Our guest blogger is Cameron DeHart, an intern at the Center for American Progress Action Fund.
The Republican National Convention Platform Committee met this week to draft the party’s official policy platform. Lost among the headlines about the human life amendment, Arizona-style immigration policies, and other radical policies, the committee included a plank that calls for an audit of the Federal Reserve System.
Accountability is no doubt an important aspect of effective and democratic government, but the GOP’s intentions are less noble than they appear. Conservatives are upset that the Federal Reserve has acted in the past, and may act again in the near future, to use monetary policy to help Americans return to work and hasten the recovery. The recent Audit the Fed movement is less about holding the Fed accountable, and more about bullying the Fed away from helping the economy.
This policy is a radical departure from the party’s own tradition of respecting the Federal Reserve’s independence. In 1980, the Republican national platform read clearly: “The independence of the Federal Reserve System must be preserved.” The Audit the Fed platform plank disregards this tradition, and instead allows conservatives to attack monetary policymakers for helping the economy.
Also on the 1980 platform: “Unfortunately, Mr. Carter and the Democratic Congress seek to derail our nation’s money creation policies by taking away the independence of the Federal Reserve Board.” The GOP accused President Carter and Congress of pressuring the Fed to pursue policies that would help unemployed Americans, a goal that was added to the Fed’s statute in 1978 by the Humphrey-Hawkins Act. Conservative sought to fix this problem by telling the Presidents and the Democratic Party: “Leave the Fed alone”.
During the Obama administration, however, the GOP has sung a very different tune. As the Fed has taken steps, such as quantitative easing and Operation Twist, to boost the economy in recent years, conservatives have raised the specter of inflation over and over again. But, as ThinkProgress has demonstrated, these fears are overblown. Conservatives are so afraid that the Fed’s policies will cause hyperinflation, or worse for them, actually help the economy, that they have taken unprecedented steps to obstruct the Fed’s policymaking authority. From writing intimidating letters to Chairman Ben Bernanke to stalling Fed Board nominees, the modern Republican Party has done all it can to sabotage the Fed’s ability to aid the recovery.
The recent changes to the national platform are not the only anti-recovery policies the GOP has unleashed against the Fed. Mitt Romney said earlier this month that policymakers should not do more to stimulate the economy. As ThinkProgress’ Jeff Spross detailed, Paul Ryan’s radical views on monetary policy would cause even more harm to our economy than the Fed’s own reticence to act. In 2008, for example, Paul Ryan argued that the Fed should only focus on controlling inflation and forget about unemployment.
The Fed said earlier this month that the unemployment rate would decline slowly over the next few years, but the GOP remains committed to not wanting to do anything about it.