The big news today wasn't Mitt Romney's continued fumbling over foreign policy (for which Team Romney is surely grateful). It was the Federal Reserve's decision to embark on a new round of quantatative easing. For the uninitated, quantatative easing-or QE to the cool kids-is a strategy for generating growth in the economy. Right now, the problem in the economy is a lack of demand. Consumers aren't spending, and so businesses aren't hiring, and so banks are not lending, and so on. One way to deal with this is to provide income to people, throw out benefits, tax cuts, or public works-i.e., stimulus. But that requires congressional action, and as we've seen for the last two years, Republicans are not interested in spending money to generate growth-or in letting President Obama do any more of it.
That leaves the Federal Reserve. It can't give money to people, but it can create incentives to spend. With quantatative easing, the Fed purchases bonds back from the government, holds interests rates down, and lowers the value of money. This forces everyone to try to get the most bang for their buck. Banks begin to loan more in order to maintain profits. Businesses decide to build or hire, since they lose money by sitting on their cash. You get the idea.
Unlike previous rounds of QE, when the Fed announced its purchases and set a horizon on when it would end the policy, this QE is "open-ended." The Federal Reserve will buy bonds indefinitely-in its words, the "Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens." This is just a fancy way of saying that they'll pursue this policy until the economy improves, and then continue it further, to make sure the uptick doesn't end prematurely.
It's hard to say how this-unlike, say, the Middle East turmoil and how the president and his challenger respond-might affect the election. But it's certainly a good sign for the medium-term health of the economy. If this goes well, it will improve the labor market, lower unemployment, and help move the country from stagnation to a genuine recovery. Which will benefit everyone, not least the guy who's sworn in next January.
So They Say
"I unequivocally support the president of the United States-no ifs, ands or buts- and it certainly is not a time to try to go one-up politically. He made a difficult, courageous decision."
-George H.W. Bush, then-Republican candidate for president, responding to President Carter's failed hostage rescue in Iran in April 1980
Daily Meme: Nobody Knows the Trouble Mitt's Seen
- Yesterday, the media-and many politicians of both stripes-were dumbfounded by Mitt Romney's response to the American embassy attacks in Libya and Egypt. Today, it was conservative pundits' turn to be miffed at the liberal conspirators who yelled at their candidate.
- Mitt superfan Jennifer Rubin wrote, "As far as we can see, Romney, the Near East desk and Clinton were in sync. Ah, but where was the president? He apparently had gone to bed and so the day passed without comment from him."
- Katrina Trinko said the press conference in which Romney was grilled about his instant criticism of Obama "was really an example of how the media sometimes just doesn't deserve that access."
- Philip Klein: "Romney's responses didn't really matter, because reporters had already decided their narrative."
- Erick Erickson had a memorable rant: "I get that Ben Smith, leading up Buzz Feed, is a leftwing journalist paraded about as if he is some sort of objective reporter at a trendy site full of cat photos. I get that precious Ezra Klein started Journolist so reporters and political operatives could collaborate on the news and narrative and now he sits at the Washington Post and gets trotted out as a fact checker."
- The Wall Street Journal editorialized that Romney's "political faux pas was to offend a pundit class that wants to cede the foreign policy debate to Mr. Obamawithout thinking seriously about the trouble for America that is building in the world."
- Bill Kristol said that Romney was "right to reject the counsel of the mainstream media, which is to keep quiet and give President Obama a pass."
- John Podhoretz chimed in: "So it appears one politician can say what he likes and the other can't. Because, you know, there's an election to win, and the self-appointed referees are also the fans."
- But the pundits who called out Romney yesterday aren't too worried. As Ed Kilgore wrote, "I've never completely understood the persecution complex of American conservative gabbers. … Maybe they will soon just shrug the whole thing off and move on instead of all this self-pitying talk about not being able to make their views known when they are making them known with deadening repetition. One can only hope so."
What We're Writing
- Abby Rapoport profiles the citizen army fighting against voter disenfranchisement in Pennsylvania.
- Paul Waldman asks whether reporters really dislike Romney-and whether it matters.
What We're Reading
- Is Wall Street Scott Brown's biggest fan?
- Germans aren't so impressed with Paul Ryan, but are pretty sure Obama's going to win.
- Amy Davidson says Romney's less-than-skillful response to Libya was a direct result of the consultant way of thinking he cultivated at Bain.
- Edith Zimmerman profiles the latest Kennedy to try to mount the national stage.
- A Guardian blogger announces, "This election is bullshit."
- Christopher Walken and the Most Interesting Man in the World have both joined the Obama camp this week, along with Snoop Dogg.
- Obama's top fundraiser is … a journalist?
Poll of the Day
New late-in-the-game polling partnership Esquire/Yahoo! News asked Americans who they thought would emerge as the victor in a presidential candidate fistfight. A resounding majority of 58 percent backed incumbent Barack Obama, while 22 percent sided with Mitt Romney. A shocking 20 percent of Americans had no opinion on who would win the scuffle.
For more polling information, go to the Prospect's 2012 election map.
