President Trump’s nomination of Stephen Miran to fill an open seat on the Federal Reserve’s Board of Governors will not, in itself, remake the world’s most important central bank. The term is temporary. The vote—should the Senate bother with one—will not tip the balance in some dramatic way. But Miran’s résumé is less significant than his stated ambitions: he has argued for shortening governors’ terms, making them dismissible by the president, and giving state governors a role in regional Fed leadership. And this comes not in a vacuum, but alongside Trump’s unprecedented, though apparently warranted, attempt to fire sitting Governor Lisa Cook—allegations she is contesting in court. Taken together, Miran’s nomination and Cook’s dismissal look less like routine personnel changes than like the opening moves of a larger campaign to bring the Fed under direct presidential control.
This raises a question that is far more important than whether Miran’s appointment survives the confirmation process, or Cook’s challenge succeeds: should the Federal Reserve be insulated from day-to-day political control, or should it operate as an arm of the White House and Congress?
One might begin with the observation—self-evident to the point of banality—that we conservatives, by and large, do not love the Fed. We regard it as an accomplice in the crime of inflation. By holding interest rates too low for too long, and by conjuring money out of nothing as though monetary value were a matter of pure will, it has helped to engineer our present economic predicament. This is not conspiracy theory; it is simply cause and effect.
It is therefore tempting—indeed, almost reflexive—for conservatives to imagine that “taking control” of the Fed is the natural remedy. After all, we blame the government for most economic maladies, and we are usually right to do so. But here we must resist the seductions of our own rhetoric. The Federal Reserve, for all its faults and missteps, must remain independent—if only because the alternative is so much worse.
Republicans will not hold the White House indefinitely, nor will they always command a majority in Congress. When power returns to the Democrats—as, in the natural pendulum of American politics, it inevitably will—these grievance merchants will be in a position to impose their destructive economic theology on the most powerful monetary institution in the world. One hardly needs to imagine the consequences; history is replete with examples. From the ruinous inflation of the Weimar Republic to repeated crises in Argentina and the grotesque collapse in Zimbabwe, the lesson is the same: once a central bank becomes the political plaything of the governing party, its currency becomes the victim of that party’s electoral anxieties.
Just look at the economic illiteracy and lunacy that dominates the American Left. Theirs is a creed in which interest itself is treated as something nefarious, as if the very concept of paying for the use of money were a swindle perpetrated by bankers against the innocent. Scroll through social media and you will find a torrent of complaints dressed up as revelations: “When I borrowed money, they made me pay it back—with interest!” The predictable supporting themes follow: every loan unpaid was “predatory”; every credit card interest rate is “exploitation”; every foreclosure is an injustice. So all loans must be forgiven, all debts erased, and all access to money equal because, of course, credit scores are “racist.”
This is grievance masquerading as economics. And grievance, given a printing press and the authority to decide what money is worth, is not merely misguided—it is catastrophic. Do we really want the Occupy Wall Street crowd taking its turn managing our central bank? These same people who live to redistribute wealth and control every price? Imagine, if you can bear it, a Federal Reserve that takes its cues directly from the leftist political passions of the moment: interest rates lowered to “stimulate” preferred industries, loans forgiven for preferred groups, credit extended or denied according to political fashion rather than financial soundness. This is not monetary policy; it is social engineering through currency manipulation.
Nor is it speculation. The Left is openly urging the Fed to go beyond its traditional mandate and use its powers to engineer social transformation. Take the Federal Reserve Racial and Economic Equity Act, championed by Maxine Waters and Elizabeth Warren, which proposes rewriting the Fed’s responsibilities to include eliminating disparities in employment, income, wealth, and access to credit across racial and ethnic lines.
If there’s one thing Republicans hate more than the Fed, it’s DEI policy. Now imagine those two things combined!
Yes, the Fed can blunder in isolation. It has, and it will again. But there is a profound difference between a technocrat making an error in judgment and a politician on a crusade that wins votes in November but destroys value in December. The first can be corrected; the second is often irreversible.
The real danger here lies not in incompetence but in intent. A central banker, however misguided, is generally trying to preserve price stability and prevent the collapse of the banking system. A politician, faced with an election, is trying to please a majority of voters right now—often at the expense of the next year, or the next generation. The incentives are not merely different; they are directly opposed.
It is fashionable in some conservative circles to insist that unelected bodies are inherently suspect, that accountability must always trump insulation. But this is an oversimplification. There are certain levers of power—war-making, criminal prosecution, monetary policy—that ought not be jerked about by the whims of the hour. We do not, for example, elect military generals every four years to ensure “responsiveness” to public opinion, and for the same reason, we ought not allow interest rates and the money supply to be dictated by the short-term needs of a political campaign.
The founders of the Federal Reserve understood this, even if they could not have foreseen every modern complication. The semi-independence of the Fed is not an accident or a flaw; it is a structural safeguard—reflected in 14-year terms for governors and traditional for-cause removal protections—against the most predictable of human weaknesses: the desire to spend money one does not have.
By all means, let us criticize the Federal Reserve for its role in creating inflation. Let us demand greater transparency, better forecasts, and more humility from those who sit at the head of the table. Let us task it with limiting, rather than maximizing inflation. But let us also remember that a Fed bound hand and foot to the political branches would not be a cure—it would be a controlled demolition of the very currency it is meant to protect.
Stephen Miran may or may not be confirmed. His tenure, if it comes, may or may not leave a dent in the Fed’s operations. But his proposals raise a question whose answer will matter far longer than his name remains in the headlines: do we want a Federal Reserve that can err in isolation, or one that is compelled to err on command?
I will take the former. I will take a central bank that occasionally misjudges the moment over one that believes, as an article of political faith, that money has no cost and debt no consequence. In one case, we suffer from mistakes. In the other, we suffer from illusions. And as the history of collapsed currencies reminds us, it is the illusions that bankrupt you.
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