I am not a never-Trumper, nor am I an always-Trumper. My allegiance is expressed in the order once articulated by the Vice-President, as I am a Christian, conservative, Republican, in that order. When DJT does something that advances the conservative agenda, I am on board, but when he advances ideas and individuals that break faith with conservative convictions, I will make my opposition clear. I believe that the President made a monumental blunder last week regarding the Federal Reserve.
I do not support President Trump’s selection of Jerome Powell to be Federal Reserve Chairman, because Powell will continue the reckless monetary policies of Ben Bernanke and Janet Yellen. There is an unsettling commonality between Republican and Democratic Presidents: they all appoint liberals to lead the central bank. President Trump is now poised to continue this tradition with Powell’s appointment; it is a missed opportunity to set right the recent wrongs at the Fed that have wreaked havoc on our economy and our country’s financial future.
Jerome Powell was appointed to the Federal Reserve Board of Governors by President Barack Obama in May, 2012, where he has faithfully voted for massive quantitative easing programs that enabled the federal government to double the national debt during the Obama presidency. QE, as the program was known, was little more than a loophole that Bernanke and Yellen used to buy Treasury debts without technically breaking the law prohibiting such a practice. Instead of buying federal bond debt directly, QE created cheap money that was lent to large financial institutions which, in turn, used their next-to-nothing interest loans to buy Treasury notes. The government got to float billions more in bonds, and big banks made off like bandits by being de facto money launderers for the Fed.
Republicans should no more stand for liberal monetary policy than for trillion dollar deficits. Artificially low interest rates, which are achieved by debasing the value of the dollar, act as an effectual tax on Americans of all ages and incomes. Conservatives must seek to reign-in the Fed, not install a successor as bad as the incumbent as Federal Reserve Chairman. If left unchecked, the Fed will lead to yet another American financial crisis.
Seriously restructuring the Fed should be the goal of any conservative federal officeholder. Congress should tighten the screws on the central bank, demand annual audits as every other financial institution must submit, reform its dual mandate, and limit its ability to buy federal debt trough bank intermediaries. The Fed charter should no longer empower it to set the value of the currency, the Constitution says Congress should perform that role, and they should not use interest rate manipulations to try and stimulate job creation in the private sector. The Federal Reserve should serve only to maintain stable monetary values and liquidity in the financial system.
By reforming the Fed and appointing a fiscal conservative as chairman, Republicans could rain-in the enabler of massive federal borrowing. The cycle of debt and monetary policy manipulation must end. The future fiscal solvency of this country, and the financial success of our economy, is on the line. Appointing an acolyte of Ben Bernanke and Janet Yellen to chairman of the Federal Reserve sends a message to millions of American taxpayers that their opinion doesn’t matter, and that Republicans in Washington are unserious about reforming the Fed and returning our nation to fiscal health.