The Daily Populous Friday December 3rd, 2021 night edition
Authored by nymag.com and submitted by bologna_wallet

Republicans have been hammering the Biden administration over inflation. Democrats have tried to respond by blaming supply-chain shortages caused by the pandemic. But Republican senator Tom Cotton has a completely different theory: He blames inflation on Donald Trump’s poor selection to lead the Federal Reserve.

Cotton’s view, laid out in a Wall Street Journal op-ed, places the blame for inflation squarely on Jerome Powell, the Fed’s chairman. “Mr. Powell’s Fed has forced millions of American families to choose whether to pay the mortgage, feed their families, fill up their gas tanks, heat their homes or buy Christmas presents,” he argues.

Cotton makes this case in the course of explaining his forthcoming vote against Powell’s renomination. And obviously, Cotton is not trying to blame Trump (whose name does not appear in his column). But, while anything Powell does in his second term will be on Biden, the reason Powell has the job in the first place is that Donald Trump appointed him.

Trump selected Powell in large part because he deemed his predecessor, Janet Yellen, too short to effectively handle monetary policy. Once in office, Powell was an inflation dove, leaving interest rates low in order to run the economy hot. Trump was constantly demanding Powell push interest rates even lower.

Cotton’s view implies that Powell was wrong, and Trump was even more wrong:

Mr. Powell also maintained the Fed’s radical emergency monetary policies a decade after the end of the 2007–08 financial crisis. The Fed had thereby already exhausted the normal tools of monetary policy when the pandemic hit and was forced to use unprecedented levels of government intervention to prop up the U.S. economy. As a result, the Fed’s balance sheet is nearly $9 trillion and continues to grow by more than $100 billion a month. For perspective, the Fed’s balance sheet barely surpassed $2 trillion after the financial crisis.

Of course, the flip side of elevated inflation levels is that the economy is growing rapidly and unemployment is falling fast. Cotton doesn’t like the trade-off, taking the position that keeping inflation low is the only objective of monetary policy. (“The Fed’s core mission is to ensure stable prices and a sound currency,” he writes, omitting any role for balancing low inflation with low unemployment.)

I happen to think Trump’s preference for low interest rates and a hot economy was correct. Cotton disagrees. But whatever your position on the merits of the Trump-Powell interest-rate regime, Cotton is telling us that inflation levels are Trump’s fault, not Biden’s.

gishbot1 on December 2nd, 2021 at 17:15 UTC »

Someone is starting the GOP primary debates early.

corkboy on December 2nd, 2021 at 16:49 UTC »

Let me tell you a little story about Tom Cotton, from his wiki page.

> In February 2015, Obama renominated Cassandra Butts, a former White House lawyer, to be the United States ambassador to the Bahamas. Her nomination was blocked by several senators. First, Ted Cruz placed a blanket hold on all U.S. State Department nominees. Cotton specifically blocked the nominations of Butts and ambassador nominees to Sweden and Norway after the Secret Service leaked private information about a fellow member of Congress, although that issue was unrelated to those nominees. Cotton eventually released his holds on the nominees to Sweden and Norway, but kept his hold on Butts's nomination.

> Butts told New York Times columnist Frank Bruni that she had gone to see Cotton about his objections to her nomination and said he had told her that because he knew that Obama and Butts were friends, it was a way to "inflict special pain on the president", Bruni said. Cotton's spokeswoman did not dispute Butts's characterization. Butts died on May 26, 2016, still awaiting a Senate vote.

ignorememe on December 2nd, 2021 at 16:48 UTC »

So is Tom Cotton a liberal Democrat deep state now?