The Federal Reserve Board will wrap up its latest meeting today and may announce a new round of efforts to boost sluggish job growth. Federal Reserve Chairman Ben Bernanke estimates that the first two rounds of so-called quantitative easing increased employment by about two millions jobs.
Republicans have consistently criticized the Fed’s QE programs, claiming that the central bank would spark inflation (even though inflation has been near-nonexistent). Many GOP’ers, in fact, have said that the Fed should ignore its mandate to produce full employment entirely, and only monitor inflation. According to The Hill, some Republicans believe that the Fed should do nothing more to help create jobs, even as they admit that such steps would be effective:
Congressional Republicans, wary of the Fed’s recent efforts to stimulate the recovery, said Wednesday that the its political independence could be jeopardized if officials embark on another round of stimulus so close to Election Day.
“It really is interesting that it is happening right now before an election,” said Rep. Raul Labrador (R-Idaho). “It is going to sow some growth in the economy, and the Obama administration is going to claim credit.” [...]
While many Republicans have criticized the Fed on economic grounds, an announcement about new stimulus — which could send financial markets soaring in the run-up to the election — is likely to bring charges that the bank has partisan aims.
“They are the ones who always say they want to remain independent. So they should consider, just how independent are they when they come out, only 50 days before the election, with this?” said Rep. Scott Garrett (R-N.J.).
The upshot of these comments is that Republicans believe the Fed can do more to help Americans suffering under still-high unemployment, but that it shouldn’t because to do so might help the Obama administration.
For several years now, the Fed has hit its inflation target while utterly failing in its mandate to reduce unemployment, even as some members of the central bank have argued for the Fed to do more. “If there’s a slowdown and you have an independent central bank, the appropriate response is to act. I think that’s exactly what we should do,” said Boston Federal Reserve President Eric Rosengren. But Republicans, for political purposes, want the Fed to stand pat, so they can continue to blast the administration’s jobs record (and block the president’s jobs bill).