2012 Presidential Election
Tue August 16, 2011
Perry Stirs Firestorm By Accusing Fed Chair Bernanke Of Near Treason
Originally published on Wed August 24, 2011 9:56 am
Texas Gov. Rick Perry only officially entered the race for the Republican presidential nomination Saturday and already by Tuesday he was raising plenty of eyebrows with his warning that he would consider it an act of treason if Federal Reserve Chairman Ben Bernanke took further extraordinary steps to boost the sagging economy.
Perry made his controversial remarks Monday as he campaigned in Iowa. He was asked his opinion of the Federal Reserve.
At first, Perry said he would "take a pass" on the question but he didn't:
"If this guy prints more money between now and the election, I don't know what you all would do to him in Iowa, but we would treat him pretty ugly down in Texas. I mean, printing more money to play politics at this particular time in America history, is almost treacherous, treasonous in my view."
Perry was apparently alluding to the Fed's practice under Bernanke of purchasing Treasury bonds held by banks as a way of providing more cash that banks could in turn lend, so-called quantitative easing.
The Texas governor's remarks were captured on video and made widely available by Think Progress, the liberal group.
Perry's comment was remarkable for a few reasons. First, the Fed prides itself on not playing politics, on its independence from the political process. Only the belief that it doesn't put its thumb on the scale for one political party or the other is what allows the Fed to keep any semblance of credibility in the financial markets.
Any true Fed watcher knows, the central bank's officials actually rather prefer to use their monetary policy levers as little as possible during election seasons to lessen suspicions that its trying to affect an election result.
Few things please the Fed's central bankers more than being able to indicate, as they did last week, that they plan to leave key interest rates in place through a presidential election.
Second, treason is the kind of charge that may get thrown around by some Tea Party activists like confetti but it's hard to recall the last major party presidential candidate in the running for frontrunner status who accused a major federal official of virtually committing treason for performing official duties.
In a political climate where violence by unhinged individuals isn't unknown, accusing Bernanke of near treason if he orders another round of quantitative isn't exactly the most responsible tack for a would-be president to take.
White House spokesman Jay Carney responded to a reporter's questions about Perry's statement by saying:
"When you're running for president you have to think about what you're saying because your words have greater impact. We take the independence of the Federal Reserve quite seriously."
Even conservatives who served in President George W. Bush's White House were taking Perry to task. On Twitter, Tony Fratto, a Bush White House spokesman, wrote:
Gov. Perry's comments about Chmn. Bernanke are inappropriate and unpresidential.
It's well known that Bush's people aren't fans of Perry, to put it lightly. And on Tuesday, they were giving him a taste of what he can expect if he opens himself up to their criticisms with other controversial remarks.
Karl Rove, Bush's key political strategist, told Fox News:
"You don't accuse the chairman of the Federal Reserve of being a traitor to his country. Of being guilty of treason. And, suggesting that we treat him pretty ugly in Texas. You know, that is not, again a presidential statement.
"If Rick Perry were to be elected president, he'd be saddled with Ben Bernanke who has a term. He's an independent chairman of the Federal Reserve board, appointed by president and confirmed by Congress and serves for a term and the president couldn't even ask him to resign. So, this is, I hope this is not the first of sort of over- the-top statements."
Rob Blackwell, Washington bureau chief for American Banker, took Perry to task in an opinion piece. An excerpt:
I'm not sure what's worse—that Perry made the comment, or that the crowd around him actually applauded when he said it. There should have been audible gasps, not clapping. It speaks volumes of the popularity of the Fed, or lack thereof, that many do not realize the central bank is at least trying to help...
... Which just makes things worse. Listen, it's possible to disagree with QE3, but we shouldn't doubt the motives behind it. If Bernanke launches another round, he will be trying to save the economy—and the country at large—not Obama.
No matter what political pundits might say, the two things are not the same. It's worth noting that Bernanke isn't even a Democrat. He's a Republican first appointed by President George W. Bush...
... I find it disturbing that Perry, and some others, appear to have lost track of that. Because who is the real traitor: someone who is trying to help improve the lives of American citizens, or a politician who is hoping the economy flatlines or worse for their own personal gain?
The Washington Post's Dan Balz reports that Perry and his campaign are trying to sit tall in the saddle on this one and not, at least so far, backing away from the governor's comments.
Meanwhile, spokesman Ray Sullivan declined to walk back the governor's harsh remarks about Bernanke, though he did not repeat the charge of treason Perry leveled on Monday night. "The governor was passionate and energized by a full day" of campaigning, he said. "It was his way to talk about his views" on the budget and the country's fiscal problems.
All told, it's a curious way to kick off a presidential campaign.