Donald Trumps threats against Federal Reserve chair Jerome Powell have prompted an unusually blunt show of international solidarity, exposing growing concerns about political interference in economic governance, writesMark Beeson.

CENTRAL BANKERS tend not to be household names. Keeping a relatively low profile and not needlessly politicising their roles is part of the job description.

After all, the reason they have been given such power and influence when it comes to determining monetary policy in particular is that itswidely thoughtthat politicians cannot be trusted to act in the national interest rather than their own.

U.S. PresidentDonald Trumpis currently demonstrating the veracity of that assumption. Not only does the Trump Administration display no concern about the impact of its policies on traditional friends and allies, but either from ignorance or indifference, its economic policies risk triggering aneconomic crisisthat is likely to impact Trumps working-class supporters more than anyone else.

There has always been a debate about what central bankers should prioritise when making their judgements about policy priorities broadly speaking, the interests of business or labour but there has never been much doubt about the need for economic stability and the avoidance of crises.

Donald Trumps second presidency has stripped away the pretence, revealing how fragile democracy becomes when power is exercised without restraint.

The presumed advantage of notionally independent central bankers is that they will act in the long-term interests of their respective countries and not for the people who run them. Leaders who have used their power to overrule independent policymakers, like TrkiyesRecep Tayyip Erdoan, have often been pilloried as authoritarian illiterates with no understanding of the inexorable laws of economics. To judge byrecent inflation levelsin Trkiye, the critics may have a point.

The inherent tension between apolitical technocrats and potentially megalomaniacal national leaders has become a much more prominent issue because it is playing out in the United States, which remains the bedrock of the international economic order. Reckless or ill-judged economic policy in America could easily trigger anotherGlobal Financial Crisis, just as it didin 2008.

This is what makes the current disagreement between Trump and Americas central banker,Jerome Powell, so consequential. Trumps major gripe is that Powell has not reduced interest rates as quickly as he would like. Consequently, he has made it clear that he wouldlike to sack Powell. However, the Federal Reserve, Americas central bank, has statutory independence precisely because this should insulate it from political interference.

Again, there is an important debate about whether elected politicians or unanswerable technocrats should make decisions that affect the lives and livelihoods of voters. However, theres widespread agreement that Trump lacks even a semblance of the sort of impartiality and expertise required to make policies that are likely to ensure economic stability. Significantly, the only thing that really gets Trumps attention is thejudgment of the financial markets.

What has made the relationship between Trump and Powell especially controversial is that the President has tried to use the legal system to undermine Powell, suggesting that he is at best incompetent and at worst corrupt as a result of the latters role in the renovation of the Feds headquarters. This move has been made easier byTrump appointees to the judicial system.

By seizing a sitting head of state, Washington has replaced international law with a doctrine of unilateral reach.

One of thedefining features of authoritarian regimesis the stacking of the administrative and legal systems with cronies who owe their positions and loyalty to the leader. This is precisely what is happening in the U.S., as the much-discussed checks and balances that are supposed to curb the power of potential despots are being systematically undermined. In such circumstances, anyone who stands up to self-serving bullies, as Powell has done, should be applauded.

Remarkable as that is in the face of presidential power, what is even more surprising is that Powell has been supported by his counterparts in other countries. Given Trumps destructive unilateralism and contempt for international norms of good governance and even the rule of law, perhaps pushback might have been expected. But it is rare and noteworthy, nonetheless.

A jointstatement of solidaritywas issued by the European Central Bank and signed by the heads of central bankers from the UK, Canada, South Korea and even Australia, not usually known for its willingness to say anything even obliquely critical of American policy. But not only did Reserve Bank governorMichele Bullocksign on behalf of Australia, but she was supported by her notional boss, the TreasurerJim Chalmers, who described her actions as appropriate.

In the context of Australias relationship with the U.S., this counts as a fiery denunciation. The first rule of foreign policy in this country isnever criticise the Yanks, no matter what improbable, illegal or destructive a policy they may be embarked on. But if we have to rely on unelected technocrats to stand up for good governance and the rule of law, were in more trouble than I thought.

Perhaps Jim should ask Michelle where she got her backbone from.

Mark Beesonis an adjunct professor at the University of Technology Sydney and Griffith University. He was previously Professor of International Politics at the University of Western Australia.

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