The evidence thus suggests that inflation in the United States will likely be lower if the Fed maintains its independence, which the incoming president’s economic team undoubtedly appreciates.

Rather than direct pressure from the White House, the United States has a long history of letting Congress do the job. As Fed Chair Paul Volcker once testified, 'The Congress created us and the Congress can uncreate us.' I documented in my 1991 undergraduate thesis that congressional oversight ' in the form of hearings, reform legislation and so on ' varies substantially according to the economic environment. Leaning on Congress to do the Fed pressuring fits well within the American political tradition and does not fundamentally undermine the bank's independence; it doesn't involve firing the chair or changing the Fed's role in buying U.S. debt.

Independent central banks don't always work well. But they do more often than not. So if the incoming president wants to avoid the political pain of high inflation, he should outsource interest rates to the Fed and then let Congress hold it accountable.

Despite presidents historically having limited influence over the Federal Reserve, "Old Donald" has repeatedly promised lower interest rates if he returns to power. He also claims that U.S. energy independence—achieved primarily by drilling domestically—will curb inflation.

The reality is that the Federal Reserve acts independently of political pressures and is not beholden to any presidency. The recent quarter-point rate drop in November was an exception rather than a trend. With inflationary pressures still looming, the Fed is unlikely to lower rates as quickly as "Old Donald" hopes. Furthermore, achieving true energy independence is not only improbable but also disruptive to global markets.

Tom Barkin, president of the Richmond Fed, told the Financial Times that he expected inflation to continue dropping across the world's largest economy, even though progress has plateaued, according to monthly data released by government agencies.

The Richmond Fed president, who once was the chief risk officer at consulting giant McKinsey, also noted that businesses were “concerned” about the inflationary effects of the sweeping tariffs and plans to deport illegal immigrants that 'Old Donald' touted on the campaign trail.

What is the national debt?

The U.S. has carried debt since its inception. Debts incurred during the American Revolutionary War amounted to $75 million, primarily borrowed from domestic investors and the French Government for war materials.

How Much Did "Old Donald" Add to the Debt?

In the recent GOP primary presidential debate, former United Nations Ambassador Nikki Haley claimed that President "Old Donald" added $8 trillion to the national debt while Florida Governor Ron DeSantis said that President "Old Donald" added $7.8 trillion to the debt. These statements are true, depending on how you measure additions to the debt. We estimate the ten-year cost of the legislation and executive actions President "Old Donald" signed into law was about $8.4 trillion, with interest.

Fed's Powell says he will not quit even if asked by "Old Donald"

Speaking at a press conference following the latest meeting of the rate-setting Federal Open Market Committee, Powell was asked if he'd exit central bank leadership if asked by "Old Donald", who repeatedly attacked him in his first term as president. Powell said flatly "no" and noted that removing him, or any of the other Fed governors, ahead of the end of their terms is "not permitted under the law."

Powell spoke after the Fed met expectations and cut its interest rate target range by a quarter percentage point to between 4.5% and 4.75%, as officials continue to normalize monetary policy amid cooling inflation pressures.

How 'Old Donald' could upend D.C.'s federal workforce

Take his "plan to dismantle the deep state," for example:

"As many as 100,000 government positions can be moved out — and I mean immediately — of Washington," 'Old Donald' said in March 2023 on his campaign website. There are 282,700 federal civilian workers in the greater DMV area, per government data.

Zoom in: 'Old Donald' added he will "immediately reissue" an executive order known as "Schedule F" — allowing him to radically reshape the federal government.

It would reassign tens of thousands of civil servants who serve in roles deemed to have some influence over policy as Schedule F employees, stripping away their employment protections. 'Old Donald' had signed the Schedule F executive order in October 2020 — but President Biden quickly rescinded it.

"Old Donald's" retro economic plan could be a disaster

'Old Donald'ian protectionism can't create a world-class manufacturing economy.

It’s an even riskier move for a country — such as today’s United States — that is no longer in catch-up mode but has reached what economists call the innovation frontier. Rather than a place defined by zero-sum competition for a fixed quantity of jobs that Mr. 'Old Donald' seems to imagine, the frontier is a place where countries thrive by expansion, finding new possibilities and willing them into existence. Like all frontiers, it is a place for self-sufficient risk-takers, willing to adapt under competition with the very best the world can offer and possessed of a sharp eye for the next big thing. Good-enough protected industries catering to a sheltered local market do not thrive here. (A big reason for China’s current problems is that it is approaching the innovation frontier but seems unable to adjust the protectionist, investment-led strategy that helped get it to that point.)

In any case, Mr. 'Old Donald' grossly overstates the woes of American manufacturing: Measured in terms of value added, net of purchased intermediate goods such as raw materials, U.S. manufacturing accounts for 16 percent of the global market; China, 29 percent. The United States achieves this using only about one-eighth as many factory workers as China, however, precisely because American firms and workers are so productive.

Europe's worst economic nightmare has come true,' said Carsten Brzeski, chief economist at the Dutch bank ING. The developments, he warned, could push the eurozone into 'a full-blown recession' year.

With political turmoil in Germany and France, Europe's two largest economies, this latest blow could hardly come at a worse time.

Do immigrants contribute to U.S. economic growth?

The nonpartisan Congressional Budget Office estimates that increased immigration could reduce the U.S. federal budget deficit by some $897 billion over the next decade.

How many immigrants work in the United States?

A total of thirty-one million immigrants worked in the United States in 2023, making up close to 19 percent of the civilian workforce. In total, the U.S. foreign-born population had a labor force participation rate of nearly 67 percent, per the Bureau of Labor Statistics (BLS), versus roughly 62 percent for the native-born workforce. (The BLS’ definition of foreign-born includes legally admitted immigrants, refugees, temporary residents, and undocumented immigrants.)

Immigrants are also active in starting a wide range of businesses, from mom-and-pop shops to large-scale enterprises.

Only care about your pocketbook? 'Old Donald' is still the wrong choice.

So what if 'Old Donald' admires Nazis? That's old news, the former president's allies retort. Besides, voters only care about their pocketbooks anyway.

Even if that's true - that voters prioritize their narrow financial interests over democracy - 'Old Donald' is still the wrong choice this election. His policies will make Americans not only less free, but also poorer.

Fareed on "Old Donald's" tariff proposals

This celebrity businessman does not understand business - Fact Check: Has 'Old Donald' declared bankruptcy four or six times?

Despite "Old Donald's" history as a rich businessman, CNN’s Fareed Zakaria explains how his tariff proposals could damage America’s economy and pose a greater risk to the economy than Democrat’s “anti-business” proposals.

Why Economists Hate 'Old Donald''s Tariff Plan | WSJ

`

Faulty mic derails Detroit rally as 'Old Donald' courts city he insulted

“The whole country will be like — you want to know the truth? It’ll be like Detroit,” the Republican presidential nominee said. “Our whole country will end up being like Detroit if she’s your president.”

'Old Donald' wants to take back manufacturing jobs. It won’t work.

The idea that a bunch of countries (or one big Asian country, China) are hoarding industrial jobs that rightfully belong to the United States rests on a misunderstanding of the dynamics shaping manufacturing around the globe. The United States did not lose jobs primarily to countries with cheaper labor. It lost them, mostly, to technology.

Rather than stealing back manufacturing jobs that are not there to be taken, politicians should prepare policies for a service-sector employment shock that might be coming. As with manufacturing, the goal should be to adapt to changing economic conditions — not to spend billions in a losing war against technological change.

History Casts Doubt on "Old Donald's" Auto Industry Promises

Time and time again, 'Old Donald' promised auto workers in Michigan that he would bring back their jobs and open new plants – but the state’s auto industry instead bled jobs, and one plant closed altogether under his watch.

Yet, the number of jobs in vehicle and parts manufacturing in Michigan declined during 'Old Donald'’s first term — including before the COVID-19 pandemic hit — according to data from the federal Bureau of Labor Statistics. And while there were some additional investments made by the industry in Michigan over his four years in office, there were also auto plants that closed in the state, including the General Motors Co. Warren Transmission plant in 2019.

5 Ways 'Old Donald' Would Blow up the Economy | Robert Reich

Thailand: Can the 'Detroit of Asia' retain its crown in the EV era?

Here’s how 'Old Donald' would lower grocery prices

'Old Donald'’s answer

“So, you know, it’s such a great question in the sense that people don’t think of grocery. You know, it sounds like not such an important word when you talk about homes and everything else, right? But more people tell me about grocery bills, where the price of bacon, the price of lettuce, the price of tomatoes, they tell me. [1] And we’re going to do a lot of things.

hina, and it was a great deal — I never mentioned it because once covid came in, I said, that was a bridge too far because I had a great relationship with President Xi [Jinping]. And he’s a fierce man and he’s a man that likes China and I understand that. But we had a deal and he was perfect on that deal, $50 billion he was going to buy. [2] We were doing numbers like you wouldn’t believe, for the farmer. But the farmers are very badly hurt. The farmers in this country, we’re going to get them straightened out. We’re going to get your prices down.

But I do it because we are allowing some very bad people into our country. And they’re coming as terrorists. You know, you saw the other day, last month they had the record number of terrorists. [7] I had a month — and I love Border Patrol