By: Bob Lucore
Last week the Federal Reserve Board met in Washington and decided to take measures to bring down long-term interest rates in order to get the economy growing. As they were meeting, they received an unusual letter from the top four leaders of the Republican Party in Congress urging them not to act.
There is nothing wrong with citizens, or their political representatives lending their advice to the Federal Reserve. In fact the system is a creation of Congress, and the Chairman of the Fed is required to report to Congress on a regular basis. At various times over the years, ADA and our allies in the labor movement have even held demonstrations outside of Federal Reserve headquarters to demand more action to address unemployment.
What is unusual about last week’s Republican missive is that it urges the Fed strongly not to take action to address our jobs crisis. That, combined with Governor Rick Perry’s accusations that the Fed is treasonous and treacherous if it attempts to get the economy moving, show an opposition party that is completely out of touch with the desires and needs of the American public.
Economic theory, historical experience and the common sense of the people, indicate that we need action to get the economy moving. The best way to do that would be with a combination of direct government spending on jobs—along the lines that President Obama has proposed—combined with an accommodating monetary policy from the Fed that would keep interest rates low and money available.
The Republican oppositionists in Congress have taken extreme measures—even holding the good faith and credit of the government hostage—to ensure that fiscal policy (i.e. direct government spending) cannot be used to address our crisis. Now they are attempting to shut down the only other avenue available in our system to address the crisis—action by the Federal Reserve.
There really is no other explanation for the behavior of the Republicans, other than putting their party’s political interests ahead of the public’s interest in ending the unemployment crisis. They prefer to keep millions of Americans out of work, in order to win an election.
Bob Lucore, a long-time ADA board member, is the former Director of Research and Policy for the United American Nurses and has worked for the Teamsters union and the Department of Economic Research at the AFL-CIO. . He taught economics for several years at Centre College and Colorado State University and is currently a research assistant and student at the School of Library and Information Science at San José State University.Back