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Honored Advisor

Forget the Russians, watch the US Federal Reserve.

More crap this President has to put up with.


t’s pretty rare that someone pens a hot take capable of causing immediate and serious damage to one of America’s key political institutions. But Bill Dudley may well have pulled it off! Today in Bloomberg, Dudley argues that the Federal Reserve should punish Donald Trump for his trade policies and actively sabotage his reelection bid by allowing the economy to tank.

The idea is awful on its merits. People would lose their jobs, their health care, etc. But what elevates the piece to truly epic heights of irresponsibility is that, until last year, Dudley served as the president of the Federal Reserve Bank of New York, widely viewed as the Fed’s second most powerful position. He is an insider’s insider, and if ever a single piece of writing could fuel conspiracy theories that a cabal of central bankers is out to sabotage Trump’s presidency, this one is it.  


And if the Fed did actually try to sway trade policy, or an election, it could easily lead to the end of its cherished independence. Republicans and Democrats might start appointing and confirming reliable partisans to the Fed who would do their best to manipulate policy to maximize their party’s electoral advantage, kneecapping the economy when the other guys are in power and pumping it up when their own presidents are in office. (Trump already tried this with Stephen Moore and Herman Cain, who thankfully weren’t confirmed.) Or Congress might decide to simply blow up the Fed’s current structure altogether to make it more politically accountable to the White House.

Given that Dudley is a powerful former leader, his op-ed is not merely ill-conceived, but outright dangerous. Trump and plenty of other Republicans are already prone to seeing deep state conspiracies hellbent on taking down the president where they almost certainly don’t exist. They are already prone, for that matter, to hate the Fed. But given his previous position, it is not a crazy leap to think that Dudley is voicing thoughts that other people inside the central bank have entertained. Ironically, by mouthing off on the internet, Dudley may be putting even more pressure on Powell & co. to go along with Trump, lest they look like they’re plotting regime change. But even if they do, this op-ed will probably live on as proof among the president’s supporters that the swamp is out to get him. 

1 Reply
Senior Advisor

Re: Forget the Russians, watch the US Federal Reserve.

I thought the Chinese were the greatest enemies since the Revolution?

There's a narrow point to be made but he shouldn't have tried to thread it.

There is a bit of danger in the Fed using up very limited ammo in order to provide cover for ill conceived ineptitude.

I see a Purdue study poll that says that 78% of farmers think their long term trade situation will be improved by Trump's actions.

Tragedy or farce?