Tuesday, February 26, 2019

Former Fed Chair Janet Yellen Says Trump Doesn't Understand the Fed or Economics

Janet Yellen 
UPDATE Below: Current Fed Chair Jay Powell responds 

Former Federal Reserve Board chair Janet Yellen lashed out at President Trump during an interview on Marketplace with Kai Ryssdal.

“I doubt that he would even be able to say that the Fed's goals are maximum employment and price stability, which is the goals that Congress have assigned to the Fed,” she told Ryssdal. “He's made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade. And, you know, I think comments like that shows a lack of understanding of the impact of the Fed on the economy and appropriate policy goals.”

When Ryssdal asked, "Do you think the president has a grasp of macroeconomic policy?:

Yellen's answer was short and to the point, "No, I do not."

Then she correctly attacked Trump's obsession with trade deficits:

 And when I continually hear focus by the president and some of his advisers on remedying bilateral trade deficits with other trade partners, I think almost any economist would tell you that there's no real meaning to bilateral trade deficits, and it's not an appropriate objective of policy.

This is sad, I wouldn't rank Yellen as a particularly astute economist but she sure can roll over the President when it comes to basic economics.




  1. This gets to the core of my complaint about anti-Trumpers. I can agree with them if what they are saying is that Trump appears to have no grounding principles and little intellectual curiosity, such that he can't really articulate a cogent view on economics or political philosophy (although I must admit that some of his instincts about modern culture and foreign policy can be surprisingly accurate). However, the Keynesian statists who believe themselves or their leaders to be so erudite are also mostly wrong because they have poor grounding principles (look at the adulation for The Oracle, Professor Obama).

    These people seem to think that having principles makes one superior to those who do not have principles, without recognizing that having poor principles and believing in one's superiority is as dangerous, if not more dangerous, than having no principles.

  2. Trump doesn't understand the purpose of the Fed? I think its purpose is clear to everyone by now: to enrich the crony class at the expense of the taxpayers. What's so hard to grasp about that?