{"id":37304,"date":"2018-09-03T16:44:45","date_gmt":"2018-09-03T21:44:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=37304"},"modified":"2018-09-03T16:45:23","modified_gmt":"2018-09-03T21:45:23","slug":"the-idea-that-the-fed-is-independent-is-absurd","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=37304","title":{"rendered":"The Idea That the Fed Is \u2018Independent\u2019 Is Absurd"},"content":{"rendered":"
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The Idea That the Fed Is \u2018Independent\u2019 Is Absurd<\/a><\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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President Donald Trump sparked controversy \u2014 as is his wont \u2014 when he recently told CNBC<\/a> that he was \u201cnot thrilled\u201d with the Federal Reserve\u2019s announced hikes in short-term interest rates, which he claimed would hinder the economic expansion for which his administration had worked so hard. \u201cI\u2019m letting them [the Fed] do what they feel is best,\u201d he added, but this assurance was not enough to prevent journalists and policy experts from pronouncing Trump\u2019s remarks as unprecedented interference<\/a> with the central bank\u2019s independence.<\/p>\n

It may be unusual for a president to openly voice such criticism, but it wouldn\u2019t be the first time one has pressured the Federal Reserve for short-term political gain. In 1965, President Lyndon Johnson considered firing<\/a> then-Fed Chairman William McChesney Martin, but upon learning this would probably be illegal, he opted instead to dress down the recalcitrant central bank chief at his Texas ranch. By Martin\u2019s later account, a heated argument erupted that resulted in the president shoving him against a wall. According to financial journalist Sebastian Mallaby, as LBJ pushed Martin around the room, he yelled, \u201cBoys are dying in Vietnam, and Bill Martin doesn’t care.\u201d<\/p>\n

Better known is President Richard Nixon\u2019s tape-recorded collaboration<\/a> with Fed Chairman Arthur Burns, Martin\u2019s replacement, who maintained an easy-money policy to stimulate the economy before the 1972 election, which contributed to Tricky Dick\u2019s landslide victory and fueled price inflation for the rest of the decade. In terms of the resulting capital destruction and economic dislocations, this episode is one of modern U.S. history\u2019s greatest object lessons about the risks of executive power reaching beyond its constitutional authority.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Idea That the Fed Is \u2018Independent\u2019 Is Absurd Reuters Photographer President Donald Trump sparked controversy \u2014 as is his wont \u2014 when he recently told CNBC that he was \u201cnot thrilled\u201d with the Federal Reserve\u2019s announced hikes in short-term interest rates, which he claimed would hinder the economic expansion for which his administration had […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,6],"tags":[21034,124,7844,303,4047,19283,13351,4219,13317,21509,3650,10587],"class_list":["post-37304","post","type-post","status-publish","format-standard","hentry","category-economics","category-liberty","tag-arthur-burns","tag-central-banks","tag-donald-trump","tag-fed","tag-fed-independence","tag-lyndon-johnson","tag-price-inflation","tag-richard-nixon","tag-robert-p-murphy","tag-the-fiscal-times","tag-us-federal-reserve","tag-william-mcchesney-martin"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37304","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37304"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37304\/revisions"}],"predecessor-version":[{"id":37306,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37304\/revisions\/37306"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}