Cyrillic Partners

Federal Reserve Chairman Ben Bernanke told Congress today that he was in favor of President Bush’s Economic stimulus package.

From the NYT Story: Mr. Bernanke said that whatever action Congress takes should be designed as a quick jolt to revive a languishing economy, and that measures like spending on infrastructure or long-term tax relief, which might take months or years to be felt, would be counterproductive.

Sound familiar? It’s the Iraq “surge” plan in action again! Many were skeptical that a short, sharp shock would do any good in Iraq, or that a “temporary” troop increase would be that. The plan seems to have been borne out though after a year. Perhaps the fiscal stimulus package will be effective too.

It’s unusual for a Federal Reserve chairman to come out for or against a fiscal policy. This is one of the few times Bernanke has gotten overtly political during his time as Chairman.

There are, of course, good reasons to give the economy a boost through fiscal spending measures. But Bernanke has explicitly put the kibosh on anything that stinks of long-term spending—a thinly veiled dig at Democratic social programs.

A short term push is also good for Republicans, who are looking at less than a year left in the oval office and may have a difficult time regaining it.

Is this the beginning of a more politically motivated Fed Chairman?

[Image, depicting the surging response to economic stimulus, thanks to OCW.MIT.EDU]

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