Economist says Fed is ‘a policy tool,’ urges Powell to cut rates
Presidential Medal of Freedom recipient Arthur Laffer, an economist who served as an adviser to President Donald Trump’s 2016 campaign, took some shots at the embattled Federal Reserve chairman as he also questioned the body’s autonomy.
“The Fed shouldn’t be independent of the administration. Never should be. None of those people were elected. They were appointed. And there’s no reason for them being appointed. It’s a policy tool that should be in the hands of the Congress and the President to make our country better,” Laffer told John Catsimatidis in an interview that aired Sunday on AM 970 New York.
“Not in the hands of some Princeton professors who never worked a day in their lives except on an academic paper that’s far from reality. I don’t think there should be an independent Fed,” Laffer added.
Laffer also speculated that Jerome Powell, the chairman of the Federal Reserve who has been criticized by Trump, “feels very besieged.”
“I’m sure Powell doesn’t feel good about Donald Trump,” Laffer said. “But, you know, it’s not his job to feel good or bad about Donald Trump.”
Like Trump, Laffer encouraged Powell to be a “professional” and lower interest rates. The president has been frustrated by the Fed’s interest rate hikes, though Powell backed off in late 2018.
Laffer, an adviser to President Ronald Reagan, was given the Presidential Medal of Freedom this month for his contributions to Republican economic theory, particularly the idea of “trickle down economics” — that lower tax rates trickle down to the rest of the economy.