Conservative Media Blame Unrest In Egypt On Ben Bernanke
Published
Following the outbreak of protest against the authoritarian regime of Egyptian President Hosni Mubarak, right-wing media lashed out against the Fed's quantitative easing -- a policy aimed at keeping long-term interests rates low and pumping money into the economy -- as the impetus to the protests.
In a January 30 Big Government blog post, Chriss W. Street claimed that the second round of quantitative easing “quickly drove up commodity food prices,” having a “devastating” impact on “over half the world” and sending “the middle East into flames.” He added: “With the price of a barrel of oil hitting $100 dollars and food prices accelerating, those flames will spread.”
Yesterday Rush Limbaugh touted Street's post, and told listeners they would “be wise to consider the possibility that part of what's going on in Egypt is because the price of food is going up and nobody in Egypt can do anything about it because the source of the problem is here.”
Fox Nation also jumped on the attack by linking to Larry Kudlow's CNBC.com article claiming “U.S. monetary policy has to shoulder at least some of the blame” for the unrest and posting the headline, “Egyptian Uprising Blamed on Bernanke.”
Of course, blaming quantitative easing and Bernanke for the turmoil in Egypt is disingenuous.
Nobel Laureate Paul Krugman directly responded to the claim that civil unrest is being caused by Bernanke, explaining that rising food prices are “straightforward supply and demand.” He further wrote:
[I]f you look at the FAO reports it becomes clear that the key thing for cereals prices is that production is down in advanced countries, largely owing to terrible weather. And yes, it's likely that climate change has played a role.
Oh, and what about Ben Bernanke? Well, to the extent that emerging markets are insisting on a fixed exchange rate against the dollar in the face of obvious overvaluation, that contributes to the boom and hence to demand. But I don't think it's reasonable to demand that the Fed stop fighting US unemployment in order to keep Chinese currency manipulation from leading to cotton hoarding by Chinese farmers.
Krugman also noted that “Chinese demand is driving the market,” and that the commodity price spike reflects the current “inflationary boom” in emerging economies.
There are plenty of other reasons why commodity prices have risen and there are plenty of other reasons aside from food prices why the Egyptian people are protesting against their government -- Egypt is plagued by rampant corruption, police state rule and a widening gap between the country's rich and poor.
But to right-wing media, the fact that any semblance of a connection can be established between quantitative easing and the political turmoil is cause to pin the crisis on Bernanke and the Fed.