Tuesday, Nov. 1, 2022 | 2 a.m.
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It is misleading to blame President Joe Biden for the state of the economy. As someone who spent his entire career involved with the capital markets, I can tell you that Biden has done a good job shepherding us through the pandemic and addressing inflation. Maybe he shouldn’t receive an A grade, but he deserves at least a B or B+.
If you are looking to identify an individual responsible for higher interest rates and inflation, it’s not Biden. It’s Jerome Powell, chair of the Federal Reserve. Yes, the pandemic caused bottlenecks that hurt the economy and led to higher prices, as did higher energy costs. But Powell could have acted early and effectively to combat these inflationary pressures. Instead, he caved into then-President Donald Trump’s harassment and kept interest rates far too low for far too long.
After Powell took office in 2018, he tried to do the right thing and began to raise rates in order to cool off the economy. But Trump came down on him, hard and in public.
Afraid that higher rates would derail the economy and the stock market, Trump harangued Powell incessantly. And Powell gave in, lowering rates in late 2019 and keeping them low through the 2020 election. Now Biden is president and Powell has presided over an unprecedented spike in rates, pushing up prices, slamming the economy and throttling the stock market.
Powell has hurt the economy, the country and Democrats’ prospects in the upcoming election.
