Courtesy of Pam Martens
Jerome Powell Is Sworn In As Federal Reserve Chairman on February 5, 2018 by Fed Vice Chairman Randal Quarles.
Remember that late 1930s play, “The Man Who Came to Dinner.” In the play (and later movie) the man slips on ice on the doorstep of his host, is injured, and never leaves. The question before the American people this week is if the Chairman of the Federal Reserve, Jerome (Jay) Powell, skidded on a slippery slope Monday evening when, on his 66th birthday, he chose to dine at the White House with the same President Donald Trump who has been bashing him for months in the press. Like the character in the play, will the Fed Chair now be thought of as the man confined to the House of Trump rather than as an independent central banker.
The time line for Powell’s birthday dinner has the same rancid aroma of Trump’s favored weapon to try to bring people around to his way of thinking: berate them in the press or on Twitter, hint they’re going to be fired, get them to do his bidding, then invite them for dinner and extract, or at least infer, that he expects a loyalty pledge.
Trump started his attacks on the Fed in July of last year. Here’s the key milestones on the slippery path to the White House dinner:
On October 23, 2018, the Wall Street Journal prints an interview with Trump in which he is quoted as follows: “I’m just saying this: I’m very unhappy with the Fed because Obama had zero interest rates. Every time we do something great, he raises the interest rates.”
On November 27, 2018, Trump tells the Washington Post that he’s “not even a little bit happy with my selection of Jay,” adding, “I think the Fed is a much bigger problem than China.” And there was this magical thinking by the President in the same interview: “I’m doing deals and I’m not being accommodated by the Fed.” In this unprecedented glimpse into the mind of the President, the Central Bank of the United States is viewed by him not as an independent mechanism for setting monetary policy for the good of the country, but as his pawn to help him look good doing “deals.”
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