Trump Fed Chair Nominee Can’t Wait To Do 2008 All Over Again, But Worse
Gorsh, it's Kevin Warsh!
Regardless of whether President Donald John Trump succeeds in getting permission from the Supreme Court to fire Federal Reserve Board of Governors member Lisa Cook over some made-up bullshit — though probably, hopefully not, because they like having money — Fed Board chair Jerome Powell’s term is set to expire in May. And though the seven-member board of governors is not a dictatorship, three of the current board members plus Powell were appointed by Trump. So, succeeding in firing Lisa Cook and replacing her, then also installing Warsh, would get Trump much closer to control of the monetary system.
Then who knows what Trump could do! Interest rates are still set by a 12-person committee of the seven governors, plus a rotating group of five regional Fed bank presidents, thank goodness. But if he ever does get control, you know he’d be juicing interest rates up and down like an Ibiza DJ, with advance tip-offs to his investor pals, just like with the tariffs we reckon!
Anyway Trump already has a nominee lined up to succeed Powell, it is one Kevin Warsh, as he announced on his shitty web platform in a lengthy screed!:
Right from central casting, says President Former Gameshow Host.
Warsh does seem qualified at first glance on paper, and as the youngest Fed chair nominee ever at 55, he still has a full head of hair, and probably most of his own teeth, too.
He looks kind of like Marco Rubio before his soul was sucked out, leaving only a grey and dead-eyed husk behind.
Warsh has a BA in public policy from Stanford and a JD from Harvard Law, was appointed to the Fed Board as a governor by George Bush the younger, served between 2006 and 2011, then stepped down before his term was even half over to go teach at Stanford.
But he’s not qualified, say Nobel-prize-winning economist Paul Krugman and others. Because he’s a “political animal” who loves inflation when Democrats are in office, but wants lower interest rates and less government involvement so America can charge up its credit card when Republicans are in control:
He calls for tight money and opposes any attempt to boost the economy when Democrats hold the White House. Like all Trumpers, he has been all for lower interest rates since November 2024.
As Medium’s Sam Bell helpfully bulleted about Warsh, back in 2017:
“He was tasked with keeping tabs on Wall Street but instead preached about the wonders of financial innovation right up until it exploded the economy;
“He helped save the big financial institutions — including rescuing his former employer, Morgan Stanley — but was ready to pull the plug on help for the real economy before it even hit rock bottom; and
“He wrongly warned of catastrophic consequences from Fed policy but didn’t even have the confidence of his own convictions to vote against them.”
Indeed, in 2007, right before the financial crisis, Warsh argued for greater liquidity, more lending, because banks had newfangled risk-assessment tools, therefore they should be more confident! Sell more derivatives, sell more loan products like variable interest rates so more people can temporarily afford low-mortgage down payments, mush, mush! We all know how that went.
After the subprime mortgage crisis hit and in the Great Recession that followed, Warsh was against the Fed buying back bonds and the same toxic mortgage-backed securities he’d been pushing, which were moves that Many People Say prevented complete economic collapse. He opposed those measures with arguments that they would stifle the economy, which Krugman called “confused and incoherent” at the time.
In 2015 Warsh and economist Michael Spence published a particularly stupid op-ed in the Wall Street Journal doubling down on Warsh’s opinion that the bond buybacks under Obama caused sluggish business investment. Larry Summers blasted it as blathering a “variety of assertions that are usually exposed as fallacy in introductory economics classes” and “assert[ing] a proposition that I have not encountered in 40 years as a professional economist — that overly easy monetary policy reduces business investment.”
Krugman summarized Warsh:
Warsh is indeed someone who has been wrong about everything; a bubble denier who spoke of strong capital markets before the crash, a hawk who has been warning about the risk of inflation for three years, an invoker of invisible bond vigilantes who somehow managed to describe the supposed threat from these vigilantes as somehow both a certainty and unknowable.
Economist takedown!
Warsh may not be respected among his peers, but he has a family tie: at Stanford, he met and then later married Jane Lauder, granddaughter of Estée, and daughter of billionaire heir Ron. Ron is a lifelong Republican insider; he was the US ambassador to Austria under Reagan, and in 1989 ran in the Republican primary for Mayor of New York, where he lost to Rudy Giuliani, who then lost to David Dinkins.
Lauder has long been a font of donations to Republicans, kicking in at least $35 million to Republican candidates, and millions to Republican legislative PACs. Though he’s known Trump for decades, he did not back him in 2024, initially supporting Ron DeSantis and then Nikki Hailey, but he eventually came around and donated $5 million to the MAGA Super PAC in March of ‘25. Warsh’s father-in-law has also been close to Israeli Prime Minister Benjamin Netanyahu since the ‘80s, and was even questioned in his graft case. Ron Lauder additionally may be the guy who first suggested to Trump he needed Greenland, back in 2018.
Family is not the only elite club that Kevin Warsh is in, either.
Like Larry Summers and Trump, Warsh appears in the Epstein files, in an emailed list from socialite Peggy Siegel as someone who would be around St. Barth’s in Christmas of 2010. He’s also mentioned in an email from Epstein’s longtime assistant Lesley Groff as someone who would be at “William Astor’s dinner.” That doesn’t mean Warsh ever even met Epstein, as the old dead pedo was a relentless name-dropper, social climber and hustler, but it’s mighty weird how all of these Epstein files people keep popping up in Trump’s orbit, no?
And that is all we have to say about that.
[Paul Krugman’s Substack / Medium]
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The fact he's in The Files means that he'll do what he's told.
He's also in the Epstein files so he's got Epstein's vote.