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Trump Discusses Firing Powell: Bloomberg


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Source:

https://www.bloomberg.com/news/articles/2018-12-22/trump-said-to-discuss-firing-fed-s-powell-after-latest-rate-hike

 

Time for Congress to discuss firing Trump.

 

Advisers close to Trump aren’t convinced he would move against Powell and are hoping that the president’s latest bout of anger will dissipate over the holidays, the people said on condition of anonymity. Some of Trump’s advisers have warned him that firing Powell would be a disastrous move.

 

Sounds like parents who can't control their unruly toddler. "We hope Christmas calms Donnie down a little!"

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It does now. Political forces are now threatening to intervene in a direct manner over the U.S. Central Bank which is unprecedented in the modern era (DOJ used to be independent too).

 

Whatever insulation the Fed had from politics may now vanish thanks to this POTUS. Guess Fed will be pushed to cut rates every Presidential election (every 4 years) now. POTUS doesn't care about precedence and doesn't care about his legacy for this country.

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

 

One thing to consider is that the Fed's mandate is not to maximize economic growth. Instead, its to moderate the business the cycle because it is extremely painful to have large segments of the voting population out of work. Arguably, even if the Fed is successful in this, that success comes at the expense of real growth.

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

 

Growth slowed pretty much anywhere, because the economy become so much larger and population growth slowed down. I don’t think slower growth after 1913 has anything to do with the creation of the Fed.

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

 

One thing to consider is that the Fed's mandate is not to maximize economic growth. Instead, its to moderate the business the cycle because it is extremely painful to have large segments of the voting population out of work. Arguably, even if the Fed is successful in this, that success comes at the expense of real growth.

 

The FRBs job is to smooth the waves of the economy as you mention. We simply don’t know what the country would look like without FRB involvement. Are there comparable countries out there with no central bank, which we can analyze?

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

 

Since 1913 the US has enjoyed unprecedented prosperity compared to any other country on earth and it is well positioned moving forward. While the Fed's role in this slow and steady climb can be debated, it is pretty clear it has been a net positive (especially when compared to what other countries have done over the past 120 years in place of Fed type institutions).

 

The current president is playing the game by his own rules; this is ok if he is right but will be devastating to the US if he is wrong. I trust the people leaving his administration and what they have to say: Mattis and Tillerson are two that come to mind (they are not political hacks). 

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

 

One thing to consider is that the Fed's mandate is not to maximize economic growth. Instead, its to moderate the business the cycle because it is extremely painful to have large segments of the voting population out of work. Arguably, even if the Fed is successful in this, that success comes at the expense of real growth.

 

The FRBs job is to smooth the waves of the economy as you mention. We simply don’t know what the country would look like without FRB involvement. Are there comparable countries out there with no central bank, which we can analyze?

 

19th century United States?

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Sounds like people in the know were not in the know.  It is incredible, that Bloomberg would publish this crap.  Bloomberg has become the National Enquirer.  I guess they knew they had an audience that what be interested in their unverified rumor.  I was concerned about FB getting hijacked & it looks like even media with editors can get hijacked also.

 

Packer

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The fed was created in 1913.  If you look at the evidence there isn't much to back that it has helped the economy.

 

S&P500 real return, 1871-1913, 6.5%.  Inflation averaged 0.5% per year during this period. 

 

If we dare to use things such as logic and evidence we can see we don't really need the fed.  Without it you can achieve your outcome of limiting the presidents ability to play with interest rates and my desired outcome of the fed not playing politics of it's own.

 

One thing to consider is that the Fed's mandate is not to maximize economic growth. Instead, its to moderate the business the cycle because it is extremely painful to have large segments of the voting population out of work. Arguably, even if the Fed is successful in this, that success comes at the expense of real growth.

 

The FRBs job is to smooth the waves of the economy as you mention. We simply don’t know what the country would look like without FRB involvement. Are there comparable countries out there with no central bank, which we can analyze?

 

19th century United States?

IMHO there are too many structural differences to really make that comparison. Internationally for example the US did not have nearly the negotiating power that it did for most of the 20th century.

 

My guess is to really make the comparison you would bucket all the non-central bank countries vs. all central bank countries. But even that is not really a good comparison because most NCB countries are in a much earlier state of development than CB countries, so you are not really averaging out structural differences by bucketing the population.

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The truth is that we will never know for sure what Trump did or did not say about firing Powell.

 

We do know that Mnuchin getting involved to the point of quoting the president shows just how high the stakes are.  If investors believed that Trump was going to fire Powell, it could unleash absolute chaos in markets.

 

So, logically Mnuchin stepped in to put of the fire.  Mnuchin's tweet says he is quoting Trump: “nor do I believe I have the right to [fire Powell].” I’m speculating here, but this sure doesn’t sound like rhetoric we’ve ever heard from Trump.  I think both sides of the political aisle would agree that Trump is not a guy who likes to acknowledge (or admit to) limits on his own authority.

 

Trump recently lost Defense Secretary Jim Mattis because of, in Mattis’ view, Trump’s rash decision to exit Syria.  This morning we learn that Brett McGurk, the top envoy in the war against ISIS

has resigned citing deep disagreement with President Trump’s decision to pull all U.S. troops out of Syria within a short period of time.

 

I can’t help but wonder if Mnuchin threatened to resign unless Trump addressed this market concern in a clear and decisive manner…which is, I believe, why Mnuchin sent out the tweet himself, rather than risking Trump sending out a vague and diluted version of the important message.

 

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Sounds like people in the know were not in the know.  It is incredible, that Bloomberg would publish this crap.  Bloomberg has become the National Enquirer.  I guess they knew they had an audience that what be interested in their unverified rumor.  I was concerned about FB getting hijacked & it looks like even media with editors can get hijacked also.

 

Packer

 

1. Bloomberg says they have four sources:

 

"President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate hike and months of stock-market losses, according to four people familiar with the matter."

 

 

2. NYT reported essentially the same thing independently of Bloomberg:

 

https://www.nytimes.com/2018/12/22/us/politics/trump-two-years.html

 

"In recent days, Mr. Trump has asked aides whether he can fire Jerome H. Powell, the Fed chairman he appointed, telling advisers that Mr. Powell will “turn me into Hoover,” a reference to the Great Depression-era president."

 

NYT article doesn't credit Bloomberg. That likely means that NYT did their own work.

 

 

3. WaPo backed Bloomberg and NYT, citing two sources:

 

https://www.washingtonpost.com/business/economy/exasperated-over-the-market-plunge-trump-asks-advisers-whether-he-can-fire-federal-reserve-chairman-jerome-powell/2018/12/22/a71b8df2-0635-11e9-9122-82e98f91ee6f_story.html

 

"President Trump has asked internal and external advisers about whether he can fire Federal Reserve Chairman Jerome H. Powell, two people familiar with the exchanges said, in a sign of his mounting frustration with the central bank chief."

 

 

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Sounds like people in the know were not in the know.  It is incredible, that Bloomberg would publish this crap.  Bloomberg has become the National Enquirer.  I guess they knew they had an audience that what be interested in their unverified rumor.  I was concerned about FB getting hijacked & it looks like even media with editors can get hijacked also.

 

Packer

 

1. Bloomberg says they have four sources:

 

"President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate hike and months of stock-market losses, according to four people familiar with the matter."

 

 

2. NYT reported essentially the same thing independently of Bloomberg:

 

https://www.nytimes.com/2018/12/22/us/politics/trump-two-years.html

 

"In recent days, Mr. Trump has asked aides whether he can fire Jerome H. Powell, the Fed chairman he appointed, telling advisers that Mr. Powell will “turn me into Hoover,” a reference to the Great Depression-era president."

 

NYT article doesn't credit Bloomberg. That likely means that NYT did their own work.

 

 

3. WaPo backed up Bloomberg and NYT, citing two sources:

 

https://www.washingtonpost.com/business/economy/exasperated-over-the-market-plunge-trump-asks-advisers-whether-he-can-fire-federal-reserve-chairman-jerome-powell/2018/12/22/a71b8df2-0635-11e9-9122-82e98f91ee6f_story.html

 

"President Trump has asked internal and external advisers about whether he can fire Federal Reserve Chairman Jerome H. Powell, two people familiar with the exchanges said, in a sign of his mounting frustration with the central bank chief."

 

LOL liberal hack EliG "backing up" sources with Wapo and NYT.... nothing from CNN?

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Sounds like people in the know were not in the know.  It is incredible, that Bloomberg would publish this crap.  Bloomberg has become the National Enquirer.  I guess they knew they had an audience that what be interested in their unverified rumor.  I was concerned about FB getting hijacked & it looks like even media with editors can get hijacked also.

 

Packer

 

1. Bloomberg says they have four sources:

 

"President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate hike and months of stock-market losses, according to four people familiar with the matter."

 

 

2. NYT reported essentially the same thing independently of Bloomberg:

 

https://www.nytimes.com/2018/12/22/us/politics/trump-two-years.html

 

"In recent days, Mr. Trump has asked aides whether he can fire Jerome H. Powell, the Fed chairman he appointed, telling advisers that Mr. Powell will “turn me into Hoover,” a reference to the Great Depression-era president."

 

NYT article doesn't credit Bloomberg. That likely means that NYT did their own work.

 

 

3. WaPo backed Bloomberg and NYT, citing two sources:

 

https://www.washingtonpost.com/business/economy/exasperated-over-the-market-plunge-trump-asks-advisers-whether-he-can-fire-federal-reserve-chairman-jerome-powell/2018/12/22/a71b8df2-0635-11e9-9122-82e98f91ee6f_story.html

 

"President Trump has asked internal and external advisers about whether he can fire Federal Reserve Chairman Jerome H. Powell, two people familiar with the exchanges said, in a sign of his mounting frustration with the central bank chief."

 

C'mon, do you guys think Trump hasn't thought of this?  Absurd would be if someone reported that he hasn't thought of this and has no intention of doing so.  I don't know exactly what you guys need to see happen to stop turning to the whole "fake news", "liberal news" argument.  He hasn't told the truth about one God-damn thing in two years...and that's got nothing to do with any news outlet.  He's lied directly to the American people...he does this virtually every time he gets in front of a mic or podium.  It's become so routine that we are sadly amused by it or don't give a damn anymore.  Cheers!

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I am not saying he has not thought of it or even discussed it but it is one option in a policy discussion not a conclusion.  What is relevant is what is the conclusion here which is no firing.  The inside of policy discussions is where you get all kinds of distortions, like death panels associated with the ACA, turned into false headlines.  Maybe the folks at Bloomberg have too much time on their hands (this was top headline for a large portion of the day yesterday & the day before) & have gotten into the speculation/conspiracy game (aka National Enquirer).  As to what Trump or any other politician says I think it safe to assume it is a biased narrative at best & a lie at worst.  Trump is just closer to the lie vs. biased narrative end of the spectrum than most politicians.  The facts & the info are out there independent of the politicians so you can make your decision independent of the editorialized media & the politicians.  Our political system of super-majority before anything gets done and weak federal government has protected us from most of the politicians.  What my concern is in states like New York & Calif where the parties do have super-majorities & you are at the mercy of the government.

 

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Gregmal, Packer16 et al

 

Blind loyalty involves being loyal to a person or cause despite the damage the person or cause does to himself or herself or others. Excusing bad behaviour in the name of protecting allegiance to another seems honourable at first, but is ultimately dangerous as silence is a form of collusion. Many people feel torn between retaining loyalty to a cause or group and risking rejection or ostracisim or personal attack by outing misconduct. Blind loyalty involves a form of cognitive dissonance where a person sees evidence of a problem or bad behaviour and then turns a blind eye to the truth in favour of keeping a positive image of the person or cause. Knowing in your gut that something is wrong, and yet acting as if everything is fine. The classic example is a battered woman who protects her partner when police arrive in answer to a domestic violence call. Think of priests covering for sexual abuse among their colleagues, mothers denying incest in favour of protecting their husbands, and teachers turning a blind eye to abusive conduct by their peers to comprehend that "Loyalty is only a virtue if the person or cause is good".

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Agree with you on Mnuchin. But here's a question. At this point can you get anyone smarter than Mnuchin to be Donald Trump's Treasury Secretary?

Probably not. Bench looks very thin. There is a limited pool of competent people who are willing to embarrass themselves. If the current officials would just decide to to nothing for the rest of their tenure and keep their mouth shut and delete their twitter accounts, things would look a whole lot better.

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