Journalist attacks by Israel aimed at killing free press

 

Gordon L. Weil

I have been a journalist, full-time, part-time, or sometime, since 1967.  The news this week has made me deeply angry.   Journalists have been killed by the government of Israel as part of its war in Gaza.  Innocent journalists have been killed for no apparent reason other than that they reported on Israeli military operations there.

After the outrageous Hamas attack on Israel on October 7, 2023, Israel understandably launched a punitive military operation against the terrorists, vowing to eliminate it entirely. While the reaction was justified, many have questioned whether it was proportionate.  My purpose here is not to question what Israel has done in responding to Hamas, except for one critical element.

To shield its operations from outside scrutiny, Israel has prevented foreign journalists from entering Gaza.  But Gaza journalists remained in the territory and issued their reports to a wider world.  They worked for Al Jazeera, a news organization based in Qatar.

From its origin in the 1990s, Al Jazeera was condemned as allegedly being aligned with terrorist groups.  The opposition came from Arab governments, targets of its revelations, and Israel, mistrustful of Arab news sources.  But it persisted, largely overcame the criticism and has been generally accepted, though not in Israel, as a reputable news organization.

One other element of the Israeli retaliation is relevant.  It designates people as members of Hamas and, being in a state of war, it feels no need to offer proof.  Once an alleged Hamas figure is identified, they are targeted for death.  If they are in the company of innocent people, the others are likely to be killed alongside them, deaths known as collateral damage.

Israel has reportedly killed over 200 journalists in Gaza, though many may have been hit in air raids on civilian populations.  But some clearly have been intentionally targeted.  It is not a question of shooting the messenger; it is an attack on a free press.

Last week, an Al Jazeera news team, reporters for its Arabic and English services and their cameramen, were working out of an identified tent near a Gaza food delivery point.  Naming one of them a Hamas operative, Israel killed all five people – one person whose alleged Hamas affiliation had been widely denied and four admitted cases of collateral damage.

The other slain reporter worked for the English service, providing on-site evidence to the world that some Israeli military claims were not true.  His was surely a voice that Israel would want to silence.

At one time, I appeared regularly on the New York public television station.  When you are on air, you know and appreciate the camera and audio operators, who get scant public recognition.  They are just as important to the story as the person in front of the camera.  Israel killed three of them along with the Al Jazeera reporters.

Almost any reporter is likely to find themselves in an uncomfortable or dangerous situation, but that’s part of their responsibility.  Like a soldier or a police officer, they may knowingly put themselves in harm’s way.

My own experience is truly insignificant compared to the heroic efforts of the Al Jazeera reporters, but a couple of times I put myself in situations where I could suffer harm so I could get the story.  To do the job, you may have to take risks.

Why do it?  In any society, the people deserve to know about events that can affect their lives.  The media is their representative and ultimately is responsible to them.

Beyond that, the press is an essential part of the system of government.  In democratic societies, the independent media holds officeholders accountable for their views and actions.  Power corrupts, and officeholders grow to dislike the media scrutiny that can hold them responsible. 

The arrogance of power resists accountability.   When President Trump attacks publications and individual journalists, he tears at the fabric of the political system.  Still, the media dutifully reports his attacks on the media itself.  The situation is even worse when a government, accused of war crimes, defends itself by suppressing reporting and killing journalists.

Americans may believe that any decent democracy has the kind of freedom of speech and the press guaranteed by the First Amendment.  The U.S. has traditionally supported democratic countries.  But you cannot find freedom of the press or of speech in the Basic Laws of Israel, claimed to be the democratic model in the Middle East.

I have never met a journalist from Al Jazeera.  But what happened to its reporters makes me despair, feel deeply sad for their fate and their families and angry that the U.S. and our supposedly democratic allies readily abandon the enlightened values of truth and justice in favor of untruths and brute force.

The phony economics of Trump's trade policy

 Gordon L. Weil

“You can’t put lipstick on a pig.”   But you can try.

Trump’s petulant trade policy lacks any underlying economic theory.  He wants to eliminate the U.S. trade deficit no matter the cost or effects.  If imports cost more or new domestic production is more expensive, the price will be paid by American customers unless foreign suppliers swallow them. 

But a loyal member of the Trump administration is trying hard to make that brutal trade policy appear to have a rational economic basis.   U.S. Trade Representative Jamieson Greer asserts that Trump wants to almost instantly replace the entire world trade system that has grown up since the end of the Second World War.

International commerce is based on a division of labor under which each country exports the products and services resulting from its economic strengths and buys the output of foreign production that best serves the needs of its people.  Competition sometimes exists, improving choice and increasing value.

Under the system that came to be managed by the World Trade Organization, tariffs were set at low levels and nations freed their trade with one another, treating each as its most favored partner.  Some nations benefit more than others from the low, reciprocal tariffs.  But most prosper from it.

The system has worked reasonably well and, more importantly, nations have become accustomed to it.  It has major problems, the result of historic change and attempts at manipulation by countries.  It needs reform, but Trump is throwing it out, because it has not given the U.S., the world’s largest economy, enough advantages.

One problem is that the manufacturing potential of developing countries has been hindered, limiting them to the sale of their raw materials.  The vestiges of colonialism have survived.

The other problem results from countries with state-run economies rather than open markets. The biggest mistake the U.S. made was to allow China to become a member of the WTO, enabling it to prey on free market countries by manipulating the value of its currency and exports.

Clearly, it’s time for the world’s trading partners to reform outmoded rules to deal with these and other issues.  The U.S. might have taken the lead in such reform, but it has refrained, because it has enjoyed the low cost of imports from China.

Greer says that, more than simply trying to enrich American industry at the expense of others, Trump intends to replace the relatively free flow of trade with something like a cut-throat unmanaged market.  U.S. nationalism is dressed up to look like a serious trade plan.

While his theory might be offered as a bold and original alternative to the WTO, it has in fact previously been tested, and it failed disastrously.  In 1930, the U.S. adopted high tariffs that Trump now tries to surpass.  They were meant to protect the U.S. from the Great Depression, but they stymied world trade and did not spur domestic industries. 

In two of the hardest hit countries, the Depression brought the New Deal in America and the Nazis in Germany.  High tariffs worsened the economic crisis worldwide.  Greer obviously hopes for better this time, but he ignores history.

Trump daily demonstrates that he has no carefully conceived economic strategy behind his tariffs.  Federal courts now consider whether his policy is even legal.  He uses emergency powers in a situation that may not qualify as an emergency.  And his haphazard application of tariffs is hardly a consistent response to an emergency. 

He uses tariffs as a political weapon, not an economic tool, raising them on Brazilian imports, because he dislikes its judicial system treatment of a former president.  He lifts tariffs on trade from India to pressure it to stop buying Russian oil.  He hits Canada hard, well, because it is still Canada.  Many of his actions are based on blatantly false data, but he persists.

He claims to be making deals. The art of the deal is that all participants believe they have benefitted.  He usually does not propose a satisfactory deal; instead, he makes other countries keep making offers, hoping to get Trump tariff reductions.  This is not dealmaking; it is bullying.

The proof that there is no coherent economic policy, despite Greer’s valiant effort, is the frequent adjustments that Trump makes day by day.  No specific level has an economic basis.   It is simply a matter of getting as much as you can now, ignoring longer term economic or political effects.  America loses allies, needed because trade is not the only challenge the U.S. faces.

When other countries hold firm or fight back or Trump realizes the degree to which the U.S. is dependent on certain of their exports, he may back down.  That’s called TACO – Trump always chickens out.  Is that real economic policy, Mr. Greer?

 

Trump as Colossus of America

 

Gordon L. Weil

Millenia ago, the Greek city of Rhodes built a huge statue, bestriding its harbor to commemorate a military victory and honor its patron god.  This Colossus of Rhodes, was classed as one of the Seven Wonders of the Ancient World.

Donald Trump seemingly seeks to become the New Colossus of America.  He aims at such impressive achievements that the country will add his likeness to Mount Rushmore, and the world will crown him with the Nobel Peace Prize.

President Trump is a member of the American nobility, a status acquired by becoming a celebrity.  For them, fame is all that matters, and people give them their adulation.  “The Apprentice” made Trump a celebrity; the presidency could make him a colossus.

Celebrities understand the importance of creating illusions.  What you do is less important than what you seem to do.  For Trump, appearance, if not everything, matters more than anything else.  Unembarrassed, he continually touts his supposed achievements.

He dislikes the report of the economy softening, published by the nonpartisan Bureau of Labor Statistics.  The report has modified downward its initial estimates, as it frequently does, based on newly received data.  The agency is struggling to perform well after its budget was cut by DOGE and Trump.

But Trump sees the revision as a message that his tariff policy is not working.  That doesn’t look good, so he fires the agency chief, claiming she was out to get him.  If the new BLS boss produces questionable reports to his liking, he’ll face protests from business and academia.   Trump’s core backers know better; he is simply wiping out the deep state.

Or take the chair of the Joint Chiefs of Staff.  The accomplished four-star Air Force general holding the job was quickly fired.  He is Black, and his mere existence made him a symbol of what Trump regards as the dreaded result of diversity-equity-inclusion policies.  His ability and experience didn’t count.

Trump promptly picked a retired, three-star Marine general for the job, skipping over many qualified officers.  He liked the man’s macho nickname, Dan “Razin” Caine.  And he also liked his looks, right out of “central casting”.  So far, Caine, a thoughtful man, may have been something of a disappointment to Trump, but he sure does look good.

During his first term, Trump joined a long line of foreign chiefs of state to have been invited to watch the French Bastille Day parade.  He was impressed, and wanted the same kind of military review in Washington and got it. 

But the Army was celebrating its 250th anniversary and produced more of an historical pageant than a show of strutting soldiers.  Trump encountered the quiet resistance against making the American military march with the grandeur seen in Paris or London. He gained few image-building points.

He is redecorating the White House with lavish and garish splashes of gold paint.  He may have seen similar ostentation in a European royal palace, but that’s not the American style.  Nixon also tried European style, but it quickly flopped.  But that’s not enough; Trump wants to build a big ballroom in the historic house the people let him use.

By using tariffs as a weapon, he seeks to be the person who reshaped the world economy.  Perhaps he’ll succeed, but he will gain little glory.  His reputation and America’s are suffering.  His successors will have to pick up the pieces of the shattered U.S. influence in the world.  Trump’s “beggar thy neighbor” trade policy is a good way to alienate friends.

Some deals he has proudly announced probably won’t produce the promised foreign investment in the U.S.   Japan was forced to agree to a seemingly huge amount to be placed under his control.  The details remain to be quietly worked out, but it’s likely investment will be a trickle, not a flood.  Meanwhile, he has undercut a country whose support the U.S. needs.

Similarly, he has sought to add territory – Greenland, Panama, Canada – to the U.S., which would make him the greatest president since James K. Polk, the champion of America’s largest  territorial expansion.  And we all remember him.

Then, there’s Epstein, whose files are a major threat to his image.  Having promised to reveal them, without knowing if they existed, he catered to his core.  When screeners found nothing more to reveal, the core attacked him for his self-made cover-up.  Do the suppressed files contain information harmful to him?  More than any other issue, this one threatens his valued image.

Trump is the best self-promoter the White House has ever seen.  But it is not working to provide him with historic acclaim.  Still, it should provide him with historic profits, thanks to his having exploited the presidency for personal gain more than any of his predecessors.

A lesson from history awaits.  The Colossus of Rhodes collapsed.

Social Security war looms

 

Gordon L. Weil

The war over Social Security is on the verge of breaking out.  It will run short of funds to pay for promised benefits in less than 10 years.

Many American leaders intentionally ignore the issue, which may be the most important economic and political challenge before them. They dodge the problem because there are only two solutions – raising taxes or cutting benefits, and both are politically dangerous.  Facing only downsides, politicians push the problem off, making it worse.

Either payroll taxes will have to be raised or retirement and disability payments will have to be cut – or both – to keep the program solvent.  The aging population does not include enough people paying payroll taxes to cover the costs of benefits for current beneficiaries.  Expenses rise, but income either does not rise as fast or might decline.

The Republican textbook answer is that revenues could be increased if Social Security reserves could be invested in the stock market instead of lower interest Treasury debt.  Over time, the financial markets have grown, though during recessions and other economic setbacks, they have faltered.  This proposal has not been endorsed by Congress, but it lives on.

Treasury Secretary Scott Bessent said a provision of the One Big Beautiful Bill, known as Trump accounts, “is a backdoor for privatizing Social Security.”  Trump accounts give newborns an account of $1,000 with gains used to supplement their education spending when they are 18. 

After he set off immediate alarms, Bessent retreated, claiming that privatization would supplement Social Security, not replace it. Two funds, the original and the add-on, would co-exist.

Trump accounts will come at a cost to taxpayers, and so would a parallel investment fund.  Does Bessent propose taking part of the payroll tax revenues for private investment, thus reducing the reserve for paying benefits that would otherwise flow from the original Social Security?  Would for-profit investment firms handle the add-on funds?

Though not an exact parallel, this proposal sounds like a variation on Medicare Advantage, run by insurers, instead of using original Medicare, operated by the government.  Recent reports suggest that the insurers put profits over health care, and retirees may suffer both physically and financially.

Two senators have proposed creating a separate fund from the Social Security Trust.  Revenues from that new fund would be used to close the gap between traditional benefits and the money available from the Trust.  The new fund could invest in the stock market rather than only in U.S. Treasury debt, as does Social Security.  After 75 years, it would repay its balance to the Trust.

This proposal would require an initial investment to get the new fund into operation so that it could produce enough income to cover the benefit shortfall and to maintain its assets, enabling it to survive for 75 years.  The senators estimate that it would take $1.5 trillion to create the fund, right from the start.  What would be the source of that seed money?

Social Security was originally intended as a retirement supplement to other income and, based on the life expectancy at the time, it was not planned for payments stretching over decades, as they now do.  For many people, it has become their main or entire source of retirement income. In effect, it may have come to be widely, if not openly, considered a national retirement plan.

In the U.S, there is a belief, virtually the Eleventh Commandment, stating: “Thou shall not raise taxes.”  If Social Security must abide by that rule, the only realistic option is to reduce benefits.  That’s what many pre-retirement people accept as inevitable, though they themselves may have failed to save for their later years.

Bessent and others seem to believe that investing in the market will increase returns enough to ensure Social Security will never have a shortfall.  Retirement payments would be hostage to the performance of those making the investments – amounting to an act of blind faith.

Congress has been approving changes that reduce the shortfall by boosting the age to receive full benefits, raising the cap on how much income is subject to the payroll tax and making most of the benefits for higher income people subject to income taxes.  These are all helpful, but not enough to close the gap.

A wide array of other options is available, and it is possible to estimate the effect of each of them on reducing the Social Security shortfall.  You can be the policy maker by using this questionnaire.  Go to the Revenues (or the other tabs) tab and make your choices, and you will see their relative effect. 

Note that diversifying Social Security investments, the Bessent idea, only solves 6% of the problem.  It’s not the solution.

Have fun with the questionnaire.   Members of Congress ought to give it a try.

 

China aims toi pass U.S. as top superpower

 

Gordon L. Weil

The magician waves his wand in the air and all eyes in the audience follow.  They don’t pay attention to what’s in his other hand or where he is walking.  He fools them.

China is today’s conjuror.  The wand is its threat to Taiwan.  Its real aim is to be the world’s only superpower, filling a gap left by Trump’s retreat to “America First.”

This sleight-of-hand has a precedent in Nazi Germany.  Its wand was insisting on absorbing ethnic Germans living in other countries.  Its aim was to control Europe and North Africa, while isolating the U.S.  The fools were in the U.K. (Chamberlain cedes Czechoslovakia to Hitler), and the U.S. (Charles Lindbergh’s first “America First”).

China would not normally be expected to seek influence over the political and military situation in Europe.   But the U.S. is turning away from Europe to face what it sees as an Asian menace.  That helps China to become a military factor there, using Russia as its agent.

Russia, the home of practical Communism, inspired the Chinese Communist Party.  But it has lost influence, while China has extended its reach.  The Ukraine war has made Russia increasingly dependent on its much larger ally.  In effect, it is becoming a satellite of China.

Here, too, history offers a precedent.  Hitler’s political thinking was influenced by the success of Italian Fascism under Mussolini.  Germany and Italy drew closer.   As World War II progressed, Italy failed to defend itself and became a German satellite with much of the country under Nazi occupation.

Russia has become dependent on China, which allows it to continue the Ukraine war into its fourth year.  Despite its initial statements about remaining neutral, China provides drones, a key element of the Russian offensive.

Even more important, it has become the leading market for Russian raw materials, especially oil.  The Russian economy depends heavily on foreign oil and natural gas sales, which form the core of its economy.  China replaces its lost European markets and pays bargain prices.  It sells manufactured goods to Russia.

China also is the leading customer for Russian coal and, soon, natural gas. It can rely on Russia for fuel by creating a tight and long-lasting tie.  The smaller, weaker country comes more closely under the control of its neighbor.  Total trade between the two countries is estimated at $240 billion. (This compares with $762 billion in U.S.-Canada trade.)

But, Chinese support for Russia’s continuing war against Ukraine comes at a price.  The EU has said that it will not replace its faltering relationship with the U.S. with China while it backs Russia.  Like Canada, this could force Europe into new trade relationships elsewhere.  They may also assume some of the American world role, as the champions of liberal democracy.

The Trump administration has encouraged these developments, perhaps unintentionally.  By rationing its support for Ukraine, it reduced risks for China in forging close ties with the Russian aggressor.  At the same time, the U.S. has struggled to come up with a workable, reformed trade relationship with Beijing.

Trump’s “America First” policy continues to appear isolationist to other countries. He seeks to gain advantages over other countries while weakening his cooperation and support for them. Whether he really would abide by NATO’s Article 5 requiring mutual self-defense remains a matter of lingering doubt.

Taiwan may be used as a distraction, but China remains intent on invading it.  The American policy of strategic ambiguity (does it favor one China or support Taiwan independence?) is increasingly difficult to sustain.  It is expected to support the island if it is attacked, though there are limits on how much American power can be deployed.

The U.S. Navy is patrolling the South China Sea, refuting China’s wild claims that the international waterway is part of its territorial waters.  Hostile warnings from Chinese vessels have been sounded, leading South Korea, Japan and the Philippines to draw closer to the U.S.

It is widely believed that China supports Russia in Ukraine for its own direct purposes.  If Russia can succeed in extending its influence there despite European opposition, then China could be encouraged to make a similar move on Taiwan despite American opposition.

Trump signals that he will strengthen sanctions on Russia, which could implicate China.   He could deploy secondary sanctions – economic penalties on countries that continue to do business with Russia thus financing its war effort.  Europe, Canada and others could sign on to this policy.

China also continues to aggressively push its role in Africa and Latin America, often through its investments.  Its obvious goal is to extend its influence by creating economic dependence and gaining naval bases.  China needs these regions to achieve its goal as the world’s leading superpower.  Quite like the pre-Trump U.S., it might not be liked, but it would have to respected,

American 'secret police' is real: it happens now

Gordon L. Weil

I recently noted that ICE agents are wearing masks and unmarked clothing to disguise their identity as law enforcement personnel.  They seize people off the street who cannot be sure if they are being accosted by the police or a thug. 

The masks are supposed to protect the identity of professional immigration law enforcers from retaliation by people linked with those they take into custody.   Individuals, often unarmed and unsuspecting civilians, are forcefully detained, even if they don’t resist.  Anonymity is allowed to replace discipline in exercising police power.

Part of becoming a soldier or police officer, naturally dangerous professions, is accepting that the jobs come with risks.   Early retirement, often after 20 years, may be partially compensated them for those risks and enable to purse another career.

Somewhat kiddingly, I replied to some comments that the solution to the issue would be to ban everyone from wearing masks, except for law enforcement officers.  That way, the police could be clearly identified when they carried out their official duties, while their exact identities would remain unknown.  

This proposal was meant to illustrate now inappropriate it is to keep the identity or even the role of law enforcement personnel secret from the public.  It might discourage them from treating immigration subjects as if they had been proven guilty and should be promptly expelled.

Wearing masks and showing no identification may be the answer used by some law enforcement agencies to counteract the growing use of police body cameras or video recordings by the general public.  Police accountability is lost.

Nassau County, New York, has come close to doing just that.  In the Long Island county with a population greater than many states, the general public is banned from wearing masks.  But local police working on immigration cases may wear masks.  Thus, if worked as designed, a person wearing a mask would obviously be law enforcement.

The new county rule could expose law enforcement agents to being singled out, the very danger that wearing masks had been designed to reduce.  

The Nassau practice is based on the idea that police are more likely to be targeted by people reacting to threat of deportation than by people associated with other accused criminals.  No evidence has been offered to back up that distinction about relative risk.  If they haven’t needed masks previously, why now?

Is there a risk that law enforcement personnel will begin wearing masks all the time, while average people may not?  Sounds like something out of a dystopian movie.

One possible explanation is that ICE personnel who are nabbing people are not law enforcement officers at all.  They may be contract employees hired to meet quotas in finding people supposedly breaking immigration laws.  They don’t wear badges, because they don’t have them, and they are not subject to police discipline.

In Los Angeles, it has happened, and ICE was sued by the ACLU and others.  It agreed not to use contractors in L.A. and San Francisco area jails and prisons.

It should be obvious that violence solves nothing, and law enforcement personnel should not be targeted.  Such attacks should not be tolerated and penalties should be severe. 

But allowing cops to be mistaken for criminals, while avoiding public accountability, is a questionable alternative, and it could encourage undisciplined policing or worse.  The system is defective if it can lead to American citizens or anyone else, for that matter, being seized like convicted criminals without the enforcers being held accountable.

  

Trump attacks Fed's Powell

 

Gordon L. Weil

President Trump wants lower interest rates. He sees Federal Reserve Chair Jerome Powell as standing in the way.

He wants Powell to resign, but the Fed Chair won’t go.  Trump resorts to childlike name-calling, as if the misplaced ridicule will drive Powell to quit. That doesn’t work.

This is not the first time a president tried to get the Fed to support his policy.  Before the 1972 election, President Nixon wanted Fed Chair Arthur Burns to lower interest rates.  Using a wide array of tactics and threats, he induced Burns and the Fed to lower rates.  The long-term result was wild inflation, forcing the Fed later to impose extremely high rates.

Trump would like to fire Powell, just as he has dismissed members of regulatory bodies.  He has been almost completely successful in those moves because the Supreme Court has backed his concept of an all-powerful president.  But only “almost.”

In a May decision endorsing Trump dismissals, the Court responded to the departing regulators’ argument that its position could threaten the independent Fed: “We disagree. The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”

The Court thus went out of its way to insulate the Federal Reserve from the powers it confirmed that Trump enjoys to remove members of supposedly independent regulatory bodies.  He was left only with the power to remove Fed officials “for cause.”

A person could be fired for cause if they had acted illegally, misused their office or had become incompetent.  Trump claims that Powell mismanaged the renovation of the Fed’s headquarters, enough for him to be fired for cause.  His actions on Fed interest rate policy are not a cause to fire him, though that’s obviously Trump’s intent.

Powell would likely resist any such dismissal and the matter would go to court.  Unless it changes course, the Supreme Court would protect Powell and the Fed’s intended independence from the politics of the day.  He could argue that he’s not responsible for building management and that no federal money is involved with costs being paid by banks.

An even more compelling reason for Trump not to try to remove Powell is the worldwide economic reaction.  The U.S. dollar plays a unique reserve currency role, and one major task of the Fed is to protect its value.  If a president could undermine that role for short-term political purposes, the world economy would be affected.

If the dollar’s status, reflecting international confidence in it, is threatened, then everything everywhere in the world will become more expensive.

Trump’s vacillating trade policy has led to domestic and international concern about American economic reliability. The doubt created by that concern translates to higher interest rates.  Attacking the Fed, Trump would make matters worse.

Surprisingly, a well-known economist urges Powell to resign, saying that continuing attacks on him will weaken Fed independence.   He ignores the certainty that Trump would replace with an ally who would follow the president’s policies rather than exercising the necessary independent judgment.  Economic expertise obviously does not produce political insight.

Powell does not set rates by himself.  The 12-member Open Market Committee decides.  For his removal to meet Trump’s demands, the rest of the members would have to be meek followers of whoever is the chair.  They aren’t.  Right now, some of them are reported to oppose any cut, while Powell foresees one or two this year.

Trump wants lower rates to encourage more borrowing for economic growth.  While they might somewhat offset the inflationary effect of his tariff policy, they could overheat the economy.  He also wants to keep up with other countries that have lower rates.  The Fed looks at the economy from a different and more long-term perspective than the president.

Trump’s concern may not be helping the economy as much as helping himself get past a recent huge increase in the national debt.   It may be the main point behind Trump’s position, though it is rarely stated. 

Trump’s One Big Beautiful Bill will increase the national debt by more than $3 trillion.  The federal government will have to pay off that debt and the interest on it that continually accrues. If the Fed lowers interest rates, those rates apply to federal debt and could lower the payments that must be made on the new debt.

By cutting interest rates, it could cut the cost of the OBBB.  That matters because the cost of servicing the national debt, even before OBBB, was greater than all defense spending.   Saving on debt service cushions somewhat the growing cost of chronic deficit spending.

Helping Trump meet this goal is not the Fed’s prime responsibility.  It is supposed to keep inflation down and employment up.  The inherent conflict between them and Trump’s urgent need to reduce the debt are at the core of Trump’s hostility toward Powell.  But it is not working.

Facing widespread insistence on the Fed’s independence, Trump seems to be backing down.  Treasury Secretary Scott Bessent asserts that the Fed engages in “persistent mandate creep into areas beyond its core mission.”  His conclusion: “What we need to do is examine the entire Federal Reserve institution and whether they have been successful.”

Fair enough.  Maybe whoever does that ought also to examine the entire Trump economic policy and whether it has been successful.  To many, he looks like the maestro of mandate creep.