My TRB column in the current issue is about the conservative movement's newfound opposition to monetary loosening during an economic crisis, and the charged question of what motivation has brought about this ideological turn:
Of all the strange things that Republicans have freaked out over during the last two years—a federal version of Mitt Romney’s health care plan, a continuation of George W. Bush’s bank bailout, a failed attempt to implement John McCain’s climate bill—perhaps the strangest target is Milton Friedman’s monetary policies. Yet here we are.
Last month, the Federal Reserve announced it would purchase $600 billion in Treasury bonds in order to push down long-term interest rates and spark the moribund economy—a practice known as quantitative easing. Conservatives exploded in outrage. The Republican group e21 published a scathing open letter to Fed Chairman Ben Bernanke by economic luminaries such as Bill Kristol, while GOP lawmakers stoked fears of hyperinflation. Several Republicans in Congress introduced bills to change the Fed’s dual mission from one of balancing low inflation with high employment to a single mission of fighting inflation at all costs.
Inflation-phobia does hold a cherished place in the conservative canon. Inflation is a tax on wealth, while unemployment penalizes labor. Naturally, conservatives cherish price stability. What’s new is the sudden ascendance of radical, hard-money beliefs. Fox News demagogue Glenn Beck has spent months stoking fears of Weimar-like hyperinflation, while imploring his audience to buy gold, the preferred currency of inflation-phobes. Incoming House Budget Committee Chairman Paul Ryan hyperventilates, “we’re coming untethered with our sound money roots.” Meanwhile, core inflation is very low and falling.
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