As of this moment the world wonders, rightfully so, why Obama has to meet with Janet Yellen in private and just what information is so important that it can only be said behind closed doors. Perhaps sensing this confusion, White House spokesman Josh Earnest apologetically noted that President Obama “cares deeply about preserving both the appearance of and the fact of the independence of both the Federal Reserve” and Fed Chair Janet Yellen, White House Press Sec. Josh Earnest tells reporters in briefing; he added that he wouldn’t anticipate “even in a confidential setting” that Obama “would have a conversation” with Yellen “that would undermine” the ability to make “critical financial decisions independently.”
So with the topic of U.S. presidents preserving the independence of Fed chairs “even in a confidential setting” we recalled this particularly colorful anecdote demonstrating just how “independent” said Fed chairs are in “a confidential setting.”
From the NYT:
… in 1965, President Lyndon B. Johnson, who wanted cheap credit to finance the Vietnam War and his Great Society, summoned Fed chairman William McChesney Martin to his Texas ranch. There, after asking other officials to leave the room, Johnson reportedly shoved Martin against the wall as he demanding that the Fed once again hold down interest rates. Martin caved, the Fed printed money, and inflation kept climbing until the early 1980s.
“I hope you have examined your conscience and you’re convinced you’re on the right track.” Lady Bird Johnson said to William McChesney Martin, on his arrival at the LBJ ranch.
We hope this time it’s different.
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