The US is venturing into very, very dark waters vis-à-vis central bank independence.
On Thursday, Donald Trump’s OMB director Russ Vought, known ignominiously as the principal author of Project 2025, went after Jerome Powell in what I can only describe as an absurdist letter which served to formalize allegations that Powell misled Congress about cost overruns tied to renovations at the Marriner Eccles building.
These are the same allegations I mentioned here on July 8 while documenting the results of a UBS poll which found that nearly one in three global reserve managers are concerned that the Trump administration might look to officially strip the Fed of its independence.
In his letter, Vought derided Powell for “plow[ing] ahead with an ostentatious overhaul” of the Fed building, which the OMB blasted for, among other things, exceeding the recommended per employee square footage.
Vought went on to explicitly accuse Powell of lying to lawmakers when he said, late last month, that the renovation plan doesn’t include a VIP dining room, nor rooftop terrace gardens. The letter also suggested Powell misled Congress regarding a four-year construction project on the premises completed in 2003. (The implication being that in fact, the upgrades weren’t necessary because the building was renovated “just” 22 years ago.)
According to the OMB, the Powell Fed might’ve run afoul of the National Capital Planning Act, and specifically a stipulation which provides that meaningful deviations from previously approved renovation plans must be reassessed by the relevant administrative panel. If the Fed’s in violation of the act, Powell will have to “immediately halt” the renovations pending review of “major design elements.”
Vought called this profoundly ridiculous charade a “serious concern,” and demanded Powell answer a dozen questions about the construction project within seven days. Those questions include inquiries as to the status of a water feature and the specifics of upgrades to the building’s marble.
I suppose (I hope) this goes without saying, but just in case: Trump’s trying to get Powell to resign or, failing that, create a pretense for firing or demoting him. That’s only possible “for cause,” and this, apparently, is the “cause.” Alleged discrepancies between Powell’s congressional account of interior decorating decisions and a renovation plan approved nearly four years ago.
I should emphasize: This is precisely, and I do mean precisely, what you’d expect from a government like Viktor Orban’s Hungary or Recep Erdogan’s Turkey. They’re not full-on dictatorships, so rather than — you know — haul a disobedient bureaucrat off to jail in handcuffs with a potato sack over his head, you fabricate a mundane, clerical excuse to fire him.
Trump and his coterie of sycophants began pushing the renovation perjury narrative two weeks ago. As of Thursday, it’s officially enshrined in an OMB information request of Powell, opening the door, perhaps, to some manner of congressional inquiry.
“The cost per square foot [of the renovations] is $1,923, double the cost for renovating an ordinary historic federal building,” Vought wrote on social media, before accusing Powell of spending nearly as much on the project as it would’ve cost in today’s dollars to build The Palace of Versailles. (Not that it matters — the comparison’s asinine regardless — but ballparking the cost of Versailles is a notoriously difficult exercise.)
Everyone in the world outside of the MAGA echo chamber will see this for the wildly dangerous gambit that it is, and if Trump goes down this route — firing Fed Chairs on excuses that aren’t just flimsy, but are transparently preposterous — he’s even more cavalier than his staunchest critics feared.
In the simplest possible terms: You can’t play around with the goddamn money. Not this way. This is one arena where you absolutely have to behave with a modicum of savoir faire, lest you should stumble into an overnight financial crisis.
Evil really does go all the way to the bone and we don’t have any protection.
And then there’s this gem written for The Hill by Peter Navarro:
https://thehill.com/opinion/finance/5381666-jerome-powell-is-competing-to-be-the-worst-fed-chair-in-history/
What a hit piece.
and i’m sure all the fanclub thinks the reno is tax payer funded! no wonder his wife dumped him last year. remember kids, when you shove toolbags into lockers, you leave them there!
H-Man, I stopped reading after the second paragraph. Powell has committed a crime that will be investigated by the FBI (Patel) and then a decision will be made about a criminal prosecution (Attorney General Bondi). Welcome to POTUS justice. Are fed governors covered by E&O policies so at least the insurance pays for the lawyers?
H-Man, now that I have read the entire article, I am more convinced than ever that these policies are going to send the economy down the same hole those poor bastards in Los Angeles escaped from. But unlike their happy ending, our economy is not going to find an easy way out.
The country is completely out of control. You have this strike on the integrity of the Bank, and then Trump’s insanely irrational tariff attack on Canada today; and what the hell was that with Brazil. Its chaos. Someone, something has got to do something to stop this guy before America implodes – maybe time for the market to engineer a TACO?
I don’t know about others. When I read this article, my BP went up. Pray for Mr. Powell and Separation of Powers in America.
Trump is just a tool, and the perfect really bad, and nasty tool. As a result, Project 2025 is alive and well. And we’re in early innings.
Powell will probably handle the OMB request professionally. He’ll turn it over to the Fed’s lawyers. Any delay will make trump even madder. Trump can’t stand not getting his way, even though he rarely, if ever, considers the adverse consequences, even self-destructive impacts, of his rattle throwing, yelling and spitting. So, yes, H is spot on: Next public step will be Mike Johnson with his nose so brown making sure the House investigates Powell.
Trump is teetering on many edges. He’s avoided accountability for so many immoral and criminal acts. He may suddenly realize the bond market is more powerful than anything he can imagine. Too bad the US will suffer if the powers that be finally start to hold the yellow-bellied sociopath accountable. Certainly not a Greek tragedy if the wannabe ever implodes, scattering rattlers and baby toys, and make-up, for miles. W
I still believe in the fundamental soundness of American institutions. What we need are a few good men to call out the failures of which can be attributed to the bad people occupying them.
Since no one else will say it, I will. Powell is being very selfish and greedy with this unnecessary gravy train renovation of one of the few Federal buildings where actual work is still being done. Surely he recognizes that these funds would be much better spent on erecting (if you can even say that) the finest flagpoles known to man or beast, paving over the White House gardens and splooging more golden baubles onto every remaining square inch of wall space still available in the Oval Office. Powell should be ashamed, but is advised not to contemplate his shame near any Fed windows, renovated or otherwise.