What year is this? What country is this? Is it 1416 or 2016? Is it the United States of America or is it 15th century England? It's a question worth asking these days as we're starting to see a monarchist-like response to criticism and scrutiny of not only our president and presidential candidates, but also their political appointees and allies.
We saw this play out very clearly on CNBC today after Republican nominee Donald Trump accused Federal Reserve Chair Janet Yellen of political bias and favoritism during his extended phone interview on Squawk Box. The response was stunning for what's supposed to be a democratic society; Trump was attacked following that interview, by on air commentators, guest after guest, and by dozens of others not on CNBC especially Mark Cuban who quickly tweeted this:
In other words, Cuban and so many others are apparently appalled that Trump could even suggest that Yellen and the rest of the Fed are biased politically. If that's the case, STOP THE PRESSES! Yellen and her cohorts on the Fed are apparently the first humans with unbiased robot/computer/A.I. minds in the world! And to think this breakthrough has occurred in the politically and culturally biased hotbed of Washington, D.C. is really a miracle!
Okay, I'm kidding there about the robot stuff. But it's just as ridiculous to say the Fed is not biased and it's even more ridiculous for anyone to act sanctimoniously angry about Trump or any critic suggesting it is. For the most part, every Fed chair and the majority of the Open Market Committee has done what the White House wanted it to within reason. If it were otherwise, we'd have 40 years worth of open sparring between presidents and Fed chairs to prove it.
Just consider all the times just in the last few years when President Obama has openly criticized the Supreme Court and of course Congress. If the Fed was doing something that irked him, we'd know it. The same is true for the Presidents that preceded him who mysteriously never had a public word of protest against their corresponding Fed chairmen and their monetary policies.
Political bias aside, remember that the Fed chairs are appointed by the president. Even if Yellen or anyone who succeeds her only wants to serve for one term, they probably aren't going to want to antagonize the person who appointed them. It doesn't mean at all that such a consideration is stopping Yellen or stopped her predecessors from making good policy decisions. But the assertion that the Fed acts in some kind of non-political or unbiased bubble is ludicrous.
But the bigger concern is the thin-skinned, wagon-circling we're seeing in what's passing for our political discourse these days. Trump did not threaten Yellen with bodily harm or even use the kinds of harsh words against her that he has indeed used against so many others.
He, or anyone else who insists the Fed is biased shouldn't be angrily disregarded right away. Economists, especially the ones likely to get appointed to the Fed, are usually very recognized as being members of one political party or another years before they earn enough chits to get into the game in Washington. It's a political job in a political city and with that comes bias, get over it.