In an open letter, almost 600 economists defend Lisa Cook against Trump pressure on the Fed

Those who are Lisa Cook, Fed’s director who decided to face Trump prominent figures from the world economy expressed support to Lisa Cook, director of Federal Reserve (Fed), the US Central Bank, accused by President Donald Trump of Tax Fraud-an argument used by him to try to remove her from office. The open letter, released on Tuesday (2), was signed by almost 600 economists, including the winners of the Nobel Prize of Economics Claudia Goldin and Paul Romer. 📱 Bake the G1 app to see real-time and free news the document also featured Christina Romer-former president of Barack Obama’s Economic Advisers Council-and Trevon Logan, professor at Ohio State University and cook research collaborator. Addressed to Trump, Congress and American society, the letter defends the Central Bank’s independence from “everyday political pressures”. “A vast set of research confirms that countries with more independent central banks achieve better economic results,” says the text. Trump increases pressure on Cook and Fed last week, the president of the United States announced the economist’s resignation, citing a provision of the Fed Creation Law that would authorize the dismissal of members “for just cause.” According to Trump, Lisa Cook would have committed mortgage fraud by declaring two homes as leading to get better financing conditions. Fed legislation determines that the US president cannot dismiss members of the board without proving serious misconduct. In a statement, the Fed himself stated that Cook remains in office until the court pronounces. In the document released today, economists point out that Fed’s legislation provides for a “rigorous criterion to protect the institution’s autonomy” and that Trump’s statements about Cook’s “possible resignation” were accompanied by “unproven accusations”. “This protection is not just a legal formality, but a practical mechanism designed to prevent monetary policy from being used for immediate political benefit to the detriment of what is better for the economy.” Economists advocate Lisa Cook by supporting the director, economists point out that, “throughout her management, she has spoken publicly and professionally on Central Fed’s mandate, such as financial stability and inflation evolution.” “This stance threatens the fundamental principle of Central Bank independence and weakens confidence in one of the most important institutions in the United States. This confidence is the basis of the system that sustained American economic vitality over the decades,” the letter concludes. Following the attempted dismissal by Trump, the Fed’s director entered the American court to challenge the Republican’s initiative to withdraw from office. In the action, Cook accuses Trump of violating the Central Bank rules and asks the US court to issue an order preventing the president from removing it. Lisa Cook, director of Fed. Reuters

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