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OT: American Politics

zeke said:

View: https://x.com/KobeissiLetter/status/1909767124131721718
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A contagion of uncertainty​

by Tyler Cowen April 8, 2025 at 2:18 pm in
That is my latest piece for The Free Press, here is one excerpt:
It is not merely that the policies keep on changing. We are seeing that the policies didn’t have much of a rational basis to begin with. Exactly how were all those threatened tariff rates calculated to begin with? A debate is raging across the internet and social media, but it seems they did not have much of a logical basis. We even were ready to put a tariff rate of 10 percent on the Heard Island and McDonald Islands (where?), which are inhabited mostly by penguins.
Not a single step of this process has inspired confidence. A variety of people are trying to defend the Trump plans on social media, but with markets plummeting they have not been convincing. We saw a three-day market loss of about 13 percent, and no coherent government response.
Who in the Trump administration has presented any account of its policies to the public with any degree of knowledge, competence, or credible reassurance? What I have seen is Secretary of Commerce Howard Lutnick speaking about the new jobs Americans might have assembling iPhones, something which currently would most likely be done in a Chinese factory. Who is supposed to be thrilled by that vision of the American future? Or should we be reassured by the possibility that Lutnick did not mean that remark literally, but instead was speaking out of mere carelessness?
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One lesson I am learning — yet again — is just how many people will defend a status quo backed by power…
 
The Telegraph is speculating Jerome Powell will be next in Trump’s line of fire.

I think the market falls 40% (not in a straight line) if the FED is compromised. Trust in the dollar would be shattered

>>Scott Bessent, the Treasury secretary, said the administration could sideline Powell by appointing a “shadow” Fed chairman, who could steer the markets by issuing forward guidance. But this does not overcome resistance from the Fed board and the hawkish regional presidents.

A secretive team of Trump loyalists drew up a 10-page report before the election proposing more radical measures. These include forcing the Fed to “align policy with administration goals” or even to make the president an “acting” member of the Fed board.

Trump could purge members of the seven-strong Fed board one by one until they get the message. The law states that the president can terminate the 14-year term of a Fed governor “for cause”, usually meaning malfeasance or neglect.

But Trump has just abused his tariff powers on an heroic scale by invoking fictitious “emergencies”. He could no doubt stretch the meaning of “for cause” to anything he wants. The Supreme Court has the last say, but Trump-appointed justices have already shown a strong leaning towards an imperial presidency.

In any case, there are other methods to bring the Fed to heel.

Maga vigilantes are intimidating American judges by having pizzas delivered to their homes – a mob tactic to say “we know where you live”. So we can assume that recalcitrant members of the Federal Open Market Committee will face this sort of treatment.
 
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