After years of cowering to Trump, congressional Republicans finally speak out against Jerome Powell intimidation
DOJ investigation against Federal Reserve chair prompts Republican outcry
By Emily Singer
Republican lawmakers have had no issue defending President Donald Trump’s worst whims over the past year, whether he was siccing the military on his own citizens, lying about a woman slain by his immigration goons, demolishing the White House, or carrying out war crimes in the Caribbean Sea.
Yet as soon as Trump’s retribution campaign threatened to take down the entire U.S. economy—which would hurt their own pocketbooks as well as their wealthy campaign donors—a number of congressional Republicans miraculously found their spines to say enough is enough.
Indeed, multiple GOP lawmakers have publicly slammed Trump’s corrupt attempt to indict Federal Reserve Chair Jerome Powell by concocting phony allegations that he lied to Congress about the renovation of the Federal Reserve Bank’s complex. Powell said the probe is just “pretext” for Trump’s effort to install a yes-man atop the country’s central bank who would lower interest rates to Trump’s desired number—a move that would not only cause investors to flee but could send the U.S. into an inflation crisis that could crater the entire economy.
Most forceful was Sen. Thom Tillis, the retiring North Carolina Republican who vowed to put a hold on any future Federal Reserve Board nominee until the baseless probe into Powell is dropped.
But others quickly followed suit, including Sens. Dave McCormick (R-PA) and Kevin Cramer (R-ND), whose votes on the Senate Banking Committee Trump would need to advance any future Federal Reserve Board nominees. Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK) also expressed their dissatisfaction with Trump’s lawfare,
Even Senate Majority Leader John Thune issued a rare rebuke, telling reporters on Monday that Trump’s DOJ probe of Powell, “needs to be resolved quickly, because the Fed’s independence in shaping monetary policy in the country is something that we need to ensure proceeds without political interference.”
Thune went even a step further saying that the allegations Trump and the GOP are making against Powell “better be real and they better be serious.”
On the House side of Capitol Hill, Financial Services Chairman French Hill (R-AR) condemned the probe, calling it an “unnecessary distraction” that “could undermine this and future Administrations’ ability to make sound monetary policy decisions.”
And other House Republicans facing competitive reelection battles also criticized Trump’s probe, including New York Rep. Nicole Malliotakis who told CNN that, “What I’ve heard so far hasn’t really made sense.”
The fact that Republicans are publicly chastising Trump and his administration shows just how dangerous ending the Federal Reserve’s independence would be for the country’s economy.
If Trump successfully installed a crony in Powell’s position who would follow Trump’s demands to lower interest rates to next to 0%, it could plunge the United States into an inflation crisis that would doom the country’s economy and send it into a horrifying recession.
Other countries whose despotic leaders have taken control of their central banks have done just that. For example, the inflation rate in Turkey skyrocketed to 85% after Turkish President Recep Erdoğan took over his country’s central bank and forced the lowering of interest rates.
“A principal factor in Turkey’s poor economic performance over the past decade was President Erdogan’s misguided belief that interest rates were the cause of rather than the cure for inflation. This induced him to lean heavily on the Central Bank of Turkey to cut interest rates even at a time when inflation was rising. He did so by firing a succession of central bank presidents and by appointing a central bank board that totally complied with his desire for low interest rates,” Desmond Lachman, a senior fellow at the right-wing American Enterprise Institute, wrote in a June critique of Trump’s economic policies. “It was only when inflation soared to 85 percent and when the Turkish lira was in free fall that Erdogan was forced to make an abrupt monetary policy U-turn.”
And in Argentina, the country’s central bank followed calls from its political leaders to print more money to fund their policies, causing an inflation crisis that nearly collapsed the country’s entire economy.
The threat of that happening in the United States has so spooked GOP lawmakers that one privately told NBC News that it may be best for Republicans to lose their congressional majorities.
“It’s like maybe we should lose the majority so the WH and leadership stop making stupid decisions,” the unnamed GOP lawmaker told NBC. “Our leadership and admin just keep doubling down on stupid.”
This article was first published by Daily Kos.