Last week Rick Perry made a comment that got wide attention in mainstream media.
Mr. Perry brought the Fed directly into the campaign debate Monday night by saying it would be “almost … treasonous” for the central bank to play politics by expanding the money supply.
“If this guy prints more money between now and the election,” Mr. Perry said in Cedar Rapids Monday night, without naming Mr. Bernanke, “I don’t know what y’all would do to him in Iowa, but we—we would treat him pretty ugly down in Texas.”
Today, on Meet the Press, Peggy Noonan showed that she is completely clueless on this subject by going off on a riff about how a president has to appear “nice.” She never did address the subject.
Others, who appear to know more about monetary policy had a somewhat different take.
Thomas Gallagher, a principal and economic policy analyst at the Scowcroft Group in Washington who advises Wall Street firms, said Mr. Perry’s comments will be the first thing many investors learn about his candidacy. And the comments are “drawing a fair bit of attention.”
“Voters may not care as much, but investors, like the chattering class, expect a candidate to know what he’s talking about when he talks about the Fed,” he said. “It’s one thing to oppose what the Fed is doing, but it’s another to call it almost treasonous.”
I don’t know that treason was the right word to use but the point is that the Fed is feeding inflation which is far more apparent to those of us who buy our own groceries than most politicians. Ron Paul has been railing at the Fed for years and he is gaining allies.
Libertarian Rep. Ron Paul, who fell 152 votes short of winning the Iowa GOP’s straw poll on Saturday, has been railing against the Fed for years, and former House Speaker Newt Gingrich has joined in with an “Audit the Fed” petition. Other conservatives complain that the Fed’s policy of using monetary policy to stimulate the economy, which it indicated last week it might renew, could be sowing the seeds of inflation.
I would say we are past the “seeds” stage.
The US Treasury has been the largest buyer of new Treasury bonds. How can this be ? The Federal Reserve is printing more money that is then used to buy the debt. Is this an example of the elusive perpetual motion machine ?
Ӣ Turning government bonds into circulating money is called monetizing the national debt.
”¢ Quantitative easing is a euphemism for creating money out of thin air. In the vernacular, we call it “printing money,” even though it really has nothing to do with the U.S. Bureau of Engraving and Printing.
”¢ The way it’s supposed to work is that the Fed buys securities in the open market, paying with a government “check.” (That’s how the money is created.) The sellers deposit those checks into their banks. The banks redeploy those deposits as loans to consumers and business. The money supply expands and, in turn, so does the economy.
What effect will this have on the dollar ? The economy hasn’t exactly expanded while this has been going on.
One factor may be saving us the worst of the effects of this reckless policy. Troubles in Europe and elsewhere in the middle east have caused many investors to engage in a “flight to quality,” although I wouldn’t call the dollar “quality” right now. The Euro, however, seems to be in even worse trouble.
We’ll see what effect Perry’s comment has on his candidacy.
Short answer: No.
Long answer: “Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.” U.S. Const, Art. 3, Sec. 3.
However bad Bernanke’s conduct may have been, it is not treason.
At this rate, Perry’s “shoot from the hip” mode may have worn pretty thin by November 2012.
Perry’s comment had the right political effect. Bernanke’s Fed has been acting as enabler of Congress’s spending binge rather than as an independent agency that acts responsibly in the national interest. It’s no accident that gold is at 1800 bucks/oz. On this topic Ron Paul has been right and prescient. It’s about time other pols caught on.
“… had the right political effect …”
I don’t know. It seems to have gotten some of the GOP base interested in him.
Not sure how the cowboy schtick plays long term, or with independents.
Say this for Perry, he is unlikely to be boring.
To deliberately impoverish your own who have entrusted you with their fiscal affairs. Not Constitutional treason*, but treason none-the-less. If the feds turn the USA into Weimar, no law will protect them from the wrath of the people.
The last nobility who acted this way were guillotined.
* If there can be information warfare, then there can be fiscal warfare, so, treason it is.
“cowboy schtick”
I don’t recall Perry riding a horse, toting a six-gun, wearing a ‘ten-gallon’ hat. Perry’s no cowboy, and use of the term ‘cowboy’ as a term of disrepute and disrespect was common in the Communist lexicon. If we are to escape Socialism’s baleful effects, we must stop thinking as they do.
Perry wears boots, has been seen in a hat, and cultivates the cowboy thing.
It is not something foisted on him by his enemies.
I am indifferent to it. I care about his ideas, which so far I cannot discern.
People in Texas seem to like the cowboy image.
But on average, it is probably a vote loser in the rest of the country.
We will see how it plays.
We live in a peculiar world compared to the days when the Constitution was written. George Soros made $1 billion dollars in one day shorting the British pound.
There are stories that he is heavily invested in Brazilian oil drilling in deep water using rigs that were driven from the Gulf by Obama’s moratorium on drilling.
Who would benefit by massive inflation in the US ?
Maybe it is not so simple.
Lexington Greene,
Not sure how the cowboy schtick plays long term, or with independents.
It’s not a schtick, it’s how a male Texas politician and most of the homegrown business men dress. When a Texan wears a Western cut business suit it’s not an affectation, it’s culture. A large number of Texans still ride, hunt and have country places. Western dress is very practical once you get past the city limits and even a Western cut business suit is better in the summer than a Northeastern business suit.
It’s not just we like to think we still retain the gumption of the real people who inspired the legends that made Western dress iconic. It’s what we’ve worn all our lives. I wore cowboy boots to school until high school.
It would be a “schtick” if Perry tried to dress some other way.
The way it’s supposed to work is that the Fed buys securities in the open market, paying with a government “check.” (That’s how the money is created.) The sellers deposit those checks into their banks. The banks redeploy those deposits as loans to consumers and business. The money supply expands and, in turn, so does the economy.
The economy doesn’t expand, just the metrics used to measure the economy expand.
It’s akin to making it appear your tomatoes have grown faster by using an elastic ruler. Measuring the economy in term of dollars only makes sense if dollars have some fixed quantity. When the value unit of money is increasing without a corresponding increase in real productive capacity, it makes measuring with money pointless.
Inflation has no redeeming qualities. It only helps the political class keep a grip on power.
Schtick or no schtick, Perry has to win a lot more states than Texas. I don’t know if his style will travel. They seem to like him in South Carolina. I tend to think it will play well in the South. Elsewhere, I really don’t know. We will find out. Also, Shannon, you seem to agree with me that the cowboy look is genuinely part of Perry’s look, which he comes by honestly, not something foisted on him by the media.
The fundamental problem is that inflation salves debtors and punishes savers. Guess who the world’s biggest debtor is, and most of those who would be punished are foreigners. Those of us US citizens who saved, collateral damage. It is an ugly situation. I, for one, will breathe easier, if BO is turfed out and Bernanke is sent back to Princeton.
BTW, I don’t know if Perry has a Colt Revolver, but he does carry a Ruger .380 while he is jogging. A couple of months ago he wasted a coyote that was threatening his dog.
http://www.newschannel10.com/story/12389611/gov-perrry-shoots-coyote-during-jog
It is seldom reported that Perry said “ALMOST treason” …
To KNOW if it was treason, we’d have to know intent.
Congress asked Bernanke where the stimulus went … he refused to tell them. We know now the elite got over a trillion, and a lot of European banks got a LOT. We know Geithner is favorable toward a world currency.
I don’t remember if Bernanke was under oath when (a couple months ago?) he claimed he was NOT doing QE, but he certainly was.
Who is really being served with massive quantitative easing and zero interest rates? The mega bankers? Goldman Sachs and Morgan Stanley? Our government underwrites Fannie and Freddie but prosecutes none of those responsible. They’ve sold all of America into debtor slavery if there is a collapse and the derivative weapons of mass financial destruction blow up on us.
The majority want less spending and a balanced budget … but instead we get put on the hook for trillions. Givining powerful “banksters” a morally hazardous guarantee has almost certainly been deliberate fraud and abuse of power. Knowing full well the destruction that will follow for citizens left to pay the bill seems … “almost treasonous”.
TREASON
“1. the offense of acting to overthrow one’s government or to harm or kill its sovereign.
2. a violation of allegiance to one’s sovereign or to one’s state. not Goldman or Morgan or France
3. the betrayal of a trust or confidence; breach of faith; treachery. ” Indeed!
Worthwhile article about Perry by Andrew Ferguson:
http://www.weeklystandard.com/articles/rick-perry-annotated_590440.html
BTW: Today, Ryan announced he is not running.
If Bernanke were making a very dumb, ill-advised, counterintuitive sucker’s bet with the country’s money, and he was knowingly taking huge huge chances against dire downsides, all in the desperate hope of supporting Obama’s chances for re-election, then it may well rise to the level of treason against Perry’s America.
But wait – it would have been done in service to Obama’s America, and so it wouldn’t be treason against America, right?
As long as there is even one person who thinks that your plan for destroying America will ultimately be good for America, it can’t be treason to America, unless you’re actually thinking about vaporizing the continent, or sinking the entire country into the sea. “America”, when used as an element of a capital crime such as treason, is simply an individually-crafted abstraction, built on what each citizen wants it to be, and so there can be no true treason.
That’s the overly complicated, sensitive-man view of it all. Perry’s view, which is likely held by many others, is going to be simpler. If Bernanke trashes our economy in the pursuit of political gain, he’s a traitor.