"Why the GOP Congress Doesn’t Care What You Think"

[applegrove]

Why the GOP Congress Doesn’t Care What You Think

By Harvey Gold at HGTransEcon

http://hg.scimth.net/2013/03/19/why-gop-congress-doesnt-care/

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The Fed Has Done Its Job, Why Won’t Congress?

The answer always reverts to abject ignorance, a political civil war, and a media that fuels it. Bernanke, appearing before Congress, recently repeated his warning that the Fed was powerless to offset the hit to the economy from the combined effects of tax increases and spending cuts, which he said could well reduce economic growth this year by about one and a half per cent of G.D.P. “There is a sense in which monetary and fiscal policy are operating at cross purposes,” he said. “The (deficit) problem is a long-term problem and should be addressed over a longer time frame.” [I suppose “Economist Joe Scarborough will want to debate Chairman Bernanke as he did Paul Krugman—word of warning to self-declared Mr. Know-it-All Joe Scarborough, Ben Bernanke won’t let you shout and verbally abuse like mild-manned Paul Krugman did].

While the Fed chairman’s warning about the futility of Republican policy appears unlikely to be heeded, it augments his reputation as a straight shooter. With just eleven months to go before his second term is up, and with reports saying he doesn’t want to be renominated, he has evidently decided to say what he thinks and be damned. Not only did he put pressure on G.O.P. leaders to compromise in the dispute over the sequester; he also called on European countries to ease up on their austerity policies, saying that they could adopt a “more judicious balance” of short-term and long-term fiscal policy consolidation.

Of course, being lectured by George W. Bush’s former chief economic adviser didn’t sit well with some Senators. Tennessean Corker, a former builder who is a long-time critic of Bernanke’s expansionary policies, called him “the biggest dove since World War Two.” Toomey, a former head of the conservative lobbying group Club for Growth, questioned whether the sequester would have any real impact on the economy. Bernanke shrugged off the criticisms, the same way he always has; by laying out the actuality of the situation.

He tried to point out some of the significant advances that have already been made in stabilizing public finances. Backing him up was the Congressional Budget Office which isrecently forecast that by 2015 the budget deficit will be just two and one-half percent of GDP, while in 2009, it was ten percent. A fact Republicans are determined to bury.


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