Saturday, December 15, 2012

Are John Roberts and Ben Bernanke Moral Cowards?

Two of the most important political stories last year were about character. More specifically, about the absence of character.

When public officials succumb to fear, they demonstrate a lack of courage and character.

Public officials fear for their reputations. Unfortunately, they sometimes confuse reputation with bad press.

The media gains influence when public officials submit to its dictates. When they show that they can be had by bad press they are telling the media that it is more important to influence decisions than to report the news.

John Podhoretz raises these issues in a column on the moral failings of Supreme Court Chief Justice John Roberts and Federal Reserve Chairman Ben Bernanke.

Podhoretz begins with John Roberts:

Chief Justice John Roberts … changed his vote against ObamaCare in June because (according to the peerless Supreme Court journalist Jan Crawford) he was concerned about the public perception of the court’s legitimacy.

Or, to put it in plain English, he was worried that liberals would say the court’s ruling proved it was stacked to the Right — and he didn’t want the Supremes to be MSNBCed to death.

Questions about the Court’s legitimacy arising from Roberts’ opinion — in which ObamaCare’s funding mechanism isn’t a tax on page 15 but is a tax on page 35 — evidently were preferable, because he figured the only people who would complain would be his fellow conservatives.

We appoint Supreme Court justices for life because we don’t want them worrying about MSNBC. They shouldn’t be engaging in repugnant sophistry to address hot political emotions of the moment, yet that’s exactly what Roberts did.

John Roberts has allowed the media to believe that he can be rolled. He compromised a sterling reputation with an act of moral cowardice.

Podhoretz is entirely correct to call him out on it.

And then there’s Ben Bernanke, a man who has been printing money to fund the federal debt and to maintain artificially low mortgage interest rates.

If Bernanke is buying 70% of government debt and if the Federal Reserve now owns over 16% of all government debt, he is rigging the bond market. By keeping interest rates artificially low Bernanke certainly contributed to President Obama’s electoral success.

Fearful of Congress and the media Bernanke has chosen to be more transparent about Fed policy.

Podhoretz considers it an act of moral cowardice:

On Wednesday … the Federal Reserve Board. In a move completely out of keeping with the central bank’s 100-year history, it laid out a specific long-term policy toward unemployment and inflation.

Chairman Ben Bernanke announced the Fed won’t lower interest rates until the unemployment rate reaches 6.5 percent. (There is a caveat: If inflation rises to 2.5 percent, that might force the Fed’s hand.) It does not expect such a thing to happen until 2015 at least. Therefore, it will continue buying tens of billions of dollars of securites every month to keep interest rates exceptionally low.

This is extraordinary. For starters, it represents an entirely new type of policy for the Federal Reserve — delineating a specific target and the measures that will be taken to reach it. And laying it out for all to see and understand.

The Federal Reserve Board has functioned since its invention in 1913 as a monumentally opaque institution — by design. It was created in the first place to prevent the bank panics that had led to consistent financial depressions throughout the 19th and early 20th centuries — and to keep politicians from making craven and convenient use of the money supply and other tools….

Well, that’s over with for now. The policy is public and unambiguous, and it’s not going to change.

Podhoretz explains where the pressure has been coming from:

Bernanke has chosen this new path in part as a response to political pressure. Fed opacity has led conspiracy mongers of the Left (journalist William Greider) and the Right (Ron Paul) to view it as a terrifying secret society of puppeteers pulling the world’s strings to protect the banks with no check on its power.

Now that the public sees Bernanke as someone who can be influenced by the media and politicians, the independence of the Fed has been compromised.

As happened with John Roberts, the side-effect of these events is that the media is becoming drunk with its own power.

It may not be a secret society but the media is acting like our new puppeteers.

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