Rick Perry’s Ugly Words

08/17/2011 11:26 am EST

Focus: MARKETS

Igor Greenwald

Chief Investment Strategist, MLP Profits

The leading Republican contender’s ill-tempered attack on Fed Chairman Ben Bernanke has been years in the making, writes MoneyShow.com senior editor Igor Greenwald.

Until this week, the Republican presidential campaign has been blessedly free of economic arguments, besides the general longing for jobs and claims they would be less scarce than this without the red tape manufactured by Democrats:

  • The one candidate who’d bothered drafting an economic “plan” got laughed out of the race not long after suggesting that tax cuts would get the economy growing 5%.
  • Another hopeful, Tea Party favorite and Iowa straw-poll winner Rep. Michele Bachmann, opposed raising the debt ceiling like the rest, and is an avowed foe of entitlements.
  • Rep. Ron Paul’s campaign is driven by his economic views, of course, and he would wrest control of the economy from the Federal Reserve and return the country to the gold standard.
  • Former Massachusetts Governor Mitt Romney is running on his business acumen, though it mostly entailed squeezing costs—and jobs—from bought-out companies.

But none of them had managed to tap into the deep vein of resentment running through the electorate this year, and in particular the social conservatives who tend to dominate Republican primaries. That is, until Texas Governor and new frontrunner Rick Perry launched a heavy-handed assault on Federal Reserve Chairman Ben Bernanke.

Asked his opinion of Bernanke and Fed policies, Perry offered this:

“If this guy prints more money between now and the election, I don’t know what you would do with him. 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."

Leave aside the fact that whether Bernanke is in fact “printing money” is debatable—though it sounds vaguely more nefarious than buying assets. Leave aside the fact that Perry’s logic assumes that additional asset buying would in fact get the economy going enough to sway the electorate, a possibility he seems to resent on partisan grounds.

Here we have a leading presidential contender using language about the head of the central bank that would get him suspended for bullying from most schools if he were discussing a classmate.

The White House is not alone in crying foul—much of the GOP establishment has also voiced its disapproval. But Perry is not retreating an inch—he is in fact standing by his remarks.

This is not a gaffe by a political novice. It’s a calculated tack by a canny populist undefeated in a 26-year political career, thanks to a keen nose for determining which way the wind is blowing.

And for the Fed, the wind is blowing in from a garbage dump, because monetary policy in a time of economic crisis is a complicated undertaking that’s easy to lampoon as an elitist effort to separate hard-working Joes from their hard-earned money.

Never mind that the hyperinflation prophesied by the Fed’s critics has not only failed to take root, but is in fact not even on the horizon. Never mind that the 2008-2009 downturn proved much deeper than anyone expected at the time, and the country is much closer to the brink of a depression that was only dodged thanks to the “bailouts” the Fed’s critics deride.

What’s notable is that the presumptive Republican frontrunner has just accused the Fed Chairman of treason, hinting that he deserves some “ugly” frontier justice for good measure, and is not only not backing down off that limb but is using the remarks to cement his status.

In an era of economic decline, Perry has realized that the winning formula is finding a scapegoat for the pain voters feel—preferably a scapegoat with whom it’s hard to identify. This tactic is as least 75 years old, and hasn’t grown prettier with age.

But it’s the logical consequence of popular efforts to vilify the Fed, none more popular with this famous Youtube video, now at 4.8 million views and counting.

It’s the consequence of news anchors and pundits adopting this video’s reference to The Bernank as a badge of disrespect. It’s a consequence of a misguided campaign, not just on the right but on the left as well, to either to abandon monetary policy entirely or to entrust it to the politicians—the same ones who made such a hash of things in the debt-ceiling debate.

Perhaps they’d appoint a supercommittee to guide interest rates; it’s all Congress can manage these days, it seems. The thought of entrusting monetary policy to people running for elections every two years should terrify anyone truly concerned about sound money.

We live in a complicated world, and Congress regularly proves that it’s a world it’s largely unprepared for. Monetary policy, like jurisprudence and neurosurgery, is a complicated craft best left to experts.

Treat them “ugly,” and it won’t take long for the ugliness to boomerang.

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