You know, it’s funny: The era of hyper-partisanship in America’s actually turning me apolitical.
Sure, I’m allergic to President Trump (as distinct from private citizen Trump, who I couldn’t care less about) and I always will be. Even if I could get over his anti-democratic tendencies, he has poor taste and exhibits a pathological aversion to cultural competence, which means he and I could never, and would never, get along.
But to see Americans lose their identities entirely to the partisan divide makes me abhor the whole sordid political discussion. You’re either for Trump or you’re against him, and that’s all anyone cares to know about each other anymore. That dichotomy permeates damn near every interaction we have in America, and that’s a catastrophic state of affairs. I’d rather just not participate.
This sickness is so deeply entrenched in the national psyche that we’re convinced no one’s capable of rising above it or seeing beyond it. Nowhere is that conviction clearer than in the by-now-batsh-t debate about whether the Fed and the BLS are engaged in a conspiracy to undermine The White House.
This week, Jefferies’ David Zervos (who I realize is to a certain extent just trolling) wrote, of Powell’s remark that “there are many uncertainties left to resolve,” “I read that as code for ‘many politically inspired hostilities left to resolve with restrictive monetary policy.'”
I’m not sure if this has occurred to folks like Zervos, but there are some people still left — and Powell was probably one of them right up until recently — who genuinely don’t give a damn about this circus and are just trying to do their jobs.
I’ve said this before: Anyone who accuses someone else of “Trump Derangement Syndrome” surely suffers from some manner of derangement themselves. Because who sits around conjuring petulant gibes for people who don’t agree with their politics? A person who lacks equanimity.
With that in mind, have a look at the two charts below, from Deutsche Bank’s Matt Luzzetti.
Those visuals show two different ways of making the same general argument — namely, that Fed policy isn’t actually out of whack if it’s out of whack at all.
When the funds rate was 4ppt below the current midpoint, headline PCE inflation was 4ppt too high and the jobless rate was on its way to undershooting NAIRU for two years straight. Currently, everything’s about right. As Luzzetti put it, the US economy “appears to have converged to steady state with rates at 4.3%.”
So that’s the figure on the left. The figure on the right shows different versions of a policy rule (the Taylor Rule, etc.) with the funds rate. There again, there’s little evidence of a conspiracy to keep rates unduly restrictive. “Policy rules support the Fed’s view that the current stance is ‘fully appropriate,'” Luzzetti remarked.
As most of you know, I do believe policy’s still 50bps or so in restrictive territory. And I don’t believe that’s warranted. But it’s just 50bps. That’s not a conspiracy. It’s not evidence of Zervos’s “many politically inspired hostilities.” It’s just some people trying their best to do a job that, almost by definition, is impossible: Set the price of money such that a $30 trillion economy is in perfect equilibrium.
I suppose, in the interest of fairness — and practicing what I preach — I should concede that Chris Waller and Miki Bowman may not actually be hopeless partisans. Rather, they too are probably more accurately described as a couple of people trying their best to do an impossible job.
The fact that I’ve repeatedly accused Waller and Bowman of having ulterior motives while simultaneously agreeing with the thrust of their respective arguments for cutting rates last month, speaks to the notion that even I have trouble extricating myself from America’s ongoing cold civil war.
It is difficult to acknowledge when a grifting moron who is a bull in a china shop and a world class a-hole is occasionally directionally right on policy.
That so many are just rolling with it…is not a reflection on said moron…
Satan had a great touch for reading the état de la politique. Right until he grabbed us all by the pussy.
Sounds so much more intelligent in French – doesn’t it?
I believe we have two CPI reports, and one additional jobs report, before the Fed meets again in September. I know it sounds virtually impossible now, but if we get some hot inflation data–perhaps as tariffs finally start to show-up in the hard data–and jobs manage to revise higher, we could still see bets on rate cuts reverse between now and then. August has been known to surprise from time to time.
It perhaps raises the question if Trump might have his new lackey (I mean appointee) at the BLS intentionally skew jobs numbers negatively in order to help secure a rate cut.
It was lost on Trump that the last jobs report being bad actually helped his cause. His ego demands that he be seen as a job creator, and no one has worse TDS than Trump himself.
Peach of an article.
We would probably all benefit from a little more of this kind of introspection. I noticed recently that I don’t challenge my kids often enough when they label Trump as ‘bad’, mainly because I’m secretly pleased that they’re aligning to my political tribe. What I’m trying to remind myself is that dealing in absolutes is a big part of the reason why we’re in this mess.
By definition he is ‘bad’ though, morally corrupt as they say. That has nothing to do with politics, he was this way before he even entered politics. The fact that politics has accepted someone like him is the reason we are forced to question why we view a truly bad person as bad politically. Take politics away from Trump and he’s just plain bad without any need for partisan concern.
I for one am finding that having Trump as my President is making me more politically engaged.
I don’t see objecting to Trump’s complete control of the former Republican Party as being partisan …. infuriating maybe.
Great article. Thank you.
I must have been out of the room when “Trump Derangement Syndrome” became a phrase. I thought it referred to the maga lickspittle yes men amen corner supporters of Trump, who might just be deranged. Now I see those people call everybody else that !
I’m with you H, at this point I identify as independent (officially) but have lately voted Democrat because, Trump (more specifically MAGA). I don’t believe Democrats are actually going to solve any problems but they at least aren’t shredding the Constitution. But after a couple of decades of GOP Constitution shredding I’m just not sure any of this is worth my time and attention anymore. And honestly, none of this really impacts me owing to my extreme privilege of being a white male in America (something that my acknowledgement of no longer holds value for).
I guess at this point, why fight the current when you can just float on by to better things?
Yeah probably wouldn’t occur to Zervos as he’s doing a circus act with former big tent acrobat Kelly Anne Conway. He probably gives her hair tips as well.
This hasn’t been mentioned in these pages yet but this AM Yahoo published a note that Trump has fired the director of the Library of Congress. The reason was apparently that the LOC has a website that shows a copy of the US (not his) Constitution. Apparently, Trump doesn’t approve of several paragraphs. He doesn’t like that Habeas Corpus stuff; erased it from the copy on the web. He also dislikes the part that says no to the conferring of titles. Specifically, he hates the part that says he can’t be King so, he took that part out too. Several pieces he took an oath to protect and defend are no longer found in the version of our Constitution on the LOC website. I’m pretty sure he thinks that means those bad parts are now actually gone. (Hint: others have found out about this. What will happen next is a mystery.) By the way, for those familiar with the classics the story persists that the learned sage Diogenes could not find an honest man in Athens so he got a lantern and searched for this lost soul every night. He never found what he sought. I wonder if this steadfast gentleman is available to continue his search around here.