The media repeat endlessly that Donald Trump is threatening the independence of the Federal Reserve, endangering the world’s monetary order, and behaving like a reckless dictator. But let us look at the matter carefully.
First, we should recall what independence actually means. In ordinary speech, it implies living freely, minding one’s own affairs, and not interfering in the lives of others. That is hardly the case with “independent” institutions such as public broadcasters, universities, or constitutional courts. In politics, independence has become a device of the liberal oligarchy—our new aristocracy. It means that a given institution is controlled by that oligarchy, wielded as an instrument of power, and placed beyond the reach of anyone else’s authority.
In short, independent institutions are incompatible with good government and with the good life of a nation.
The central bank is even more peculiar. It was created, in part, as an instrument to supervise and restrain the banking sector. Through it, citizens and industries were meant to exert some control over finance. And the decisions in question are not technical but profoundly political: Should monetary policy aim at creating jobs? Or at protecting savings? Should it boost the stock market—a massive scheme of redistribution—or should it erase government debt? Each of us can answer differently, but the point is obvious: the central bank carries out political directives. The only question is who gives those directives.
In the case of the Federal Reserve, there is no need to indulge in conspiracy theories about secret ownership by a handful of families. More simply and more realistically, the Fed belongs to the financial sector, staffed by men and women drawn from it, sharing its expertise, its networks, its interests. “Expert opinion” in this context means the outlook of financial speculators themselves. Thus, an institution designed to protect society from bankers has been turned into their weapon—sold to the public under the mask of expertise.
Sohrab Ahmari rightly reminds us that America has seen this battle before. Under President Andrew Jackson, the interests of bankers clashed openly with those of industry, ending in the destruction of the Second Bank of the United States. It was a victory, but one followed by decades of chaos and recurrent banking crises, until, in 1914, the Federal Reserve was established—ironically, again in the name of restraining financiers.
Donald Trump is, in this sense, simply doing his job. He is cleaning the streets of American cities from criminals, and he is cleaning the American financial system of criminals. No one should expect this task to be smooth. But it is the duty of leadership to confront entrenched power.