I'm not a huge fan of the Federal Reserve; at best, it's a clumsy fit into the US Constitutional order. But I'm even less of a fan of Trump's obvious lawfare to get his way on Fed-set interest rates. So let's take a look at some of the reactions, ranging from the semi-humorous to the spittle-flecked:
Jeff Maurer manages to link the Fed stuff with another top story: Trump Should Just Charge Jerome Powell with the Minnesota Shooting.
How to describe the rule of law under Trump? I’d say it’s a lot like this video:
[Hilarious TikTok video that I can't embed correctly. Kids playing softball who have little idea of the game rules. Use your imagination ]
So, I get it: Trump is dragging us into thuggish authoritarianism just as fast as his flabby little arms will allow. He wants one standard of justice for his allies and another for his enemies. Roger that…I don’t think the signals could be any more clear — we’re basically living the “just give me a sign” joke from The Man with Two Brains. And I really don’t need more information confirming something I’ve known for a long time.
And Jeff's suggestion is… well you see his headline up there. Makes as much sense as anything else, I guess.
John R. Puri goes (accurately) metaphorical: Trump Sets the House on Fire with Himself Locked Inside. (NR gifted link)
First off, let’s get some things straight.
The chances that Trump would investigate Federal Reserve officials like Chairman Jerome Powell and Lisa Cook if they were acquiescing to his demands instead of resisting them are zero — zilch, nada, none. Potentially negative, thus shattering the laws of mathematics. Everybody knows this.
A second undeniable fact is that Trump is trying to dominate the Fed — to break it to his will. That he doesn’t control the Fed already infuriates him. He would seek to subjugate it even if he sought no changes in the monetary policy it sets.
But, oh, does he seek changes to policy. Destroying the central bank’s independence would be terrible enough in itself. As my predecessor Dominic Pino has documented, it extinguishes confidence in the currency and unmoors the money supply from empirical concerns in favor of political expediency. What Trump wants from the Fed in particular, however, makes his gambit all the more destructive. And obscenely stupid.
That's a free link, so continue reading about the obscene stupidity.
Alex Tabarrok comments on Chairman Powell's Statement.
Whether an independent Fed is desirable is beside the point. The core issue is lawfare: the strategic use of legal processes to intimidate, constrain, and punish institutional actors for political ends. Lawfare is the hallmark of a failing state because it erodes not just political independence, but the capacity for independent judgment.
What sort of people will work at the whim of another? The inevitable result is toadies and ideological loyalists heading complex institutions, rather than people chosen for their knowledge and experience.
For a good example of "toadies and ideological loyalists", see… well, Trump's cabinet. (Has Pam Bondi quit in disgust yet?)
There is a new substack, apparently set up to hold a single article: a Statement on the Federal Reserve from (in alphabetical order): Ben S. Bernanke, Jared Bernstein, Jason Furman, Timothy F. Geithner, Phil Gramm, Alan Greenspan, Glenn Hubbard, Jacob J. Lew, N. Gregory Mankiw, Henry "Call me Hank" M. Paulson, Kenneth Rogoff, Christina Romer, Robert E. Rubin, and Janet "Can't you hear me" Yellen.
The Federal Reserve’s independence and the public’s perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates. The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence. This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.
As noted above, I am not the Fed's biggest fan, but … it's what we got.
Also of note:
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Without even mentioning the Fed. David Bahnsen looks at The Saddest Part of This Recent Economic Lunacy. (archive.today link)
Economic conservatives find themselves increasingly isolated in today’s politics as the reality of horseshoe theory plays out in the current populist moment. This past week, President Donald Trump explicitly suggested all four of the following policy ideas, some taken verbatim from the policy portfolio of Bernie Sanders or Elizabeth Warren:
- An outright ban on institutional buying (if those investors own more than one hundred properties) of single-family residential real estate
- Government control of executive compensation at defense and aerospace companies, along with, under loosely defined circumstances, a ban on such companies’ returning capital (whether by share buybacks or dividends) to investors
- The implementation of quantitative easing by ordering the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to purchase $200 billion of mortgage-backed securities
- A federally imposed limit of 10 percent on the interest rates that credit cards can charge borrowers
Of that list, only No. 3 is arguably allowed within the powers of the presidency (and even that only because the federal government has foolishly maintained the conservatorship of Fannie and Freddie 17 years past their demise). To the president’s credit, his Truth Social announcement regarding No. 1 (a ban on institutional ownership of residential real estate) acknowledged a need to get the codification of Congress. But even if all of these ideas go the way of his 50-year-mortgage idea of not that long ago (it has already been abandoned), even mere ideation on social media carries consequences. Not only do these proposals stroke the emotions of his populist base that demands that the government “do something,” but they offer credibility and support to future endeavors to do the same thing that may prove more serious and substantive.
"Other than that, though, they're fine!"
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Pun Salad endorses. Since 2008, I've been on record as agreeing with people who find the Pledge of Allegiance "kinda creepy". Nikolai G. Wenzel joins the club, and describes his own solution: Why I Pledge Allegiance to the Constitution.
I don’t much care for the pledge of allegiance. This got me into a bit of hot water when I was the convocation speaker at Hillsdale College, standing on the stage right next to the flag, silent and polite, while the assembled faculty and studentry recited the pledge.
Don’t get me wrong. I love the “standard to which the wise and honest can repair.” And I confess I’ve gotten misty-eyed when I’ve seen Old Glory flown around a rodeo arena, as the sun is setting over the Rocky Mountains.
Alas, the pledge of allegiance had an ugly midwife: the Christian Socialist Francis Bellamy, who was kicked out of his Boston pulpit for preaching against the evils of capitalism. Not for me, the pledge to a symbol or the Hegelian nation. And not for me a pledge that was accompanied by the Bellamy salute, until it was quietly dropped during World War II because it looked a little too much like Nazi theatrics.
The pledge was a clever work of Progressivism. It inculcated allegiance to the state and the abstract patria, while ignoring the bedrock of American liberty, the US Constitution — because its pesky constraints might otherwise thwart wise leaders who can fix all of our problems with the stroke of a regulatory or legislative pen.
I am, however, ready to pledge allegiance to the Constitution.
Nikolai doesn't even mention the inherent idolatry; as a moderate fan of the Ten Commandments, that's another thumb on the anti-Pledge side of the scale.
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