“The Fed’s pump priming addiction has got our small businesses running scared, and our allies worried. The German finance minister called the Fed’s proposals “clueless.” When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again, maybe it’s time for Chairman Bernanke to cease and desist. We don’t want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings.”
—Sarah Palin’s prepared remarks on November 12th obtained by National Review Online
Two years ago, Sarah Palin claimed that she could handle foreign policy because she could see Russia across the Bering Sea. That was poorly received. But Sarah Palin at least didn’t abandon the politics of audacity.
Pundits who look for growth (or decline) in public figures suggest that she’s maturing as a politician. Today, she radiates ambition rather than innocence. But is she any closer to a brand of conservatism that could lead America during perilous times?
What is striking about her attack on the US Federal Reserve is its extravagance and premeditation. She is no longer the spiny mascot for the Tea Party but, likely, the presidential candidate-of-choice of a group of East Coast neo-cons determined to recapture the presidency—whatever the state of the union.
A few days after her speech, a group of Republican intellectuals and former office holders promptly placed an open letter in The Wall Street Journal, essentially repeating her concerns. http://blogs.wsj.com/economics/2010/11/15/open-letter-to-ben-bernanke/
Unsurprisingly, William Kristol—the ardent wordsmith, Palin confidant, and editor of The Weekly Standard—was reported to be one of the group’s key organizers.
Both Palin’s speech and their public letter enumerated the risks entailed in expanding the money supply to encourage economic activity. Neither, however, granted the Reserve any credit for understanding those risks or possessing the means and the will to abate inflation if the economy responded too enthusiastically to easy money. They all know, despite Palin’s false sympathy for rising food prices, that there remains deep, painful slack on the supply side of the economy to absorb a resumption of consumer demand and investor confidence. They didn’t offer any concrete ideas to launch an alternative fiscal policy to expand the economy. And, while they spoke of the importance of a stable credible dollar, both the speech and the letter invited the world to question the Federal Reserve’s competence and commitment to a sound dollar.
There isn’t a name on Kristol’s list—with the possible exception of his own—that would have any trouble corresponding directly with or talking directly to Reserve Chair Ben Bernanke about his or her concerns.
Along with Congress and the Presidency, should the Federal Reserve also be buffeted by 24-7 political spin and become a platform issue in the approaching Republican presidential primaries? For three generations of enviable growth, in America and globally, the Federal Reserve’s independence has been respected. Surely, that’s something a serious Conservative appreciates.
The Economist’s editorial of November 6th called for “urgent incrementalism” in rebalancing the world economy and sustaining economic recovery. The term won’t end up in Palin’s speeches or as a bumper sticker. Yet, it should prick the conscience of Conservative thinkers, especially those who speak for interests that have benefitted so greatly from the status quo.
William Kristol’s Harvard degree in government, however, doesn’t include personal discipline. A doctor who loves medicine can ask for your trust. A public intellectual who loves power should be watched.