The Magazine

Republicans Learn Moneyball

Why the GOP candidates need to talk about the Fed.

Oct 24, 2011, Vol. 17, No. 06 • By JEFFREY BELL
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

Congress has many powers, actual and potential. Freezing the economy of Main Street by imposing zero interest rates on the country’s small businesses, community bankers, and middle-class savers is not among them. Only the Fed can do that. But Bernanke’s call for Congress to see to the matter is of a piece with a whole range of similar Bernanke pronouncements calling for congressional action to deal with various aspects of the economic crisis both he and the Obama administration finally admit we are in.

To most conservatives, Obama’s campaign for the American Jobs Act is a joke. The bill is so determinedly a warmed-over reprise of earlier, failed policies that it appears consciously designed for Republican rejection. But there are signs that the president’s deeper strategy of blaming Congress, understood as Republican-dominated, for his own failures is capable of succeeding.

In early September, a Washington Post/ABC News poll found voters divided 40-40 on whom they trust more to create jobs, the Obama administration or congressional Republicans. Just a month later, in the wake of Obama’s intense barnstorming, 49 percent said Obama can be trusted, with only 34 percent choosing the GOP. The swing toward trusting Obama was even bigger among independents.

It will be a political tour de force if Democrats succeed in blaming a three-year record of economic stagnation on a party that has had control of one legislative branch for less than one year of those three. For it to work, the debate must be restricted to fiscal policy. Then the premise will be that congressional obstructionism is preventing action on measures that both sides “know” will allow the economy to resume its creation of new jobs.

The ultimate destination of this narrative was previewed by Obama campaign manager Jim Messina, who last week accused Republicans of trying to keep unemployment high to increase their 2012 vote totals: “Their strategy is to suffocate the economy for the sake of what they think will be a political victory,” he wrote in an email to supporters. “They think that the more folks see Washington taking no action to create jobs, the better their chances in the next election. So they’re doing everything in their power to make sure nothing gets done.” Democrats and the mainstream media define getting something done, of course, as sharp tax increases and draconian defense cuts, neither of which seems particularly well designed to bring on a burst of job creation.

Among the Republican presidential candidates, Newt Gingrich seems furthest along in understanding that the exclusion of monetary policy from the debate is a mortal threat to Republicans in 2012. He delivered a major speech attacking Fed policy back in June, and his discussion of monetary policy has been accelerating since then. In last week’s Washington Post/Bloomberg debate he opened the door for the first time to what he described as a “hard money” policy, which positions him rhetorically next door to advocacy of a gold-backed dollar.

One of the establishment reporters at the debate made the mistake of asking Gingrich a question lifted from the Obama/Democratic playbook: “Do you think it’s right that no Wall Street executives have gone to jail for the damage they did to the economy?” Gingrich replied, “Everybody in the media who wants to go after the business community ought to start by going after the politicians who have been at the heart of the sickness which is weakening this country and ought to start with Bernanke.”

If Republicans keep their eye on the monetary ball, they can still avoid being outwitted in 2012 by the endgame.

Jeffrey Bell is policy director of the Washington advocacy group American Principles and head of its GoldStandard2012 campaign.

Recent Blog Posts

The Weekly Standard Archives

Browse 18 Years of the Weekly Standard

Old covers