The tools of monetary policy are not themselves inherently political. The Federal Reserve can raise or lower the interest rates charged to member banks; this, in turn, results in the member banks raising or lowering the interest rates that they charge their customers. This is one of the most common tools of monetary policy, and the meetings of the Federal Reserve Board are now watched carefully by members of mainstream as well as business media. Possible pronouncements are eagerly anticipated and business decisions and the stock market both react both to rumors as well as actual decisions.
However, the situation is not as simple as merely adjusting the money supply. Instead, politicians and the bureaucrats making these decisions have their own political agendas and use monetary policies as ways of furthering those agendas. For liberals, monetary policy is a way to redistribute wealth in the economy, moving it from the "haves" to the "have-nots". Liberals favor low interest rates which make money cheaper (easy) and which enable low-income families to purchase (among other things) homes which offer the first significant step toward economic prosperity.
Conservatives, on the other hand, view monetary policy as a necessary part of the creation of capital, but generally favor intervention as a way to keep the economy stable. Intervention, according to Hayek and others, cannot be done well because there is never perfect information available. Tinkering, therefore, results in unnatural swings in the money supply which cause an irrational attraction (or flight) of money both internally and abroad. These conservatives favor a monetary policy which results in as little intervention as possible and which leaves issues such as interest rates and other economic factors in the market arena.
The conservative approach can lead to situations which can be confusing to those not familiar with basic economic principles, and to seeming c...