Has Trump cap­tured the Fed?

Financial Mirror (Cyprus) - - FRONT PAGE -

None of this both­ers Trump, of course, who as a busi­ness­man has been no stranger to ne­far­i­ous prac­tices. For­tu­nately, it ap­pears that Pow­ell recog­nises the im­por­tance of well-de­signed fi­nan­cial reg­u­la­tions.

But politi­ci­sa­tion of the Fed should be viewed as just an­other part of Trump’s bat­tle against what his former chief strate­gist, Steve Ban­non, has re­ferred to as the “ad­min­is­tra­tive state.” That bat­tle, in turn, should be viewed as part of a larger war against the En­light­en­ment legacy of science, demo­cratic gov­er­nance, and the rule of law. Uphold­ing that legacy en­tails em­ploy­ing ex­per­tise as needed, and cre­at­ing, as Ed­ward Stiglitz of Cor­nell Law School has em­pha­sised, trust in pub­lic in­sti­tu­tions. A large body of re­search now sup­ports the idea that so­ci­eties per­form more poorly with­out such trust.

Ev­ery few days, Trump does some­thing to rend the fab­ric of US so­ci­ety and in­flame its al­ready-deep so­cial and par­ti­san di­vi­sions. The clear and present dan­ger is that the coun­try is grow­ing so ac­cus­tomed to Trump’s out­rages that they now ap­pear “nor­mal.” For more than seven decades, Amer­ica has fought – of­ten fit­fully, to be sure – to re­deem its stated val­ues, tak­ing on big­otry, fas­cism, and na­tivism in all their forms. Now, Amer­ica’s pres­i­dent is a misog­y­nist, racist xeno­phobe whose poli­cies em­body pro­found con­tempt for the cause of hu­man rights.

One may ap­prove or dis­ap­prove of the Repub­li­cans’ tax pro­pos­als, ef­forts to “re­form” health care (obliv­i­ous to the tens of mil­lions who might lose in­sur­ance cov­er­age), and com­mit­ment to fi­nan­cial dereg­u­la­tion (ig­nor­ing the con­se­quences of the 2008 cri­sis). But, while the Fed may be safe for now, what­ever pos­si­ble eco­nomic ben­e­fits this agenda could bring pale in com­par­i­son to the mag­ni­tude of the po­lit­i­cal and so­cial risks posed by Trump’s as­saults on Amer­ica’s most cher­ished in­sti­tu­tions and val­ues.

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