This week, the United States will find out if the Federal Reserve will raise interest rates for the first time in nearly a decade or if the central bank will just delay the inevitable for another couple of months. Many people, like Hillary Clinton (SEE: Hillary Clinton comments on possible Federal Reserve rate hike) and several Fed officials, have come out in favor of a rate hike, and one of the latest is a Republican presidential candidate.
New Jersey GOP Governor Chris Christie, who is barely registering in the polls, told supporters at a campaign stop in New Hampshire that the Fed should increase interest rates. He argued that the central bank has eliminated a tool to fight recessions in the future by keeping rates too low for too long.
“They’ve been playing politics with it,” Christie said at a campaign stop at Merrimack in New Hampshire. “I would hope they would get above it and do what makes fiscal sense for our country.”
Of course, Christie ignored the fact that the business cycle is caused, fueled and exacerbated by the central bank with its money-printing policies. Christie, like much of his fellow GOP and Democratic candidates, omits the fact that the Fed was the cause of the last economic collapse, and will be the cause of the next one.
It seems like the only ones who get this is Ted Cruz and perhaps Rand Paul, though the latter is keeping relatively quiet on the matter (SEE: Is Ted Cruz stealing Rand Paul’s thunder on monetary policy?).
Just in case Christie has never touched upon Austrian economics, here is a superb excerpt from a Robert Murphy article in 2008:
“The case against the Fed is straightforward: In an attempt to jumpstart the economy out of recession, Greenspan slashed the federal funds target from 6.5% in January 2001 down to a ridiculous 1% by June 2003. After holding rates at 1% for a year, the Fed then steadily ratcheted them back up to 5.25% by June 2006. The connection between these moves by the central bank, versus the pumping up and popping of the housing bubble, seemed to be more than just a coincidence. On the contrary, it looked like a classic example of the Misesian theory of the business cycle, in which artificially low interest rates lead to malinvestments, which then require a recession to correct.”
Instead of telling the Fed what to do, urge the central bank to shut its doors.
Sure,time for the FED to raise interest rates. Then we can go into recession over the next 12 months and they will have a tool to bring us out of recession. Christie is a TOOL.