At the GOP undercard debate, the candidates were asked to offer their views of the Federal Reserve's conduct of monetary policy. Not surprisingly, everyone who spoke took a dim view of President Obama's choice for the job, Janet Yellen. New Jersey Gov. Chris Christie offered his criticism in a way that was both particularly pointed and strikingly self-contradictory, arguing that the Fed is simultaneously doing the wrong thing for the economy and helping Obama politically:
Now, when they cut interest rates during the economic recession and crisis, that was the right thing to do, but they have kept those interest rates artificially low and for one reason and one reason only: because they're trying to politically support Barack Obama and his agenda. And it's been wrong. What it has done in an administration where the president has talked about income inequality, he has more income inequality in this administration than any previous administration. The middle class is doing worse than it has ever done before, and the investor class and the wealthy are doing better because of cheap money from the Fed.
This is the worst part. We had 1 1/2 percent GDP growth in the first quarter. If we slide back to recession you can't slide interest rates below zero. Where do we go if the economy slides back into recession? It has been the wrong thing to do. It is hurting the American economy.
Christie is doing a good job here of channeling the views of many Wall Street types who live in New Jersey and enjoy complaining about the Fed.
But the argument doesn't really make sense. You can believe the Fed is responsible for slow growth or you can believe the Fed is acting to boost Obama's approval ratings, but unless you think a bad economy benefits Obama, it can't be both.
A theory that might make sense would be to say that the Fed is so desperate to help Obama that it is overheating the economy and prompting dangerous inflation. Except right now inflation is super low. So it can't be that either.