The Wall Street Journal Editorial Page Has Shot Itself in the Head Department
CBPP Against Mitt Romney and Nick Eberstadt

Yet Another Sufficient Reason to Vote Against Mitt Romney: His Bizarre Attack on the Fed

Once again: Where are his economic briefers? Where are his economic advisors?

Matthew O'Brien

Mitt Romney's Bizarre Attack on the Fed: How much can you get wrong in just three sentences? A whole lot….

Barack Obama is at it again -- spending your tax dollars to bail out his failed economic plan. It's more of the same from an out-of-touch president with no plan to fix our economy and put Americans back to work. This past week, the Federal Reserve announced it would print $40 billion every month to prop up this administration's jobless recovery -- that's money we can't afford for jobs we will never see….

[T]he Fed did announce that it would buy $40 billion of mortgage bonds a month… but the rest is nonsense. First, Barack Obama had nothing to do with the Fed's decision to do QE3…. Second, the Fed isn't spending tax dollars. As Team Romney acknowledges two sentences later, the Fed is printing money…. Third, this isn't a bailout. It's not even clear who is supposedly getting "bailed out". Is it the government? We can already borrow for basically nothing for 20 years. Is it the banks? The Fed is just swapping one interest-bearing asset for another when it buys long-term bonds and gives the banks more reserves. Fourth, QE3 isn't more of the same…. That's why markets are excited.

Fifth, President Obama actually does have a plan to get the economy moving again…. [I]t died where all good ideas go to die….Republicans on Capitol Hill killed it, and then they turned around and blamed Obama for the weak economy. It was a neat political trick, but it meant we didn't get… 2.1 million additional jobs….

Sixth, there's no way we can't afford printing money…. [T]he Fed expects to make money from its bond-buying….

That's a lot of errors crammed into 73 words. But there's a bigger error here. That's Romney's approach to monetary policy. He's repudiating a generation of conservative economic thought…. Milton Friedman…. Economists from both sides of the aisle agreed that the Fed rather than Congress should manage the business cycle, unless short-term interest rates were stuck at zero…. But that is an idea non grata among conservatives nowadays…. Bernanke himself is a Republican… hasn't done anything that Milton Friedman wouldn't have approved of.