Perry and the Fed

David Warren:

Rick Perry, the governor of Texas, made waves this week, upon entering the Republican presidential fray, by suggesting that Ben Bernanke, of the Federal Reserve, would be treacherous if he continued to "print money" to grease the government's way out of the solvency crisis. Perry's colourfully frank Texas language got him into big trouble with all the smooth people who routinely refer to politicians like him as "terrorists."

That language may have been rather cleverly chosen, for the splash it created had two immediate political consequences, beyond persuading people who would never vote for Perry that they must never vote for Perry. First, it elbowed Ron Paul and others aside, by making Perry the "don't print money" candidate. His Republican rivals on the tea party side are now moaning about his theft of their thunder.

Second, it puts Bernanke on the spot. For after the sympathy has evaporated for a man who has been verbally abused, he cannot go ahead with what in fact amounts to printing money, without totally identifying himself with President Barack Obama and the "stimulus" establishment. Perry has made Bernanke's job impossible, and in present circumstances that might just be a good thing.

For generations now, governments not only in the United States have eased their way out of solvency crises by stoking inflation, and by some plausible mixture of cosmetic budget cuts and real tax increases. To do otherwise, as even the Economist now says, is to display "economic illiteracy." Sophisticated people play with all the dials, on the economy machine, and those who refuse to touch certain dials are unsophisticated.

Observe, where all this sophistication has got us.

There are some issues that are too simple for intelligent people to understand. Most moral issues are like that. The problem isn't distinguishing between right and wrong. That is not always as plain as day, but usually it is. The problem is finding a way to justify doing the wrong thing. And once you think you have found it, the people still arguing for doing the right thing may be dismissed as "simplistic."

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The Texas model works, and the California model fails. Quite apart from whether anyone in the States should vote for Rick Perry, they must choose between these models.

Warren grasps the intelligence of Perry's remarks and ignores the atmospherics. Many in the media did just the opposite as did several former Bush administration figures. Ron Paul has to be wondering how Gov. Perry was able to steal his suitcase.