Perry right on the substance of his remarks about the Fed

Opinion Journal:

All the world's right-thinkers are denouncing Rick Perry for suggesting this week that Texans would get "pretty ugly" with Federal Reserve Chairman Ben Bernanke if he guns the money supply any more between now and the 2012 election. His poor choice of words aside, the Texas Governor is right to put monetary policy front and center in the 2012 Presidential debate.

...

... everybody knows Mr. Perry meant no literal harm and was indulging the irrational exuberance that is one of his trademarks. The faux-outrage from liberals who routinely refer to the tea party as "terrorists" shouldn't be taken seriously.

The real news isn't the rhetorical gaffe but the substance and politics of Mr. Perry's demarche. Here we have a Presidential candidate, a Texas populist no less, laying out a position in favor of sound money. This is a bear walking on its hind legs. The ghosts of Wright Patman and Henry B. Gonzalez are howling in the Hill Country.

...

Mr. Perry seems to appreciate that the Federal Reserve can't conjure prosperity from the monetary printing presses. His articulation needs some work, but we hope the Texan doesn't let media and other criticism deter him from pursuing the argument. The issue is crucial to understanding—and explaining to the American public—how the meltdown happened and why Americans are so unhappy with the current recovery.

The Texas Governor has a better insight into middle-class economic anxiety than do most Washington-Wall Street elites. Americans intuitively understand that their after-inflation incomes haven't risen for a decade. Even when incomes rose during the growth years from 2003-2007, the gains were undermined by the rising cost of housing, as well as by rising food and energy prices.

Then huge chunks of middle-class net worth were wiped out in the panic. And now, even as the recovery is supposedly underway, their meager salary increases are being washed away with another burst of commodity inflation caused by near-zero interest rates and quantitative easing. This is what happens when politicians and central bankers try to use monetary policy to compensate for the slow growth caused by bad fiscal and regulatory policies.

...

There is a legitimate concern that some will want to inflate their way out of the debt crisis. That would make all of us poorer. The last increase in the money supply drove up the cost of commodities including oil which is imposing an inflation tax on transportation. Obama may want this but the people in this country are smart enough not to want it. So is Gov. Perry.