John (11:20)
Alright, first up, let's start with what the left is saying. The left sharply criticizes the investigation and applauds Powell for resisting Trump's intimidation tactics. Some say the investigation will backfire on Trump. Others suggest the controversy will test Republican lawmakers loyalty. In Bloomberg, Jonathan Levin said Powell needs to stay at the Fed now more than ever. These are officially the darkest days for Federal Reserve independence since at least the Nixon administration. After attacking Fed governor Lisa Cook last year, President Donald Trump is now weaponizing the Justice Department against Chairman Powell in a thinly veiled effort to intimidate him into lowering interest rates against the best interests of the American people. It's the sort of treatment you'd expect in a tin pot banana republic and it will be a stain on America's reputation for years to come, levin wrote. The attack is a sign of why America needs principled leaders at its central bank and why Powell himself should opt to stay on as a governor after his chairmanship ends in May. For Congress, Trump's attacks are a reminder of why lawmakers must demand absolute independence from any future chair. That could create additional doubts about candidate Kevin Hassett, Trump's National Economic Council director, Levin said in a demonstration of how foolish and self destructive the Justice Department maneuver is. The Fed news initially prompted the S&P 500 index to retreat and yields on the 10 year treasury note to rise while the Fed sets short term policy rates, mortgage rates and other long term borrowing costs are set by the market. Ill advised rate cuts could actually lead to greater interest expenses for consumers. In the American Prospect, Robert Kutner suggested Trump's attack on Powell backfires. Powell, ordinarily circumspect and technocratic, is fighting back. He has taken the step of hiring the blue chip law firm Williams and Connolly as outside counsel. The Supreme Court blocked Trump's earlier effort to fire Fed governor Lisa Cook on bogus charges. It is hard to imagine any court convicting Powell, kutner wrote. The attack on Powell and the Fed's independence was quickly denounced by people from both parties. Former Federal Reserve chairs Janet Yellen, Ben Bernanke and Alan Greenspan the latter two Republicans as well as four former treasury secretaries representing both parties issued a statement supporting Powell. Republicans in Congress who have been reluctant to criticize Trump on other issues joined in. Trump's move could also slow down his effort to appoint a successor to Powell, whose term expires in May. Senator Thom Tillis, the Republican from North Carolina, said he would block any Fed nominee for either chair or another post until the investigation is resolved, Kutner said. If anything, Trump's clumsy efforts will reinforce the Fed's independence. It is rare for a Trump vengeance gambit to backfire so quickly and so totally, a sign of both Trump's impaired judgment and growing isolation. In the Atlantic, Jonathan Chait wrote that the investigation into Powell will test Republican loyalty to the president. When a respected public servant is being accused of wasting taxpayer dollars and lying to Congress by a president whose extravagant White House renovation has already doubled in cost in just three months and whose inexhaustible capacity for lies has essentially broken every fact checking medium, one almost wonders if the criminal allegation was chosen for its absurdity to demonstrate that Donald Trump can make the law mean whatever he wants it to, chaitz said. Even if Trump were to manage to install sufficiently pliant figureheads at the agency, the Fed's demonstrable lack of independence would be apt to weaken its influence over monetary policy and make the economy worse, not better. Every affluent Republican, from the tech right to fossil fuel owners to heirs managing their inherited portfolios, has a direct and visible interest in stable and competent monetary policy. The Republican Party's respect for the Fed's independence is already evident in a recent Supreme Court ruling in which the conservative majority appears to be seeking to create a special exemption for the Federal Reserve from the court's general doctrine that presidents are entitled to fire the heads of independent agencies, chait wrote. Trump is defecating where his wealthy donors eat. Perhaps they will go along with this too, but he is testing the limits of their acquiescence. All right, that is it for what the left is saying. Which brings us to what the right is saying. The right is mixed on the case, but some advocate for withholding judgment until the investigation is complete. Others view the investigation as overtly political and call on Congress to restrain Trump. Others suggest Trump is sending a message to the next Fed chair in the Washington Examiner, Guy, Benson wrote. Let's wait and see the evidence against Jerome Powell. I've lived through enough President Donald Trump related freakouts over the years to have learned an important it's usually wise to wait for the facts before rushing out definitive declarations, benson said. For example, when an indictment came down against John Bolton, a former Trump official turned Trump critic, accusations of retaliatory government thuggery came raining down. But it turned out that the investigation into Bolton was initiated during the Biden administration and that the government's evidence appears to be strong. The initial conclusion that Trump was ticking down an enemies list in an effort to imprison his foes didn't quite match the facts of the case. The Justice Department had better bring powerful and irrefutable evidence of clear cut lawbreaking. If such evidence is offered, the usual coercive critics will once again look like they've pounced prematurely, having never learned the lesson mentioned above. If, however, the case looks thin, the decision to move forward with an investigation will smack of politically motivated targeting, benson wrote. Conservatives who rightly fulminated against any number of lawfare weaponization excesses deployed against Trump and his allies should not make a heel turn into supporting or excusing naked reprisals along the same lines that happen to flow in the opposite direction. In national review, Andrew C. McCarthy offered practical responses to the investigation. The politicized Powell probe is not a one off. The Justice Department has a now extensive pattern of pursuing Trump's political enemies and officials he seeks to scapegoat. The suggestion that these lawfare gambits are the idea of Pam Bondi or Jeanine Pirro with no direction from Trump would insult the intelligence. Even if we did not have Trump's diatribe against Bondi for foot dragging on charges against James Comey, Letitia James and Adam Schiff. McCarthy said the Senate should stop further consideration of Trump's nominees. Republicans should be doing this anyway to vindicate Congress constitutional prerogatives. Congress should amend the obstruction and false statement statutes in the penal law to require a referral from Congress before the Justice Department may investigate or charge charge someone for providing false statements to or otherwise obstructing a congressional investigation, McCarthy said. I imagine that if a vote were taken, Congress would overwhelmingly reject a Justice Department inquiry into Powell for allegedly misleading Congress regarding the renovations of the Fed's office buildings, something Congress itself has not accused Powell of doing. In the Wall Street Journal, Greg IP suggested the investigation is Also a warning to the next Fed chair. The criminal investigation into Federal Reserve Chair Jerome Powell isn't ultimately about the Fed's headquarters or Powell or even interest rates. It's about power, it wrote. In that sense, the investigation is also a message to whoever succeeds Powell. Likely. Either Trump advisor Kevin Hassett or former Fed governor Kevin Warsh. Both claim they will be independent, but if either sets interest rates contrary to Trump's desires, they can expect the same treatment as Powell. That's a powerful incentive to stay in line. That Trump officials are going after Powell without awaiting the Supreme Court's decision on Cook's removal reflects their determination to break the Fed's independence. They might succeed even if they fail in court, IP said. The message to all Fed officials is that defying Trump is an invitation to have their backgrounds and public statements investigated for a pretext for removal. Given that, who would wish to serve? Presumably only someone ready to deliver what Trump wants. All right, let's head over to Isaac for his take.
