“It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes.”
– President Andrew Jackson, Washington, July 10, 1832
They are three players, all problematic in their own way. They are the creatures of inconvenient chaos. Donald Trump was born into the role, a misfit of misrule who found his baffling way to the White House on a grievance. Wall Street, with its various agglomerations of vice and ambition constitute the spear of global instability while the US Federal Reserve, long seen as a gentlemanly symbol of stability, has done its fair share to avoid its remit to right unstable ships, a power in its own right.
The Federal Reserve, despite assuming the role of Apollonian stabiliser, remained blind and indifferent through the Clinton era under the stewardship of Alan Greenspan. The creatures of Dionysus played, and Greenspan was happy to watch. While he is credited with having contained the shock of the 1987 stock-market crash, he proceeded to push a period of manically low interest rates and minimal financial regulation through the hot growth of the 1990s and early 2000s. Rather than condemning “Ninja loans” and other such bank exotica, he celebrated them as creations of speculative genius.
The mood at the Fed these days might seems chastened. They are the monkish wowsers and party poopers, those who lock down the bar and tell the merrily sauced to head home. The sense there is that the market, boosted and inflated, needs correction after years of keeping interest rates at floor levels. Unemployment levels are at 3.7 percent; inflation levels are close to 2 percent. “If the strong growth in income and jobs continues,” reasoned Federal Reserve chairman Jerome H. Powell in August, “further gradual increases in the target range for the federal funds rate will likely be appropriate.”
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