The Federal Reserve announced a new round of quantitative easing, known as QE3, to boost economic growth and promote employment. The stock markets and investors reacted very favorably, building on an already strong run over the last two months. The new round of quantitative easing will be executed by the Fed through expanding its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month. It will essentially pump liquidity into the market and boost asset prices, thereby creating a temporary wealth effect.
Thanks to rising stock markets, a seemingly improving economy and a general feeling of increased confidence in the future, people feel wealthier and less likely to want to change the status quo. With just a few weeks to the election in which the economy and jobs are the biggest issue on voters minds, QE3 may just provide the catalyst that gives President Obama the edge when it comes to getting re-elected.
Clearly the Republicans are aware of this and were scathing in their criticism of the Federal Reserve and its chairman. Republican presidential nominee Mitt Romney called the Federal Reserve’s third round of quantitative easing another “bailout” for President Barack Obama’s economy, while other GOP members wondered whether Fed Chairman Ben Bernanke was doing the administration’s bidding by calling for the jolt to the economy. They also questioned the timing of the Fed’s action, just before the November presidential election.
Romney campaign policy director Lanhee Chen said in a press release: “The Federal Reserve’s announcement of a third round of quantitative easing is further confirmation that President Obama’s policies have not worked. After four years of stagnant growth, falling incomes, rising costs and persistently high unemployment, the American economy doesn’t need more artificial and ineffective measures. We should be creating wealth, not printing dollars.”
Fed Chairman Bernanke though sees QE3 as a much needed measure to boost a flailing economy and tackle stubbornly high unemployment, rather than as another “Obama stimulus” political move. He reiterated that, “monetary policy is no panacea for the problems currently faced by the US economy….a much bigger issue right now is the fiscal cliff, which adds to the already high uncertainty about the economic outlook. As a result, businesses are delaying investment expenditures and are more cautious about hiring. Accordingly, today’s monetary policy decision is unlikely to have any perceptible impact on the labor market and the US economy in general“
6 thoughts on “Bernanke’s QE3 Just Won Obama The Election”
The intention creation of the fiscal cliff by the Republicans (called starving the beast), the intentional deadlock in congress, harrassment and slowing of the US government attempt to help the economy as well as the lastest comments by Rommney and his neo-cons show that they would rather see the econony fail inorder to improve their political position.
They not only want to see the federal government (USA) fail, but are actively trying to make it fail.
The Confederacy has risen again.
Interesting comments. While I agree that QE3 will help Obama more than Romney, the impacts of QE3 (other than the immediate stock market bounce) will take a while to play through. In fact if you looked at the Fed commentary, they think things are not that rosy and as a medium to long term investor that is not a good thing. Also, this announcement would make a lot of retirees very unhappy as they see little return on their retirement savings. And they are a big voting block.
Bernanke is doing the bidding for Obama. It was Obama, Barney Frank, and Christopher Dodd who pushed for the policies that led to the 2008 collapse. Of course, that got Obama elected. And, now, Chicago thug Obama is setting himself up for reelection by getting Bernanke to do QE3. What the article does not tell us is that it is also setting us up for massive inflation. Three rounds of arbitrary printing of money, to pump into the economy, will result in devaluation of the dollar. That will make every doallr we have worth 1/2 or less of what its value was prior to the QE1, 2, and 3 idiocy. And it will cause huge inflation. The devaluation and inflation at the same time will push our economy over the cliff that Bernanke claims he is trying to keep us from going over. We are headed for a mess that will make Greece look like child’s play.
Ahhh, the sweet smell of revisionism.
I guess you were sleeping from 2000 to 2007.
Say What??? I doubt this will have any impact as Obama was going to win anyway. Romney is a joke like the rest of the right wing conservatives who want to take America back to the 60’s.
I agree. Romney is winning the election for Obama.
He’s waffled too much over the years on most issues (its hard to escape video in the 21st century). He’s weak on foreign policy. Out of touch with the middle class, etc. He is the lesser of two evils between the two, if you’re in the GOP. Voters won’t be voting for Romney, they will be voting against Obama. He’s simply a very weak candidate.
Reminds me of Bush v Kerry in 2004. Everyone knew Bush was going to win again, but we kept hoping he wouldn’t.