Voters weren’t thinking about monetary policy when they voted on Tuesday, yet the Federal Reserve had a key role in the presidential election—possibly even a decisive one.
Exit poll results show that, not surprisingly, a majority of voters said the struggling economy was their top concern. Yet Republican challenger Mitt Romney’s strategy of hammering President Barack Obama for his spotty handling of the economy obviously didn’t work. In the end, voters seemed to believe the economy was gradually getting better, and Obama deserved more time to make things right.
The economy has been up and down all year, yet Obama enjoyed a subtle lift from positive economic development during the final weeks of the campaign. I tracked these changes in detail through the U.S. News Obamanometer, which analyzed nearly two dozen economic indicators on a daily basis to determine whether trends favored Romney or Obama. In mid-September, they favored Romney, largely because job numbers were weak, gas prices were high and the stock market was erratic. But by Election Day, the needle had firmly moved to Obama’s side.
So what changed? Without question, the biggest factor impacting the economy this fall was the Federal Reserve’s decision in September to extend its controversial quantitative easing program indefinitely, until the economy is back on track for good. This type of monetary easing is an arcane strategy that doesn’t directly impact consumers. But it can have a powerful effect on the economy that filters through to ordinary people in many important ways. And the biggest advocate of quantitative easing has been Fed Chairman Ben Bernanke.
Read More at usnews.com . By Rick Newman.
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