Among Republican presidential hopefuls, bashing Ben has become a sport of choice. That’s Ben Bernanke, chairman of the Federal Reserve Board. First, Texas Gov. Rick Perry said it would be “almost treasonous” for Bernanke to embrace the so-called Quantitative Easing 3 (QE3). Then former House speaker Newt Gingrich said at Wednesday’s GOP debate that he’d fire Bernanke, calling him the most “dangerous and power-centered chairman” in Fed history. This rhetoric is beyond over-the-top. Its distortions are so grotesque and its judgments so poor that they should suggest disqualification for the White House.
All presidents want to create economic confidence. Indeed, improving confidence is crucial to boosting today’s lackluster recovery. The easiest way to destroy confidence is for the White House and Fed to get into a public brawl. By law, the Fed is “independent.” The Fed chairman, for example, is not a member of the president’s Cabinet. The reason is to insulate the Fed from short-term political pressures. It is to allow the Fed to take actions that, though perhaps initially unpopular, are judged necessary for the economy’s long-term health and stability.
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