Fiorina and Huckabee Hit the Right Note on Fed’s Easy Money

money-95793_1280In an appearance on Fox News yesterday, presidential candidate Carly Fiorina blamed the Federal Reserve’s easy money policy, also known as quantitative easing, for the major correction in the stock market. From National Journal:

In her own Fox appearance Monday, former Hewlett-Packard CEO Carly Fiorina took a more moderate tack—focusing more on inside-baseball economic policy than party politics—but got in a couple of shots against the Federal Reserve’s role in propping up economic growth. She referred to quantitative easing—a policy put forth by the Fed to stimulate growth—as an “easy-money policy.”

“I actually have been expecting a correction for some time,” Fiorina said. “I think the stock market has hit record highs over and over again because the Federal Reserve has ensured through its easy-money policy that the stock market’s the only place you can earn a return. And now the Federal Reserve finally is going to back off of that easy-money policy. So I think this is warranted, honestly.”

The first thing to do during any crisis is to stop doing the thing that got you into the crisis in the first place. Easy money — and artificially low interest rates — were a major cause of the 2008 financial crisis and will be a major cause in the next major financial crisis. That’s why it’s so puzzling that the Fed decided to expand their push for easy money in an attempt to recover from the 2008 meltdown.

Mike Huckabee also hit the Fed for its love of easy money. From Breitbart:

The Federal Reserve is partly to blame, just mainly because they’ve manipulated the economy with quantitative easing. They’ve made sure that the stock market is really the only place to put an investment. Nobody can put it in bonds, nobody can put it in CDs, and it’s artificially sugared it up. I mean, this is like giving your grandkids a big, big boost of sugar, and yeah, they’ve got a lot of energy for a while, but when that sugar runs out, they’re going to crash, and we’re running the economy on the sugar rush of infused capital, which is really not going to be sustainable, and so I think the Fed has some responsibility for that.

The Fed has a long track record of being wrong. So why do we continue to put our faith in them to set the ideal target rates for our economy, let alone prevent the next financial crisis? It’s crazy.

The Fed should stop toying with interest rates and the lives of every American. They should stop picking winners and losers, and they should let the market determine interest rates.

You’d think that with as much information as there is out there, there’d be more than just two presidential candidates making this case.

Even so, Huckabee and Fiorina should get stars today for being the first candidates to tie the Fed to this latest crisis.

Terry Schilling is the executive director of American Principles in Action.