The Great Debate

By Nicholas Wapshott
The views expressed are his own.

There is one thing every Republican candidate agrees on. Once in the White House, the first thing they’d do is fire Ben Bernanke. His crime is to follow the legal brief of the Federal Reserve to maximize jobs and keep prices stable. To this end he has been printing money to keep interest rates low to boost business confidence to invest and thereby create more American jobs. For many conservatives and libertarians, who dominate the early GOP caucuses and primaries, Bernanke’s cheap money policy has dangerously devalued the dollar’s worth.

Guaranteeing cheap money is a Keynesian way of restoring health to an economy in recession, though Keynes himself was aware that low interest rates do not automatically lead to jobs. However cheap money is, you can’t force people to invest. Or, as he put it, “You can’t push on a string.” He compared it to buying a bigger belt to gain weight. The fact that Keynes backed easy credit is enough to make the policy treacherous in the eyes of many con-libs. (They are far more tolerant of another Keynesian remedy–slashing taxes.)

Bernanke, however, owes his allegiance not to Keynes but to Milton Friedman. To encourage growth without hyper-inflation, Friedman prescribed gradually increasing the money supply. That way, prices would rise slowly and predictably. Bernanke is also an expert on the 1929 Crash and the Great Depression, catastrophes he, like Friedman, attribute to the 1920′s Fed keeping money too tight for too long. As Bernanke told Friedman on the father of monetarism’s 90th birthday, “You’re right. We did it. We’re very sorry. But, thanks to you, we won’t do it again.”

The legislation setting up the Fed in 1913 went out of its way to ensure that the Fed would be free of political interference so that monetary policy could be independent of politicians with short-term aims. It stipulated that the Fed should fund itself, depriving Congress of its traditional means of starving programs and institutions it doesn’t like. It gave Fed board members long terms, 14 years, with the chairman serving for four.

The sole means of influencing the Fed are through appointments and Fed board salaries. Bernanke’s current term ends in 2014* (see editor’s note), when he or his potential successor, nominated by the president, must be approved by the Senate. (The GOP candidates’ demand that Bernanke leave before his term ends would trigger an ugly constitutional crisis much like Franklin Roosevelt’s failed attempt in 1937 to pack the Supreme Court.) By demanding Bernanke’s head on a plate, however, the con-libs have served notice that the Fed’s days of independence are numbered and that every new appointment, like those to the Supreme Court in recent times, will trigger a pitched battle.

By Michael A. Cohen

The views expressed are his own.

WINDHAM, N.H.—Newt Gingrich is flying high these days – on top of national Republican polls and currently leading in three of the first four Republican primary and caucus states. He hasn’t been this relevant in American politics since Bill Clinton sat in the White House and Titanic was the biggest movie in America. But while the new Newt is clearly enjoying himself, seeing him on the campaign trail brings back familiar glimpses of the old Newt, defined far more by his acid tongue than he was by his policy acumen.

On Monday night, Gingrich took his frontrunner status on the road to New Hampshire, where he spoke at a packed town hall in Windham to crowds that were as ecstatic for him as they would have been for Leo and Kate. More than a thousand Republican partisans were there to greet him. What they got was the sort of grandiose ideas and red-meat political attacks against liberals – and in particular President Obama – that have been the hallmark of Gingrich’s political career, the key to his recent political rise, and perhaps his best hope for winning the Republican nomination. In a year in which Republican voters are angry with Obama and angry with Washington, all the GOP wannabes are cultivating conservative ire – but no one quite does it as effectively and as gleefully as Newt.

For Gingrich then, New Hampshire is a win-win state. The state is generally seen as Mitt Romney’s fail-safe; the place where he must—and should be able to—win in order to keep his election hopes alive. Moreover, the state GOP tends to be less socially conservative than their Iowa brethren; more attuned, it seems, to a Romney rather than Newt candidacy. Nonetheless, Gingrich’s numbers in New Hampshire are beginning to tick up, becoming Romney’s top rival and within shouting distance of first place. If he loses, the world won’t come to an end – and if he wins it could be the killer blow to Romney’s campaign. All the more reason, it seems, for Gingrich to play up his frontrunner credentials and critique Romney.

By Adam Skaggs and Bert Brandenburg
The opinions expressed are their own.

Attacks on judges who “legislate from the bench” are commonplace in conservative politics, but the current crop of Republican presidential contenders has taken attacking the judiciary to a new level.  New frontrunner Newt Gingrich is the most outspoken — promising that if elected, he would impeach judges, abolish judgeships, and ignore court rulings he doesn’t like.

Gingrich’s plans violate basic constitutional norms and would set off a constitutional crisis.  But, ultimately, they ring hollow:  however effective in motivating the Republican base, the attacks on the courts are not credible policy proposals.

Outside the realm of presidential politics, however, there is a looming — and very serious — threat to our justice system.  Despite all the attention focused on money in politics, few Americans know how much campaign cash is pouring into courts of law, and how it threatens to undermine equal justice for all.

Mitt Romney and Newt Gingrich, and the entire Republican presidential field before them, have enjoyed painting Barack Obama as a European-style socialist, an apologizer, an appeaser, a president who is ceding America’s place in the world. Their stump speeches and debate soundbites seem to always end with some variety of the phrase, “when I’m your president, I’ll make America great again.” It would seem the nation is hungry for that kind of leadership; after all, polls now say that Obama’s job approval ratings are worse than Carter’s at the same point in his term. The game clock would seem to be running down on his re-election hopes. But what if it turns out we’ve been reading the scoreboard wrong, and Team Obama already has the lead? What if, by the time Americans get to vote, less than a year from now, America is already great again?

Coming off the heels of a nasty recession and horrible intertwined crises in banking, housing and economic confidence, every decision President Obama and his team made on the country’s way forward has come under intense scrutiny. Inevitably, the left has called some decisions, like the smaller-than-hoped-for size of his stimulus bill, weak sauce. The right has decried everything this administration did, as with health care reform, as lurching us towards socialism. Even Rockefeller Republicans have changed their spots in order to make libertarian arguments, as when Mitt Romney argued in the New York Times that the auto-industry bailout was wrong and Detroit should have been allowed to go broke.

One shouldn’t feel bad for Obama -- this kind of scrutiny comes with the job, after all. But the criticism his administration has endured from all sides has seemed particularly craven, perhaps because the stakes have been so very high these past few years. And yet, the political capital invested in his centrist, negotiated policies are now paying dividends. Perhaps Bill Clinton was a smoother operator, but it’s beginning to look a lot like Obama’s triangulation of policy, politics and the press is working, and that may deliver him to a political comeback and a 1996-style election victory.

The president’s new populism comes from Teddy Roosevelt’s new nationalism.

By Michael A. Cohen

The views expressed are his own.

Has there ever been an American President more regularly compared to his predecessors than Barack Obama? Since arriving on the national stage Obama has been weighed against Washington, Lincoln, Roosevelt, Reagan, Kennedy, Truman, Carter and even George W. Bush. But after his remarkably full-throated populist speech yesterday in Osawatomie, Kansas we have to add another one to the list – Theodore Roosevelt.

The choice of Osawatomie for a speech that basically establishes the outlines of Obama’s 2012 re-election campaign was hardly accidental. It was the sight of Teddy Roosevelt’s famous “New Nationalism” speech, a set of remarks that laid the foundation for his 1912 run to recapture the White House and signaled his own ideological break with the conservative wing of his own Republican Party.

In evoking Roosevelt’s century-old rhetoric, his attacks on concentrated wealth, and his call for a more active and engaged federal government, Obama yesterday embraced a grand tradition in American politics — that of the anti-business populist standing with the ordinary American. In doing so, Obama has framed the 2012 election in terms that have been the focus of presidential campaigns since Roosevelt ran for a third term in 1912: what is the proper role of government in the lives of the American people?

By Eric Edmonds

The opinions expressed are his own.

Republican Presidential frontrunner Newt Gingrich continues to insist that child labor laws in the U.S. are “truly stupid,” that the poor lack good work habits, and that the former would solve the latter. He hasn’t mentioned any specific policy changes, yet it’s clear that he doesn’t like the way things are done now, and that that he thinks America would be better off if kids worked more. If only the economics agreed.

Gingrich hasn’t been clear about what exactly he wants, but he seems to be advocating two complementary policies. First, he would like to see a reduction in the minimum age of employment. While campaigning in Cambridge, he said, “You go out and talk to people who are really successful in one generation. They all started their first job between 9 and 14 years of age.” Second, he wants to put poor children to work in their schools, because “really poor children in really poor neighborhoods have no habits for working and have nobody around them who work.” Granted, if there really is no proclivity to work, it’s not clear how he will actually get these children to start working.

Nevertheless, let’s imagine Gingrich gets his wish. What would be the practical consequences of a reduction in the minimum age of employment in the U.S.? Most likely, nothing good.

By David Callahan

The views expressed are his own.

Occupy Wall Street protestors are pondering their next steps after police raids this week dismantled more Occupy encampments in Los Angeles and Philadelphia. In some ways, though, the movement has already scored its most important victory: It has changed the “narrative” that frames public debate. Polls show that the Tea Party story – about an America being destroyed by big government – has been pushed aside by the Occupy Wall Street story, which stresses rising inequality and corporate greed.

This is good news for President Obama. While there is little that Obama can do between now and next November to jumpstart the economy, he may have a strong chance at reelection anyway if Americans keep gravitating to a progressive worldview.

In an NBC/Wall Street Journal poll taken earlier this month, 76 percent agreed that the “current economic structure of the country is out of balance and favors a very small proportion of the rich over the rest of the country.” In another recent poll, by The Washington Post/ABC News, respondents were asked: “Do you think the federal government should or should not pursue policies that try to reduce the gap between wealthy and less well-off Americans?” A majority – 60 percent – said the government should pursue such policies.

By David Callahan

All views expressed are his own.

One irritating thing about rich people nowadays is their boundless faith that they can solve society’s most daunting problems – whether it’s underperforming schools or the AIDS epidemic. Yet just because someone made a bundle trading stocks or developing software doesn’t mean they’re equally brilliant in other areas.

The latest example is Americans Elect, an ambitious effort by wealthy individuals to circumvent the two-party political system in order to give voters a “centrist” choice in next year’s presidential election. Never mind that we already have a centrist candidate –President Obama, who has repeatedly sold out progressives to cut deals with the GOP. The real problem with Americans Elect is that it exacerbates the biggest flaw in our political system: the dominance of money.

Americans Elect aims to get a nonpartisan candidate on the ballot in all 50 states and has already secured ballot access in 24 states, including Florida and Ohio, by gathering over 2 million signatures.

By David Gordon and Sean West
The opinions expressed are their own.

There’s a good reason that only paid staffers and blood relatives seem to approve of Congress, as Senator John McCain recently quipped. But it is not the simple reason that Congress continues to fail, as witnessed in the implosion of the supercommittee. Rather it’s that Congress continuously promises unachievable historic fixes when it should instead be focused on slow progress.

There’s nothing wrong with small-scale fixes when they are the best achievable outcome. Congress is hyperpolarized and both sides are fighting for a mandate to reform the entire economy in line with their competing visions. As underwhelming as the August debt limit deal was, in the current political environment, saving over $2 trillion one way or another was a positive result. The fact that Congress could agree to something this large this year is actually quite stunning.

Failure – and the ensuing loss of respect in the eyes of voters – is largely due to leaders on both sides pretending that massive overhauls are in reach when they clearly aren’t. The problem is that Congress isn’t content to just do its job — it can’t help itself but to overpromise and then underdeliver.

The author is a Reuters columnist. The opinions expressed are his own.

Thanks to Republicans who signed Grover Norquist's pledge never to raise taxes, your taxes are automatically scheduled to go up in January -- unless you are a plutocrat.

The law that created the congressional super committee set a target of this week for reducing budget deficits. The committee failed to meet the target.

Republican members were willing to cut programs that benefit millions, but they would not raise taxes on the hundreds of thousands of families whose annual income is in the millions and, in a few cases, billions of dollars.