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Friday, April 25, 2025
Prices of Domestic Goods Increase When Tariffs are Imposed on Imported Goods.
When President Trump first announced massive tariffs, many of his followers believed that tariffs were paid for by the exporting country or the exporting company. Of course, that is not true. I think many people must have become informed and realized that a tariff is a tax paid by the importer of goods and usually passed on to the consumer. A tariff becomes a cost of doing business for the importer just like rent, wages, or utilities.
Now the argument is being made that if one does not buy imported goods, one is not impacted by tariffs. That also is not true. For those not schooled in economics, it would seem reasonable to believe that if you only bought goods made in America, then tariffs would not impact you. A moments reflection should cause one to reconsider that, however. Simply consider wages. A Vietnamese worker in a Niki shoe factory makes between $150 and $250 a month. If those Niki shoes were made in America, the lowest paid workers would earn about $2600 a month. So, if shoe manufacturing did return to America, you would pay more for those shoes.
Of course, one could simply not buy any more athletic shoes. Still, if you bought things only currently made in America, the price of those items would also increase. If you stop drinking French wine and instead drink only California wine, you can still expect to pay more for wine.
The following from the Foundation for Economic Education explains in more detail why domestic prices rise with tariffs.
Why Do Domestic Prices Rise with Tariffs?
by Alex Tabarrok, Foundation for Economic Education, April 16, 2025 -Many people think they understand why domestic prices rise with tariffs—domestic producers take advantage of reduced competition to jack up prices and increase their profits. The explanation seems cynical and sophisticated, and it’s not entirely wrong, but it misses deeper truths. Moreover, this “explanation” makes people think that an appropriate response to domestic firms raising prices is price controls and threats, which would make things worse. In fact, tariffs will increase domestic prices even in perfectly competitive industries. Let’s see why.
Suppose we tax imports of French and Italian wine. As a result, demand for California wine rises, and producers in Napa and Sonoma expand production to meet it. Here’s the key point: expanding production without increasing costs is difficult, especially so for any big expansion in normal times.
To produce more, wine producers in Napa and Sonoma need more land. But the most productive, cost-effective land is already in use. Expansion forces producers onto less suitable land—land that’s either less productive for wine or more valuable for other purposes. Wine production competes with the production of olive oil, dairy and artisanal cheeses, heirloom vegetables, livestock, housing, tourism, and even geothermal energy (in Sonoma). Thus, as wine production expands, costs increase because opportunity costs increase. As wine production expands, the price we pay is less production of other goods and services.
Thus, the fundamental reason domestic prices rise with tariffs is that expanding production must displace other high-value uses. The higher money cost reflects the opportunity cost—the value of the goods society forgoes, like olive oil and cheese, to produce more wine.
And the fundamental reason why trade is beneficial is that foreign producers are willing to send us wine in exchange for fewer resources than we would need to produce the wine ourselves. Put differently, we have two options: produce more wine domestically by diverting resources from olive oil and cheese, or produce more olive oil and cheese and trade some of it for foreign wine. The latter makes us wealthier when foreign producers have lower costs.
Tariffs reverse this logic. By pushing wine production back home, they force us to use more costly resources—to sacrifice more olive oil and cheese than necessary—to get the same wine. The result is a net loss of wealth.
Note that tariffs do not increase domestic production; they shift domestic production from one industry to another.
Here’s the diagram, taken from Modern Principles, using sugar as the example. Without the tariff, we could buy sugar at the world price of 9 cents per pound. The tariff pushes domestic production up to 20 billion pounds.
As the domestic sugar industry expands, it pulls in resources from other industries. The value of those resources exceeds what we would have paid foreign producers. That excess cost is represented by the yellow area labeled wasted resources—the value of goods and services we gave up by redirecting resources to domestic sugar production instead of using them to produce other goods and services where we have a comparative advantage.
All of this, of course, is explained in Modern Principles (which I co-wrote with Tyler Cowen), the best textbook for principles of economics. Needed now more than ever.
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Planning Commission Disapproves CM Jenny Welsch's Radical Rezoning of 600 Acres in Woodbine
The Planning Commitee staff made a presentation explaining the proposal as originally proposed by Welsch and a substitute developed by the Planning Committee staff. The staff recommendation was to disapprove as originally proposed but to approve the substitute, which was still extreme but not as extreme. After a staff presentation and the public hearing, the Commission voted against both the original proposal and the substitute. Only one member of the Commission voted in favor.
With a Commission recommendation, the bill to rezone the property could have passed the Metro Council with a simple majority of the Council, 21 votes. With a negative recommendation, it takes a two-thirds vote to pass the Council, 27 votes. Members of the public opposed to this radical rezoning need to continue to oppose it and attend the Metro Council public hearing and not just assume victory has been achieved, but last night makes ultimate victory more likely.
Below is a more detailed report from Waylon McInturff originally posted on the 16th District Nashville Facebook Page.
I want to personally thank everyone who came out and spoke for our neighborhood at the Planning Commissioners meeting last night. I was sincerely moved by the amount of neighborhood pride exhibited and the commissioners' reactions to our concerns. When we show up and get involved, we can make a difference.
There were two plans put forward - the original plan proposed by our councilwoman and a substitute plan suggested by the planning commission staff. The commissioners voted to DISAPPROVE both the original plan AND the substitute plan, almost unanimously. The main reason being that our community was not involved in the process of creating these plans that will drastically alter the character of our neighborhood.
The commissioners discussed how the process for a blanket rezoning of a neighborhood is normally initiated and led by Planning, not the city council, and should involve a large amount of community engagement and a thoughtful and intentional community plan that is developed over a longer period of time. The commissioners also acknowledged that any large-scale effort to redevelop neighborhoods should include plans for redeveloping the main corridors (Nolensville Rd & Thompson Ln). The Vice Chair Jessica Farr stated that she would not be comfortable approving any plan to redevelop our neighborhood that did not include plans to redevelop and improve Nolensville Rd. Chairman Greg Adkins also stated that redevelopment should begin in and along the main corridors before extending into the neighborhoods. THANK YOU!
This is just the beginning though… The Planning Commission’s decision to disapprove the rezoning bill does not kill the bill. It will still go before the Metro Council for a vote on May 6. Because the Planning Commission voted to disapprove the bill, the Council needs more votes to pass it than they would if the commission had approved the bill. Specifically, they need 27 votes to pass it. The council has 40 members, so they need 27/40 votes to pass the bill and rezone our neighborhood. I do believe this needs media coverage to put pressure on the council members to not pass this bill.
If we succeed in preventing this bill from passing now, it does not mean that changes are not coming to our neighborhood over the next 1-2 years. It will just allow us as a community to have a say in how our community evolves. No one knows these neighborhoods better than we do. We know what makes our community special, why we love it, the aspects that make it great as well as those that need to be improved upon. We ARE the 16th District, and our voices should not only be included, but they should speak the loudest and weigh the heaviest when it comes to how our neighborhood evolves to accommodate current and future generations.
As I write this, I can see my neighbor, Mrs. Murphy, who is 89 years old working out in her yard. She has lived in her house here since the 50’s. She has maintained it, loved it, and preserved not only her house, but also her yard for a future generation. Seeing her work out in her yard reminds me of something my grandmother used to tell me: “Be a good steward” We are not just here to use, extract, and take what we can from life for our benefit. We are also here to maintain, love, and preserve what has been given to us for future generations. It is in this spirit that I intend to contribute my voice and energy into the efforts to evolve our neighborhood.
I am excited about the possibilities of what our community can become if we work together. We need thoughtful planning, engaged discussions, the exchange of ideas, and a COHESIVE community-driven vision, so that when future generations walk down these streets, they’ll think “Wow, these people really care.” We should strive to leave our community in a better condition than we found it. I believe we can, and I invite everyone to share in my vision of a positive, beautiful, functional, and thoughtfully designed 16th District that is better for all. Thank you and God bless you!
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Thursday, April 24, 2025
Congressman Andy Ogles faces FEC complaint over numerous discrepancies in campaign reports
By: Phil Williams, WTVF, April 23, - U.S. Rep. Andy Ogles faces yet another official complaint that accuses him of engaging in an "overarching effort" to hide how he raised and spent money for his two campaigns for Congress.
That latest complaint — filed with the Federal Election Commission by the non-partisan Campaign Legal Center in Washington, D.C. — focuses on the Maury County Republican’s false claims to have personally loaned $320,000 to his campaign in 2022, as well as numerous other discrepancies recently uncovered by NewsChannel 5 Investigates.
.... The CLC complaint argues that, "particularly in light of the apparent, imminent ending of a criminal investigation of Ogles and his campaign — which appears to reflect a new policy of dropping corruption-related cases — it is essential that the Commission enforce the law and vindicate these core transparency principles."
... The final report from the Office of Congressional Ethics, released by the House Ethics Committee in January, concludes that Ogles "may have intentionally misrepresented the amount of money he loaned to his campaign" in order to create "the appearance that his campaign had more money than it did."
... In addition, the FEC complaint just filed by the Campaign Legal Center notes NewsChannel 5's recent reporting about thousands of dollars in questionable spending by Ogles' campaign with vendors who are not in the business of providing the services that Ogles claimed his campaign received. As NewsChannel 5 Investigates revealed, in some cases, there is no evidence that the companies actually exist. (read it all)
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Wednesday, April 23, 2025
District 16 Residents Blindsided by Massive Rezoning Plan
My father, our dear Disgruntled Republican, has offered up his platform to help spread the word about some news affecting the Nashville neighborhood I call home. My district Council Member, Ginny Welsch, has filed a massive district-wide rezoning plan and design overlay affecting over 600 acres, which invites and encourages developers to reshape the historic residential sectors of the neighborhood. This plan was developed with no community input, leaving residents to scramble to make sense of it all, with only a matter of weeks before the city council votes on May 6.
If you call District 16 home, please help by spreading the word to your neighbors. And help by sharing your voice by showing up at the Planning Commission’s meeting on Thursday, April 24 and then again at the City Council meeting on May 6.
If you don’t call District 16 home but are alarmed by this closed-door, high-density blanket zoning approach, please reach out to your district council member, express your concern, and ask them to vote NO on May 6. What’s happening in the 16th may be a trial for many other districts throughout the city.
While increasing urban density is of paramount importance for our city, this is not the way to go about it.
Please see my letter below, submitted to the Planning Commission, which summarizes just a few of my concerns about the scope and approach of Welsch’s proposals.
With thanks,
Rachel Williams
Dear Planning Commission,
I'm writing to share my thoughts and concerns and submit some questions about a proposal that is currently taking place for my neighborhood in the 16th District: Rezoning: #2025Z-036PR-001/Overlay:#2025UD-001-00.
I was first made aware of these potential changes a little over a week ago when I saw the red signs placed along the roadways throughout the neighborhood. I did an online search to learn more. To be honest, I was shocked that what I was reading was about to be on the Council Members' voting table. I wasn't even sure if I was understanding the information correctly, as I was confused at how such a massive change could go without any community outreach or input. A few days after the signs appeared, on Sunday, April 13, our Glencliff Neighborhood Group called a meeting, which I was able to attend, that shared more facts and offered more clarity.
I would like to voice my strong opposition at what is being proposed. I cannot support this massive rezoning effort and design overlay. Please let me be clear that I understand the need for increased density within the city of Nashville, but I do not think that the approach proposed here is the right answer. This measure is TOO MUCH, TOO FAST for District 16.
I consider myself a somewhat educated and engaged citizen. I vote in local elections. I read the local news. I'm on the email list for my district council person's newsletter. And so on. But this proposal was a complete shock to me. After talking to many of my neighbors, I know that many (actually everyone I've spoken to) are completely shocked by this news and unaware that any such plans had been in place too. Many weren't even clear that the zoning notice signs were for the entire neighborhood, initially thinking that they were only for the properties where the signs appear (some of which, by the way have been removed by property owners). Any attempt that Council Member Welsch has made to education or solicit feedback from community members of her district has been paltry, at best.
From what I understand, Council Member Welsch's first community meeting about this was held last week, on Thursday April 17 at the Coleman Rec Center at 6pm, which I attended. (She admitted then that she'd hoped to hold a meeting at an earlier date but that she "got sick.") At last week's meeting, it was a packed house with people spilling out the doors, with over 200 community members in attendance. I cannot help but wonder if even more would have hoped to be there but were turned away due to lack of parking; I arrived to the parking lot at 5 minutes before 6:00, and the Rec lot was completely full. I had to park elsewhere and walk in. I think this is worth noting. As clearly there is great interest and concern about what is happening.
That meeting demonstrated there has been no due process. In hearing Welsch's presentation she often cited the idea of your Planning Commission's NashvilleNext plan. I have looked through that plan and fear she has grossly misrepresented the plan that NashvilleNext lays out. I also understand there are to be some updated recommendations released in the summer. I do not understand why Welsch is trying to, as she stated, "get ahead" of those recommendations. To be honest, I'm impressed with the hard work of the Commission with this plan, especially knowing it was produced in-house rather than hiring some consulting firm. I appreciate the amount of community input garnered in its production; the fact alone, that Welsch has NOT DONE THAT AT ALL, should be a red flag her proposal is in a great misstep from the NashvilleNext approach. This proposal should not be the "vision of one" (i.e. Welsch's) but should reflect both the broader vision of the city and the voices of community members.
Additionally, Welsch's plan does not target the major commercial corridors, the "transects," at all. There were no zoning changes made to Nolensville Road or Thompson Lane. These transects are the areas where the NashvilleNext plans say should be a primary focus as neighborhoods seek to transition to higher density, so how could they possibly be omitted? I think there is great community interest in seeing these areas rezoned to accommodate multi-use zoning. I know I would love to see more high-density apartment buildings with ground level businesses serving the community needs below. This sort of development has been successfully appearing all over the city. Why is this not also the vision, the primary approach, for the 16th district?
Despite the perplexing omission of the main corridors, I'm concerned by exactly how much of the 16th district IS included in these proposed changes. (Though interestingly Welsch's own neighborhood is omitted, despite slated civic resources being devoted to the East Thompson Lane Multimodal Project, with massive improvements slated for traffic flow, bike lanes and public transportation amenities along East Thompson, connecting to Murfreesboro Pike, another area that shows great potential for increasing the city's residential density.) These huge swaths of the district on the map slated for change are more than highlighted areas on a map! They are our neighborhoods! NashvilleNext gives great priority to these suburban neighborhoods within the city, with a thoughtful outline for policies that both "maintain" and "enhance" the growth within the neighborhood element. Welsch's proposal seems illogical to skip so many steps in the zoning options and go straight to RM-40 and RM-20. Again, it's TOO MUCH, TOO FAST. There are other ways and ways that the community is interested in seeing, such as for permitting DADUs in back yards.
Lastly, I find many issues with the urban design overlay as well. It's limited, feels rushed, uses vague terminology, and just not adequately thought through. Welsch explained it as being a safety guard against "large" apartments (though she never defined that subjective term "large"); her overlay explanation felt like a way to placate people and honestly a deceptive explanation. But to me, the UDO just brings up more questions. No parking requirements? No plan for water runoff (we already have issues with flooding here!)? No plan for civic greenspaces? Limited requirements for landscaping and no protection for existing trees? So on and so forth.
My list of questions and concerns could continue but I hope this will suffice for now and show there is broad support to pump the brakes on the project and to involve, educate the community that feels so blind-sighted at how Council Member Welsch is essentially asking our district to be the sacrificial lamb for the city's high density housing needs. This is my community and my home. I am eager for changes in this district as I see the growing needs of the city. I've been here to witness a lot of those changes. I am a born and raised Nashvillian, with very deep ties to the 16th district. My family moved into the Radnor neighnorhood in 1989 when I was six, and still owns property there. As an adult moving back to Nashville to raise my own family, I knew that this neighborhood was where I wanted to raise them. We bought our Glencliff home in 2021. I don't expect time to stand still for this neighborhood, but I know the changes being proposed not only are not fair in their lack of transparency and approach, but are not the solution.
With thanks,
Rachel Williams
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Tuesday, April 22, 2025
Wildly Inaccurate List of Canadian tariffs Circulates on Facebook and Other Social Media
The meme to the right, I must have seen thirty or more times on my Facebook page in recent days. I asked posters of this meme to give me the source of this information and no one could provide a source.
A Google search found a site called AFP Fact Check. This site says the information is false. Some of the items on the list are actually duty-free. It had this to say about other items on the list:
The highest supposed tariffs discussed in the posts were dairy and poultry products, which some users claimed were charged at over 200 percent. Clark explained that Canada has supply management regulations for these types of products, meaning that after an import quota has been reached for a specific exporter, they are charged a much steeper fee (archived here). These measures are allowed under USMCA.
Bruce Muirhead, a history professor at the University of Waterloo (archived here), said Canada instigates supply management quotas on particular items intending to prevent agricultural surpluses within the country's market.
"As its name suggests, they manage supply," he said.
For example, CBSA's list shows milk has an initial tariff of 7.5 percent (with exemptions again for USMCA signatories) but above a certain quantity that could rise to 241 percent for any exporter. This is still less than the 270 percent claimed in the post.
Trump has referenced the 270 percent tariff on milk for years without context, including in claims he made during his first term at the 2018 G7 summit.
Muirhead said other products mentioned in the social media posts, such as butter, cheese, eggs and poultry, are also regulated by supply management policies. As with milk, the CBSA list shows these items are subject to higher tariffs over initial quotas.
Other research finds that another name for "supply management regulations" is "tariff-rate quota." I will assume that whoever created this meme was using the tariff rate quota. To learn more about tariff rate quota, see the Wikipedia page addressing this and one can also find it explained at other sites.
In summary, these tariffs rates are only imposed after a certain amount of the product has been imported. The US has never exceeded those quotas for products exported to Canada and has not even come close. Also, these import caps were agreed to by Donald Trump during the USMCA negotiation.
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CM Ginny Welsch Proposes Radical Massive Rezoning for Woodbine Allowing 20 to 40 apartments per acre
by Austin Hornbostel, The Tennessean, April 22, 2025-
Key Points
- District 16 Metro Council Member Ginny Welsch is proposing an Urban Design Overlay for southeast Nashville's Glencliff, Woodbine and Radnor neighborhoods.
- The rezoning would affect hundreds of acres of properties to the north and south of Thompson Lane near Nolensville Pike, shifting zoning standards to allow for up to 40 housing units on some parcels.
- Neighbors have plenty of questions and concerns. Some are worried about adding density around an already high-traffic area, while others have felt blindsided by a rapid proposal process.
There’s a significant rezoning proposal on the table for southeast Nashville’s Glencliff, Woodbine and Radnor neighborhoods, and it’s leading to plenty of questions from residents.
Well over 100 neighbors packed the meeting room at Coleman Park Community Center just off Nolensville Pike on April 17. They were there to learn more about an Urban Design Overlay proposed by Metro Council Member Ginny Welsch, who represents the neighborhoods in District 16. (read more)
#
Rod's Comment: I generally favor a reform of Davidson County's zoning ordinance to allow greater density. However, a single district should not be massively rezoned in this manner. This is too radical of a proposal.
From WKRN, Channel 2;
‘The fabric of a neighborhood’ is up for debate in Glencliff, Woodbine as new zoning proposed
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Monday, April 21, 2025
This is a Good Week to Stock up on Cocoa Puffs
I guess in a certain sense that is true. However, my life is kind of consumed by politics. I consume a lot of news and analysis and read political journals and books dealing with contemporary issues and political ideology. When I go shopping, I don't want to have to remember which products I can and cannot buy in good conscious.
Actually, I shop very little. I don't like shopping and almost never go into a store unless I have a specific item in mind. If I go to a store, I am going there to buy some thing. I just don't understand shopping as a leisure activity. When I do shop, I don't want to be bothered remembering which products I can buy and which I can't.
I live not far from a Home Depot. Lowes and Home Depot to me are pretty much interchangeable in my mind. Now, I know one of them supports liberal causes and I am supposed to boycott it, but I forget which one. If the two were side by side and I remembered which was the good one and which was the bad one, I would shop at the good one. However, Home Depot is a mile from my house and Lowes is about four miles. I am going to the one closest to my house regardless of which one it is.
I did boycott Bud Light. Of course, I never drink Bud Light anyway. So, do I get credit for not buying Bud Light when I already was already not buying it? I don't think so, but I will claim I boycotted Bud Light.
In addition to not wanting to inconvenience myself by remembering who I am supposed to boycott and not wanting to drive the extra mile to avoid the bad brand, I justify buying the evil brand or shopping at the evil store the same way an environmentalist will justify emitting carbon into the air. To soothe their conscious, an environmentalist may buy carbon offset credits. These offsets are used to plant trees or something which is supposed to cancel out the evil of emitting carbon into the air. Now, if the environmentalist was already spending money to plant trees or whatever, can they in good conscience pollute? Can they rationalize their emitting of carbon by giving other monies to noble causes. I don't know; that is a tricky one.
For a person of modest income, I contribute a fair amount of money to support conservative causes. Not as much as I used to in this age of Trump because I have stopped supporting all branches of the Republican Party and have stopped supporting organization that used to be conservative but have gone Trumpinista. I still support quit a lot of conservative causes, however. So, if a fraction of a penny of my $12.96 purchase goes to Planned Parenthood, can I tell myself, I am a paid subscriber to National Review, so I have offset for my sin of baying a product from a store that supports Planned Parenthood? I don't know, but it is my rationalization.
If I go to the story and buy the wrong brand. How much of my money is actually going to that cause with which I disagree. It could not be much. Greedy corporations only operate on a net profit margin of about 7.71% across different industries. Amazon only operates on a net profit margin of about 3.5%. Grocery stores have a lower profit margin. Of the little bit of money I spend buying stuff, not much of it could possibly be going to support abortion advocacy or trans rights or whatever.
Anyway, all of this brings me to Cocoa Puffs. A group called People's Union USA, has announced a week-long boycott of General Mills products. It started today and ends April 28th.
A week-long boycott is something I don't understand. The Montgomery bus boycott lasted until Blacks no longer had to sit in the back of the bus. The Boycott Grapes movement of the early 70's lasted for years. A week-long boycott seems useless. If you know the boycott is coming you can stock up on your Cocoa Puffs the day before it starts and then resume purchasing the day after it ends. This seems kind of silly really. Having to plan your shopping around a week-long boycott does not seem like much of a commitment.
And that ain't all: "they have spent millions lobbying against GMO [genetically modified organism] transparency and better food labeling, just so we stay blind to what we're really feeding our families. This company has exploited farmers, drained our soils with unethical farming and done nothing to fix their role in the plastic pollution crisis. Their executives rake in millions while factory workers struggle to make ends meet."
What silly liberal pablum. I said this was a good week to by Cocoa Puffs. That is one of the General Mills products and one loaded in added sugar and one I would never buy. I read labels and try to avoid products with added sugar. Cheerios, also a General Mills product, is one of the cereals with very little added sugar at only 1 gram a serving. I buy Cheerios.
If I have nothing else to do, I may go grocery shopping this week so my purchase can counter the lack of purchase of someone participating in the week-long boycott. I will stock up on Cheerios and some Fiber One bars and I might go off my diet and buy some Häagen-Dazs ice cream. I love the Rum Raisin.
So, if you are going to go shopping this week, here are a list of products you can buy to counter the boycott:
Pet Food: Blue BuffaloIce Cream: Häagen-Dazs ice creams
Breakfast Cereals: Cheerios: Honey Nut Cheerios, Multi-Grain Cheerios, and more. Chex: Rice Chex, Corn Chex, Wheat Chex, and other flavors. Cinnamon Toast Crunch. Lucky Charms. Wheaties. Trix. Cocoa Puffs. Kix: Original, Berry Berry, and Honey Kix. Total: Whole grain flakes with various vitamins and minerals.
Snacks and Bars: Nature Valley granola bars and snacks. Larabar Energy Bars. Fiber One Bars.Fruit Roll-Ups, Fruit by the Foot, Gushers
Baking Products and Mixes; Betty Crocker baking products. Bisquick pancake and baking mixes. Gold Medal Flour.
Dairy and Yogurt: Yoplait. Go-Gurt. Liberté.
Frozen and Prepared Foods: Totino's pizza rolls and frozen pizzas. Old El Paso products, including taco kits and sauces. Progresso soups and broths. Green Giant's frozen and canned vegetables. Annie's Homegrown products.
Happy shopping.
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Sunday, April 20, 2025
Trump Is Flirting With Economic Disaster
by Annie Lowrey, The Atlantic, April 15, 2025- According to President Donald Trump, the banker he picked to lead the Federal Reserve is “WRONG.” His reports are a “complete ‘mess!’” And his termination “cannot come fast enough!”
These kinds of remarks would be extraordinary for any other resident of the White House. Presidents are normally deferential to central bankers and avoid lobbying for monetary-policy changes in order to maintain the markets’ faith in the Fed’s independence. Not Trump. He has blasted the Fed dozens and dozens of times over the years, labeling its policies “ridiculous,” calling its officials “pathetic” and “boneheads,” and branding Jerome Powell an “enemy.”
The markets (and Fed officials) have largely shrugged off this jawboning and name-calling. Trump hasn’t swayed the central bank’s policy in any appreciable way, and Powell—again, a Trump nominee—has proved a deft leader of the central bank. But interest rates are climbing and growth is falling, giving Trump trillions of reasons to get rid of the Fed chair. A pending court case might grant the president the capacity to remove him without cause, in contravention of current law.
“Fast enough” might come surprisingly soon. And if Trump then manipulates the Fed to increase growth, he risks damaging the American economy for the foreseeable future.
.... If Trump bullies the Fed into a policy decision by firing Powell and installing a crony in the central bank, investors around the world will dump even more American assets and flee to the relative safety of the euro, raising domestic borrowing costs as the central bank scrambles to shore up the financial system and tries to bring interest rates down. It would be chaos, with costs extending into the trillions of dollars and the ramifications felt for decades. ... Trump wants cheap money and strong growth. The surest path to those outcomes involves getting rid of the tariffs and leaving the Fed alone. (read it all at this link)
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