NEW YORK (
) - The Federal Reserve should just ignore Republican leaders trying to bully the central bank into leaving the economy alone.
That's not to say the Republicans are wrong. I'm just saying the Fed should do what it thinks is best for the U.S. That's why the Fed exists and why it is granted so much independence from political meddling.
House Speaker John Boehner, R-Ohio, and the other Republican leaders who sent a letter to Fed Chairman Bernanke this week have every right to express their opinions on monetary policy and Bernanke has every right to ignore them. I think that's best for everyone.
Let's face it, Federal Reserve officials have more economic training and less re-election motivation in their decision-making, so I think they are in a better position to decide how best to manage monetary policy.
Besides, no one else is doing anything for the economy, and I hold pretty much no hope of seeing a job plan or deficit reduction effort or any other pro-growth policies getting passed by Congress amid the overblown rhetorical hype mounting in anticipation of a big election year showdown between Republicans and Democrats.
I understand why Republican leaders might think doing nothing is better than continuing with the Fed's free money policies, but I don't think any of us know what would happen if the Fed turned off the spigot. It's hard to prove a negative - we may think that monetary stimulus isn't doing much but we'll only find out the hard way when growth stops and unemployment surges back to recessionary levels.
Some believe that would best - that we should suck it up and endure the pain quickly and severely rather than keep taking the Fed's medicine and numbing ourselves from the pain while prolonging our recovery.
I think that gives too much credit to the Fed. Monetary policy can only encourage economic activity, ultimately it works if the private sector takes the bait.
Monetary policy is no substitute for sound fiscal policy, but at the moment monetary policy is the only game in town.