I agree with Paul Krugman that powerful Republicans are intimidating the Federal Reserve into inaction to deter them from doing anything that might improve economic conditions and help Obama’s reelection. I also agree with him that part of the problem is internal dissent within the Federal Reserve itself. Assuming that Obama somehow weathers the storm and wins reelection anyway, I wonder how things will change in his second term. A strategy of complete obstruction can work for a single term, but can it work for eight consecutive years? Deliberately undermining the economy makes less sense when the president whose career you are attacking is not up for reelection. If the American people ratify Obama’s performance in 2012, a lot of the stuff the Republicans have been doing won’t make as much sense anymore. What’s the point of trying to delegitimize a second-term president? Didn’t the Democrats stop talking about Bush v. Gore in 2005?
A lot of things won’t change, but some of them will.