High Unemployment Isn’t a Big Concern for Conservative Republicans
Writing at Slate, Daniel Gross wonders why Fed Chairman Ben Bernanke doesn’t seem to care much about high unemployment:
In a speech earlier this month, Bernanke noted that “in all likelihood, a significant amount of time will be required to restore the nearly 8-1/2 million jobs that were lost nationwide over 2008 and 2009.” In another recent speech in Michigan, he acknowledged that “high unemployment imposes heavy costs on workers and their families, as well as on our society as a whole.” But he doesn’t seem inclined to do anything about it. The Federal Open Market Committee this week stood pat on monetary policy and announced no additional efforts or initiatives to combat persistent high unemployment.
Gross dismisses ideology as he tries to explain Bernanke’s inaction, but I don’t see why. Bernanke’s indifference to high unemployment and low wage growth makes perfect sense if you just assume that is a conservative Republican, which wouldn’t be an unreasonable assumption, given his initial appointment by a conservative Republican. Here’s Matthew Yglesias, who made this point earlier in the year when Bernanke was up for reconfirmation:
For example, remember when conservative Republican George W Bush was president and made Ben Bernanke chairman of the Council of Economic Advisors? And remember when Bush put Ben Bernanke in charge of the Fed? And remember when Ben Bernanke didn’t see the underlying problems in the financial system? But remember how, in a moment of crisis, Bernanke did turn out to believe in forceful government intervention on behalf of financial institutions and asset owners? And that time when, having stabilized asset markets, Bernanke stopped caring about unemployment and wages? And then, of course, there was the time Bernanke opposed the creation of an independent Consumer Financial Protection Agency.
If it looks like a duck and quacks like a duck, then it’s probably a duck.
Gross’ “compelling” explanations for Bernanke’s inaction aren’t all that convincing in the face of the simple fact that Bernanke is a conservative Republican, acting as a conservative Republican would. Indeed, true to their ideology, Bernanke’s conservative Republican fellow-travelers in the Senate have been similarly unwilling to pursue measures to would lower unemployment. As Yglesias wrote as his blog, the real question isn’t “why is Bernanke indifferent to high unemployment?” it’s “why would President Obama nominate someone indifferent to high unemployment?”