One of the more hilarious moments of President Obama’s Asia trip was when he said he doesn’t comment on what the Fed does, and then he commented on what the Fed does.
Here’s what he said in India when asked about Federal Reserve Chairman Ben Bernanke’s decision to print more money – um, sorry, engage in “quantitative easing.”
As you’re aware, the Federal Reserve is an independent body. It doesn’t take orders from the White House, and it’s important as a policy matter, as an institutional matter, that we don’t comment on particular Fed actions.
I will say that the Fed’s mandate, my mandate, is to grow our economy. And that’s not just good for the United States, that’s good for the world as a whole.
The United States has been an engine for growth, for trade, for opportunity for decades now. And we’ve just gone through an extraordinary economic trauma, which has resulted in some extraordinary measures. And the worst thing that could happen to the world economy, not ours — not just ours, but the entire world’s economy — is if we end up being stuck with no growth or very limited growth. And I think that’s the Fed’s concern, and that’s my concern as well.
Bwahahahahaha! “We don’t comment on particular Fed actions.” Funny president. Did Obama drop a wet kiss on Bernanke’s stubbly beard or what?
People brushed this off, since Obama wasn’t CRITICIZING the Fed, which of course is supposed to be totally independent of political influence. But Obama is improperly interfering. Even if this statement is relatively benign, what about next time the Fed does something controversial, and Obama actually DOESN’T comment. His lack of approval will be compared with his current Fed cheerleading, and duly interpreted as a silent disapproval.
I’m no fan of Ben Bernanke, Alan Greenspan, Paul Volcker or any of them acting as God of the Economy. The position should be made more answerable to the people, you know, incorporated into a DEMOCRACY, which is what we have around here. But it certainly doesn’t need to be made more answerable to the White House.
Of course, I’m going a bit out on a limb, since it’s all fully provided for in the Constitution, under Article V Section 173, which states: “There shall be no establishment of State religion or a monarchy except for The Fed.”
Anyway, if you’re having some trouble understanding all of this, and thought the QE2 was just a big boat, this should help explain things: