ICYMI: Toomey: Former Fed Official’s Call to Politicize the Fed is “Rank Partisanship”
Philadelphia, Pa. - In case you missed it, U.S. Senator Pat Toomey (R-Pa.) responded to a recommendation by a former top Federal Reserve official that the central bank should consider influencing the presidential election.
Bill Dudley, the former president of the Federal Reserve Bank of New York, made his recommendation in a recent Bloomberg column. Senator Toomey's response is currently featured as the top comment on Dudley's subsequent column, available here, and below. You may also view Senator Toomey's letter on Bloomberg Terminal.
To the Editor:
Bill Dudley, former president of the Federal Reserve Bank of New York, recently argued that the Federal Reserve should willfully violate its statutory mandate of maximizing employment, as any action in support of the economy might encourage President Donald Trump to escalate his trade war with China.
This is a terrible idea. Most disturbing is that a recent member of the Federal Open Market Committee is recommending his former employer break the law. Such disregard for the rule of law should be disqualifying for any position of public authority.
Dudley is asserting that unelected, unaccountable Fed officials should decide the merits of an elected president's economic policies and punish the economy if they disagree. This is an outrageously anti-democratic position. Whether one agrees with Trump's use of tariffs, and I have been a frequent critic, the president, and a complicit Congress, will rightly be held accountable by the American voters. Dudley would undermine this constitutional accountability.
Finally, Dudley is advocating the politicization of the Fed. He states "There's even an argument that the election itself falls within the Fed's purview. After all, Trump's reelection arguably presents a threat to the U.S. and global economy."
Setting aside his blatant partisan bias, if the Fed were to exercise its powers in an attempt to influence the outcome of a presidential election, as Dudley recommends, Congress and any president would move quickly to eliminate that ability, bringing monetary policy entirely into the political branches of government.
Dudley's recommendation is rank partisanship. It's worrying that someone of his experience is willing to destroy the Fed's independence to advance his own political agenda.
U.S. Senator (R-Pa.)
September 4, 2019