In advance of the Federal Reserve’s quantitative easing announcement on Thursday, Senator Bob Corker, R-Tn., a member of the Senate Banking Committee, expressed his hope that Federal Reserve Chairman Ben Bernanke would “make clear the limits of what monetary policy can achieve” and argued “artificially lowering interest rates and printing more money will not solve our country’s structural economic issues.”
“I hope Chairman Bernanke will show humility and make clear there are limits to what monetary policy can achieve,” said Senator Corker. “There is no doubt that elected officials in Washington have left a vacuum of leadership where the economy is concerned, but if Chairman Bernanke announces more quantitative easing on Thursday, he will only be exacerbating the problem. Artificially lowering interest rates and printing more money will not solve our country’s structural economic issues. To get this economy really moving we need true fiscal reform that includes pro-growth tax reform, a long-term plan to restore solvency to Social Security and Medicare, and dramatically lowers the deficit.”
In reaction to Chairman Bernanke’s recent speech in Jackson Hole, Senator Corker said the market response highlighted “just how far away from fundamentals our unhealthy obsession with the Fed has taken us,” noting it’s time for “policy makers to meaningfully address the underlying problems in our economy.”
The Financial Times published an op-ed (“Bernanke should show some humility”) by Senator Corker on August 28, in which he argues that the Federal Reserve has become a distraction from substantive policy debate in Congress to address the nation’s fiscal situation.