By Kevin D. Williamson
Friday, August 23, 2019
“Who is our bigger enemy,” President Trump asked, “Jay
Powell or Chairman Xi?”
What if I told you it was . . . [dramatic pause] . . . neither?
(First, a little rhetorical criticism: It would have been
a better tweet if he had written “Chairman Powell or Chairman Xi,” for the
parallelism.)
Jay Powell is the chairman of the Federal Reserve. He was
put there by Donald Trump, a notable social-media figure who serves as
president of these United States in his spare time. Xi Jinping is the Communist
boss in China. He’s the guy on the other side of that “great, and easy to win!”
trade war that Trump has started, which could end up inducing a
presidency-ending recession. Trump has miscalculated badly vis-à-vis China, and
he wants the Fed to bail him out, but the Fed’s mandate is dual rather than
triune: It is to work toward price stability and low unemployment, not price
stability, low unemployment, and Donald J. Trump’s political convenience.
China is not our enemy, and it is a mistake to think of
China as our enemy. China is our rival.
You do not have normal diplomatic relations with an enemy. China certainly is a
potential enemy, and our military and
intelligence operations do well to keep that possibility in mind. But we are
not at war with China. We are in a destructive tit-for-tat contest of tariffs
and trade barriers, which already are leaving both countries economically worse
off. There difference is that a recession in the United States might mean
President Elizabeth Warren, whereas a real economic disturbance in China could
mean blood in the streets — and not just in the so-called People’s Republic.
Trump promised excitement. Here it is.
If I were designing the United States from the ground up
like a kid with an ant farm, I don’t think I’d include a central bank like the
Fed or a national bank guarantor like the FDIC. But we have a Fed, and an FDIC,
and other institutions of that nature, and the thing about them is: They work
pretty well. I was not a supporter of the bailouts associated with the
financial crisis, but the institutions we have executed the program that was
put into place pretty well — and pretty well is nothing to sneeze at in
government. And certainly not in the U.S. government. You can have a long and
happy life on pretty well.
One of the problems with populists — with Trump-style
populists but also with Comrade Muppet and the rest of those ghastly
knuckle-draggers on the left — is that they are anti-institutionalists. Show
them a NAFTA and they want to set it on fire, show them a Federal Reserve
System and they’ll wonder why it can’t stand on its head or ride a unicycle.
For Trump, it’s all swamp. And there is much that is in
need of reform. But the Fed works pretty well, in part because we do not
(usually) ask it to do too many different things.
At the same time: We have a lot of longstanding and productive business practices based in
part on certain trade relations with China. We should not be under any
illusions about what Xi et al. want, but neither should we impoverish ourselves
unnecessarily in a fit of populist pique. “But we have to do something!” No, no we don’t. And we
certainly don’t have to do something dumb and destructive.
H. L. Mencken famously wrote: “Democracy is the theory
that the common people know what they want, and deserve to get it good and
hard.” Trump was elected to be a disruptor. Warren, Sanders, and the rest of
the Left are promising disruption, too. And the American people seem eager for
disruption of one kind or another.
Pray that we do not get too much of what we are asking
for too quickly.
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