The Ron Paul effect: Why Republicans like Rick Perry feel comfortable criticizing Ben Bernanke.

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Who's winning, who's losing, and why.By David WeigelPosted Tuesday, Aug. 16, 2011, at 7:42 PM ET

Rick Perry's Fed-bashing isn't unusual for the GOPRest easy: Rick Perry probably isn't going to execute Ben Bernanke. When he told a crowd of Iowa Republicans Monday that "we would treat him pretty ugly down in Texas" if the chairman of the Federal Reserve "print[ed] more money between now and the election," it wasn't exactly a Kinsley gaffe, defined as when a politician tells the truth. Instead, call it a "Perry gaffe": when a politician doesn't mean what he says, but means to say it.

Castigate Perry for his crude style. Go right ahead. On substance, however, Perry is clearly within the bash-the-Fed mainstream of the Republican Party. His comments came two days after Rep. Ron Paul, R-Texas, scored a strong second place at the Ames straw poll, and eliminating the Fed is one of the causes of Paul's life. Paul lost narrowly to Rep. Michele Bachmann, who was one of the GOP's loudest voices against the Fed's 2010 plan to spent $600 billion on mortgage-backed securities?the second round of "quantitative easing." Both of them voted for Paul's 2010 "audit the Fed" legislation, an effort to crack open the central bank's books that passed with bipartisan support. In the modern GOP, you either hate the Fed or you go home.

Fed fatigue isn't just for Republicans. Pollsters ask few questions about the Fed, but the information we do have shows a public that has turned wildly against it. In the 1990s, and even in the 2000s, polls showed that longtime Fed Chairman Alan Greenspan was one of the most popular political figures in the country. Occasionally, voters gave him more credit for the economy than Bill Clinton. Before Greenspan finished his last term, the NBC/Wall Street Journal poll gave him a 43-percent approval rating and a disapproval rating of 12 percent. Americans have never felt that way about his replacement; the comparable figures for Bernanke in a late 2009 Bloomberg poll were 35/26. Republicans just grew colder on the Fed faster than anyone else. In 2008, according to Gallup, 61 percent of them approved of Bernanke. In 2009, only 36 percent did.

Fed watchers can't quite believe what Perry said.

"To call it treasonous or almost treasonous, to me is outrageous, really," says Donald Kohn, who spent most of his career working at the Fed, and retired as vice chairman of the Board of Governors in 2010. Bernanke is "trying to follow what Congress has given as its goals for the Fed," he said. "To threaten, to use names like that, is not productive."

So what do Americans think of the Fed now? What inspired the question to Perry? And what gave him the confidence to start talking treason?

"I think it reflects two things," says Kohn. "One is that the economic recovery has been disappointing. The Fed has been trying to help the recovery along. But the efforts of the Fed and the government haven't been enough to put people back to work. So they look at the economy and think, surely, the government could have done better. They include the Fed in that sentiment. Two, I think it reflects a feeling that the Fed, through its actions in the crisis, helped the large banks and didn't do anything to help ordinary people."

Anger at the Fed, and mistrust in the Fed, did not spring up because Ron Paul willed it to. It's a reaction to failure.

"The Fed has become politicized," argues Allan Meltzer, a professor of economics at Carnegie Mellon and a historian of the central bank. "It's doing fiscal operations. It's doing a lot of things that the public doesn't like, like bailing out the banks. So it's unpopular, and deservedly so."

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