Perry and Treason

Treason is a serious charge; I would hope that a presidential candidate would not bandy it about lightly.

But first, I find it unsettling that Rick Perry seems to have flunked Economics 101 in his diatribe yesterday against the Fed, that it should not “print money.” He fails to understand that in our (and every other) modern economy banks create money, not the government. That was true when the US was on the Gold Standard, too. The Federal government does print paper bills – but it is Treasury that oversees the Comptroller of the Currency; the Fed has nothing to do with it. Is it too much to ask that someone wanting to be chief executive know a little bit about the tools of governance, or at least listen to people who do?

Second, Perry exhibits a lack of intellectual principles. He charges the Fed with treasonous behavior. He seems to be unaware of Milton Friedman’s 1963 magnus opus with Anna Schwartz, A Monetary History of the United States, 1867-1960. Whatever flag of conservatism Perry might be claiming to wrap himself in, it’s not Friedman’s. Friedman and Schwartz do deride the Fed, justly, for turning the 1929 market crash into a depression – but for not printing enough money, not for printing too much!^{[Note 1]} So Perry wants not only to repeat the budgetary idiocy of Herbert Hoover, he wants to repeat the monetary idiocy of Roy Young and Eugene Meyer, the successive Chairmen of the Board of Governors of the Federal Reserve System during 1927-1933. So Perry makes it clear that he has no conservative principles, only campaign ones.^{[Note 2]}

This campaign focus extends to moral principles; Perry displays an ethic that is, well, so self-centered that I find it hard to fathom: he wants the Fed not to print money because it might create jobs and lessen his election prospects. Yes, for his own vanity he wants to keep millions of Americans unemployed.

I’m resigned to the occasional bad student; academic firepower isn’t all that matters. Diligence does; even my bad students do their homework, and learn to stick to a consistent line of argumentation. But to lack principles — well, at Washington and Lee Honor Code violations get you expelled, though guilty verdicts in practice are hard to come by.

I hope primary participants quickly expel Perry from the race. As President he would take an oath to uphold the Constitution, the opening sentence of which states that one purpose of the Federal government is “…to promote the general Welfare….” He must believe that once someone is unemployed they are no longer worthy of being considered a citizen. But that’s not what the Constitution says: even slaves counted (though not for much).

Perry is apparently quite willing to destroy livelihoods for his own political benefit. But I don’t bandy around the charge of treason lightly; however reprehensible I find that stance, I don’t think it merits accusing him of seeking to destroy the country.

 

Note 1: Ben Bernanke lauds their work; I do as well, though I am uncomfortable with the monocausal view of the causation of A Monetary History. The link to Wikipedia provides a start for those who want to know more of the details.

Note 2: Obama is little better in practice: his stated goals are not pernicious, he on occasion talks a good talk on policy. But refuses to walk the walk, neither leading nor following through. Perhaps he too cares only about his standing in the polls.