Republicans’ Letter to Bernanke

Republican leadership letter to Fed chair Ben Bernanke today suggesting strongly that he not use monetary policy in service of economic growth. I’m trying to be non-partisan here, but I still this remarkable and verging on thuggish.

Dear Chairman Bernanke,

It is our understanding that the Board Members of the Federal Reserve will meet later this week to consider additional monetary stimulus proposals. We write to express our reservations about any such measures. Respectfully, we submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people.

It is not clear that the recent round of quantitative easing undertaken by the Federal Reserve has facilitated economic growth or reduced the unemployment rate. To the contrary, there has been significant concern expressed by Federal Reserve Board Members, academics, business leaders, Members of Congress and the public. Although the goal of quantitative easing was, in part, to stabilize the price level against deflationary fears, the Federal Reserve’s actions have likely led to more fluctuations and uncertainty in our already weak economy.

We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy. Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers. To date, we have seen no evidence that further monetary stimulus will create jobs or provide a sustainable path towards economic recovery.

Ultimately, the American economy is driven by the confidence of consumers and investors and the innovations of its workers. The American people have reason to be skeptical of the Federal Reserve vastly increasing its role in the economy if measurable outcomes cannot be demonstrated.

We respectfully request that a copy of this letter be shared with each Member of the Board.


Sen. Mitch McConnell, Rep. John Boehner, Sen. Jon Kyl, Rep. Eric Cantor


  1. This letter is merely a request that the Fed carefully consider its actions and provide measurable metrics related to any actions undertaken in support of monetary policy. All but one of the members of the Fed are Obama appointees. In light of the poor economy the potential for misuse of the Fed to support the reelection of Obama is an issue that must be considered in light of any long term damage to the United States and its citizens that might be caused in the process. The letter basically says, "stick to your charter", "carefully consider the results of your actions", and "we are concerned that prior actions in the same vein had no effect".

    I consider the letter to be nothing more than a request for the Fed to do an excellent job, while communicating some concerns that various corporations, investors, and politicians have expressed to date related to recent policy. I believe this kind of communication is constructive, opens the opportunity for dialog, and gives Bernake the opportunity to address these "concerns" or perhaps explain some of the Feds past actions.

    This is part of the managerial process, and I'm actually quite excited to see this dialog begin. It shows me Congress is awake, getting involved, and expressing interest. Sure, some of the Congressional concerns may be unfounded, or their reading of the effects of Fed policy might be incomplete, but that's what dialog is all about – closing the gap between concerns, understanding, and information.

    If I were Mr. Bernake, I would be excited to have the attention of Congress. I also suggest that if he responds appropriately he will probably be reappointed. This may be the first step in healing the wounds between Congress and the Fed that have festered since the Carter administration.

    Len Umina

    • Sort of like the repuke Supreme Court supporting open donations to the nutcases that are running for president.

  2. Mr. Kedrosky — Who is showing partisan colors?

    Inflation is a very real issue. Commodities are priced very high and raw inflation numbers including food and energy are nontrivial. Inflation is substantial in Europe and downright high in China.

    In any event, if more Fed accommodation brings even higher oil prices, it is not at all clear that Fed efforts to goose the economy would work, right?

  3. Len-
    I agree with the substance of your comments, but let's not inject a partisan slant to the Board membership:
    Of the five Board members, two were appointed by Bush, and additionally Yellen was Pres of the SF Fed under Bush. So strictly speaking, two of the five came in under Obama. The Board of Govs has seven seats total, of which two are vacant due to Republican blocking actions.
    Of the other five current voting members on the FOMC, three served in the same capacity under Bush.

  4. As the Federal Reserve has not sat idle through the past several years – with respect to those economic inputs available to it, chiefly monetary policy – I see rich irony in such a letter from a source some of us have watched in vain for signs of fiscal policy. Bernanke and the FOMC have politely urged the legislative and administrative branches for substantive fiscal and regulatory response. It appears the signatories return that gesture by recommending their most favored course of action, i.e., none at all.

    I'm no champion of the Fed, and have many a bone to pick with the direction the FOMC and the Governors have taken since 2003, if not earlier. But the idea of this particular communication originating on the Hill has provided my morning with more amusement than I can say.

  5. When you consider the obstructive actions of the signers of that letter toward the exact goals they praise, it is hard to imagine greater hypocrisy.
    To restate, "Since we are refusing to shoulder our responsibilities, you should, too. Join us in political sabotage of our country."

  6. come on Paul… verging on thuggish? name calling without analysis or explanation… good form

  7. Treasonous was Scott Sumner's term, and well deserved.

  8. I believe this kind of communication is constructive, opens the opportunity for dialog, and gives Bernake the opportunity to address these "concerns" or perhaps explain some of the Feds past actions.


  1. […] Extraordinary (and self-contradictory) letter from US Republicans to Ben Bernanke. […]

  2. […] to Paul Kedrosky’s Infectious Greed, I came across the letter written by Republicans ‘warning’ Mr. Bernanke against any adventurous monetary policy […]