Finally Coming Around?

Rick Perry's comments this week about the Federal Reserve confirmed that the Fed has made itself a legitimate campaign topic, but there were signs in recent months, including this interesting entry from Bill Kristol, that Republicans as a party would start to co-opt this issue. They had ceded it to Ron Paul and a few others because Fed rate policy has meant an ongoing bailout of the financial sector. It will be interesting to see if the trend continues because of electoral exigencies. Is the speculator/too-big-to-fail class, with its eyes on the 2012 prize, willing to sacrifice the Fed temporarily -- especially now that the Fed has publicly committed itself to bailout-level interest rates for the next two years?

Maybe there's an important distinction to be made between grassroots/Tea party Republicans and Fed/financial industry-friendly ones. Here is the latter's response to Rick Perry's remarks. It's long been obvious that when it comes to criticism or even oversight of the Fed, there is a supra -- or perhaps more appropriately, sub -- political element for which party identification is irrelevant.

The Fed's recent announcement of zero percent rates for the next two years was chilling, less for the danger aptly noted by Kristol's correspondent than for the desperation-driven geopolitical moves that boxed-in policy necessitates -- "days, not weeks" at a minimum.