Trump has every right to berate the technocrats

Telegraph

20-07-2025

Knucklehead or numbskull? Donald Trump uses both terms to describe Jerome Powell, the chairman of the US Federal Reserve. It depends on which day of the week it is.
His attacks on Powell are now so frequent they have lost the power to shock, but imagine the horror if Sir Keir Starmer started regularly describing Andrew Bailey, the Governor of the Bank of England, as a nitwit or a simpleton.
Or if France's president, Emmanuel Macron, were to refer to Christine Lagarde, the president of the European Central Bank, as a 'nigaud' or 'crétin'.
Imagine also if they let it be known that they were examining ways of ridding themselves of their troublesome monetary priests, as Trump has done in the US.
The entire political and economic establishment would be up in arms and there would be mayhem in the bond markets. Yet Trump is Trump and iconoclasm comes with the territory.
Trump's bark may in practice turn out to be worse than his bite. It often does. It is none the less worth considering whether in this instance he might not have a point.
Looked at objectively, the unwritten understanding that presiding governments should never criticise their central banks is one of the modern world's more absurd conventions.
Of course, we all know how it came about. It was part of a much wider shift in which key parts of government were removed from direct political control and vested instead with independent technocrats.
Free from the need to win elections, it was argued, these arms-length bodies would do a much better job than the politicians in keeping things on the straight and narrow.
In Britain, granting the Bank of England independent control of monetary policy, was very much part of the then-Labour government's attempt to sanitise itself with markets and present the UK as a trusted and stable monetary regime that had finally put its post-war inflationary past behind it.
As with most other central banks, independence has been buttressed by provisions that make it virtually impossible to sack the incumbent governor except in the case of madness or misfeasance.
Much as he would like to dismiss Powell, even Trump has struggled to find a way around these guardrails. The ballooning costs of renovating the Federal Reserve's grandiose Washington headquarters may be evidence of public sector waste and incompetence but it is not, on the face of it, a case of outright fraud.
All the same, the lavish nature of the Fed's refurbishment touches a chord that characterises central banks as out of control, unaccountable and often just plain wrong. And now they build themselves palaces and cathedrals as symbols of the once-ruling idolatry.
Admittedly, Trump's own vulgar redecoration of the Oval Office in his trademark gold chintz is in some respects just as bad, even if far less expensive.
But at least Trump is elected, while Powell is a mere appointee.
This in itself is causing much amusement, for in this week describing Powell as a 'terrible' chairman, Trump added that he was 'surprised he was appointed', seeming to forget that it was he who originally chose him.
He soon regretted it and, by the end of Trump's first presidency, the two were barely on speaking terms.