Left and Right Agree About the Fed, and That’s Too Bad

Originally published in Real Clear Markets, 7/16/2019

When the 21st century began, “internet cafes” were a thing. Hard as it may be for some to imagine now, bricks and mortar businesses existed into which individuals would enter with an eye on renting both a laptop and internet time.

The subsequent explosion of Wi-Fi and smartphone usage quickly rendered the internet café of the early 2000s unnecessary in short order. What was once a growing sector of the U.S. economy quickly fell into a major recession, only to disappear altogether.

This small piece of business history rates mention in consideration of the bipartisan belief that the Federal Reserve must act fast to allegedly stave off recession. As a New York Times editorial put it last week, “the argument for a rate cut is that the Fed should try to extend this economic expansion, which is now the longest period of uninterrupted growth in American history.” On the right, myriad arguments have been made (including by President Trump himself) that the Fed’s supposed “tight” monetary policy is the source of slower growth, and that rate cuts are necessary to extend the boom.

Translated to readers, left and right are both saying “you didn’t build that,” that the economy is reliant on the Fed’s ongoing fine-tuning via rate machinations. It’s easy to see why the left would take potshots at the most dynamic economy in the world, but it’s more than odd to see Trump and so many Trump partisans make such a weird case.