Want to know how to spot someone who was unaffected by the last recession? Look for the people who argue now that another economic disaster would be worth it if it means President Trump loses his 2020 reelection bid.
The former chair of the New York Federal Reserve this week encouraged the central bank to “refuse to play along” with the president’s trade war with China, arguing in a Bloomberg News opinion article that it would be worth risking a major economic downturn if it means “making it abundantly clear that Trump will own the consequences of his actions.”
“I understand and support Fed officials’ desire to remain apolitical. But Trump’s ongoing attacks on [Fed Chairman Jay Powell] and on the institution have made that untenable,” Bill Dudley writes this week.
He adds, “Central bank officials face a choice: enable the Trump administration to continue down a disastrous path of trade war escalation, or send a clear signal that if the administration does so, the president, not the Fed, will bear the risks — including the risk of losing the next election.”
Remember: Dudley served as the president of the New York Fed for almost a decade (2009 to 2018, to be exact).
“There’s even an argument that the election itself falls within the Fed’s purview,” his op-ed concludes. “After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives.”
He adds, “If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.”
Well, that is a none-too-subtle message. He’s effectively calling for a coup, stating in almost so many words that the Fed’s mandate requires it to interfere in the Democratic process — to help presidents it likes and to ruin the economy for the ones it doesn’t like.
Dudley argues that the central bank taking a stand against Trump “could benefit the Fed and the economy in three ways.”
“First,” he writes, “it would discourage further escalation of the trade war, by increasing the costs to the Trump administration. Second, it would reassert the Fed’s independence by distancing it from the administration’s policies. Third, it would conserve much-needed ammunition, allowing the Fed to avoid further interest-rate cuts at a time when rates are already very low by historical standards.”
I suspect Dudley would feel differently about encouraging potential economic disaster had the last one affected him in a meaningful way. But I suspect he suffered no real consequences for the disastrous decisions made by the same sort of people whom he calls on now to “resist” Trump through economic pressure. Those who had their life’s savings wiped out, those who lost their homes, and those who struggled for months to find work as bills piled up are likely not the same ones suggesting that another recession would be preferable to four more years of Bad Orange Man in the White House.
Unfortunately, Dudley is not even alone in entertaining this destructive, vindictive fantasy. He is merely the latest and most powerful to call for economic sabotage.
I wonder, though, whether it won’t help Trump’s reelection in 2020 if those who oppose him are cheering on economic destruction.
