There's Something Rotten in the Dallas Fed Chief's Parroting of Perry's Positions
When Rick Perry takes a shot at Federal Reserve chairman Ben Bernanke, you can kind of imagine him twirling that laser-sighted .380 Ruger coyote-killer of his on an index finger. When Richard Fisher does it -- he's the Harvard-grad president and chief executive officer of the Dallas Federal Reserve Bank -- he quotes Shakespeare.
The intended message is pretty much the same: Things are bad in the national economy because of that bad, bad, junkyard dog Barack Obama.
Two weeks ago Perry sent a little dentist's drill jolt through world financial markets when he pretty much called Bernanke a traitor. Bernanke is chairman of the Board of Governors of the Federal Reserve System, so, if he's a traitor, we are a banana republic on the verge of collapse. It's a thought that is highly nervous-making for people to whom we owe vast sums of money.
Nevertheless, presidential candidate Perry told reporters: "If this guy prints more money between now and the election, I dunno what y'all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous in my opinion."
"Prints more money" is far-right code-talking for something called "easing monetary policy," which does, in fact, entail printing more money -- putting more currency into circulation. Monetary policy has been a standard tool of central banks in capitalist countries for at least a couple centuries. Countries do it because it works: Increasing the currency supply kickstarts a stalled economy. Then later, new policies are needed to shrink the supply down again.
But the whole monetary policy thing has become code on the Tea Party far-right for global conspiracy theories positing a world takeover plot by Illuminati-like secret orders. All of that is pertinent context for Perry's assault on Bernanke.
When Perry suggested that a time-tested tool of economic policy was treason, some people took it for a sign he was terminally over-the-top. But Fisher, a serially disappointed candidate for national office himself before settling into his sinecure at the Fed, has been saying the same stuff all year, and nobody calls him a cowboy. Maybe that's because when Fisher says it, he quotes the Bard.
There is an interesting story in today's New York Times reporting that Fisher was one of three dissenters at a recent convocation of Fed policymakers. The story says the dissenters basically stymied the Fed from decisive action on the economy. The Times story, quoting just-released minutes of the meeting, says: "Mr. Fisher said he did not think further monetary easing would do much, since he 'felt that it was chiefly nonmonetary factors, such as uncertainty about fiscal and regulatory initiatives, that were restraining domestic capital expenditures, job creation and economic growth.'"
It's a line Fisher has been handing out at least since January, when he spoke to the Manhattan Institute in New York. There, Fisher said: "The key to correcting the underperformance of the American economy and American job creation does not rest with the Federal Reserve. It is in the hands of those who make fiscal and regulatory policy."
Um, that would be ... Obama? Yeah, pretty much.
In fact, Fisher's speech in New York was a Harvardized version of Perry's stump speech on the "Texas Miracle," a reference to the relative success of the Texas economy compared with the national economy. And Texas really has done better than average. That's true.
But there is serious debate among the experts about why. Some agree with Perry that it's our dang gun-totin' freedom that done it. Others cite long-range fiscal policies including some big tax hikes in the '80s and '90s to pay for better schools. The point is that it's debatable.
But not according to Fisher and the Dallas Fed, whose staff has been churning out articles supportive of the Texas Miracle dogma. Fisher's speech in New York would have been a foot-stomping gospel hymn to Texas freedom and the evils of regulation, if bankers could stomp. Instead, Fisher dragged out some finger-clappin' muffled-chuckle erudition for them.
"A reader of Shakespeare," he said, "will recall the dialogue between Glendower and Hotspur in Henry IV. Glendower claims, 'I can call spirits from the vasty deep.' And Hotspur replies, 'Why, so can I, or so can any man; But will they come when you do call for them?'"
Oh, chuckle-chuckle. Yes, indeed. Right. But, uh ... I have read some Shakespeare. I just don't ... maybe I do ... nope, to be honest, I really do not recall that particular line. Plus, I have reread it and reread it in the context of Fisher's speech, and I still don't get why it's there. I put a request in to the Dallas Fed this morning for Fisher to call me. You will be the first to know when that call comes in.
But no matter. In the end, Perry's treat-'em-ugly line and, yes, that thing about the "vasty deep" means the same thing. Texas good. Obama bad.
It's a view holding that the national economy is stalled because capitalists won't risk money as long as Obama is in the White House. They'd rather sit on their money and lose it.
If we think of the way headlines are supposed to drive markets up and down, then really the only headline you would have to show these guys every day would be: "Black guy still president."
My own problem with economics was always that it assumed there was something rational about capitalism. Maybe what we are witnessing is the collapse of that notion. And who knows? That may be a really good thing.