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Christie: Fed partly to blame for U.S. income inequality
May 12, 2015 / 2:07 PM / 3 years ago

Christie: Fed partly to blame for U.S. income inequality

WASHINGTON (Reuters) - In unusual remarks for a moderate Republican who may run for president, New Jersey Governor Chris Christie said on Tuesday the Federal Reserve deserved part of the blame for a widening gulf between the rich and the poor.

A man looks at his phone as he walks out of the courthouse past a man arranging his bags in Los Angeles, California July 8, 2014. REUTERS/Lucy Nicholson

Some investors find anti-Fed rhetoric unsettling, fearing politicians might try to curb the U.S. central bank’s independence.

The Obama administration’s regulatory policies, along with the Fed’s monetary policies, have stymied economic growth by allowing financial assets to grow substantially in value while wages have stagnated, Christie said.

“The Fed’s easy money policies and the president’s anti-growth policies have made the rich even richer and made our middle class work longer and harder for less pay and less promise for their future,” Christie said.

Christie made his comments during an appearance in New Hampshire, which holds one of the party’s first presidential nominating contests. Though Christie has not formally launched a White House campaign, his remarks revealed the basis of his economic plan should he seek the presidency.

Christie said he would create conditions for the economy to grow at a brisk annual rate of 4 percent through policy changes such as overhauling the tax code and rolling back what he said were burdensome regulations put in place by President Barack Obama.

Christie said he would lower tax rates for all Americans, including eliminating payroll taxes for those over 62 and under 21. He also pledged to transition corporations to a system in which they pay taxes in the country in which profits are generated.

Obama, a two-term Democrat, cannot seek another term as president.

Matthew Green, a politics professor at Catholic University in Washington, said Christie’s speech appeared to be an effort to distinguish himself from other candidates and to appeal to members of the Republican conservative base who are critical of the Fed.

The sharpest criticism of the Federal Reserve typically comes from the Tea Party and libertarian wings of the Republican party, including from Kentucky Senator Rand Paul, who in April said he is seeking the presidency and favors opening up the Fed’s policy decisions to congressional audits.

Congressional Republicans have criticized the size and scope of the central bank’s $3 trillion bond-buying program that it put in place to spur economic growth following the 2007-2009 recession. They have also taken aim at the Fed for keeping interest rates ultra low, which critics say will spur inflation and create a dangerous economic bubble.

In a tense exchange on Capitol Hill last year, Jeb Hensarling, the conservative chairman of a U.S. House panel on financial services, railed against the Fed’s wide discretion over the economy and pressed for a more “rules-based” approach to monetary policy.

The Fed also surfaced as a 2012 campaign issue when former Republican presidential candidate Rick Perry unsettled Wall Street by suggesting then-Federal Reserve Chairman Ben Bernanke’s decision to “print money” was “treasonous.”

Criticism of the Fed from moderate Republicans has been less common.

“It is possible that Chris Christie is trying to appeal in some way to some of those Rand Paul supporters in the party, trying to distinguish himself,” Green said.

Christie was considered a Republican 2016 favorite until the “Bridgegate” scandal in which transportation and state officials were alleged to have engineered a traffic jam as political punishment.

Recent opinion polls show him lagging other Republicans, including former Florida Governor Jeb Bush and Senator Marco Rubio of Florida.

Reporting by Lisa Lambert and Amanda Becker; Additional reporting by Luciana Lopez and Hillary Russ in New York and Howard Schneider in Washington; Editing by Howard Goller and James Dalgleish

Our Standards:The Thomson Reuters Trust Principles.
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