New fuel to Trump-Powell feud? US economist Art Laffer says Fed ‘should not be independent’
FOX Business’ Liz Claman talks to former Reagan economic adviser Art Laffer about the U.S.-China trade dispute and the federal budget.
Art Laffer, a U.S. economist whose philosophy helped support the GOP’s rationale for the recent tax reform effort and an informal White House advisor, is reigniting an ongoing feud between Trump and the Federal Reserve.
At the heart of the administration's animosity towards Chairman Jerome Powell is the central bank’s decision late last year to raise interest rates, one that Trump believes undermined U.S. economic growth.
Following that decision, the White House reportedly examined whether Trump could remove or demote Powell from the Fed’s top spot. Trump recently said he is not considering such a move, but that he would trade Powell for Mario Draghi, who heads the European Central Bank.
Now, economist Arthur Laffer, a former adviser to Ronald Reagan, is reigniting the spat and calling for lawmakers and the executive branch to have greater control over decision-making at the Fed.
“The Fed should not be independent of the administration, never should be. None of those people were elected, they were all appointed,” he told podcast host John Catsimatidis. “It’s a policy tool that should be in the hands of the Congress and the president to make our country better, not in the hands of some Princeton professors who have never worked a day in their life.”
While Laffer added that he believes Powell doesn’t “have control of his board,” some Fed leaders are more vocally backing the chairman.
“He commands my trust completely,” Tom Barkin, who heads the Federal Reserve Bank of Richmond, told the Wall Street Journal of Powell. “He’s been a role model of how one handles oneself in a situation where you could imagine other people doing things that would [harm] the institution.”
Trump recently bestowed the Presidential Medal of Freedom on Laffer, who became infamous for pushing the policy that tax cuts spur economic growth.
Conservatives and Democrats alike criticized that decision. A former budget director for Reagan blasted Laffer as “the greatest Fake Economist to ever come down the pike,” while Washington Gov. Jay Inslee, a Democrat who is running to be the party’s presidential nominee in 2020, said he was “the last person” to deserve the distinction.
Economist Stephen Moore, who was a top choice for the Fed board but removed his name from consideration amid tepid support from Republican senators, floated Laffer as a potential replacement for outgoing top White House top economist Kevin Hassett.
Laffer, however, said he didn’t have an interest in the role, telling FOX Business that he doesn’t “have any chance of doing as good a job as Kevin Hassett does.”
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“I really don’t do those types of jobs well,” he said “My job really is to give you unvarnished, true my views of the world, from my perspective. And you know when you’re an employee of a person, you have to carry the water for the person you work for.”