Tuesday, August 16, 2011

Rick "Texas Thug" Perry Doesn't Understand Treason or Economics

So, either one of the serious contenders for the United States Presidency - Rick Perry - is tone deaf to dangerous hyperbole or he's a raving madman who needs to be locked away before he gets someone killed. Apparently getting a congresswoman shot isn't enough for the current breed of conservative running the lunatic fringe over on the right. They've gotta aim for something else: we have a potential president making death threats (or what can be construed as death threats).

As always, article from a non-US Media source (the Guardian.)

First, a definition: What Perry is condemning is "quantitative easing," which, according to Wikipedia, is this:

Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank implements quantitative easing by purchasing financial assets from banks and other private sector businesses with new electronically created money. This action increases the excess reserves of the banks, and also raises the prices of the financial assets bought, which lowers their yield.The Bank of Japan targeted the quantity of reserves held by the banks during quantitative easing, while the US Federal Reserve emphasized that they targeted a credit easing in the business and household sectors.


Quantitative easing can be used to help ensure inflation does not fall below target Risks include the policy being more effective than intended in acting against deflation or of not being effective enough (if banks do not loan out the money).
This is how QE normally interacts with regular monetary policy: Normally, central banks (like the Federal Reserve) do policy as usual by raising or lowering their interest rates. Interest rate targets are normally achieved when the bank buys and sells government bonds banks to other banks. When the central bank puts the bonds out, or pulls the bonds back in, the amount of money in the economy either increases or decreases, affecting the price of the bonds and, therefore, the interest rates of those bonds. If the "regular" interest rate is at or near 0, then the bank can't lower the interest rate anymore and it ends up in what's called a "liquidity trap," where standard monetary policy is unable to affect the economy. In this situation, the central bank gets with the other financial institutions and agrees to buy back a large number of these bonds, with the goal in mind of raising the money supply rather than decrease the interest rate, which can't be decreased anymore. It's called "the oh shit" button of economics.

The basic sum of the situation is this: The fed can only decrease the interest rate so low to try and stave off inflation, and try to stimulate economic growth. If this doesn't work and there's signification deflation, there's no way you can lower the interest rate any lower. So the option then becomes buy back the bonds, to try and increase the money supply (because the fed is spending that money to buy back a prearranged number of bonds), as opposed to dropping the interest rate, which can't be dropped any further.

As of right now, you now know more about economics than Rick Perry does. I guarantee it.
Economists are divided over the sticky question of whether America should attempt to stimulate its struggling economy with a third bout of quantitative easing. But to Rick Perry, the Texan governor who hopes to become the next president of the United States, the issue is clear – QE3 would be akin to treason.
Perry, a late entry to the race to challenge Barack Obama for the White House, told a gathering in Iowa that it would be disastrous for the Federal Reserve to print more electronic money to fuel another round of asset purchases.
"Printing more money to play politics at this particular time in American history is almost treacherous, or treasonous, in my opinion," said Perry, on his first full day of campaigning for the Republican nomination.
That's right. Printing money to save the economy at this particular time in American history is almost treacherous, or treasonous, in his opinion. That means that Bernanke is on the verge of being the next Benedict Arnold. He's getting ready to sell us out to... who again?
Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.
The Congress shall have Power to declare the Punishment of Treason, but no Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted. (U.S. Constitution, Article III, Section 3)
Good thing he qualified that with almost. He was almost absolutely wrong. Keep in mind how easy this guy is throwing around the term, when Treason is clearly defined as "shall consist only in levying war against them, or adhering to their Enemies, giving them Aid and Comfort." He almost got it. If by almost we mean not even in the same super-cluster of galaxies.
Perry was responding to a question asking what he would do with the Fed if he became president. He initially tried to duck the issue, saying he would "take a pass on the Federal Reserve", before launching a personal attack on Ben Bernanke, the Fed chairman.
"If this guy prints more money between now and the election, I don't know what y'all would do to him in Iowa, but we would treat him pretty ugly down in Texas," said Perry.
We'd treat him pretty rough. We'd hang him, just like we used to do Jews and Black People.

I love how quickly Perry was criticized: "Texas Thug" is probably the best term for Perry and his ilk, and I think it'll be the one that I use from now on to describe him. If you get the chance too, dear reader, make wide use of the term: if nothing else, it'll get the word out that Perry is a dangerous man, detached from reality, who needs to lose and lose drastically in the primary. Of course, that would mean he would be losing to Michele Bachmann.

Sleep well.


  1. I notice you only have "Funny", "Interesting", and "Cool" as potential reactions to your posts.

    I am terrified of your audience.

  2. Google won't let me add "terrified", "scared shitless", and "I didn't need to sleep tonight anyway" as possible choices.