by liberal japonicus
A phrase prompted by Adam Tooze’s discussion of Incoming Fed Chair Kevin Warsh. Woo, boy, we are screwed is my primary takeaway. A couple of points.
Warsh is rich. Scrooge McDuck rich. He’s going to be the richest Fed chair and as this Forbes article points out, he’s married to a billionaire heiress. Nevertheless, despite that handicap, he still understands the working class because, according to Warsh, growing up around a family business (school uniforms) involved in domestic manufacturing provided him with a firsthand look at the challenges facing American production, labor, and the “real economy” outside of the financial sector. All credit to Tooze and his podcast cohost, Cameron Abadi, at not doubling over in hysterics when they make this observation.
Warsh seems to be at the center of the 2008 financial crisis, but not as a main player, so I wonder why he was able to come back, though honestly, I don’t know why they all lost every shred of credibility after that.
Tooze can’t help but read some stretches of Warsh’s pretty purple prose, and at around 24:15, he points out how Warsh is not going to take anything happening in climate change as something the Fed needs to consider, and that the Fed needs to avoid taking position on social questions. As Tooze says, it is a ‘lurching segue from very conventional 1990s central bank independence discourse to free speech on campus debates and diversity of opinion discourse that we’re very familiar with in the last four or five years in the US.”
It all suggests to me that the Fed is going to be shoe-horned into culture wars. Tooze thinks it questions the ‘coherence of the Trump coalition’, but I take the more pessimistic view that if the Republicans in the legislature can contort itself into pretzels, a person like Warsh is going to go along with whatever he can.
We’ve got folks who are a lot better versed at econ stuff, so I’d love to hear what they think, but as Abadi concludes, we are at a point where Steve Bannon is Edmund Burke. God help us.