When Republican presidential candidate Rick Perry uttered what many heard as a physical threat against Federal Reserve Chair Ben Bernanke for the allegedly “treasonous” act of easing the nation’s money supply, did he realize that he was actually admitting that might be a good idea? Matthew Yglesias at Think Progress points out what most political reporters covering Perry’s outburst missed, namely that monetary easing — printing money and injecting it into the economy by purchasing assets – would be good for employment:
I’ve been tracking hard moneyism for a couple of years now, and the main thing about it is that most of its exponents claim that monetary stimulus would be bad for America. Since they’re mistaken about this, the arguments they offer are often confused, confusing, or somehow nonsensical. But the basic premise is always that monetary easing will lead to some bad result. That’s most emphatically not what Perry said. What Perry said was that he was worried that Ben Bernanke would “play politics” by engaging in monetary easing before Election Day. Which doesn’t make much sense as a position unless Perry agrees with me that monetary easing would boost growth. If monetary easing hurt the economy, then it would hurt Obama. But Perry’s concern is that monetary easing would work well, and he was putting Bernanke on notice to avoid it because he wants to win the election. That’s a very different view.
Now maybe Perry didn’t mean that. But it’s what he said. And given all the attention that his remarks have prompted, I wish some of the reporters covering him would try to pin him down on this point. If monetary easing would help Obama, doesn’t that mean monetary easing would boost growth? And if it would boost growth, shouldn’t we be doing it?
Perry is implying that Bernanke cut a deal with Obama in exchange for another term as Fed Chairman to boost the president’s reelection — or maybe just that he’s committed to the dual mandate of the Fed, which includes boosting employment. Either way, Perry implicitly acknowledges that Bernanke’s loose money might be helping the economy — and that, because this could help the incumbent president, he must be a traitor to his country.