The Martin-Truman story reminds me of Thomas Beckett and Henry II. Henry appointed his friend (and carousing partner) Beckett to head the Church of England, with which Henry had been feuding, in the belief that his friend would do his bidding. Instead, Beckett transferred his loyalty to the institution he had been chosen to lead and fought Henry tooth and nail. Henry considered him a traitor, and acting on his heavy hint, several knights murdered Beckett.
No, Truman did not muse "will no one rid me of this meddlesome banker," resulting in a hit, but he like Henry ignored the fact that people who serve an institution have strong tendencies to have far stronger loyalties to it than to the person who appointed them to it.
Trump should heed those lessons, but probably won't.
Looking forward to reading it. Tom McCabe was a great benefactor to Swarthmore College, including the athletic programs (the McCabe Scholars program). I use to run into him occasionally at the field house in his chauffeur driven Chrysler station wagon (when I was coming in or out of lacrosse practice).
Fascinating historical reflection, article and commentary whether viewed through the lenses of rational expectation fiscal theorist, monetarist, or Austrian ... and yes, which way Warch will "blow" is an interesting question of the day.
The anecdote about William McChesney Martin, who apparently changed positions when he left the Treasury for the Fed, reminds me of the seminal paper explaining why "where you stand depends on where you sit." See Rufus E. Miles Jr., The Origin and Meaning of Miles' Law, 38 PUB. ADMIN. REV. 399 (1978), https://www.jstor.org/stable/97549.
Miles was an aggressive defender of the Treasury Department's interests against the Bureau of the Budget. Until he changed jobs, that is. When he moved from Treasury to BoB, he became an aggressive defender of BoB's interests over that of the Treasury.
"Powell, like McCabe, is the Fed chair, who experienced a lot of inflation mostly not his fault in my reading."
I think Powell is a hero for asserting Fed Independence. But let's not sugar coat a major mistake on the inflation front: The Fed was buying $40 billion per month of MBS through late 2021—even as inflation surged—and only stopped in March 2022.
Also, "transitory" would like a word! If the Fed had more rigorously hewed to the Taylor Rule, it's possible inflation wouldn't have achieved 9%+. Would it still have happened? Yeah, probably. But an earlier response and more aggressive hiking was possible, even without being Monday-morning quarterbacking the Fed's decisions. The actual data warranted interest hikes (bigger, earlier) much earlier, just like the 2%+ inflation the entire 2025 warranted interest hikes, not a "wait and see".
“Unless inflation is controlled, it could prove to be an even more serious threat to the vitality of our country than the more spectacular aggressions of enemies outside our borders. I pledge myself to support all reasonable measures to preserve the purchasing power of the dollar.”
The markets fear the Fed more than any foreign enemy or act of war.
The Martin-Truman story reminds me of Thomas Beckett and Henry II. Henry appointed his friend (and carousing partner) Beckett to head the Church of England, with which Henry had been feuding, in the belief that his friend would do his bidding. Instead, Beckett transferred his loyalty to the institution he had been chosen to lead and fought Henry tooth and nail. Henry considered him a traitor, and acting on his heavy hint, several knights murdered Beckett.
No, Truman did not muse "will no one rid me of this meddlesome banker," resulting in a hit, but he like Henry ignored the fact that people who serve an institution have strong tendencies to have far stronger loyalties to it than to the person who appointed them to it.
Trump should heed those lessons, but probably won't.
Looking forward to reading it. Tom McCabe was a great benefactor to Swarthmore College, including the athletic programs (the McCabe Scholars program). I use to run into him occasionally at the field house in his chauffeur driven Chrysler station wagon (when I was coming in or out of lacrosse practice).
Fascinating!
Loquacious. "Trump is certainly more locatious [sic] in his disapproval than Truman!"
Fascinating historical reflection, article and commentary whether viewed through the lenses of rational expectation fiscal theorist, monetarist, or Austrian ... and yes, which way Warch will "blow" is an interesting question of the day.
The anecdote about William McChesney Martin, who apparently changed positions when he left the Treasury for the Fed, reminds me of the seminal paper explaining why "where you stand depends on where you sit." See Rufus E. Miles Jr., The Origin and Meaning of Miles' Law, 38 PUB. ADMIN. REV. 399 (1978), https://www.jstor.org/stable/97549.
Miles was an aggressive defender of the Treasury Department's interests against the Bureau of the Budget. Until he changed jobs, that is. When he moved from Treasury to BoB, he became an aggressive defender of BoB's interests over that of the Treasury.
Loquacious (not locatious) in last sentence.
"Powell, like McCabe, is the Fed chair, who experienced a lot of inflation mostly not his fault in my reading."
I think Powell is a hero for asserting Fed Independence. But let's not sugar coat a major mistake on the inflation front: The Fed was buying $40 billion per month of MBS through late 2021—even as inflation surged—and only stopped in March 2022.
Also, "transitory" would like a word! If the Fed had more rigorously hewed to the Taylor Rule, it's possible inflation wouldn't have achieved 9%+. Would it still have happened? Yeah, probably. But an earlier response and more aggressive hiking was possible, even without being Monday-morning quarterbacking the Fed's decisions. The actual data warranted interest hikes (bigger, earlier) much earlier, just like the 2%+ inflation the entire 2025 warranted interest hikes, not a "wait and see".
“Unless inflation is controlled, it could prove to be an even more serious threat to the vitality of our country than the more spectacular aggressions of enemies outside our borders. I pledge myself to support all reasonable measures to preserve the purchasing power of the dollar.”
The markets fear the Fed more than any foreign enemy or act of war.