Lawfare for Dummies, Monetary Edition
S E E D E D C O N T E N T
In the annals of political lawfare there’s dumb, and then there’s the criminal subpoena federal prosecutors delivered Friday to Federal Reserve Chairman Jerome Powell . President Trump would do himself and the country a big favor by firing those responsible for this fiasco.
The subpoena relates to testimony Mr. Powell gave to Congress in June concerning renovations to the Fed’s office buildings in Washington, D.C. Those renovations raised a brief ruckus over the summer after Administration officials such as Russ Vought of the Office of Management and Budget accused the Fed of running over budget on a needlessly grandiose project.
Fair enough, although this is hardly the first government building project to cost more than advertised, and the Fed funds it from the central bank’s own resources rather than sapping tax revenue from Treasury. Mr. Trump seemed to lose interest in the imbroglio, although not before visiting the building site alongside Mr. Powell, both in hard hats.
Asked at that meeting if the project is “a fireable offense for Jerome Powell,” Mr. Trump replied, “Look, I would love to see it completed. I don’t want to put that in this category.”
Alas, someone forgot to tell the rest of the Administration to let the matter go. Our sources say Bill Pulte of the Federal Housing Finance Agency wrote a report that made its way to Jeanine Pirro, the U.S. Attorney for Washington, D.C. Ms. Pirro’s office sent the subpoena, though Attorney General Pam Bondi no doubt signed off. Presumably the gambit is to catch Mr. Powell for lying to Congress regarding the office renovations or scrounge for details in search of some other so far undetected offense.
Mr. Trump said this weekend he didn’t know about the subpoena, which would be the first time he hasn’t been involved with DOJ decisions regarding his opponents. He has long signaled his dislike for Mr. Powell. This episode smacks of loyal underlings trying to curry favor with the President by doing what they think he would want.
Mr. Trump has made a routine of criticizing Mr. Powell for not cutting interest rates fast enough, despite having cut three times in recent months. Mr. Pulte is an especially eager toady, having led the campaign to unseat Fed Governor Lisa Cook on unproven allegations of mortgage fraud, in hopes of stacking the board with more accommodating members.
This brings to mind the medieval episode of England’s King Henry II idly importuning some knights to rid him of Archbishop Thomas Becket, only to be surprised when they actually did it. That historical episode proved self-defeating for the king (Becket became a saint and Henry lost his fight for supremacy over the church), and this one may not work out better for Mr. Trump.
His saner advisers are worried that Wall Street will view this as an attack on the Fed’s institutional independence, which it is. Markets reacted calmly on Monday, though the dollar fell and bond yields rose as a bet on more inflation. Whatever you think about Mr. Powell or central-bank independence, the way to change the Fed’s legal status is through legislation, not a criminal prosecution of dubious merit.
This ploy may backfire on Mr. Trump’s plans for the Fed. Mr. Powell’s term as chairman ends in May, but his seat on the Board of Governors doesn’t expire until 2028. He issued a defiant statement about the subpoena Sunday night, describing it as a pretextual political assault on the Fed.
Mr. Powell isn’t required to leave the Fed when his chairmanship ends, and Mr. Powell may now feel he needs to stay to avoid the appearance that the White House can bully Fed officials. That would deny Mr. Trump a second appointment to the Fed board.
Mr. Trump also is alienating Senators who will judge his nominees for confirmation. Sen. Thom Tillis (R., N.C.), a member of the Banking Committee, said Sunday he’ll block a Trump nominee for Fed Chair until this legal matter is resolved. Mr. Trump needs to call time on this self-defeating scheme, with a message to Ms. Bondi to halt the legal harassment. Firing Mr. Pulte before he can cause any more embarrassment would also help.
Americans elected Mr. Trump to reduce inflation, and he and Republicans have 10 months until the elections to show progress. Picking a fight with the Fed—and the bond market—over an issue that voters will find confusing and irrelevant is lawfare for dummies.
Tags
Who is online
93 visitors
To be filed under 'my lawfare can beatup your lawfare'.
I'd have a whiplash collar handy for when maga morons that endorse this lawless activity abruptly reverse when the tables get turned and their traitorous hero is finally held accountable.
Same folks who think Bethoven plagiarised the Beatles.
That's fine taht Tillis is doing something but what about the other senators?
the maga congress is clueless, spineless, and dickless. he'll cave, they always do ...