Views on Trump and the Fed’s Guardians: Independence cannot replace accountability | Editorial

dOnald Trump’s attempt Governor Lisa Cook, who fired the Fed, is a familiar authoritarian trick, which is to bending the agency to serve the immediate service of leaders. Wide condemn Deserved. This is not a bold experiment on the control of monetary policy people. However, the condemnation that should be held is reflection. Because Ms. Cook’s anger has revealed a special reflection: defending the independence of the Fed Synonyms and democracy itself.

But is the independence of the Federal Reserve or the central bank usually true? Eric Levitz at Vox This is considered, or at least close enough. He believes Congress has set the Fed’s goal. Independence applies only to means. Without independence, politicians will be free to get the game rate for votes – because Richard Nixon It did it in 1972, relying on the Federal Reserve to squeeze juice before the election. From this perspective, independence is not anti-democratic, but a prudent delegation.

Historian Adam Tooze Saying this argument missed this. He said the Fed is not a neutral technocratic: its regional council provides formal seats for business elites, while Labor and consumers are on the edge or lacking. Independence is not independence away from politics. This is independence away from the electoral accountability system. Defend this arrangement, because Tooze, a fortress of democracy, believes that it is confusing professional consensus with popular legitimacy.

this Left-wing economist Michael Roberts Go further. In his blog this week, he argued that central bank independence was never really about technocratic efficiency. It bloomed in the neoliberal era because it suited finance. He noted that central bank independence rose sharply in the 1980s and 1990s, while inflation fell. Relevance has been considered a proof of causality. However, Mr Roberts believes the price drop is attributed to the end of a slowdown in global growth and the one-time supply shock.

It turns out that the central bank has no one else when predicting the crisis: Former Fed chairman Alan Greenspan admitted that the 2008 crash put him in trouble.Shocking state of doubt”. Türkiye’s recent round Overinflated Criminalized for presidential intervention – But Mr Roberts believes the real culprit is the trade deficit, political turmoil and collapsed lira. Monetary policy is too dull commentator Acknowledge, deal with the turbulent world today. So, does this leave a wise opinion? Of course not Mr. Trump. There is no benefit to replace an irresponsible form with an incitemental strongman. The real task is to ask what democratic politics of the central bank is like.

Academic Saule Omarova People’s ledger is a fundamental answer: treat the Fed as a public utility, provide a common bank account, and explicitly align its balance sheet with public priorities. one National Investment Administration Long-term finances can be shifted to infrastructure and decarbonization, rather than leaving investment decisions to Wall Street. Can work hard expand Board representatives exceed business and need Assessment of Impact And tighten”reason“The clause prevents the president from using fragile excuses.

Mr. Trump’s attack must be condemned – Ms. Cook defended. But if voters stop there, deeper lessons will be missed. Central Bank Independence Never democratic. At best, it is a compromise suitable for the early era. Today’s challenge is to rebuild monetary authority on a stronger, more democratic standpoint.