How can you tell President Donald Trump thinks he’s going to lose in November? Because he has already begun salting the earth behind him.
And his fellow Republicans are helping by sabotaging key institutions that the next (presumably Democratic) president will inherit.
On Tuesday, the Republican-controlled Senate Banking Committee approved Trump’s latest two picks for the Federal Reserve Board of Governors. One of these nominees, Christopher Waller, would be a competent, reasonable, totally qualified addition to the most powerful economic body in the world.
The other is Judy Shelton.
Shelton, a professional crank, has previously suggested that the Fed shouldn’t exist. She has repeatedly likened the Fed to a “Soviet State Planning Committee” because the central bank, rather than the quantity of gold, controls the money supply. Shelton has spent her career trying to bring back the gold standard, a monetary system abandoned worldwide and roundly rejected by economists.
Those were her views until recently, anyway. Once Trump nominated her to the Fed, she changed her tune. Now the key problem with the central bank, she says, is that it is not political enough and ought to “pursue a more coordinated relationship with” the president. Which happens to be exactly what Trump wants: a Fed that serves his narrow political interests, rather than the economy’s.
Never mind that the Fed must be politically independent in order to function; as Argentina, pre-euro Italy and other basket-case economies have illustrated many times over, a central bank cannot credibly commit to stable prices if the money supply is even mildly suspected of being controlled by politicians.
Republicans have indulged Trump’s choice to install charlatans elsewhere in the executive branch. But GOP senators had previously drawn the line at unqualified picks for the Fed. The central bank was too powerful, too important, to leave in the hands of buffoons and yesmen.
So, as with some other quacks Trump had advocated for the Fed, until quite recently it looked as though Shelton’s nomination would fail. Especially, perhaps, when the economy hit its worst numbers since the Great Depression and it became clear the Fed was the country’s only competent economic policy making body.
After all, Shelton has long been considered fringe even by hard-line Republicans. In fact, she was previously considered too outlandish to merely testify before the committee that just approved her for a Fed seat. “The idea of even calling her as a witness for something was beyond the pale,” a former Republican Senate Banking Committee aide said as Shelton faced confirmation hearings earlier this year.
So what changed?
For one thing, Trump’s poll numbers.
There is, even according to Republican lawmakers, no economic upside in putting Shelton on the Fed. In praise so faint it’s inaudible, Republican senators have suggested the best thing about her is . . . she’d be just one voice among many and would therefore be unable to unilaterally implement her worst ideas, such as reinstating the gold standard.
That’s their best-case scenario: that Shelton has no influence whatsoever. The worst: She could cause some chaos, including by making discussion among (understandably paranoid) Fed officials less candid. But perhaps a less functional Fed is desirable, if you’re expecting Joe Biden to be president come January.
It’s reasonable to suspect that Republicans might advocate personnel or policy changes damaging to the economy simply because a Democrat is president. They’ve done so before, when Barack Obama was in office. In the aftermath of the financial crisis, such advocacy came in the form of open letters and crabby op-eds fear mongering that low interest rates and Keynesian stimulus would stoke (in Shelton’s words) “ruinous inflation.”
If Shelton is ultimately confirmed to the Fed by the full Senate, those crank calls would be coming from inside the house.
Outgoing presidential administrations have engaged in petty, puerile pranks against their successors, such as stealing W keys from computer keyboards. This administration may be seeding something more sinister, across multiple critical institutions:
This landmine in the Fed. A hollowed-out State Department. Brain-drained statistical and scientific agencies. A shredded social safety net. A gutted immigration system, so financially mismanaged that about 75 percent of its employees are slated for furlough in two weeks. A hobbled higher-education system, once the envy of the world, now struggling to attract global talent because the administration has made it so difficult for that talent to study here. Perhaps a permanently lost tax-revenue stream from the past several decades of unrealized capital gains.
Of course, much could change before November. What might Trump do if, after so much destruction and earth-scorching, he wins reelection?
Perhaps he hasn’t thought that far ahead. Or maybe he’d revel in the “Mad Max”-style landscape he’s now cultivating. William Tecumseh Sherman left flames in his wake; Trump appears to prefer everything on fire, at all times, around him.