A group of leading economist have joined together with Republican political strategists to take aim at the Federal Reserve’s latest money supply gusher (a.k.a. “QE2”) in an open letter to Fed Chairman Ben Bernake (the Wall Street Journal has both the open letter and the reaction). Among the economists weighing in is Stanford’s John Taylor.
This, plus news that the economists have reached out to incoming House Budget Committee Chair Paul Ryan, ensures that monetary policy will remain a subject of serious political discussion for a while. I repeat my assertion that this is a good thing, and reflects an electorate more knowledgeable than the political consulting industry is willing to admit.
Fed defenders, such as Rob McTeer, are already trying to smear the group: “What populists on the right and the left have in common is a distrust of the establishment, and to them the Fed personifies the establishment.”
So . . . John Taylor and Douglas Holtz-Eakin are now Ron Paul populists?
I don’t think so. If those who defend loose money want to engage in a serious debate, we can have one; but placing the Fed on some ivory tower-like perch above the rest of us isn’t going to cut it anymore.