Very Few Things Upset Me...

but this one really had me irked, and I feel compelled to write about it. 

Sen. Mitch McConnell, Rep. John Boehner, Sen. Jon Kyl, Rep. Eric Cantor

These are the 4 lawmakers who, last week, wrote a letter to Fed President Ben Bernanke. In the letter (the letter can be found here) they try to suggest (read: pressure) Bernanke into not taking any further monetary easing measures. In a nutshell, I feel that this letter is an absolute disgrace which borders on illegal. 

A little background for those of you who don't know - the Federal Reserve is a separate and distinct entity from the Federal government. Most countries around the world have similar entity, but not all are separate from the government. It was created to promote 2 things - control inflation, and promote employment. Now, if you really think about it, that's a tough job. It's like being told you have to navigate a ship while also plugging holes in its hull at the same time. 

Anyway, the key to all this is that the Federal Reserve was purposely created to be separate from the government for a specific reason. Similar to the principle of church and state, the activities of the Federal Reserve are free from the influence of politicians. Leaders of the Fed are appointed, not elected, and in the case of Bernanke, he does not answer to any government official (granted he is appointed by politicians, but the interaction ends there). 

This is the reason why this letter upsets me. Having the separation between the Fed and government is sacrosanct. It is essential in ensuring that monetary policy is done in the best interest of the economy and the American people. Do they always get it right? No. But that's not the point. The point is that they should be able to whatever they please as long as its consistent with their charter. The letter from these politicians comes seriously close to violating these principles. Even if the letter is merely political posturing, it shouldn't happen, ever, but especially when you have a government that is as dysfunctional as the current one.

Ever since the debt ceiling debacle, I've felt that the current government has lost sight of the greater good for its constituents and has become overly rooted in its ideologies (both democrats and republicans). However, taking this even further by trying to involve the Fed (even in the case of a token political gesture) is going much too far.

What are your thoughts?

Questions/Comments/Feedback?

Please don't hesitate to let me know of questions or comments you have about this post or any other. If you want me to write about something else investing related, do let me know!

The Standard Disclaimer

Everything I've written above is my opinion and my opinion only. Please do not take it as fact. Perform all necessary research and analysis prior to acting on anything I've said above. This includes consulting with a financial advisor.