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No more able interlocutor than @sam_a_bell, even (especially?) when we disagree. He thinks folks who are troubled by Trump’s politicization of the Fed are overreacting & in “panic” (although correct me if I’m mischaracterizing you, Sam) (also, everyone should follow Sam) /1
The historical examples he has cited from Carter and Reagan are clearly inapposite—governance changes in the usual course are not only permissible within the norms of Fed independence, but are healthy. /2
Truman-McCabe (really, Sproul and Eccles) is better, but it was the Fed that wanted, with some but not unanimous congressional approval, to deviate from their previous normalized equilibrium of pegged rates. /3
Trump’s attacks are different in kind and degree. It is an explicit and successful attempt to shift the Overton window about what is the appropriate narrative for monetary policy. /4
My friend @sam_a_bell is a good example of how quickly these norms shift. Sam, you probably wouldn’t have brushed Trump aside (or invited the clash as healthy?) if he had started with calling the Fed the only problem with the economy and openly seeking Powell’s dismissal /5
This is how institutions change. Slowly, then suddenly. So this is why I say we’ve never seen anything like what we’re seeing and this is why I don’t think commenting strongly on the asymmetric risks is “panic”. /6
Stakes are pretty high right now. We have no idea how this ends, but we know what direction it has moved in just a few short months (except for this thread, which is over now). /end
