Nobel laureate Paul Krugman slams Donald Trump's attempt to fire Federal Reserve Governor Lisa Cook, calling the move "completely insane." Cook, appointed by President Biden, plans to sue Trump over his unfounded allegations of mortgage fraud. Krugman warns of disastrous consequences if the Fed or Supreme Court allows Trump's actions, comparing a potential outcome to Turkey's economically devastating authoritarian rule. This unprecedented attack on the Fed's independence raises serious concerns about the future of US monetary policy
“This is completely insane,” said Krugman, the 2008 winner of the Nobel Memorial Prize in Economic Sciences, in an interview with CNN’s Jake Tapper.
Krugman stressed that there’s “no evidence” that would warrant Trump’s firing efforts, which the president has tied to allegations that Cook — who was appointed to the post by Joe Biden in 2022 — committed mortgage fraud.
Cook has contended that she hasn’t been charged or convicted of any wrongdoing.
In a post to his Substack newsletter Tuesday, Krugman warned that if Federal Reserve Chair Jerome Powell caves to the president or the Supreme Court “acts supine again and validates Trump’s illegal declaration” on Cook, “the implications will be profound and disastrous.”
“The United States will be well on its way to becoming Turkey, where an authoritarian ruler imposed his crackpot economics on the central bank, sending inflation soaring to 80 percent,” he warned in a nod to Turkish President Recep Tayyip Erdoğan cutting interest rates in an effort to boost the economy.
Critics have warned that Trump — who has hurled attacks at Powell in recent months and threatened to fire him — hopes to show Cook the door to appoint a loyalist to the board and get the Fed to slash interest rates.
Krugman, when asked how Trump’s efforts to fire Cook impact the future of the central bank’s “independence,” simply remarked that the president’s move is “really awful.”
“It would be bad enough if he were simply pressuring the Fed — if he were simply, even, managing to find some cause to fire somebody, but this is actually saying, ‘If you, Federal Reserve official, get in my way or don’t follow my orders, I will ruin your life,’” Krugman said of Trump.
“This is pure intimidation, it’s personal intimidation. So this is, really, this is the authoritarian playbook … There’s a reason that we want the Fed to be really insulated.”
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H/T: Raw Story
Source: Original Article