During a CNN Town Hall event in South Carolina last night, Sen. Marco Rubio (R-Nickelodeon) took a question from a voter who was very disappointed in what the Federal Reserve has been doing for the last few years.
Here's the thrust of the question from "Douglas"...
Households incomes are down, workplace participation is down, the stock market seems to be trending down and the Fed has been stimulating our economy for the past decade and this is what we have to show for it. Could you prioritize three actions that you believe we must take as a nation to turn this economic ship around?
It was an "Alley-Oop" question, a chance for Rubio to throw out a handful of halfway logical economic ideas from a possible Rubio administration. A chance to shed the goofy political robot label and use some newly-memorized, maybe even smarter word jumbles.
Instead, Rubio said this...
Well first of all, let me just address the Fed issue, Douglas. That's not the Fed's job to stimulate the economy. The Fed is a central bank, it is not some sort of overlord of the economy. They're not some sort of special Jedi Counsel that can decide the best things for us.
While the Senator is indeed correct that Yoda and Obi-Wan are not members of the FOMC, he might want to fact check himself on the notion of "That's not the Fed's job to stimulate the economy."
In yet another gorgeous moment in this truck stop burlesque show of an election cycle, a "major" candidate is once again playing against the facts of economics and towards partisan rhetoric.
Tea Partiers love to hate the Fed because it's part of the government and will not "commit to a strong dollar," while Bernie and the Warrenistas enjoy the narrative that the Fed lives to serve only Wall Street banks by creating dark magic pools of soft money. Knowing this, Rubio either willfully misrepresented his understanding of the Fed or doesn't really know what the Fed actually does.
For those following along at home, the Fed's mandates are to control inflation and grow employment. A simple thought Venn diagram shows that economic stimulation is very much the job of the Fed. While one assumes that Ben Bernanke would love a reality in which it wasn't the case, this is simply a fact.
But Marco wasn't even done.
The Fed is a central bank. Their job is provide stable currency and I believe they should operate on a rules-based system. They would have a very simple rule that determines when interest rates go up and when interest rates go down.
Today, it's like a magic eight ball. We don't know when they're going to raise interest and it creates an incredible amount of uncertainty in the marketplace.
Marco Rubio finds economics a little too complicated, and he knows you do too. Why let all these non-Jedi nerds study and dither when we could just have like, unemployment levels and inflation targets? Or better yet, why don't we just peg interest rates to which Kardashian sister is having the best quarter? If it's Kendall of Khloe, we go up 25 bps, but if it's Kim or Kylie, we explore the dark world of negative rates.
But before we go and make that kind of decision, we should ask noted economist Marco Rubio if it's politically advantageous to say whether or not it's the Fed's job to keep up with the Kardashians.