WASHINGTON — Ron DeSantis has found a new rhetorical target as he prepares for a potential presidential bid: Federal Reserve Chairman Jerome Powell.
In press conferences and speeches across the country, Florida’s Republican governor has begun to single out Powell — often by name — for criticism, arguing he has wreaked havoc on the economy and shown favoritism to wealthy investors.
“This Fed chairman has been a total and complete disaster,” DeSantis said last week in suburban Atlanta, speaking as part of a nationwide book tour. “And you are paying for it, and people all across this country are paying for it.”
The criticism is part of a broader message from the governor, who has positioned himself as a forceful critic of even ostensibly non-partisan government officials who he says are part of an unaccountable bureaucracy in Washington.
It’s an approach that has led DeSantis to regularly attack Anthony Fauci, former director of the National Institute of Allergy and Infectious Diseases, saying his leadership during the coronavirus pandemic did the country great harm.
But ahead of a widely expected presidential campaign, the governor’s focus on Powell might also double as an implicit critique of former President Donald Trump, who nominated the current central bank chairman in 2017.
In a party whose voters are by and large still reluctant to embrace direct attacks against the former president, Republicans say, going after his personnel choices as president might be one of the few safe lines of attack DeSantis can pursue.
“You can’t upfront say that Trump was bad or that Trump failed,” said Liam Donovan, a GOP operative. “You can say these people that Trump empowered failed, or led us astray.”
The governor, Donovan added, is “setting the table for a future line of argument with Powell and Fauci and other Trump-era figures, who he will argue failed the American people.”
DeSantis has yet to declare if he will run for the presidency next year, and many Republicans believe he’ll wait until the end of the state legislative session to do so, likely later this spring. Hypothetical polls of the GOP primary show him earning the second-most support from Republican voters behind only Trump, although his standing has slipped since reports began to emerge that the former president would be indicted.
Public criticism of the Federal Reserve and its leaders has traditionally been a sensitive subject in Washington, with some politicians worrying that applying political pressure would jeopardize its ability to independently make decisions, including setting interest rates. Officials in President Joe Biden’s White House regularly decline to comment about the central bank, citing its independence.
As president, Trump criticized Powell, even threatening to fire him. Biden re-nominated Powell for a new term in 2021.
DeSantis, who as governor has no authority over the Federal Reserve, has not shown the same reticence, saying that the financial entity laid the groundwork for inflation after it “printed trillions and trillions of dollars.”
“That obviously is going to create inflationary pressures,” the Republican said during a public appearance in Naples last week. “And so people were saying this, that this was always going to happen. They didn’t want to listen. And so you had inflation start to percolate.”
Powell, the governor said, initially called the inflation “transitory” before realizing belatedly that the central bank needed to act.
“So then what does the Fed do?” DeSantis continued. “Jerome Powell, they start hiking rates very rapidly. And that’s causing dislocations in the banking sector. It’s causing individuals to suffer just because they took their eye off the ball and didn’t know what they were doing. And, you know, I think the Fed has done a horrible job over these last few years. And they really are creating potential significant turmoil in the economy going forward.”
During an appearance near Harrisburg, Pennsylvania, on Saturday, DeSantis said nobody had done more than Biden to create high inflation — except “maybe Jerome Powell.”
DeSantis’ critique of the Federal Reserve, of course, isn’t entirely treading on new ground for a Republican politician.
In 2011, Texas Gov. Rick Perry, then a candidate for president, accused former Federal Reserve Chairman Ben Bernanke of being “almost treasonous” for actions he took during his tenure.
“If this guy prints more money between now and the election, I don’t know what you all would do to him in Iowa, but we would treat him pretty ugly down in Texas,” he said.
Former U.S. Rep. Ron Paul of Texas, meanwhile, rose to political prominence in part because of his oft-stated ambition to “end the Fed,” a plan to outright abolish the central bank. The policy was attractive to many libertarian-leaning Republicans, who resist any government involvement in the economy.
For some of those same Republicans, more than a dozen years later, the criticism of the central bank might still resonate.
“There’s just a general mistrust of finance and monetary policy,” Donovan said.”There’s just been an endless trail of kind of general populist discontent with what’s been happening with the financial system.”
DeSantis has not shown any indication he’s ready to go as far as Paul. And unlike with Fauci, the governor has not said Powell should have been removed from his post.
But DeSantis’ criticism of Powell extends beyond inflation. He also blames the Federal Reserve, along with the Treasury Department and Federal Deposit Insurance Corporation, for rescuing the depositors of Silicon Valley Bank after its high-profile failure in March.
“If there was a bank in this part of Pennsylvania that serviced, like, agriculture or small businesses, do you think that they would have been bailed out under similar circumstances? No,” DeSantis said, speaking at an annual gathering of leading conservatives in Pennsylvania. “So what they’re trying to do with their policies is make all of us deal with the harm, but the elites get insulated from their decisions.”
As Silicon Valley Bank collapsed, the Treasury Department, FDIC, and Federal Reserve jointly moved to lift the $250,000 cap in protection depositors normally receive, drawing the extra cash from an insurance fund paid for by banks. Government officials have resisted calling the rescue a “bailout,” saying the bank was not saved and no taxpayer money was used.
At his stop in Georgia, DeSantis called the arrangement “fundamentally unfair” and said it would worsen inflation.
“The other thing they’ve done in the process of bailing out the handful of banks that they have, they’ve printed another three, $400 billion and putting it back into the economy. They spent all last year trying to take money out, trying to get inflation under control, and they just now printed, wiping away half of what they’ve already taken out in the last year.”
