Thread: I don't think @WSJ confused and inaccurate editorial doing anyone, including @judyshel, any favors. wsj.com/articles/shelt…
The WSJ responds to Lamar Alexander's suggestion that placing Shelton on the Board of Governors would have meant handing control of monetary policy "to a Congress and a President who can’t balance the federal budget."
It tries to turn the tables on the Shelton-less Fed, observing it has already "willingly become the chief enabler" of the present government's failure to balance the budget--as if the Fed were a schoolyard drug pusher and Trump and Congress were innocent schoolchildren.
And as if Powell had not pushed back against Trump's repeated complaints that the Fed hadn't lowered rates enough, and that it should have gone negative. markets.businessinsider.com/news/stocks/tr…
The article then goes on to suggest that had @judyshel been on board, she'd have been a bulwark of Fed independence--clearly implying that she'd have gone further than Powell & Co. in resisting pressure on the Fed to "accommodat[e] the political class."
It's an awkward thesis, to say the least, because it conflicts with Shelton's avowed views on interest rate policy at the time. And the WSJ editorial staff know it. But it doesn't stop them from pressing on with it.
They write: "Ms. Shelton’s supposed sin against Fed independence is that she warned against raising interest rates as the Trump-era economy began to benefit ordinary workers, having opposed low rates when Barack Obama was President. That’s an oversimplification of her views."
It is indeed an oversimplification; but not just in the way the editorial suggests. For it oversimplifies the oversimplification by ignoring the fact that Shelton argued not just "against raising" but for lowering rates, just as Trump did, and not just in 2018.
As @byHeatherLong informed us then, Judy had favored a 50 bsp cut in mid 2019. washingtonpost.com/business/2019/…
I take no view on Judy's position here, or on what her motivation for taking it was. My beef isn't with her but with the WSJ staff. They must think very little of their readers to have written such twaddle. Perhaps they think all are like those inhabiting its comment section.
Well, if they keep up this sort of thing, they'll soon be right!
Att'n: @NickTimiraos @michaelsderby @vtg2 @sam_a_bell @norbertjmichel @PeterContiBrown @ken_duda @lawrencehwhite1
Oops: here's the right link wsj.com/articles/shelt…
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