Trump was just caught pushing national economic policy to enrich himself

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With the stock market on a roller coaster ride heading for a tailspin due to President Trump’s misguided trade and tariff policies, the nation can be at least slightly consoled by the fact that the Federal Reserve Board of Governors — which oversees the country’s central bank and sets our monetary policy with the goals of maximizing employment, stabilizing prices, and moderating long-term interest rates — is an independent body not subject to presidential interference outside of the chief executive’s power to nominate its members to their 14-year terms.

Trump being Trump, however, means that mere legalities haven’t stopped the president from trying every trick in his likely ghost-written book to bend the board’s action to his will.

After inheriting a roaring economy rescued from the threat of a worldwide depression thanks to the actions of President Obama after the last economic debacle created by Republican governance in the final months of the G. W. Bush administration, Trump has pressed the Fed to reverse its policy of slowly letting interest rates rise to more typical levels from the rock-bottom rates it was forced to implement to save America from a decade of bread lines and hungry unemployed masses.

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A new report from Bloomberg today hints at a hidden personal reason for the president to be pushing for the Fed to keep interest rates lower than its financial prognosticators deem appropriate for a healthy economy.

Cheap credit at historically low interest rates can help businesses expand more easily, encourage consumer spending, and generally keep the economy percolating, allowing Trump to continue to accept the accolades for Obama’s stewardship of the economy.

The danger is that excessively low interest rates can also create an over-heated economy, increasing inflation and leaving the Fed with less room to maneuver when the next economic downturn inevitably arrives.

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Trump has expressed his opposition to the Fed’s publically announced roadmap of gradual rate increases since it was forced to drop them to the lowest possible level in the aftermath of the 2008 financial crash. Interest rates stayed at that negligible level for seven years before the Fed was confident enough in the stability of the economic recovery to begin a policy of slowly raising rates by a quarter percentage point, an action they initially took just once each year beginning in 2015 and accelerated in the last two years to three to four hikes each year.

The Fed ignored Trump’s entreaties today and raised the official Federal Funds rate by another .25% to now reach 2.5%. The increase reverberated on a Wall Street — already in decline due to worries over Trump’s tariff policies and a trade war with China — which responded with yet another drop in the Dow Jones Industrial Average. Today’s fall of nearly one and a half percent brings the Dow nearly 10% lower than where it was earlier this month and below its starting point for the year.

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While Trump is surely eying his electoral prospects for 2020 in wanting to ensure that current American economic activity at least matches the performance under his predecessor whom he has unfairly denigrated out of pure spite, Bloomberg revealed what may be the most important reason the avaricious creature in the Oval Office is so hell-bent on keeping interest rates low.

“Federal Reserve Chairman Jerome Powell’s interest-rate increase on Wednesday may add almost $1 million to the Trump Organization’s annual borrowing costs,” Bloomberg reports.

“The increase may raise President Donald Trump’s cumulative cost from the U.S. central bank’s hikes since his inauguration to $6 million per year, according to a Bloomberg News analysis of the president’s financial disclosures and property records,” an article on the financial news organization’s website declared.

Bloomberg lists a series of variable-rate loans totaling $340 million that the president has taken through the Trump Organization from the only lender willing to continue to work with the company after Trump’s multiple bankruptcies. Bloomberg’s analysis shows that today’s increase pushes Trump’s estimated annual borrowing cost on those variable-rate loans to about $17.1 million.

No wonder the president is opposed to the Fed’s policy. Trump’s legal bills are going to require a lot of cash and, with the president’s tax returns still unavailable for public scrutiny, we don’t know how much cash he actually has on hand.

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Sure, the Trump Organization will be raking in the dough from charging the government for golf cart rentals as the president takes a leisurely 16-day vacation at Mar-a-Lago over Christmas, but the idea that Trump’s personal finances may be impacting monetary policy for the nation as a whole proves why senior government officials need to divest their business interests before entering government service, as if we needed a reason besides foreign emoluments to reach that conclusion.

Follow Vinnie Longobardo on Twitter.

Original reporting by Shahien Nasiripour at Bloomberg.

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Vinnie Longobardo

Vinnie Longobardo is a 35-year veteran of the TV, mobile, & internet industries, specializing in start-ups and the international media business. His passions are politics, music, and art.

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