To Jay Powell: In the Name of God, Go

So it looks like a legal battle between the Fed chairman, Jay Powell, and President Trump, with Hashtag Free Kevin Warsh caught in the middle.Yet if Mr. Powell stubbornly insists on fighting the president and the Justice Department over a couple of pieces of paper concerning Fed building cost overruns, he will do even more damage to Fed independence than he’s already done with his policy mistakes and his lack of accountability and transparency during his eight-year tenure. All-star Washington watcher Dan Clifton of Strategas put it well by noting that Mr. Powell’s press conference on Wednesday has a more negative impact on stocks than a huge attack on the world’s largest natural gas plant.To step back a moment, the Wall Street Journal economic survey does not produce a recession forecast according to today’s paper.For what it’s worth, 50 economists expect GDP growth of slightly over 2 percent this year, with an inflation rate of less than 3 percent.They’re assuming roughly three months duration for the Iran war. And oil prices will wind up averaging less than $150 a barrel.I don’t agree with any of these estimates. We’re about halfway through the 4-to-6-week war anticipated by the president. And while oil prices have jumped, it’s not nearly as much as $5 or more per gallon for gasoline under President Biden. Or in inflation-adjusted terms, it’s not $200 oil per barrel that occurred briefly in 2008.The thing about these legacy press economic forecasts, is that there are usually no supply-siders or pro-growth advocates who understand the prosperity power of tax cuts, 100 percent immediate depreciation write-offs, widespread deregulation, “drill, baby, drill,” and reciprocal free trade policies.There’s a business boom going on out there that includes capital spending and factory construction, along with very decent pre-war consumer spending. I think that boom will continue post-war.And as oil prices return to normalcy, perhaps $60 or less, the temporary war-time inflation will fall off a cliff. That’s one reason why apart from Mr. Powell’s desire to be forever Fed Chairman, the worst news he delivered yesterday was the likelihood that there will be no Fed rate cuts this year, or barely one, and that’s a big change from the three rate cuts markets expected pre-war.Then Mr. Powell said he has quote “no intention of leaving” the Fed until the Justice Department investigation of him is quote “well and truly over, with transparency and finality” end quote.And Mr. Powell now expects to be something called the chairman pro-tem, even after his term as chairman ends May 15.Yet he has no such authority to appoint himself chairman forever. That’s a presidential appointment.And although there will be legal disputes, if Mr. Powell simply remains as a board member through his term through 2028, it is still a presidential decision to appoint a chairman from the existing board members, of whom Kevin Warsh will hopefully be one.However. Mr. Warsh has to be confirmed by May 15. And he probably has to start his confirmation no later than May 1, but that may be tied up in this legal dispute between the Justice Department and the Fed.I’m going to posit that financial markets do not want Mr. Powell forever either as chairman or board member. And Mr. Powell is being egotistical for behaving this way, not only in bucking presidential authority, which is unbecoming and unseemly, but in the middle of a war that will hopefully change the entire course of history and rid ourselves of the Iranian nuclear and terrorist scourge.So Mr. Powell can blather on about independence all he wants and pick a legal fight with the president in the middle of a historical war that can do the rest of the country so much good. Yet Mr. Powell doesn’t have the authority to appoint himself chairman forever anyway. That all belongs constitutionally to the executive’s authority. Mr. Powell is just doing more to damage Fed independence. Why doesn’t he just do what other Fed chairmen have done and go quietly into the night?As Oliver Cromwell told the Rump parliament in 17th-century England, “in the name of God go.”From Mr. Kudlow’s broadcast on Fox Business Network.

To Jay Powell: In the Name of God, Go

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