Bernanke Blasts Rand Paul Back

Former Federal Reserve Chairman Ben Bernanke (photo credit: Medill DC via Flickr, CC BY 2.0)

The Fed is touchy these days.  No wonder, with economic growth lagging and the tools of monetary policy failing to do what the Fed probably can’t do: spur economic growth.

So Ben Bernanke, former Fed chief, is blasting Rand Paul in blistering terms (for the Federal Reserve) for proposing a minor “Audit the Fed” bill:

“This is very deceptive — this bill is very deceptively titled,” Bernanke said during a discussion at Nasdaq’s Times Square headquarters to promote his new book, “The Courage to Act.”

Bernanke suggested the bill wasn’t about increasing transparency so much as giving lawmakers more control over the Fed and its monetary policies.

“You’re basically saying that Congress should run monetary policy,” he said. “I always like to say, if you love the way they’re managing fiscal policy, let them run monetary policy.”

The average American working family hasn’t had a real raise in a decade, while the Fed-inspired bubble in stocks and real estates raises the net worth of the already well-to-do.

Honest debate about the failure of monetary policy to spur economic growth has to be part of the equation. Bad theories make bad policies.

Maggie Gallagher is a senior fellow at the American Principles Project. Continue Reading

High Praise for Rand Paul’s Challenge of Ben Bernanke to Debate

Sen. Rand Paul (R-KY) (photo credit: Gage Skidmore)

The Libertarian Republic has this to say about Senator and presidential candidate Rand Paul’s recent challenge of Ben Bernanke to debate:

Ben Bernanke, who recently called Senator Rand Paul and those like him “know-nothings” because they wish to audit the Federal Reserve and question the central bank’s manipulation of the price of money.

So let’s get this straight: seek more information, transparency, and discourse from one of the most powerful and privileged institutions in the world and you will be called ignorant and unwilling to learn.

It appears the former Federal Reserve Chairman prefers condescension over open debate. Who would have thought the former leader of a monopoly institution would think in such a way.

Dr. Bernanke may (or may not) have been alluding to the infamous and short-lived anti-Catholic “Know Nothing Movement” of the 19th century. Yet there is a distinguished pedigree to knowing nothing: that of Socrates of Athens. As recorded by Plato, in The Apology, Socrates said:

Well, Chaerephon … went to Delphi and boldly asked the oracle to tell him whether … there was anyone wiser than I was, and the Pythian prophetess answered that there was no man wiser. Chaerephon is dead himself, but his brother, who is in court, will confirm the truth of this story.

[…]

When I heard the answer, I said to myself, What can the god mean? and what is the interpretation of this riddle? for I know that I have no wisdom, small or great.

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Chris Christie and Jeb Bush Show Real Leadership By Tackling the Fed

The Federal Reserve headquarters in Washington, DC (photo credit: Dan Smith, CC BY-SA 2.5)

Recent statements by two presidential aspirants, former Florida Governor Jeb Bush and New Jersey Governor Chris Christie, indicting the Fed for its role in inhibiting job creation, causing wage stagnation and paralyzing income mobility, come in the context of a titanic public dispute over the role of the Fed in causing such a sluggish, bad job creation, low wage growth economy.  Both Govs. Bush and Christie deserve high praise for showing leadership in addressing what deserves to be a leading issue in the 2016 election.

Late last April, Ben Bernanke, in his Brookings blog, trenchantly critiqued prominent conservative economist John Taylor.  The Wall Street Journal immediately ran an editorial entitled “The Slow-Growth Fed.”  This triggered a response by the former Fed chairman in his blog.  That promptly was followed by a WSJ op-ed indicting the Fed by Prof. John Taylor, “Taylor on Bernanke: Monetary Rules Work Better than Constrained Discretion.”

The most recent evolution of this altercation came on June 1 when Bernanke attempted to exonerate the Fed for income inequality in his blog:

Certainly, inequality and lack of social mobility are issues of first-order significance for economic policy in general. Should they also be first-order considerations for the making of monetary policy? I have my doubts.

First, widening inequality is a very long-term trend, one that has been decades in the making. The degree of inequality we see today is primarily the result of deep structural changes in our economy that have taken place over many years, including globalization, technological progress, demographic trends, and institutional change in the labor market and elsewhere.

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