Left-leaning thought leaders have been unfairly scalding Donald Trump for his recent observations that the Federal Reserve is politicized. Therein an inconsistency, verging over into naked hypocrisy, by the left is revealed.
The LA Times summed up the story in an article headlined “Is the Fed Politically Biased“:
Every four years, the independent Fed faces the same predicament: how to try to manage the economy without appearing to favor either party’s presidential candidate.
The sly phrase is “without appearing to.”
Which, of course, is a very different thing than “without.”
The politicization of the Fed is one of Washington’s biggest Open Secrets. As I wrote in Forbes.com, “Dear Chair Yellen: Mend The Fed“:
As journalist Steven Solomon wrote in his indispensable exploration of the Fed, The Confidence Game: How Unelected Central Bankers Are Governing the Changed World Economy (Simon & Schuster, 1995):
Although they strained to portray themselves as nonthreatening, nonpartisan technician-managers of the status quo, central bankers, like proverbial Supreme Court justices reading election returns, used their acute political antennae to intuit how far they could lean against the popular democratic winds. “Chairmen of the Federal Reserve,” observes ex-Citibank Chairman Walter Wriston, “have traditionally been the best politicians in Washington. The Fed serves a wonderful function. They get beat up on by the Congress and the administration. Everyone knows the game and everyone plays it. But no one wants their responsibility.”
Why, then, gold? As Virgil wrote in the Aeniad: Facilis descensus Averni.