The following is the text of an open letter to Federal Reserve Chairman Ben Bernanke signed by several economists, most of them close to Republicans: (We could list the signatories if you want)
    We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued.  We do not believe such a plan is necessary or advisable under current circumstances.  The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.
    We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.”  In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.
    We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.
    The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.
    A spokeswoman for the Fed responded:
    “As the Chairman has said, the Federal Reserve has Congressionally-mandated
    objectives to help promote both increased employment and price stability.
    In light of persistently weak job creation and declining inflation, the
    Federal Open Market Committee’s recent actions reflect those mandates.
    The Federal Reserve will regularly review its program in light of incoming
    information and is prepared to make adjustments as necessary.  The Federal
    Reserve is committed to both parts of its dual mandate and will take all
    measures to keep inflation low and stable as well as promote growth in
    employment.  In particular, the Fed has made all necessary preparations and
    is confident that it has the tools to unwind these policies at the
    appropriate time.  The Chairman has also noted that the Federal Reserve
    does not believe it can solve the economy’s problems on its own.  That will
    take time and the combined efforts of many parties, including the central
    bank, Congress, the administration, regulators, and the private sector.”

    The following is the text of an open letter to Federal Reserve Chairman Ben Bernanke signed by several economists, along with investors and political strategists, most of them close to Republicans:

    We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued.  We do not believe such a plan is necessary or advisable under current circumstances.  The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.

    We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.”  In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

    We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

    The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.

    Cliff Asness
    AQR Capital

    Michael J. Boskin
    Stanford University
    Former Chairman, President’s Council of Economic Advisors (George H.W. Bush Administration)

    Richard X. Bove
    Rochdale Securities

    Charles W. Calomiris
    Columbia University Graduate School of Business

    Jim Chanos
    Kynikos Associates

    John F. Cogan
    Stanford University
    Former Associate Director, U.S. Office of Management and Budget (Reagan Administration)

    Niall Ferguson
    Harvard University
    Author, The Ascent of Money: A Financial History of the World

    Nicole Gelinas
    Manhattan Institute & e21
    Author, After the Fall: Saving Capitalism from Wall Street—and Washington

    James Grant
    Grant’s Interest Rate Observer

    Kevin A. Hassett
    American Enterprise Institute
    Former Senior Economist, Board of Governors of the Federal Reserve

    Roger Hertog
    The Hertog Foundation

    Gregory Hess
    Claremont McKenna College

    Douglas Holtz-Eakin
    Former Director, Congressional Budget Office

    Seth Klarman
    Baupost Group

    William Kristol
    Editor, The Weekly Standard

    David Malpass
    GroPac
    Former Deputy Assistant Treasury Secretary (Reagan Administration)

    Ronald I. McKinnon
    Stanford University

    Dan Senor
    Council on Foreign Relations
    Co-Author, Start-Up Nation: The Story of Israel’s Economic Miracle

    Amity Shlaes
    Council on Foreign Relations
    Author, The Forgotten Man: A New History of the Great Depression

    Paul E. Singer
    Elliott Associates

    John B. Taylor
    Stanford University
    Former Undersecretary of Treasury for International Affairs (George W. Bush Administration)

    Peter J. Wallison
    American Enterprise Institute
    Former Treasury and White House Counsel (Reagan Administration)

    Geoffrey Wood
    Cass Business School at City University London

    A spokeswoman for the Fed responded:

    “As the Chairman has said, the Federal Reserve has Congressionally-mandated objectives to help promote both increased employment and price stability. In light of persistently weak job creation and declining inflation, the Federal Open Market Committee’s recent actions reflect those mandates.  The Federal Reserve will regularly review its program in light of incoming information and is prepared to make adjustments as necessary.  The Federal Reserve is committed to both parts of its dual mandate and will take all measures to keep inflation low and stable as well as promote growth in employment.  In particular, the Fed has made all necessary preparations and is confident that it has the tools to unwind these policies at the appropriate time. The Chairman has also noted that the Federal Reserve does not believe it can solve the economy’s problems on its own.  That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators, and the private sector.”

    See related article: Fresh Attack on Fed Move

     

     

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