From NY Sun (4 Dec) via the Independent Institute:
Mr. Biden is true to the practice of affirming his respect for the Fed’s independence in public pronouncements.
It is, though, also true that Mr. Powell regularly schedules breakfast meetings with President Biden’s top two economic advisers—Secretary Yellen at Treasury and the director of the National Economic Council, Lael Brainard. They formerly served as chairwoman and vice chairwoman, respectively, at the Fed.
Not that there’s anything wrong with Fed officials having personal political views and candidate preferences.
Here, Dr. Shelton insinuates the meetings occur because of the political preferences of the Fed Chair. It would’ve been appropriate for Dr. Shelton to observe that over the last two or more decades, the Fed Chair and Treasury Secretary have by tradition regularly met. I seem to recall it was lunches with Greenspan, so it’s not always breakfast.
While President Biden hews to affirming the independence of the Fed, Dr. Shelton notes:
President Trump relentlessly criticized Fed actions after it raised interest rates three times in 2017, the year he took office, and then another four times in 2018.
Mr. Trump was adamant in complaining that the Fed’s rate increases were needlessly constraining economic growth and raising borrowing costs. “I personally think the Fed should drop rates,” he told reporters in April 2019. “I think they really slowed us down. There’s no inflation.”
April 2019 headline (core) inflation was 2.0% (2.1%), year-on-year.
We should also note that the Fed did indeed drop rates in 2019 a year before the election https://www.nytimes.com/2019/07/31/business/economy/federal-reserve-interest-rate-cut.html after tremendous caterwauling at the Fed by Trump https://www.cnn.com/2019/04/30/economy/trump-fed-rate-cut/index.html (is it possible that this is part of a campaign by Dr. Shelton to be appointed Fed Chair in the Trump dictatorship if he gets elected.)
“It is, though, also true that Mr. Powell regularly schedules breakfast meetings with President Biden’s top two economic advisers—Secretary Yellen at Treasury and the director of the National Economic Council, Lael Brainard.”
One would hope they would meet. Greenspan regulary met with the people who decided fiscal policy matters for Clinton. Now had Volcker got the attention of Reagan’s supply side morons we could have avoided that toxic policy mix in the first two years of his Presidency.
“When does the grumbling begin that Mr. Powell could end up choreographing an economic boost that serves to help the incumbent presidential candidate? It wouldn’t be the first time a Fed chairman was suspected, rightly or wrongly, of using monetary stimulus to swing an election. Arthur Burns allegedly sought to juice economic performance under pressure from the Nixon administration.”
Biden is not Nixon and Powell is not Burns. Besides – the FED should lower interest rates.
Greenspan not only met with Treasury secretaries during his tenure as Fed Chair, he worked on a project with at least one of them. Greenspan and Paul O’Neill wanted growth numbers without the lag of quarterly or even monthly, so they (with the aid of staff) cooked up something along the lines of GDPNow.
But we wouldn’t want anything like that to happen now, would we?
Off topic, Chinese economic policy –
China’s annual Central Economic Work Conference ended yesterday. Western business press has focused primarily on what is seen as inadequate attention to supporting consumer demand, along with speculating that the PBOC will add to monetary stimulus in 2024.
The Shanghai and Hang Seng stock indices ended today’s session modestly lower while most other Asian-session stock indices ended higher. USD/CNY hasn’t shown much response.
A wrap-up of the meeting by state-run CGTN contained the usual bland assurances that everything is just fine, but also offered a bit of policy direction:
“It (the meeting) urged the introduction of more policies that will help stabilize expectations, growth and employment…” So there is recognition of problems.
“The country should strengthen counter-cyclical and cross-cyclical adjustments in macro policies and continue to implement a proactive fiscal policy and a prudent monetary policy…” Suggesting conventional solutions.
The meeting urged “efforts to make good use of fiscal policies to improve financial efficiency and policy effects, implement structural tax and fee reduction policies, and enhance fiscal sustainability.” This seems to recognize that economic policy efforts in recent years have been inefficient – not much bang for the buck.
“Stressing that a prudent monetary policy should be flexible, appropriate, precise and effective, it called for…maintaining the stability of the renminbi (RMB) exchange rate at a reasonable and balanced level.” The trilemma us recognized – expansionary policies can weaken an already soft currency.
“Pan Gongsheng, governor of the People’s Bank of China (PBOC), said the central bank will keep interest rates at an appropriate level and ensure that the financing costs of the real economy are lowered steadily.” Lowered steadily? In tiny increments, or will monetary policy be given a bigger role?
“Calling for continuing to build a market-oriented, legal and international business environment, it stressed the need to effectively remove the obstacles for foreigners to come to China … and…support high-quality Belt and Road cooperation.” Speaking of bland text, this paragraph ignores a lot.
“Regarding the real estate sector, China will speed up the construction of a new model of development, and coordinate the resolution of local debt risks and stable development.
“Efforts must be made to actively and steadily resolve real estate risks, and meet the reasonable financing needs of different real estate enterprises, aiming to promote the stable and healthy development of the real estate market, said the meeting.” Yes, but how?
https://news.cgtn.com/news/2023-12-12/China-holds-Central-Economic-Work-Conference-1ptFMcqRhUQ/index.html
If you repeat a lie often enough, people will believe it, and you will even come to believe it yourself. —Joseph Goebbels
I just noticed the heading of Kevin Drum’s blog. Yes JohnH is Joseph Goebbels!
Here’s anotherexamefrom the article of trying to link things together in order to tell a story, when thestory is just blazingly stupid:
“No doubt mindful as well that the Fed’s about-face on interest rates might be seen as having succumbed to Mr. Trump’s jawboning, Mr. Powell carried out a formal review of the Fed’s monetary policy framework that included a series of Fed Listens public engagement events held around the country with various community groups “to hear about how our policies affect peoples’ daily lives and livelihoods.”
The review of and subsequent changes to the policy framework was in response to the Fed loss of power to stimulate growth in a low-interest-rate environment. There was enormous worry, both inside and outside the Fed, over the Fed’s inability raise Inflation to target.
This is just more bad journalism, making stuff up in the hope of ginning up some interest.
President Donald Trump called on the Federal Reserve to open the monetary floodgates to turn the world’s largest economy into a “rocket ship.”
This was back in early April 2019. And Republican toadie Kudlow said Trump was not trying to undermine the FED. Come on Larry – your lies were transparent then and are transparent now.
If one goes back to the April 2019 statement by Trump – which nitwit Larry Kudlow endorsed – abuse monetary policy to have the economy take off like a rocket ship:;
Real GDP was 1.076 times potential real GDP per the CBO measure
The unemployment rate had declined to 3.6%
Trump was begging the FED to set off the next round of accelerating inflation. Yea – Trump’s mishandling of COVID derailed this train wreck but Trump was someone who was so insane – any real economists would have resigned. Of course Kudlow the Koke head never was an economist.
Are JDVance and JohnH the same person?
https://www.yahoo.com/news/tillis-calls-vance-remarks-ukraine-003928070.html
Vance, in an interview with former White House aid Steve Bannon earlier Monday, claimed some lawmakers are looking to cut Social Security benefits for more aid to Ukraine that he argued will be used so one of Ukrainian President Volodymyr Zelensky’s ministers “can buy a bigger yacht.” … On Sunday, Vance reaffirmed his opposition to sending additional aid to Ukraine and said he does not believe Ukraine will ever be able to prevail over Russia. He argued the U.S. needs to accept Ukraine will likely need to “cede some territory” to stop its fighting with Russia and questioned how billions in additional aid to Ukraine will help the war-torn country. Presented with Tillis’s criticism later Monday, Vance said he believes Ukraine is “one of the most corrupt countries in Europe.” “We know that a number of people have gotten rich in Ukraine, and … I think it’s naivety if you don’t think they’ve gotten rich with some of our money,” Vance told reporters.
Republican Senator Thom Tilliis said what needed to be said:
When asked about Vance’s remarks later on Monday, Tillis told reporters, “I think it’s bull‑‑‑‑.”
Vance wants to say others are “not living in reality” whereas Vance is lying like a rug for Putin.
“Biden administration officials are far more worried about corruption in Ukraine than they publicly admit, a confidential U.S. strategy document obtained by POLITICO suggests.” https://www.politico.com/news/2023/10/02/biden-admin-ukraine-strategy-corruption-00119237
But pgl insists on pedaling the lie that Ukrainian government and its elites are honest and upright!!! What a hoot!
Johnny, I kept asking you to provide quotes as evidence for your innate accusations. Just copy and paste the text which you claim amounts to pgl is “pedaling the lie that Ukrainian government and its elites are honest and upright.”
See? Like I just did. Quotation marks are helpful, but skip them if it’s too much trouble. What words did pgl use to say what you claim he said?
Or are you just lying again?
You are right – I never said that. But note one other thing. Jonny’s own link only talks about the perception of corruption. The number of actual cases of corruption in Jonny’s own link is precisely zero.
even if they are corrupt, that is better than the murderous putin regime. Johnny worries about somebody stealing cash, but turns a blind eye to the murder and rape perpetrated by the Russians in Ukraine.
Pedaling lies? That’s JH’s speciality, doing so with the ferocity of an Olympic cyclist. Who else can simultaneously cheer on the Russian invasion while denouncing futile, pointless, wasteful wars?
Who? Here’s Johnny!
Gee Jonny boy managed to read only the first paragraph. Now I read his own link in its entirety. The perception of corruption but not one single mention of actual corruption in his little article. Come on Jonny boy – we’ve been over this before. READ your own damn links before writing such blatantly stupid lies.
BTW your claim that Zelensky’s wife bought some mansion for almost $5 million was exposed to be a Kremlin generated LIE. Like most of the things Jonny boy writes. You are a fraud who gleefully supports the raping and murdering of innocent Ukrainians. I hope you are proud of your disgusting little self.
The Washington Examiner is such a right wing rag that they ran this recent headline
https://www.msn.com/en-us/money/markets/democrats-go-full-nixon-on-price-controls/ar-AA1lspYZ?ocid=msedgdhp&pc=U531&cvid=59af94b4a9194c6983d1c2fcc2690f88&ei=15
Democrats go full Nixon on price controls
OK this is such a lie that all this story has is some polling not policy action. And of course we get this Bruce Hall style lie:
Consumer prices are up roughly 20% since 2020, according to consumer price index data, and recent polls show the public believes inflation is the single biggest problem facing the country.
Well if Faux News keeps telling people that inflation is 20% then we get these moronic polls. But a price level change over THREE years is being reported as the current inflation rate. Yea – Bruce Hall has his comrades in dishonesty/
Followup on my slam of the Wash. Examiner’s lying. Consumer prices over the past 36 months have risen by 18% not their 20%.
Now they did rise by 20% since August 2019 but that is not since 2020. Yes – the Washington Examiner is even more dishonest than Bruce Hall.
You made a huge blunder in this post Menzie (I’m jesting you of course). The title of the blog post should begin “With Apologies to ‘Seinfeld’ and Larry David……. “
Kevin Drum does the hard work which shows another stupid lie ala JohnH~
https://jabberwocking.com/managers-have-taken-a-big-earnings-hit-over-the-past-three-years/
the average wage for all employees has been close to flat. But that hides a big difference. Non-managers have seen their wages rise about 3%. Managers have seen their wages fall about 3%.
Now it is true that managers make more in absolute terms but their real earnings have declined a bit while the real earnings of non-managers is up. Thankfully we have smart and honest people like Kevin who debunked the serial dishonesty from little Jonny boy.
My nephew just stepped down from a job managing a small fleet of trucks to driving one of those trucks, ’cause the money is way better.
That’s how you turn an art history degree into a money-making machine, baby!
Amen brother.
https://www.msn.com/en-us/money/markets/commentary-biden-blames-businesses-for-inflation-but-his-own-numbers-refute-him/ar-AA1lu7zj?ocid=msedgdhp&pc=U531&cvid=dbe390d7531b4a32b04b58c674184418&ei=10
Public service warning. Some clown at Heritage writes an oped claiming greed inflation is not the cause of that spike in inflation. Alas the argument this goofball makes is beyond stupid. Yes even more stupid that the nonsense from JohnH.
My favorite example – he notes over time that the PPI has risen more than the CPI. OK – retailers are not the culprit. But does this Heritage clown not get that some businesses receive ad revenue producer prices? Duh!
now now. Judy is an eminent economist. it has been stated as fact by some really serious people on this site. combined, Judy and those fools may just be qualified to run a McDonalds.
Maybe Judy S. should update the PPP Big Mac index!