Does Trump Have The Authority To Fire Fed Chair Powell?...Does It Even Matter?
There's no such thing as a good central planner. No one can successfully manipulate the economy and be a good Fed Chairman. The problem with the economy is the existence of the Federal Reserve itself. Ron Paul discusses on today's Liberty Report!
There's no such thing as a good central planner. No one can successfully manipulate the economy and be a good Fed Chairman. The problem with the economy is the existence of the Federal Reserve itself. Ron Paul discusses on today's Liberty Report!
There's no such thing as a good central planner. No one can successfully manipulate the economy and be a good Fed Chairman. The problem with the economy is the existence of the Federal Reserve itself. Ron Paul discusses on today's Liberty Report!
Hello, everybody, and thank you for tuning in to the Liberty Report.
Today, we're doing an audio report on Christmas Eve.
So, first thing off, I want to welcome our guest host today, Chris Rossini.
Chris, Merry Christmas.
Merry Christmas, Dr. Paul.
Great to be with you.
Very good.
And we're going to be talking about the Federal Reserve and whether or not the chairman ought to be fired or not.
Trump's talking about firing him, and there's a big controversy on whether he's allowed or whether he should.
But maybe we can think up a Christmas president.
Maybe the president will say, I'm all for the audit the Fed, and this year that's what we're going to work on.
And next Christmas, maybe we'll get rid of the Fed.
Well, that's not so much of a practical expectation, but it's a dream.
So we'll see what happens.
But anyway, we do want to visit with this whole idea about whether or not the president can fire the Federal Reserve Board.
And there are a lot of controversies there.
The one thing that the Federal Reserve Charter says is that he can be removed for cause, but they don't define what cause it's all about, and who knows what would happen.
I think politics control a lot of this.
I think the media could beat up on Bush, on Trump.
If he did fire him, I don't think that's going to happen.
But in looking back, Chris, there was a time when they had a Federal Reserve Board chairman that was not doing his job.
It was in the midst of the 1970s crisis.
And President Carter appointed G. William Miller.
He was there for just a little over a year.
Things kept getting worse, and they wanted to get Volcker in there.
So they wanted to get rid of Miller, and they did.
But what they did, they promote him or demote him or transferred him.
They transferred him over to Treasury Man and Treasury Secretary.
So in a way, he was fired, but it was a sophisticated firing.
And the president had the authority to do that, and there was never a question about it.
But right now, this is a big issue in the media, whether or not the president is overstepping his bounds, claiming that he's looking into firing the chairman.
Yes, and from our point of view, it's really a moot point because the problem is not the head of the central planners, but the institution itself.
There's no such thing as a good central planner.
No one can successfully manipulate prices.
And for those who followed Ron Paul's career in Congress, there were a lot of Fed chairmen, but he never harped on the individuals involved.
It was always the institution itself that needs to be audited, that needs to be ended.
His book is called End the Fed, not Replace the Chairman.
And the kids on the campuses would chant End the Fed, not give us a different price fixer.
So we're just spinning our wheels talking about the individuals that are head of it.
We have to go right to the root of the problem, which is the Fed itself.
You know, traditionally, the presidents, when they complain about the Fed, and the Fed has created the problems, and the problem has always been that interest rates are too low, too long, and they print too much money.
But presidents inevitably complain, well, don't raise the interest rates, keep the interest rates low, print more money.
So they're just putting fire onto the problem that we have and making things worse.
But that is traditional because they either don't understand or they don't have any other options.
Really, it's the understanding, I think, by most that if you do the right thing, it's sort of like taking necessary medicine or taking necessary surgery to save yourself from cancer.
Nobody wants to go through the pain of taking the treatment that you need.
And at one time in our history, they did, you know, in the early history of the Federal Reserve, even after 1913, they weren't obsessed with trying to solve the problem with more inflation and more intervention and more regulations.
Their theory has always been, yes, the Fed does this and there will be consequences, but it's always because the consumer is doing things and the investors are doing something.
So if we just regulate things, things would be better.
Even Mnuchin just the other day said there's nothing wrong with the Federal Reserve and nothing wrong with the chairman.
It's that the investors just don't understand what the Federal Reserve is doing and they're misinterpreting things and they're selling stocks.
Well, the truth is, Chris, I think the marketplace is pretty smart and pretty shrewd.
And I think they know what's happening.
And they are deceived, though, for long periods of time.
These last 10 years, they've been literally deceived massively, probably more than ever before.
When you look at the monetary inflation, these QEs, trillions of dollars, and they think this is a salvation.
The one thing, Chris, that I've tried to do over the years is try to get people to think of the big picture, either the Congress and spending or the Federal Reserve, that you can't get away without realizing that you can't just do more of the same mistake and think that it's going to get better.
But they keep trying that over and over again.
They think there's a free lunch.
They think that there's no end to it.
Individuals, if you look at an individual, you or I or anybody else or the average businessman that doesn't have a straight line to the Treasury, they know that they have to live within means.
They have to make profits.
They have to be frugal.
They have to be good entrepreneurs.
And they have to satisfy the king's consumers.
And if they don't, they suffer the consequences if they get into too much debt.
If they keep getting into trouble and the government and the banks keep loaning them money, you know, they know that that just doesn't work.
And yet, when it comes to government and the Federal Reserve, there are no restraints other than the ultimate test is the marketplace.
So even though the information is out there causing the individuals and the business people to make so many mistakes, ultimately the market, the sentiment of the entire market has a sentiment that figures it out, that just printing more money isn't the solution.
And that's why if they see this as if they would see it as an individual, they know they just can't keep doing it, but they think the government's going to get away with it.
And that, of course, has been the abuse of monetary policy, which we have systematically abused since 1913.
And the whole thing collapsed in 1970, 71, and now it's facing further collapse.
So I think that we're on a bad course.
And you've already mentioned that honing in on the President or the Federal Reserve Board Chairman is missing the whole point.
So we who present our we have an opportunity to make a case to show that it's policy, it's the system, it's what sound money is.
It's not the mere mistakes made by a Federal Reserve Board chairman.
Yes, and I believe that Trump even knows deep down that what he's calling for is not right because he campaigned against it.
Right now he's upset that Powell is raising interest rates.
So naturally it's safe to assume that Trump wants an inflationist in there instead.
Keep printing the money, keep printing the money, don't raise interest rates.
But when Trump campaigned for president, this is exactly what he was complaining about.
The Yellen and Bernanke, they kept interest rates so low for so long that it created a big, fat, ugly bubble.
And he got elected because of that.
But now he wants them to stay low, which contradicts what he got elected on.
So by doing so, by wanting to keep interest rates low artificially, Trump is basically saying that he is a better central planner than the Fed chairman.
But you shouldn't want to be the central planner either.
Nobody should be doing this.
The market should be setting interest rates.
And neither the president nor the Fed chair should be price fixing.
Yeah, no, I think you're right.
I think he knows it.
But politicians and people in charge live very short time, short term.
It's next election or next month or whatever, and they're never thinking about the future or another generation or what's going to happen to the monetary system.
There is a crisis in monetary policy now.
We have crisis in the market.
There will be a crisis in the economy, too, even though they say this has nothing to do with the economy.
The economy is healthy.
Well, in the 70s, which I remember well, and the inflation rate being very, very high, costs prices were going up at 15%, and interest rates got as high as 21%.
That period of time was completely different.
They had the stagflation.
The economy was very weak, and prices were going up.
Right now, although we are suffering from the consequence of inflation, the system is different because the CPI isn't going up very rapidly, and they keep reassuring themselves.
See, there's no inflation.
We hear it incessantly on the television.
There's not a problem.
There's no inflation.
There's no reason why they have to worry about inflation.
But what they're dealing with is the consequence of 10 years of massive inflation.
That was the QE.
So we're still in the midst.
And right now, though, when you look at the details of the money supply, there's a tremendous pressure for liquidation and prices going down, deflation.
And of course, everybody tremendously fears this.
But if the market's left alone, that's what really happens.
Prices go down, there's deflation, there's liquidation, and you cleanse the system and you go back to work.
Of course, you wouldn't even have to do that if you didn't have the Federal Reserve distorting things, requiring these corrections.
But most people want you to assume, and the people, and you're taught in the colleges, that the Federal Reserve doesn't cause these problems.
The Federal Reserve bails us out all the time.
The people, greed does this.
Labor union wages go up.
Oil prices.
The Arabs caused our last depression.
This sort of thing.
Where they just will not want you to look at the Federal Reserve and the monetary policy because that is where the power is.
But ultimately, though, I think it will come to an end because it's non-viable.
It's not a Federal Reserve Board chairman.
It is the system, and that's what we have to concentrate on.
Absolutely.
And I'll finish, Dr. Paul.
It may be a speculation on my part, but perhaps Trump never even intended to fire Powell.
But just to keep blaming the Fed and keep the heat off of himself, I mean, we all know that as the stock market was rising, the president was its biggest cheerleader, calling it oftentimes the greatest economy in the history of America.
So now that things are falling apart, he doesn't want the heat on himself.
And in that respect, Trump may be succeeding, at least with his supporters, by at least blaming the Fed, even though he's not blaming the right reasons.
But it's really not helpful because Americans are not learning the truth.
I mean, we have a great opportunity the president has.
The Fed is failing.
They've painted themselves into a corner.
But he has to go after the root of the problem and not keep the American people on this central planning hamster wheel.
We've got to get off of this hamster wheel and do what Ron Paul has said over the decades, audit the Fed, and then once the American people see the corruption that is involved with this institution, then we can end the Fed.
And you're right.
And I think you make a good point that maybe Trump does know what he's doing or think his work, even though he might know the basics as well.
Because if he's successful in putting the blame on the Fed, and more people are likely to do that now than they were, say, 10 years ago, because I think people are becoming more knowledgeable about the Fed, and that's where the blame should go.
But if he can concentrate on that, because he knows somebody has to get blamed, and I'd like to see the Fed get blamed, because ultimately the blame generally, with recessions occurring, it's always excessive capitalism and free markets and gold standards.
That's what they did after the Great Depression.
They say it's gold standard and capitalism, and that had to be blotted out, and that's what Usher did in the age of Keynesianism.
So if he can redirect that, he might save himself a little trouble, but that's going to be difficult.
It's been so traditional in this country that when the economy turns down, the presidents get blamed.
And that's always been a mistake because they like to take credit, and then the blame comes there that way instead of saying, don't you understand the business cycle?
Don't you understand monetary policy?
If you'd concentrate on that, you wouldn't have this, oh, it's the Republicans, it's the Democrats, it's the Congress, it's lack of spending.
And they go on and on and looking for excuses where we should be looking at the source of the problem.
Progress Eludes Economists00:00:36
That, of course, is the Federal Reserve system, the Federal Reserve, not the Federal Reserve Board Chairman, because you can't get a chairman smart enough to know what to do because it's impossible.
But it is an interesting issue.
I'm fascinated with it.
I think we do make progress.
And hopefully this year we'll even have more progress with it.
And because we are going to see a lot greater financial crisis, and maybe there will be a greater incentive to expose the Fed for what they've been doing.
And that's, of course, one of the things that I've worked on for years.
But, Chris, I want to thank you today for being with us.
And I want to thank our listeners for tuning in today.