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What did Ayn Rand teach Paul Ryan about monetary policy?
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| Parent(s) |
Candidate
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| Contributor | RP |
| Last Edited | RP Aug 14, 2012 03:34pm |
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| Category | Commentary |
| Author | Brad Plumer |
| Media | Newspaper - Washington Post |
| News Date | Monday, August 13, 2012 04:55:00 PM UTC0:0 |
| Description | Paul Ryan has been heavily involved in these debates from his perch in the House. But he comes at monetary policy from a somewhat non-mainstream perspective. Like many other Republicans, he has repeatedly criticized Ben Bernanke’s efforts to stimulate the economy. But he has also gone further, arguing that the Federal Reserve shouldn’t be focused on reducing unemployment, period. And he has argued repeatedly for a “sound money” policy that has left some economists scratching their heads.
This is not a common view. Most economists tend to think that raising interest rates will slow the economy down. Here, for instance, is Mitt Romney’s economic adviser Kevin Hassett explaining the basics of monetary policy back in 2007: ”When inflation fears are aroused, the Fed increases the fed funds rate (called a ‘tightening’) in order to slow activity in sectors of the economy, such as housing and automobiles, that are particularly sensitive to interest rates.”
Ryan, however, has been consistent in his view that the Fed should do whatever it takes to fight inflation — and stop trying to fret over the unemployment rate. In 2008, Ryan sponsored a bill that would repeal the Federal Reserve’s “dual mandate” to tackle both inflation and high unemployment. Instead, under his bill, the Fed would focus only on “price stability.” |
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