This is what you signed up for fellas
by digby
And here everybody said those Big Money Boyz were the smart guys:
President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate hike and months of stock-market losses, according to four people familiar with the matter.
Advisers close to Trump aren’t convinced he would move against Powell and are hoping that the president’s latest bout of anger will dissipate over the holidays, the people said on condition of anonymity. Some of Trump’s advisers have warned him that firing Powell would be a disastrous move.
Yet the president has talked privately about firing Powell many times in the past few days, said two of the people.
Any attempt by Trump to push out Powell would have potentially devastating ripple effects across financial markets, undermining investors’ confidence in the central bank’s ability to shepherd the economy without political interference. It would come as markets have plummeted in recent weeks, with the major stock indexes already down sharply for the year.
White House spokespeople declined to comment, as did Fed spokeswoman Michelle Smith.
Trump’s public and private complaints about members of his administration have often been a first step toward their departures — including former Attorney General Jeff Sessions, his first Secretary of State Rex Tillerson and outgoing chief of staff John Kelly.
It’s unclear how much legal authority the president has to fire Powell. The Federal Reserve Act says governors may be “removed for cause by the President.” Since the chairman is also a governor, that presumably extends to him or her, but the rules around firing the leader are legally ambiguous, as Peter Conti-Brown of the University of Pennsylvania notes in his book on Fed independence.
Such a move would represent an unprecedented challenge to the Fed’s independence. Though he was nominated by the president, Powell was thought to be insulated from Trump’s dissatisfaction by a tradition of respect for the independence of the central bank.
That separation of politics from monetary policy is supposed to instill confidence that Fed officials will do what’s right for the economy over the long term rather than bend to the short-term whims of a politician.
Trump’s frustration with Powell has greatly intensified in recent days, said two of the people. Though Trump’s aim is to stop interest rate increases that slow economic growth, such a move could backfire by roiling already turbulent financial markets.
Even routine changes at the top of central banks create uncertainty in markets as investors try to assess how tough a new leader may be in preventing the economy from overheating and accelerating inflation. Another problem with dismissing a sitting Fed chief may be finding a replacement who wants assurance that he or she won’t succumb to the same fate as Powell.
Trump is in the midst of a rolling shake-up of his administration. Since the November midterm elections, he’s announced the exits of Sessions, Kelly, Interior Secretary Ryan Zinke and Defense Secretary James Mattis. At the same, a partial federal government shutdown has added to the sense among investors of disarray in Washington.
Krugman comments:
And that lethal, disease riddled caravan.
There is no sector of the government he hasn’t trashed. And he’s taking a meat ax to the private sector too. But then, everything he’s pretty much destroyed everything he’s ever touched, including his father’s fortune.
Until now he’s managed to wriggle out of any accountability. It is his one true talent and the reason he’s so sure of his stable genius. In a way, you can’t blame him. He’s the personification of the Peter Principle:
The Peter Principle is an observation that the tendency in most organizational hierarchies is for every employee to rise in the hierarchy through promotion until they reach the levels of their respective incompetence.
No one has ever “failed up” as spectacularly as Donald Trump. It’s made him believe he is omnipotent. He’s totally inept and knows about five things, all of which are wrong. And yet he became the most powerful man on the planet. It makes you wonder if there isn’t some kind of flaw in the system, doesn’t it?
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cheers — digby
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