June 21, 2016

Brown Opening Statement at Hearing on Semiannual Monetary Policy Report

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement, as prepared for delivery, at today’s hearing on “The Semiannual Monetary Policy Report to the Congress.” 

Brown’s remarks, as prepared for delivery, follow.

Senator Sherrod Brown - Opening Statement:
Hearing on “The Semiannual Monetary Policy Report to the Congress”
June 21, 2016

Thank you, Chairman Shelby.

Chair Yellen, welcome back to the Committee.

Since your last appearance, the economy has made only modest gains.  Inflation remains low and job creation seems to have slowed.  The economies of our trading partners are struggling.  Uncertainty -- most notably with the possibility of Britain’s exit from the European Union – remains high.

In the face of these headwinds, you would think politicians here at home would do everything they could to promote our economy.

Instead, many of them seem intent on doing just the opposite.  My colleagues on the other side of the aisle are failing to invest in infrastructure or research and development or education and training -- the very building blocks of our economic success.

And if that were not enough, they are trying their level best to undermine the safeguards that dampened the economic crisis and were erected to prevent the next one.

They would like to repeal the Dodd-Frank Act and return our country to the casino capitalism that caused so much ruin for families and communities across the country.

And they are trying to politicize and undermine the Federal Reserve, despite the key actions it has taken to help the recovery.  Congress raided its reserves and reduced dividend payments in order to pay for a transportation bill.  Many of my colleagues are trying to insert Congress into monetary policy decisions.

This committee has yet to even hold a hearing on the two nominees to the Board of Governors of the Federal Reserve.  And bad legislative ideas continue to multiply.

The presumptive nominee of the Republican Party is a factory of bad ideas.  Moody’s Analytics recently released a report that states that if adopted, his economic proposals would leave our economy, “significantly weaker.”  

He has suggested he would replace the current Fed chair based on imagined partisan political considerations.  That is a bad idea.  You might argue someone is failing to pursue the right course on monetary or regulatory policy, but partisan labels should never be part of the discourse.

The presumptive nominee has suggested he would simply renegotiate or renege on our debts, comfortable in the belief that the United States can never default “because you print the money.”  In his opinion, he understands “debt better than probably anybody.”

He also thinks, along with the runner up for the Republican nomination, that our country should return to the gold standard. 

When Ron Paul was promoting this idea a few years ago, the Wall Street Journal reported on a poll of a panel of economists on whether a return to the gold standard would improve price stability and employment.  The response was split -- between those who disagreed and those who disagreed strongly.  Not one person thought it would help.

So we don’t know if it is just a bad idea, or a really bad idea.  But as one University of Chicago professor put it, “Love of the [gold standard] implies macroeconomic illiteracy.”

If your own very good brain is your top consultant, I suppose the unanimous opinion of a diverse group of economists does not count for much.

But for those of us in the evidence-based world, the prospect of this nominee trading imagined for real authority gives added significance to what we do in Congress.

That is true in general, and it is particularly true with maintaining the independence of the Federal Reserve and the other regulators of the financial services industry.

Chair Yellen, I think you have shown your commitment to an independent, data driven Federal Reserve.  I commend you for that, and hope we will all work together to maintain it.

Thank you.