Jerome Powell, a public servant against Trump
Never before had a Federal Reserve chairman been forced to record a video to convey a dramatic message Addressed to the citizens of the United States, as Jerome Powell did early this morning. In a country and an international environment where almost everyone has chosen to bow to Donald Trump's wishes or, at least, try not to further enrage him, Powell has decided to confront him and tell the truth; that is, that the federal investigation opened against him for the alleged misuse of funds in some of the institution's construction projects is nothing more than a ploy to stop him from doing his job according to his technical expertise and instead simply obey the president's wishes.
This is an unprecedented confrontation that affects the credibility of US monetary policy and, by extension, that of its entire economy. What is at stake, according to Powell, is "whether the Fed will be able to continue setting interest rates based on evidence and economic conditions, or whether monetary policy will instead be driven by political pressure or intimidation." It should be noted that the Fed's political independence, besides being enshrined in the founding law of 1913, has always been a defining characteristic of the American economy. It is the way a country particularly hard hit by financial panics found to ensure a monetary policy based on clear objectives (maximizing employment and controlling prices) and free from interference. This fundamental pillar of the American, and therefore global, economic architecture is now in danger. And it is in danger because Donald Trump does not believe in the system of checks and balances either The checks and balances on his power. He acts with the arbitrariness of an 18th-century absolute monarch but using methods reminiscent of the dictatorships of the 1930s.
And in the face of this, an honest public servant, who has received the support of previous Fed chairs, has decided not to bow to their wishes, refuse to follow their orders, or resign, and has declared himself in open rebellion against those who intend to punish him with imprisonment. Powell has stated that "public service sometimes demands standing firm in the face of threats," but at its core, his message includes a very serious warning to the American public: if the Fed stops making its forecasts and decisions based on real data and a sound methodology, the entire credibility of the American economic system will collapse.
What Powell is saying is that it's no longer a matter of being for or against Donald Trump, but rather that certain decisions can shape the country's economic future for years or decades. And that's without even considering the violent undermining of democracy and the rule of law involved in subjecting a public servant to pressure that, surely, many would not have withstood. Therefore, Powell's integrity represents a ray of hope today.
