Americans who have been hurt economically by the coronavirus pandemic can take some solace in the steady leadership shown during this crisis by Jerome Powell, chairman of the Federal Reserve.
The remarks Powell gave Wednesday at a news conference after a two-day Fed meeting reveal the thinking of a man more concerned with hard economic data than with pleasing the political whims of his notoriously fickle boss, President Donald Trump.
“The path forward for the economy is extraordinarily uncertain,” Powell said, “and will depend in large part on our success in containing the virus.”
Powell may have been stating the obvious to many of us, but he subtly challenged Trump’s insistence that the “cure” of stringent lockdowns and mask-wearing mandates is “worse than the disease.” On the contrary, as Powell noted, failure to effectively control the spread of the virus is not merely a failure of public health, but one of economic stewardship as well.
“Social distancing measures and a fast reopening of the economy — they actually go together,” Powell noted. “They’re not in competition with each other.”
The Fed chairman also reaffirmed his commitment to keeping American business afloat, keeping interest rates low and extending seven of its nine pandemic-related lending programs through the end of the year after they were set to expire in September.
We would give Trump credit where due for choosing an effective, level-headed Fed chairman. But Trump seems angry with himself for appointing an independent-minded central banker, calling Powell at various times “clueless,” a “bonehead” and an “enemy,” with “no guts, no sense” and a “horrendous lack of vision.” This was sparked by a 2019 feud in which Powell showed little interest in Trump’s harangues to artificially inflate the economy, no matter the long-term cost, for his political benefit as he entered an election year.
It’s unsurprising that Trump has tried to install loyalists around Powell in an attempt to bend the Fed to his will. Herman Cain, who died this week of COVID complications after attending Trump’s June rally in Tulsa, Okla., was nominated by Trump to the Fed board last year before his candidacy fizzled in April 2019 over doubts about his qualifications and background. Former Wall Street Journal writer Stephen Moore, a third-rate political hack, met a similar fate a month later.
Now Trump is attempting to install Judy Shelton, whose candidacy was approved along party lines by the Senate Banking Committee last week. A hardcore Trump sycophant, Shelton’s views on numerous macroeconomic issues have conveniently flipped 180 degrees since President Barack Obama left office, and there’s little reason to believe she would be the sort of independent, objective thinker fit for a Fed seat.
The irony is that if Trump would only listen to Powell’s advice, his chances of being re-elected would likely improve. As Trump and Senate Majority Leader Mitch McConnell were poised this week to slash emergency pandemic unemployment payments from $600 to $200, Powell was prodding Congress and the White House for “policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed.”
Trump and McConnell bet heavily — and foolishly — that Americans would agree with their desire to resume full economic activity as soon as possible, public health be damned. As a result, both could find themselves out of work in November, just like the millions of Americans they’ve betrayed during this crisis.
In such a scenario, Joe Biden would take over a troubled White House that would require all hands on deck. It would behoove him to consider retaining Powell, just as Obama at the start of his first term kept holdover Fed Chairman Ben Bernanke from George W. Bush’s administration, on account of Bernanke’s competence. As a steady hand through an unprecedented crisis, Powell deserves far more credit than Trump will ever give him.