Life Is But An Illusion

I have some, um, nuanced views about the whole Fed Independence issue, but if the people who run it aren't willing to preserve it, then it never really existed anyway.

Unless, of course, he makes the decision to stand up for the rule of law and explain that the attack is not merely on the central bank, but democracy and the constitution. Powell should give a public, primetime television speech explaining the stakes, that the president’s order was legally invalid and that the Federal Reserve system will ignore the order. Federal Reserve Board General Counsel Mark Van Der Weide and the legal division of the Federal Reserve Board are no doubt advising Powell that any such bold action would open Powell up to the risk of a “for cause” firing from Trump himself. Their legal analysis is sound but their political instincts are wrong.

When your opponent is Donald Trump you escalate in response to threats; you don’t try to appease him. Powell must do everything in his power to compel the conventional wisdom of market traders to more adequately “price in” the degradation of the rule of law. This must include tying the rule of law and the threats to the constitution to the credibility and standing of the Federal Reserve itself. Powell’s term expires in less than a year anyway. If defending the constitution and his own institution is not worth the risk, what would be? The Federal Reserve has already made the error of letting itself become isolated from the attacks on the rest of the administrative state. Powell can still change course, but time is running out. Federal Reserve Chairman Powell: hang together with Lisa Cook.