Gov. Perry is Right

Texas Gov. Rick Perry has come under intense pressure to cease commenting on Federal Reserve Chairman Ben Bernanke's monetary policy for the remainder of the presidential campaign. He should ignore such advice.

The wheels have come off American monetary policy. The troubled era that began with the sharp decline in this country's residential real estate market in 2007 became a collapse in the liquidity of U.S. banks — a classic financial/monetary crisis. Yet the monetary gyrations that were the immediate cause of our problems have pretty much escaped scrutiny.

Yes, the Fed was set up to be independent of direct political control. But Bernanke and a majority of his open market committee are appointed by the president and confirmed by the Senate. Perry and other presidential aspirants have the duty to tell voters how their appointees would change present policies.

Yes, Mr. Bernanke was appointed to his two four-year terms by presidents of different parties. But that defines the scope of the problem: Neither party in Washington has a clue about what's going wrong.

Last week, the Fed's open market committee voted 7-3 to hold short-term interest rates at roughly zero percent through the middle of 2013. This will bring the duration of zero interest rates to a total of nearly five years.

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