One of the Republican candidate’s favorite whipping boys is Ben Bernanke, head of the Federal Reserve. They have been accusing him of employing monetary policies that produce inflation. But it turns out, inflation rates continue to be low:
Bernanke didn’t need to rebut his critics; the facts already have. Earlier Wednesday, the Fed reported that expectations are inflation will remain between 1.4 percent and 1.8 percent for 2012 and between 1.5 percent and 2 percent through 2014. The exceptionally low inflation rate proves false the complaints about Bernanke’s aggressive — and successful — actions to avert an economic depression after the 2008 financial crisis.
Former candidate Rick Perry has been the worst of the critics, calling Bernanke’s behavior “almost treasonous” and declaring that Bernanke would face an “ugly” greeting in Texas if he injected more monetary stimulus into the economy. “It’s a travesty that young people in America are seeing their dollars devalued,” Perry complained.
Newt Gingrich called Bernanke “the most inflationary, dangerous and power-centered chairman of the Fed in the history of the Fed.” Ron Paul accused Bernanke of “inflating twice as fast as Greenspan.” Mitt Romney joined the others in saying he wouldn’t reappoint Bernanke, who was first appointed by President George W. Bush.
On Wednesday, Bernanke allowed himself just a passing reference to such critics. “The low level of inflation is a validation,” he said. “There are some who were very concerned that our balance-sheet policies and the like would lead to high inflation. There’s certainly no sign of that yet.”
Could someone explain Ron Paul’s and Newt Gingrich’s criticism of the Federal Reserve? My understanding is that Paul is against the institution on principle–what’s the principle? The need to go back to the gold standard? Is that feasible?