This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Mitt Romney Is Off Base on QE3 Criticism

More simply, part of the Fed's hope is that these moves will buoy investor wealth and decrease the cost of raising money. Bernanke is also attempting to reduce the cost of capital for corporations to make projects more attractive to invest in.

The Romney campaign used the Fed's new monetary policy announcement to claim that it confirmed Obama's economic policies had failed.

"After four years of stagnant growth, falling incomes, rising costs, and persistently high unemployment, the American economy doesn't need more artificial and ineffective measures," Lanhee Chen, Romney's policy director, said in a statement.

Not all Republicans agree with Romney's approach.

"The Fed has had a decades history of independence from politics, and I think that the Fed acted when they felt they should act, and not when anyone else said they should act," said Jim Denton, a Nevada-based Republican political consultant. "I remember when President George H.W. Bush was upset with former Fed Chairman Alan Greenspan because he wouldn't lower interest rates during the election."

The Fed downplayed the possibility of easing in the early part of the summer as investors magnified their calls for the central bank to step in to combat the elevated unemployment rate. The worry among many analysts was that if Bernanke and his team waited too long, Americans would see a late 2012 move as purely political -- something that would benefit President Barack Obama.

It's unlikely that QE3 will have a noticeable impact on the economy before the election, and The Washington Post's Chris Cillizza pointed out that "economic-minded" Republican and Democratic strategists don't think the monetary stimulus will influence the presidential race.

Many voters and market analysts may side with Romney, though on slightly different grounds.

"Clearly, the effectiveness of each quantitative easing looks to me that each time they do it it's less and less effective," said Allan Flader, a financial adviser at RBC Wealth Management. "They keep making money plentiful; the economic term is 'marginal utility,' where you're coming out of the desert and you're really thirsty so that first glass of water you'd pay $1 million for, but the 100th glass of water you might only pay a penny for."

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs