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Fed Chair Powell Isn’t The ‘Enemy’ — It’s Trump Himself

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Fed Chair Powell Isn’t The ‘Enemy’ — It’s Trump Himself

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Jerome Powell

Jerome Powell is the bane of Donald Trump’s existence. Lately, it seems Trump would rather bash the Federal Reserve than eat his favorite fast food. Every other tweet from him accuses the central bank chairman of being a hopeless bungler.

On Friday, the president decided he had been far too mild in his criticism. “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” he tweeted. This comes from someone who said of the Chinese leader in June, “I think we’re going to be strategic partners.”

Trump has grown increasingly frustrated that Powell will not do his bidding. The president asserted Wednesday, “The only problem we have is Jay Powell and the Fed.” Earlier in the week, he accused Powell of a “horrendous lack of vision.” A year ago, he was grousing about Powell for raising interest rates.

What apparently ignited his Friday fury was that the Fed chairman said the obvious in a speech in Jackson, Wyoming: “Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States.” Trump doesn’t like it when people note the likely consequences of his mistakes, particularly his trade wars.

It’s not surprising when he attacks Nancy Pelosi, Alexandria Ocasio-Cortez or Joe Biden — or even the prime minister of Denmark. They are all people he is forced to deal with. But Powell was not foisted on him. He was appointed to run the Federal Reserve by Trump.

After years of steady growth and falling unemployment, the Fed decided late 2017 that it was time to bring interest rates back up from their historic lows. It was a reasonable shift under the circumstances. But in July, with the outlook clouded by slowdowns in Europe and China, as well as Trump’s trade wars, the Fed cut rates for the first time since 2009.

Even then, there was a notable lack of unity among the decision-makers. At the meeting where that decision was made, reports The Wall Street Journal, “nearly half of the Fed’s 12 reserve bank presidents said they didn’t see a convincing case to cut interest rates.” Two officials voted against the reduction.

Whether the Fed has been wise or foolish in its interest rate moves is a question whose answer will come only later. Even now, it seems, among the people with the greatest expertise in the area, there is considerable room for doubt. As Powell said Friday, there are “no recent precedents to guide any policy response to the current situation.” It would be premature at best to conclude that he is botching his job.

But if he were, who bears responsibility? Anyone who concludes that Powell is clueless and inept has to conclude something similar about the person who chose him for the job.

By Trump’s own standards, the president is a terrible judge of talent, brains and loyalty.

No administration in memory has produced so much personnel churn. A tally by Brookings Institution fellow Kathryn Dunn Tenpas found that 75 percent of the senior jobs in Trump’s administration have turned over at least once. That doesn’t count his Cabinet, which has had nine departures.

When I asked Tenpas how this record compares with previous administrations’, she said, “The Trump turnover figures are off the charts, not even close.”

Several of those who left found themselves showered in bile. Former Secretary of State Rex Tillerson was “dumb as a rock,” Trump said. The president claimed he fired Defense Secretary Jim Mattis because he was “not happy with what he’s done in Afghanistan.” Jeff Sessions, Trump charged, was “very weak” and “disgraceful,” — and that was while he was still attorney general.

Trump got rid of his first chief of staff, Reince Priebus, and his second, John Kelly. He canned Homeland Security Secretary Kirstjen Nielsen and Veterans Affairs Secretary David Shulkin. Health and Human Services Secretary Tom Price, Interior Secretary Ryan Zinke and EPA chief Scott Pruitt had to go because of scandals.

Notice a pattern here? Time after time, Trump has been disappointed, aggrieved or infuriated by the performance of people working for him. When something doesn’t go as he wants, he looks for a person to blame, and he always finds one. Powell is just the latest scapegoat.

But if Trump wants to find the enemy who is doing the most to sabotage his administration, derail the economy and prevent his reelection, he shouldn’t look at the Fed. He should look in the mirror.

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