Are Rick Perry’s Fed views extreme for a Republican?
By Dylan Matthews,
Rick Perry's statement that another round of bond-buying by the Fed would be "almost treasonous" has been treated as the first major gaffe of his campaign, with everyone from the White House to Karl Rove pouncing on him. But while more bluntly worded than usual, the statement in many ways reflects a mainstream Republican consensus against looser monetary policy. Consider:
House Budget Chairman Paul Ryan: "There is nothing more insidious that a country can do to its citizens than debase its currency."
House Ways and Means Chairman Dave Camp: "Simply to begin printing more money at this stage I think is a great concern."
Former presidential candidate Tim Pawlenty: "We need to make sure that we stop the practice of devaluing the dollar. ... When you devalue the dollar, you are devaluing the net value of this country."
Presidential candidate Newt Gingrich: "Pouring out more paper money and increasing the risk of inflation is not a very clever way of trying to solve [our problems]."
Senate Minority Leader Mitch McConnell, Minority Whip Jon Kyl, House Speaker John Boehner and House Majority Leader Eric Cantor: "[Quantitative easing] introduces significant uncertainty regarding the future strength of the dollar and could result both in hard-to-control, long-term inflation and potentially generate artificial asset bubbles that could cause further economic disruptions."
Senate Banking Committee Ranking Member Richard Shelby: "Long-term interest rates since quantitative easing started have gone up. The object was to make them go down. That hasn't worked. ... The balance sheet of the Federal Reserve is at unprecedented levels."
Sen. Jim DeMint: "Mr. Bernanke has been one of the chief proponents of the Fed's easy money policy that created the current financial crisis. He ignored asset bubbles, dismissed concerns about the weakness of the dollar, and helped encourage the credit mania that led to the financial panic."
Obviously, Perry's tone was more severe than most Republicans' (though Ryan and Pawlenty's rhetoric comes close), but his opposition to more Fed action is the mainstream position among Republicans now. Mitt Romney stands more or less alone among Republicans in defending Ben Bernanke. This is despite the fact that Bernanke is a Republican who served as George W. Bush's head economic adviser, and that Republicans in general were much more trusting of the Fed only a few years ago. For example, when Bernanke was first nominated in 2005, Shelby declared, "President Bush has selected the best possible candidate to serve as the next Federal Reserve chairman. Dr. Ben Bernanke may well be the finest monetary economist of his generation." DeMint agreed, sending out a news release stating,"I believe Dr. Bernanke has the wisdom and experience needed to lead the Federal Reserve.” Perry's language was coarse, but his statement reflected a much broader, and unfortunate, shift among Republicans on monetary policy.