Marcus Nunes pointed out in a new post that a former Fed governor and Bernanke adviser, Kevin Warsh, who resigned his post in 2011 has crawled out of the woodwork to protest the “Fed allowing the government to behave irresponsibly” in a WSJ column today. I don’t have access to the entire piece as I refuse to pay a subscription fee to that rag of a publication seeing it as an enabler of the perpetuation of monetary policy induced crisis. I don’t even want to link to it, but it would be a breach of protocol if I didn’t.
But I found some snippets of it from across the web and this one from Adam Button of ForexLive is particularly breathtaking:
The administration and Congress are unwilling or unable to agree on tax and spending priorities, or long-term structural reforms. They avoid making tough choices, confident the Fed’s asset purchases will ride to the rescue. In short, the central bank has become the default provider of aggregate demand. But the more the Fed acts, the more it allows elected representatives to stay on the sidelines. The Fed’s weak tea crowds out stronger policy measures that can only be taken by elected officials. Nobel laureate economist Tom Sargent has it right: “Monetary policy cannot be coherent unless fiscal policy is.”
Aside from the obvious problem in this paragraph, that he didn’t understand the job of the BoG when he was there, it is the Fed’s job to manage aggregate demand according to its legal mandates, I don’t believe he was ever elected to any post by anyone and he, together with other Federal Reserve officials, was never bestowed with the power or the right to wag the dog, the Federal Government. Never mind that if the Fed is targeting inflation or NGDP, and particularly if it has a policy regime that targets headline inflation with no floor and no memory of past undershooting, there is almost no reform that can be undertaken by the central government that can make a huge difference in outcome. Perhaps he forgot to consult his M3 measures before penning this arrogant suggestion that the Federal Reserve should usurp Congressional power by ignoring the law, keeping the economy weak and millions unable to find jobs until Congress enacts the reforms it wants. Does the WSJ really want a soft coup?
This kind of talk should startle the bejezzus out of any small ‘d ‘ democrat, as Warsh encourages his former colleagues to disrespect elections, and our institutions, and the people themselves to serve their own arrogant desires. With this op-ed, this unelected bureaucrat with subversive tendencies has taken self-importance to an entirely new level; and I’m shocked, frankly, that the WSJ would dignify such tyrannical filth with a platform. I am positively glad I never paid them even a cent, nor will I ever change my mind – even if it inconveniences my blogging.
PS: Here’s the definition of “coup” from the Free Dictionary: