The point of view of Trump and Locke: Independence is not an alternative to accountability Editorial
DOnald Trump’s attempt to dismiss the ruler of the Federal Reserve, Lisa Cook, is the familiar authoritarian trick represented by bending institutions to serve the direct goals of the leader. Wide spread condemnation He deserves. This is not some bold experience in popular control over monetary policy. However, what should follow the blame is thinking. Because anger at Mrs. Cook revealed a strange reaction: to defend the independence of the Federal Reserve Bank as if it were synonym With democracy itself.
But is the independence of the federal reserve, or the central banks in general, really? Eric Levitz in Fox It is believed, or at least it is close enough. He argues that Congress defines the goals of the Federal Reserve; Independence applies only to the means. Without independence, politicians will be free in gaming rates for votes – as Richard Nixon did in 1972, and they tend to federal federal reserves to grow juice before the elections. On this opinion, independence is not hostile to democracy but it is wise.
Historian Adam Tuzi He says this argument misses this point. He says that the federal reserve is not a neutral technology: its regional councils provide business seats on the table, while employment and consumers are marginal or absent. Independence is not independence from politics; It is independence from electoral accountability. Defending this arrangement as Bulwark for democracy, as Professor Tooze, is the confusion between professional consensus and popular legitimacy.
the Economic Left Michael Roberts It goes further. On his blog this week, he argues that the independence of the central bank was never about technocratic efficiency at all. It flourished in the era of neoliberals because it fits financing. It indicates that the eighties and nineties witnessed a sharp rise in the independence of the central bank, while inflation decreased. The relationship was taken as evidence of causation. However, Mr. Roberts argues that the decrease in prices is more debtor with a slowdown in global growth and the end of display shocks.
Central banks have proven that it is not better than anyone else in predicting crises: former Federal Reserve Speaker Alain Greenban admitted that a crash in 2008 left him in a “sudden disbelief”. The excessive inflation attack in Türkiye has been blamed for presidential intervention – but Mr. Roberts indicates that the real perpetrators are the trade deficit and political instability and Lira El -Manjal. The monetary policy is very explicit, like many Commentators Acknowledgment, to deal with today’s volatile world. So where does this enlightened opinion leave? Certainly not with Mr. Trump. To replace one form of non -accountability with a strong man Demagogic is not earning. The real task is to ask how the democratic policy of central banking services will appear.
Academy Sole Amroufa The Popular Professor Book It is a radical answer: dealing with the federal reserve as a general aid tool, as it provides international bank accounts and explicitly agreed to its public budget with general priorities. A National Investment Authority Long -term financing can be directed towards infrastructure and carbon removal, instead of leaving investment decisions to Wall Street. Efforts can be made expansion Representing the board of directors behind the work, requires Distribution effect assessments And tightened “For“The sentences so that the presidents cannot chase the conservatives from his position regarding flimsy.
Mr. Trump’s assault – Mrs. Cook defended. But if the voters stop there, a deeper lesson will be missed. The independence of the central bank Democracy was never embodied. At best it was a suitable compromise for a previous era. The challenge today is the rebuilding of monetary authority on more accurate land.
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