Monetary Damages
Donald Trump’s weaponized Justice Department has its latest target, as the administration attempts to feed the Fed to the wolves. It’s a particularly dangerous gambit that hinges on some particularly ridiculous, trumped-up charges. Jonathan Chait in The Atlantic (Gift Article): “The Trump administration has opened a criminal investigation into Federal Reserve Chair Jerome Powell on grounds so flimsy and transparently hypocritical that it is difficult to know whether anybody is supposed to take the charges at face value. 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.” A criminal investigation of Federal Reserve Chair Jerome Powell will test whether Republican loyalty to the president has any limits. In this rare case, there may actually be a limit. As Chait explains, “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.” And we’re already seeing a backlash from a handful of Republicans, and members of the administration are pointing fingers, many suggesting they knew nothing about the impending charges against Powell. Of course, there’s a broader economic story here. Healthy capitalism requires a sane adherence to the rule of law. That’s a reality that corporate leaders have been conveniently ignoring for a year, betting that they could weather (and even thrive during) the Trump storm through placation and sycophancy, taking what they see as the good parts of Trumponomics while avoiding the bad. For the sake of our portfolios and the future of the American economy, many of us have been hoping that this strategy would work out. But with Trump, the lawless envelope never just gets pushed, it gets obliterated, and sooner or later, kissing ass turns into the kiss of death. Maybe with Trump weakened and something as sacred as the Fed’s independence at stake, corporate America will finally get fed up. As Powell himself stated in response to the phony charges: “Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.” There was a time, not that long ago, when that statement would not have seemed at all radical.
