The Fed's new boss: The dove v the desperadoes OTHER things being equal, the news that Barack Obama had chosen Janet Yellen to succeed Ben Bernanke as chairman of the Federal Reserve bodes well for the American economy. As the Fed's current vice-chairman, she implies continuity in monetary policy. Her faith in the central bank's unconventional policies, and her determination to keep monetary conditions loose, should support growth. But other things are not equal. America's government is still shut down, and the country is marching closer to spending cuts worth 4% of GDP or even a default on its debt. Ms Yellen's nomination, announced on October 9th, was thus overshadowed by the brinkmanship on Capitol Hill. Unfortunately, that is a taste of what lies ahead for America's economy. Aside from Ms Yellen's appointment, those inclined to optimism can take some support from the figures. From rising house prices to stronger consumer balance-sheets, the ingredients are in place for the recovery to strengthen. The IMF's latest forecasts, published on October 8th, say that America's growth rate will accelerate from 1.6% this year to 2.6% in 2014. Recent history also offers some grounds for taking a rosy view of America's prospects. The last government shutdown, in 1996, did not undermine the era's fast growth and low unemployment. The 2011 debt-ceiling fight was serious, but not catastrophic. Share prices fell, as did consumer confidence. But there was no financial collapse. Booming emerging economies propped up global growth. And although the date on which the Treasury effectively runs out of borrowing authority, October 17th, is approaching fast, reasonable people believe that the politicians will find a solution - because the consequences of failing to would be so catastrophic. But those who have created this impasse are not, unfortunately, reasonable people. Even if the most catastrophic outcome - a default on federal debt - is avoided, the consequences of this fiscal insanity are likely to be bigger than many now expect, for two reasons. First, the fanaticism of some Republicans suggests that the stand-off may not end until it does serious harm. A mere shutdown has not proved painful enough to elicit compromise. Breaking the deadlock is likely to demand something more dramatic - whether a slump in share prices, or the fury of elderly constituents when their pension payments fail to arrive. By then the economic damage will be considerable. Second, even if cooler heads prevail earlier, any budget compromise is likely to be followed by fiscal decisions that will hurt America's growth. Mr Obama has promised to negotiate with Republicans on further budget cuts once they see fit to reopen the government and raise the debt ceiling. Republicans have made it clear that they will not raise that ceiling by much. And judging by the pattern of the past two years, any subsequent negotiations are likely to lead to blunt spending cuts that hit growth today rather than to the long-term reforms to tax policy and entitlements that America needs. The antipathy between the two sides makes a sensible "Grand Bargain" budget deal hard to imagine. Far more likely is serial brinkmanship punctuated by short-term cuts - both of which bode ill for growth. The danger of mixed signals Against this backdrop, it seems all too likely that America's growth will, once again, fail to accelerate. It also means that responsibility for supporting the recovery will remain, disproportionately, with the Fed. Ms Yellen may be forced to consider an expansion, rather than a contraction, of its bond buying. With some of her fellow policymakers at the Fed raring to get started on tapering (see article), she may struggle to achieve consensus. At a time of great fiscal uncertainty, America can ill afford mixed signals from its central bank. Even if Ms Yellen manages such tensions adroitly, there are limits to what the Fed can do. Central banks can help prop up growth in the face of spending cuts, as they have been doing in much of the rich world in recent years. But they cannot protect an economy against destructive politicians. If America's recovery is to continue, let alone accelerate, congressional Republicans must come to their senses, and fast.