Monday, August 22, 2011

Treason and Fed Policy.

Mr. Perry has accused the Fed of being 'treasonous'.

Specifically he claimed engaging in 'quantitative easing' during an election season was treasonous.  Perry describes quantitative easing as 'printing money'.  In fact the Fed does create virtual money and use it to buy up corporate and government debt to lower interest rates.  In effect it prints money electronically.  As the Fed has the right to print money, this is not illegal.  If you or I do it, it would be illegal - because we don't have the legal authority to print money.

The danger here is that it may cause inflation.  For example, if we were to decided to solve our debt crisis by printing out actual money, we would need to print out $14 trillion.  Today, we have less than 1 Trillion physical dollars out there, so that would be increasing the amount of cash out there by a huge amount.  This would cause a massive amount of inflation, as people would use that money to buy things, driving up prices.  Similar problems would exist if we did it by printing 'virtual' money.  More money out there, causes inflation.    But of course, the Fed is not creating 14 trillions of dollars.

When you buying up bonds to lower rates, you are fighting inflation - particularly if you buy a mix of corporate bonds as opposed to just federal bonds.   So printing money to buy up many different bond types is different than printing money to pay off just Treasuries.

First, lets admit that we have already done quantitative easing twice earlier.  No one called it treasonous then.   Perry's complaint seems to be that it is being done to help out our economy in the short term ( just before an election) despite causing long term risk.   Perry claims this is treason because he says Obama is doing it to get re-elected despite it being bad for the country.  The second round of Qunatitative easing involved about $600 billion. 

But you see that is exactly what ANY kind of 'recession response is - an immediate short term benefit to the country that will cause problems later.  If it did not cause problems later, then you would be doing it all the time, not just during a recession/economic trouble.  

Inherent in Perry's belief (about treason) are three unstated assumptions:  1) the economy is doing just fine now and does not need any Quantitative Easing.  Otherwise Perry would have objected to it being done the first two times (he did not) or at least stated it should never be done.  2) That it is the GOP's right to have an America economy worse now to make it better later (presumably after the 2012 election when he dreams of being in power).  3) That Obama is not just wrong but KNOWS he is wrong about Quantitative easing. 

In either case, he has made NO attempt to convince the world that the Fed is being influenced by Obama - he asks for them to open their books to obtain proof but admits he has no reason to think it is going on.   He is Republican, so it is understandable that he thinks he knows better than a Democrat (he doesn't), but it is not appropriate to claim that Obama is intentionally hurting the country.  George Bush was wrong about MANY things (WMD's in Iraq, who he hired in the Justice Department that thought Torture was acceptable), but we don't call him a traitor.  Why?  Because we know George Bush was simply stupid, not evil.  

In his claims, Perry has demonstrated:

  1. Ignorance of the current state of the economy
  2. A sense of entitlement - he thinks he is entitled to a bad economy to help him get elected
  3. Arrogance in his belief that no one can possibly really disagree with him on economic matters.
  4. Paranoia - in his belief that people that pretend to disagree with him must in fact have ulterior motives.  Their claimed reasons must be lies, they must hate Perry and America.
Yes, that is the kind of man the Republicans want to run against Obama - an ignorant, entitled, arrogant and  paranoid man.   He is a perfect match for the party that thinks Evolution is a lie, that the rich should not be taxed, that the Democrats can't actually believe what they say they believe, and that they must be socialist.

It is a wonder he is not hoarding ammunition to protect against Obama's plans to outlaw it. (As the far right paranoids keep insisting despite Obama making NO attempts to get involved in gun legislation at all. Those idiots will still be doing it till 2016 - when Obama leaves office.  I mean really - don't you think Obama has more than enough real problems to deal with as opposed to little stupidity?)

Compare Perry and Huntsman.  Perry accuses the president of treason, while Huntsman stands up for truth, science and the American way - by proclaiming that Evolution and Global Warming are real.

As I have said earlier, Huntsman is the best announced Republican with a chance of getting non-conservative votes.  Rubio could do so as well, but is smart enough to know he would lose to Obama so he won't run.  Perry is just another GOP clone following the extreme right T-Party agenda.  He can win the GOP nomination, but not the Presidency.

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