Why banks must be independent of ignorant politicians

Four top Republicans write an open letter to the Federal Reserve.

I have just read the dumbest letter ever. I have copied it below. It's a letter from the four top Republicans in Congress to Chairman Bernanke. It urges the Fed to do nothing because: "It could exacerbate current problems or further harm the US economy."

I have never heard such unsubstantiated tosh. It is unclear how lengthening the duration of assets held on its balance sheet could cause harm. This is a bit rich after the ridiculous shenanigans by the Republicans over the debt ceiling, which led to a downgrade. The risk of inflation is diminishing by the hour. These guys really have no idea. This really does illustrate well why central banks need to be independent of ignorant political interference.

Fortunately, the Fed will ignore them and instigate, perhaps, the $500bn Operation Twist today. It probably raised the prospects of the Fed acting as it's likely to have annoyed FOMC members who value their independence.

Dear Chairman Bernanke,

It is our understanding that the Board Members of the Federal Reserve will meet later this week to consider additional monetary stimulus proposals. We write to express our reservations about any such measures.

Respectfully, we submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people.

It is not clear that the recent round of quantitative easing undertaken by the Federal Reserve has facilitated economic growth, or reduced the unemployment rate . . . we have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy.

Sincerely, Sen. Mitch McConnell, Rep. John Boehner, Sen. Jon Kyl, Rep. Eric Cantor.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Theresa May takes early lead in the Conservative leadership race

The first poll of the Tory contest puts the Home Secretary well out in front

Theresa May, the Home Secretary is well ahead among Conservative members according to a new YouGov poll for the Times

She is both the preferred first choice of a plurality of members from an open field (she secures 37 per cent of the vote, with her nearest rival, Boris Johnson, 10 points behind) and roundly trounces Johnson with 55 per cent to 38 per cent. In all other head-to-heads, Johnson wins comfortably.

Although YouGov have a patchy recent record in national contests - they predicted the London mayoral victory but failed to foresee the Conservative majority or the Brexit vote - they are four for four as far as internal party contests are concerned, having accurately predicted both the result and the final vote share of the 2015 and 2010 Labour leadership contests and the 2005 and 2001 Conservative contests. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.