Guess Who Is Going to Steal the Election (or Tank the Economy!) This Time

So now it's the Federal Reserve that's going to either taint the November election or tank the economy.

"Delivering a rate cut ahead of the election could rile up Republicans and former President Donald Trump," the Wall Street Journal reported on Wednesday, "but withholding a needed reduction could undermine the economy and upset Democrats."

Never mind that high rates are what's keeping inflation in check and that we've been told for three years that Bidenomics has delivered an economy so strong that it kicks sand in the face of 7% mortgages and 9% car loans.

The facts are that full-time, private-sector jobs are still well below pre-lockdown levels and that the labor participation rate has been declining for a year and remains well below where it was in 2019. We've been in a jobs recession for four years and yet, thanks to Washington flooding the economy with trillions in funny money since 2020 and overregulation since 2021, inflation could still come roaring back.

So what is Fed Chair Jerome Powell supposed to do?

Let me make a confession here: I have no idea what the Fed should do. Zero, zilch, nada.

Economically, the Fed is in a damned-if-you-do/damned-if-you-don't situation. They're in one politically, too.

While I'm not too shabby at picking individual stocks, oftentimes the broader markets mystify me — and it just happened again today. Ever since the Fed began belatedly to jack up interest rates to knock Bidenflation down, the markets have been screaming for rate relief. The higher that interest rates go, the more attractive other investments look — even simple CDs — compared to stocks.

It has been assumed that as soon as it seemed likely the Fed would cut rates, stocks would rise like a balloon held too long underwater. Except that today we got a bunch of stories indicating that high interest rates have finally choked off enough of the economy that the Fed is almost certain to cut rates next month, and maybe twice more before the end of the year. 

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So what did the stock markets do on Thursday? They tanked. Go figure.

But I digress.

Regardless of any actual impropriety at the Fed, no matter what it decides to do between now and Election Day, either Democrats or Republicans will be able to claim that the central bank was trying to influence the election. If Powell & Company keep rates the same, Democrats will shriek (that's their way) that the Fed is trying to hurt Kamala Harris. Any cuts would be interpreted as an effort to help the Democrats.

And those accusations will fly, even if the Fed does the exact right thing economically, with blindfolds on regarding the election.

Some fix they're in, eh? Us, too. 

There's a solution to our politico-economic conundrum, summed up in three tidy little words that horrify every doubleplusgoodthinking person in Washington...

End the Fed.

While I'm open to suggestions on how to eliminate the Fed as quickly and as painlessly as possible, my preferred method is tried and true: take off and nuke the entire bank from orbit.

It's the only way to be sure.