of us through price-hiking market distortions. Unfortunately, there is no single silver bullet to ending the cumbersome socialist fiscal policy (although, a spending amendment would go a long way). The pernicious monetary policy, however, can be eliminated through one act of Congress; ending the Federal Reserve’s mandate to control the economy (H.R. 245-Mike Pence).
In 1977, Congress vested the Federal Reserve with a dual mandate of stimulating the economy and job growth in addition to keeping a stable currency. This has allowed the Fed to become a fourth branch of government by initiating its own stimulus policies of printing money. These stimulus policies exacerbate the fiscal stimuli of the other branches of government by devaluing the remaining dollars that we own (non-borrowed money).
Hence, as much as Obama’s trillions in stimulus and bailouts have bankrupted the country, Ben Bernanke’s $600 billion monetary stimulus has attenuated the value of our remaining savings and spiked the cost of vital commodities across the world. Additionally, their rash intervention in the credit market was one of the big culprits of the housing crisis. Thus, while the Fed seeks to achieve a dual mandate of low unemployment and low inflation, they are ultimately inimical to both goals. It’s time for House leadership to bring Mike Pence’s H.R. 245 to a floor vote and end the Fed’s overreach into our economy.
The same Wall Street Democrat corporate cronies who work tirelessly on behalf of bailouts and fiscal stimulus have also promoted and benefited from monetary stimulus. This is our opportunity to stand with the majority of the country who are harmed by stagflation and stick a fork in big government and big Wall Street.
It’s also time for presidential candidates to get serious about this issue and articulate to the average voter how the deleterious policies of the Fed are a direct result of anti-free market intervention. Sarah Palin has hit this early and often; others must follow suit. Democrats have long planned to counter the populist outrage against big government with righteous indignation against the unpopular Wall Street power players. The candidate who exposes the truth about Democrat corporate cronyism and explains its relation to the high cost of living, will be the next president.
Earlier this week, Fed Chairman Ben Bernanke asserted that low GDP growth and inflation will be “transitory.” Republicans must show him that the only thing transitory in this era of perennial stagflation is his ability to destroy our economy.