Stan Collender muses on the possibility that congressional Republicans will attempt to pressure the Fed to deliberately tank the economy: “With Republican policymakers seeing economic hardship as the path to election glory this November, there is every reason to expect that the GOP will be equally as opposed to any actions taken by the Federal Reserve that would make the economy better, and that Republicans will openly and virulently criticize the Fed for even thinking about it. The criticism is likely to come both before any action is taken to try to stop it from happening and afterwards to make the Fed think twice about doing more.”
I think this is pretty unfair in ascribing motives to the GOP. The goldbug outburst I noted this morning at the Heritage Foundation strikes me as stemming from a perfectly genuine strain of right-wing thinking that likes deflationary monetary measures.
But it is interesting to note that Collender has accurately identified the objective incentive structure here. Something those of us taken with the political scientists’ view of how electoral outcomes are determined are often frustrated by is how few political professionals in Washington DC seem to share this view. But while it’s always nice when people start agreeing with you, there would actually be something potentially quite scary about a scenario in which the party that doesn’t control the White House started consciously acting to sabotage the economy at every turn. Under the circumstances, it may be a great blessing to the world that inaccurate views are widespread.