Open Thread - Thurs 14 Aug 2025 - The Fed
The Fed
I have never paid much attention to the Fed, what it is, how it worked, whatever. It's something that none of us, at least in almost all of my lifetime, could control. It seems to me to be an entity that makes things better for the rich, especially bankers, and 'bleh', on average, for the rest of us. It's 'politically independent' which means... means that TPTB rule it without any input from the lower classes. But it wasn't always like that as I learned recently from a good article by Matt Stoller 'Federal Reserve Independence Is Bad' with the subheading - 'Donald Trump wants to fire Fed Chair Jay Powell. He should be able to do so. The Fed needs to be controlled by elected leaders, not Wall Street. Even if those elected leaders are bad.'
I didn't at first agree with the subheading at all, except for the part about some elected leaders being bad. But then I read the article, and learned that up until the late 1970s the Fed was controlled by elected leaders, which is why it did a decent job for most of the country's people before that.
From The Week.
But that changed in the late 70's *surprise!* and, well, here we are now.
Here's the first bit of the article, to get you interested 
On Sunday, I noted that Donald Trump is seeking an excuse to fire former private equity titan and current Federal Reserve Chair Jay Powell, by pointing out the Fed is over-budget for a construction project. No one is fooled, of course, Trump is trying to gin up an excuse to take over the Fed.
I consider this possible firing of Powell to be good news, which confused a lot of people. Surely I can’t mean that Trump controlling monetary policy would be a good thing? Well, no, I don’t, but that’s because I don’t think Trump is a good leader, and I’d prefer he not have control of policy in general. However, I think we should respond to bad leaders by electing different leaders, not by removing important areas of politics from political control. I also think Trump, yes even Trump, will do a better job at managing the central bank than a leadership group insulated from political control.
In that, I have very stark disagreement with most of my fellow Democrats. In part because of Trump, but also because of an undeserved popular faith in Wall Street and experts, there’s a widespread belief these days that the “independence of the Federal Reserve” is some sort of economic virtue. I do not subscribe to this view; such a powerful government agency should be under the direct control of elected leaders.
When it is not, there are three problems. First, Americans lose faith in democracy as a meaningful system. They want their elected leaders to deal with prices, but their elected leaders have foregone any control over the institution tasked with doing so. Second, the Fed operating without direction from elected leaders gives politicians bad habits. For instance, Joe Biden’s administration was crippled in part by his refusal to take control of monetary policy, giving him an excuse not to even try addressing inflation. And third, Federal Reserve leaders and the institutional culture, without political control, become dedicated to consolidating financial power.
And some of Stoller's final points:
Ultimately, the Fed isn’t ‘independent,’ it’s out of control. Americans use credit cards, mortgages, auto loans, corporate bonds, Treasury bonds and bills, and go through payment systems and banks. If elections are to matter, then the people we elect should get to make policy on these institutions, aka how we use money.
I don’t care if it’s done by direct Presidential control, or Congressional control, or some hybrid. Much of the technical expertise at the Fed can be retained, with elected leaders making the big decisions like any Congressional committee. That’s how we managed debt and monetary policy for a long time. It could work again.
I'm not sure I trust politicians enough to take control of the Fed. But then, who would I trust? Right now the board is uncontrollable unless one has multi-millions and knows the right people. What do you think?
Here's the open thread! What's up, whatcha doing? Reading? Thinking? Remember, everything is interesting if you dive deep enough, so tell us about where you're diving!
Comments
Thursday is Here!!
Happy Birthday to my Brother!! He's 61 today!
Hope everyone's Thursday is great, birthday or not. A few days ago we were in smoking hot weather territory (for here in the PacNW, it hit over 90). Now we are in very comfortable lovely outside and inside weather territory. I'll take it. I wish everyone else could be in their comfy weather territory too. What's up with you?
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
The Fed exists
simply and only to make the rich richer. All the masks are off now, so they don't even have to pretend to maintain that thin veneer of civility.
Trump may achieve something I thought was impossible in this country. He might actually impoverish enough people to make a civil war a real possibility. People won't act until they themselves finally become uncomfortable- and more and more people are seeing the end of their formerly-comfortable customary existences. The light at the end of the tunnel is on the train that is coming at us all.
Tomorrow will be amusing. I'm sure that shit will be pulled at the "summit", and doing it on US soil is telegraphing what form that shit might take. We'll see if we still wake up Saturday.
Twice bitten, permanently shy.
Well, I'm getting out of town
tomorrow for the weekend. And there is nothing to target where I'm going. Out in the sticks.
Gone fishin'.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
Fishing sounds good!
Have fun with that. And ignore anything on the radio too
Tomorrow is rain, here. I think I will be doing indoor chores. And then maybe picking early apples. It's too early for them, but they are falling off the trees already. Yikes, must be the abnormally hot and dry we've been having.
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
'The Fed exists simply and only...
to make the rich richer.' That sure is true, and it has been that way for most of our life times. I just had no idea that it was different before the late 70's. Never paid attention when I was a kid, or a high schooler. I don't know if it can be reclaimed and reformed. I think that, as you have said, maybe what Trump does is finally bring about civil war, or the threat thereof. After all, that's basically what made the super rich share a bit of their wealth in the 1930's. It was share, or get destroyed by the 'people'.
I have not been paying attention to the 'summit'. But I reckon shit will be pulled, yes indeed. Gah. Have a great weekend, if we are still here!
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
Trump wants to cut interest rates
This is exactly what brought us to this point (beyond the maldistribution of wealth, the lopsided tax system, financialization and militarization of the economy). Trump wants interest rates lowered because the asset markets are about to implode. My search for housing has forced me to follow the credit markets because of the enormous affect they have on housing prices generally. The bloated housing prices need to undergo a correction like they did in 2008. It appears to have started.
Lowering interest rates just kicks the can down the road. Yes, the artificial compression of interest rates for such a protracted period was an arbitrage grift which enriched the financial class (and their digital proteges) beyond their wildest dreams. The imposition of higher interest rates is placing their club members in the real estate/mortgage business in the toilet. Default rates on mortgages, car loans, student debt are going up. Somehow they have to postpone this, ie, kick the can down the road until after the next election cycle.
Trump proves the point about Fed independence. He and his supporters are grifters whose object is to loot everything they can get control of before the upcoming collapse. Letting a fraud like Trump and his team of scoundrels take control of monetary policies and regulations will destroy the financial markets. They've already done incalculable damage to the departments and agencies of the executive branch, their regulatory function, and the rule of law that governs them.
I wouldn't trust Stohler as far as I could throw him. .
A fairly large and busy coffee chain outlet in what appeared to be a prosperous community and location here in the local area, just notified us, they are closing their doors, Aug. 29. The cafe is super busy. Gee, why aren't they profitable? Could it be the explosion in rent for the prime location? Maybe it's the increased prices for foodstuffs, and coffee.
語必忠信 行必正直
Trump taking control of the Fed sucks...
If he were to do it, I completely agree, it sucks.
The economy now, for the regular people and little people, is horrible in so many ways. I don't know that I agree with Stoller that having politicians control the Fed would be good. However, I do know that having bankers control the Fed, those who get the richest, those who don't give a crap about normal people and have nothing... nothing that makes them have to even pretend to give a crap, that kinda control is awful. And that's all we've known, for most of our lives.
I think a revolution in some form or another is gonna haveta occur in order to change things. Wonder who the modern day FDR - rich person but 'traitor to his class' - will be? If there is one?
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
I think Trump already disabled
the SEC, the IRS, the BLS, the CPB. The IRS had 6 commissioners since he took office? He's decapitating the agencies in general terms. Now making a frontal assault on the Chairman because he's too "conservative."
Anyway this is one of the candidates, for the Fed who seems to fit the "reality gameshow" script Trump seems to favor. He comes from the market side of the house, at least that's what I gathered from the comments made. He has a Ph.D. but he had to forget about that to be a "market guy," like Bessent, Ludnik, etc. They are market people, not bankers. They're hedge funders, currency traders, etc. There's a difference. I think.
Trump PANIC CALLS Fed Jesus to save economy
The current fed chair Powell doesn't bother me near as much as Bessent, Ludnick, Jesus and Trump. The patient is on life support...
Thanks Sima for your OT. I wouldn't even have taken a look at this without your commentary. I've just ignored the topic since the last meltdown other than the housing markets.
語必忠信 行必正直
Fed Jesus?
Boy, that video is spot on calling that guy Jesus. And I learned a lot from the video, yes, Trump chooses people by their TV popularity, it seems. So thank you very much!
And yea, I'd rather have Powell.
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
The Fed was a banksters' wet dream from day one. They had a
private brainstorming session on an island during which they figured out the ideal banking system to benefit bankers and wealthy individuals so they knew what to shoot for with respect to various things. They presented it to Congress and were dumbfounded tht they got everything they wanted. They control the money solely for their own benefit and charge the government for letting them do so. They create money which they give the member banks to use for their benefit and create offsetting federal debt which, to compound the theft, bears interest. It is an evil scam and should be completely done away with.
be well and have a good one
That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --
Doing away with the Fed..
IS certainly an option, and perhaps the best one. I don't know. I want controls like in the late 1930s and 1940s, and 1950s, on monetary policy. I want back to the gold standard. I want... yea, none of it will happen, will it? The whole world is controlled by the super rich. Maybe it always has been, but there have been times when they have to let the little people have some success?
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
Good morning, sima!
That was an interesting read, chica. We do need to get control of the Fed, and there are outspoken advocates for clkosing it down entirely.
Meanwhile, I read an article yesterday that tariffs had thus far increased consumer goods prices by 26%, and that by the year's end, they predicted an additional increase of 67%.
Maybe this is the beginning of a revolt, and maybe Trump with his militarization of the police in DC will spread in anticipation of massive public unrest.
Well, I don't remember anyone being as obsessed with winning a meaningless, junk Prize, and if he does win the Nobel Peace Prize, they need to rename it or disappear it.
A Peace Prize that ignores genocide, and where the genocider's leader nominates his fellow genocider for it, is not worth wiping your ass with.
As Dad would say about these nutty billionaires in banking and politics, "fuck 'em in the ass."
Sorry for the rant. Thanks for your thoughtful OT, chica!
"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981
Glad you enjoyed the read...
I found it interesting too. Not sure I completely agree with Stoller, but he does bring up some good points. 'The People' have to have control of the Fed, or it needs to be destroyed.
Tariffs are raising prices, but I didn't realize how much. That article you read predicts 67% by year's end? I wonder if there will be a revolt of some kind? I don't see how there can't be, but, what do I know?
As for the Nobel Peace Prize, I hate to say it, but I thought the thing was junk when Obama got it, right after he started a war. Hah. Now they are thinking about giving it to Trump? Are people insane???
Your Dad was right. 'Fuck em in the ass'. And your rant was a very good one!
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so
Thanks for the OT, Sima
The monetary system we used to have worked pretty good until Nixon took us off the gold standard. The greenback was backed by gold in Ft. Knox then. I have to wonder if that hasn't disappeared into private vaults.
They should open it up for public tours so people can see for themselves the gold is still there.
What are they afraid of? Somebody shoving a gold brick into their back pocket? Hrumph!
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
Gotta wonder...
Is the gold still there? I am a bit dubious, myself. Maybe it's been replaced by AI gold! So we'd get a brick of AI gold in our back pockets
And yes, this all started, well, the current economic crap started, with Nixon removing the gold standard, and the new economic ideas of Paul Volker, Friedman and so on (from Nixon and on).
Hopefully it's fixable, AI gold or not!
If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so