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Republicans will use the expected vote this month on the nomination of Janet Yellen to chair the Federal Reserve as one more chance to slam the Fed’s easy money policies.It's hard to tell with this crowd whether they're kooks, pandering to kooks, or both. Either way, their policy prescription--restricting the money supply--would be disastrous.
But there’s one big rub to their argument: Their predictions about the impact of these policies since they first began in late 2008 have been wrong so far.
Inflation has not spiked, and the value of the dollar has not collapsed. At this point, in fact, there are more worries about deflation than inflation.
But thanks to the tea party influence in the GOP — in particular the Fed-bashing Rand and Ron Paul wing of the party — ripping the Fed and the bigger role it is playing in the economy has become more a litmus test for party loyalty, regardless of whether the dire predictions have come true.
Naturally, this is the same crowd that believes that extended unemployment benefits are a "disservice" to the unemployed and that defaulting on the debt is a worthwhile colonic for the economy.