Texas Governor Rick Perry’s considered perspective on Fed chairman Ben Bernanke at a time of national economic crisis:
If this guy prints more money between now and the election, I don’t know what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous, or treasonous, in my opinion.
It isn’t so much a “threat” as a revealingly air-headed thing to say. Still, FT Alphaville is confused. Let’s do this by the book…
Article III of the United States Constitution provides that:
Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort
Surely most foreign powers who hold dollar assets would have had anything but “aid and comfort” from the Fed’s “money-printing”?
(Assuming it was money-printing. It wasn’t. In fact the whole issue now is that the Fed’s liquidity isn’t going anywhere, though good luck explaining that to any US presidential candidate.)
Although naturally this isn’t really about the Constitution. It’s much more about the amazing – and as Ezra Klein says, under-discussed – conservative insistence that there’s no tight money in America, and that monetary (rather than fiscal) stimulus is the problem.
It’s already pretty weird given the legacy of Milton Friedman, although there’s even more to it than that, perhaps. We’re talking about seemingly intractable dysfunction and lack of discourse between institutions here. Perry’s simply been the first to cross the line into using the T-word, but the playground insults aren’t new.
Actually, there’s long been a rich ideological vein of Fed-bashing for politicians to mine within the modern Republican party, but this is getting so bad, you almost have to go further back into US history.
You might compare the current level of furore to President Andrew Jackson’s “Bank War” against the Second Bank of the United States during the early 1830s. Jackson was a Democrat but he sure hated central bank monopolies. It wasn’t exactly US politics’ finest hour, and indeed the Second Bank’s destruction ironically led to a massive speculative lending boom (ergo, massive expansion to the money supply) only to end in a rapid deflationary crash: the Panic of 1837. It’s a deliberately provocative analogy — this was back when the US was a dodgy emerging market with loads of political risk — and it’s not as if the support base for the likes of Perry will be around forever.
Still. A bit worrying as the economy tanks all over again, no?