Judgment Days: November 2 and 3
by Gary North
On November 2, the voters go to the polls. On November 3, the Federal Reserve goes to the mat.
On November 2, the voters will get to judge the United States Congress. On November 3, the Federal Reserve gets to judge the Federal Reserve.
Most political commentators think the voters will turn thumbs-down on the Democrats. Most economic commentators thing the Federal Reserve will turn thumbs-down on the Federal Reserve.
November 2008 was the day of judgment for the Republicans’ House majority. In October, the voters did not want the Big Bank Bailout. Congress ignored the voters and did what Hank Paulson and Ben Bernanke told them to do. The Republicans got tossed out a month later. They were in the majority, and they got blamed. The Democrats voted with the Republicans, but the Republicans were on duty, and they got hammered in November.
Meanwhile, the FED more than doubled the monetary base. The FED was panic city.
The Republicans then got two years to play spoilers. The Democrats had the votes to get the shovel-ready stimulus packages passed – larger than the Big Bank Bailout. They had the votes to get Obamacare passed. They had the votes to get the bank reform bill passed. The Republicans could vote no without fear of reprisals if these laws failed to restore the economy.
The economy is still on its back. The unemployment rate is not falling. The shovel-ready stimulus did not work. Nothing Congress has done has worked.
Nothing at the FED has worked, either.