Nixon bullied his Fed chair into lowering interest rates — a political move that wrecked the economy for years.
Taking to Twitter late last month,
President Trump made clear that when it comes to the economy, the real
enemy is not in Beijing, but just down the street from the White House,
in the headquarters of the Federal Reserve. The Fed’s chairman, Jerome
Powell, had recently led his board in lowering interest rates by 25
basis points, a smaller increment than the president desired. “China is
not our problem, the Federal Reserve is,” the president wrote.
Such
audacity may feel uniquely Trumpian, but it isn’t. Though our modern
political culture holds that the Federal Reserve is independent, other
postwar presidents have bullied Fed chairmen just as egregiously.
President Lyndon Johnson pushed Fed Chairman William McChesney Martin
against a wall after Martin dared to raise the discount rate half a
percentage point.
But the worst
example is President Richard Nixon’s campaign to coerce “his” Fed
chairman, Arthur Burns, into promulgating policy that guaranteed
devastating inflation. Worst, because it worked — and demonstrated that
this economically vital, supposedly apolitical agency is more vulnerable
to presidential meddling than we’d like to believe.
Read the rest here.
Amity Shlaes is no left-wing moonbat. She is an old right conservative whose recent biography of Calvin Coolidge is sitting on my bookshelf. But what even she dares not mention, is that the world is drowning in debt and the central banks are already up to their eyeballs in money printing and aggressive manipulation of interest rates and financial markets. Their sole function at this point is to keep the bubbles inflated for as long as possible. Trump really aught to read "This Time is Different- Eight Centuries of Financial Folley" by Carmen Reinhart and Kenneth Rogoff (also on my bookshelf). I'd offer to lend him my copy, but there aren't any pictures.
