Paul Ryan and the Fed

I like the choice of Paul Ryan as VP running mate. Paul understands the problems with the Fed and will be active for change.

Quotes from John Hilsenrath’s Fed Could Face White House Foe in Ryan.

In February, Mr. Ryan (R., Wis.) criticized the Fed for enabling large government budget deficits by pushing down long-term interest rates and holding down the cost of financing government debt. He also told Mr. Bernanke that he feared the central bank was stoking a new financial crisis. “A lot of us believe that the Federal Reserve was too loose for too long in the 2003 to 2005 period,” Mr. Ryan said in February. “Our fear is that you’re just going to repeat these same mistakes again, but by orders of magnitude that we can’t even comprehend right now.”

The Fed chairman has argued against Mr. Ryan’s contention that the central bank’s low-interest-rate policies in the 2000s caused the housing bubble and has challenged Mr. Ryan’s admonition about the risks that monetary policies will lead to unwelcome inflation or a decline in the dollar’s value.

Mr. Ryan has sided with Rep Ron Paul (R., Texas) on a proposal that Fed interest-rate policies be audited by the Government Accountability Office, a congressional watchdog. Mr. Bernanke opposes that and calls it a threat to the Fed’s monetary-policy independence.

In 2010, Mr. Ryan co-authored an opinion piece criticizing the Fed with Stanford Professor John Taylor, one of the bank’s most outspoken academic critics. They took issue with a Fed bond-buying program known as quantitative easing. The two argued that the program risked higher inflation and a depreciating currency, and accused the Fed of stoking “sugar-high economics.”

Mr. Ryan and Mr. Taylor also called on Congress to rewrite the Federal Reserve Act so that the Fed has a single mandate—to pursue stable prices—and not a dual mandate, which also includes seeking maximum sustainable employment. The employment part of the mandate, Mr. Ryan said, makes the Fed too interventionist. Mr. Bernanke has said that the Fed can perform its job either with a single or dual mandate.