Always remember it is the HOUSE that Constitutionally has the mandate that "All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bill." Article I Section 7.
At this moment whatever the outcome of the fiscal policy debate between and among members of Congress and each HOUSE it is the FEDERAL RESERVE that by its actions both encouraged the various bubbles in the economy in last 30 years and also failed to observe their mission in their statutory authority other than fight inflation. Now the FED is the leader in the world wide currency war of the US struggling to retain some of its prestige as a reserve currency that has been frittered away by various President's including two formal devaluations by the Nixon Administration (going off of gold standard) and the so-called Plaza Accords entered into during the Reagan Adminsitration. At least the Executive Branch participated in these decisions. But always remember the Federal Reserve despite its Federal charter, like the American Red Cross, is actually an independent private entity owned by its membership and almost completely opaque in its decisions and operations. Some would argue that its principal clients are the so-called "Bond Ghouls" as in the inexperience new President William Jefferson Clinton announcing publically that he had "No idea the bond ghouls ran the country" before coming to Washington. That brilliant maker and destroyer of political appointee and flag rank careers Bob Woodward in his book "Maestro" fawningly discussing the brilliance of the then FED Chairman failed to discuss adequately the relationship of the FED to the Bond Market anywhere in that book. Now of course the FED offers low interest rates to the Banks so that they can in turn improve their balance sheets by buying government bonds. A Ponzi scheme worthy of a Bernie [Not Rachel[Maddow.
So whither thou goest, GOP? My recommendation is given the failure to capture a majority in the Senate and not having the White House either, the GOP should focus like a laser on the FEDS and its inherent conflicts of interests, and at a minimum make sure some organization can audit it. After all it earns money from its own operations and its salaries and benefits are not in any way controlled by the Executive Branch, nor the comings and goings of its members and staffs. The revolving door revolves fast elsewhere but never so fast as at the FED.
The real question for the GOP is to decide whether it is the WALL STREET party or the rest of the country. This choice normally could be dodged. But now since fiscal policy is controlled on the up-side by the HOUSE and GOP, monetary policy is the only escape hatch and both the FED and Administration have decided that a world-wide currency war is NO BIG DEAL and the US will win. I would argue that is not the case and the fact that so little has been written about the backlash from other governments is very remarkable.
One thing the man and woman on the street will notice is the rapid and permanent rise in the prices of gasoline that as in 2008 helped precipitate the financial collapse as EXXON and others made record profits when gas reached $4.00 per gal.
There is no question in my mind that the FED in its arcane calculations has almost none on board, and never has, who understand the world of energy and the world of housing. Hey they do understand the bond market however and oddly energy and housing in the past have been largely independent of that market. So have fun GOP and reign in the FED and its view that its decisions have consequences only for inflation, and not full employment or other social issues.
And while you are at it GOP let's have the private portfolios of FED members and staff subject to public scrutiney and we will see if they are betting their own dollars on the future of the USA.
