Trump's Plan to Collapse the Economy Ahead of a Globalist [Communist] Controlled Collapse---Video

Ziad Abdelnour | CEO, Blackhawk Partners / The Daily Caller

President Trump’s latest sharp criticism of the Federal Reserve on Tuesday for raising interest rates too quickly has touched off a lot of hyperventilating inside the beltway, but he was absolutely right to speak up.

Although often portrayed in the mainstream media as an independent and impartial oracle of economic wisdom, the Fed is nothing of the sort.

The seven members of its governing board are appointed by the president, and the 1913 Federal Reserve Act states explicitly that they can be “removed for cause by the president.” It follows that they should defer to, or at least not knowingly subvert, his or her guiding economic strategy.

Our supposed tradition of presidential non-interference in the Fed is a polite fiction designed to assure investors that U.S. monetary policy won’t be subject to political whims.

Past presidents have paid lip service to this ideal by avoiding public criticism and other outward signs of interference with the Fed, but all have sought to exert undue influence through the appointment process and many — notably Truman, Johnson, and Nixon — put immense private pressure on their Fed chiefs to lower interest rates.

Obama certainly got his way with the Fed, which slashed the federal funds rate — the interest rate at which banks and credit unions lend reserve balances to one another — to near zero at the beginning of his tenure (in response to the 2008 financial crisis) and kept it low throughout his eight years in office even as the economy recovered.

When Trump was elected president, the Fed had raised interest rates just once during Obama’s presidency. Since the election, it has hiked interest rates eight times.

Nearly everyone agrees that some monetary tightening is in order, if only to “stack wood” for the next time rate cuts are needed to fight a recession.

But the Fed’s rapid increases suggest rigid adherence to econometric models showing an inverse relationship between unemployment and inflation (the so-called “Phillips curve”), for which interest rate hikes are the traditional cure.

With Trump’s regulatory reforms, tax cuts, and restoration of consumer confidence having brought second-quarter annual GDP growth to a whopping 4.2 percent and unemployment to a 49-year low, the Fed is anxious to put on the brakes.

“Our Federal Reserve is raising rates too fast because they think our economy’s too good,” as Trump put it in an interview with CBS on Thursday.

But the economy is not overheating. Inflation remains relatively low, in part because wage growth is slower than expectations, while the dollar remains strong. The fact that central banks in other developed countries have been far slower to raise interest rates should give pause to Powell.

But it hasn’t, and there may be more to it than bad economics. The 831-point plunge in the Dow Jones Industrial Average on October 10 was precipitated less by the Fed’s latest interest rate hike (to 2-2.25 percent) on September 26 than by subsequent press statements from Federal Reserve Chairman Jerome Powell reiterating that major hikes are still to come.

This eagerness to make sure everyone got the message suggests a determination to thwart the president’s strategy for reviving the American economy and thereby damage him politically.

The president, who campaigned against the concentration of power by Washington technocrats, is perfectly within his rights to fight their interference when the prosperity of our country is at stake.

The rate hikes have already slowed activity in the auto and housing sectors at a time when working families are just getting back on their feet after eight years of anemic recovery under Obama.

Unlike his predecessors, Trump knows monetary policy like the back of his hand. Unlike bureaucrats at the Fed, who have never built companies or constructed anything, he knows how the living economy works and has exceeded everyone’s expectations making economic policy thus far.

If Trump says the Fed should cool it, the American people expect it to do just that. If firing Powell, or even more far-reaching overhaul of the Fed, is necessary to see that expectation met, so be it.

Ziad Abdelnour is CEO of the private equity firm Blackhawk Partners, chairman of the Financial Policy Council, and author of “Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics” (2011).

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https://dailycaller.com/2018/10/19/president-trump-take-fed/

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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