So it feels awkward because people are piling on Perry for all sorts of reasons, mostly political. However, he made what I feel is an open assault on the core economic institution in America.
An assault, that I should add, was very different from Ron Paul. Ron Paul has a philosophical and theoretical problem with the Fed. That is definitely not what Rick Perry suggested. Matt Yglesias says it well
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.
Couched in terms of “not wanting to play politics with the Fed” Perry blatantly and publicly played politics with the Fed. He essentially warned them that if they did their jobs correctly, a man who might very well be their new boss will be none to pleased.
And, again, its not just that he did this. Its that he did it publicly. He did it in a way that anyone who knows monetary policy would be unmistaken about his point. He did it in front of cameras and he has refused to back down.
That sets the unacceptable precedent that it is okay for strong Presidential contenders to bully the Federal Reserve. We just can’t let this go.