by Jonathan Decker
Last week, I explained why Barack Obama does not deserve credit for Trump’s economic boom. To the contrary, the economic growth President Trump has achieved comes in spite of Obama, as many of the previous administration’s economic policies remain on the books (though President Trump is working diligently to dismantle them brick by brick).
This week, Reagan economist Arthur Laffer echoed this sentiment by pointing out that we had “the worst recovery in U.S. history under Barack Obama,” while President Trump has had the “best year and a half in office” that he’s ever seen. Laffer gives President Trump full credit for igniting a surge in economic growth.
The Manhattan Institute’s Peter Ireland wrote a terrific piece explaining why the Fed should adopt a rules-based monetary policy to reduce uncertainty in financial markets. Ireland writes:
Without a rule, central bankers appear instead to be making decisions on a meeting-by-meeting basis, without any consistent link to either the past or the future. That discretionary feature of policymaking leaves them vulnerable to unfair criticism, as outsiders can always look back with the benefit of hindsight and point to things the Fed should have done, without having to propose a strategy of their own that works better in real time. The Fed could protect itself against these attacks by identifying a rule that acknowledges uncertainty about the workings of the economy and delivers acceptable results nonetheless; the onus would then shift to the critics to find an even better rule.
I concur with Peter Ireland’s call for a rules-based monetary policy, and suggest that the ideal vehicle to get the conversation started is the task force previously called for by The Wall Street Journal:
Mr. Trump could ask his Treasury to lead the developed world’s finance ministers and central bankers toward a more stable system. Mr. Mnuchin doesn’t have much experience in this area, but his Under Secretary for International Affairs David Malpass does. (For the record, Mr. Malpass has not suggested this to us.)
They could put together a task force of American and foreign experts to debate and recommend how to navigate the transition from postcrisis policy and promote more currency stability. Experts who have written for us over the years include Messrs. Warsh and Taylor, economists Steve Hanke, Glenn Hubbard and Judy Shelton, former Fed Chair Paul Volcker, investor and philanthropist Sean Fieler and historian and investor Lewis Lehrman, among others.
Convening a task force of monetary experts will shine a light on this largely forgotten area of economic policy. The task force would allow for full consideration of the various rules free market thinkers have proposed, and it will help determine the best way forward. By fostering a public conversation on monetary policy, President Trump would be aligning himself with similar efforts made by President Reagan, and he would give conservatives something huge to cheer for.
Congratulations Amazon! Amazon has now become the second American company to reach a trillion-dollar valuation. With Apple and Amazon having hit this historical mark, we will now turn our attention to Alphabet and Microsoft to see who will be joining this elite club next.