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One of my favorite sayings is “It’s not so bad to be old when you consider alternatives.”

Biden’s decision to reappoint Federal Reserve Chairman Jerome Powell for a second term – that’s my attitude – was apparently shared by many on Wall Street. Powell gets a C+ grade as Fed chairman, but he’s far better than the second-place candidate in Fed board member Lyle Brainard.

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Biden Taps Jerome Powell for Second Term as Fed Chair, Turning Down Progressives

Powell’s performance at the Fed has been uncertain. On the one hand, he gets high marks for presiding over one of the great bull markets in world history.

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But the economy’s real growth and real income have grown at a lousy rate because of its asymmetrical monetary policies. He steps on the brakes and then presses the accelerator of monetary policy at the wrong time. This is because he is making rules rather than sticking to rules-based monetary policy. The latter is what the country desperately needs.

The pattern has been on the past three Democratic presidents to re-appoint Republican Fed chiefs. Why? Because Americans don’t trust Democrats when it comes to getting their hands on the money supply. And for good reason.

This has led to costly mistakes. In 2018, he was too tight for a very long time, following a series of interest rate hikes that nearly drove the US economy into recession at the end of that year. Investors can recall that GDP growth and the stock market collapsed in December of 2018 and it wasn’t until Powell had to admit his errors, and reverse the deflationary effects of those rate hikes, The economy grew in 2019 with massive real income gains for Americans. ,

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Then in 2020 he helped keep the economy out of recession during the pandemic, but he also allowed prices to slide in the second half of the year. This severe deflation slowed the recovery and may well cost Trump the election. Commodity prices have fallen by more than 50%. (I have long been a proponent of using the CRB commodity index as a guard rail should interest rates rise or fall.)

Worst of all, the Fed is now way behind the curve in stemming the inflation stampede, which is slashing pay checks for low- or fixed-income Americans. Inflation has tripled from 2 to 6.2% – and, sorry Mr. Powell, that certainly doesn’t seem “transient” to us.

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That said, Powell was a safe and wise bet for Biden. The pattern has been on the past three Democratic presidents to re-appoint Republican Fed chiefs. Clinton reappointed Alan Greenspan. Obama reappoints Ben Bernanke. Why? Because Americans don’t trust Democrats when it comes to getting their hands on the money supply. And for good reason.

The US seems to have dodged a bullet here. Brainard would have been a potential disaster. She was favorably inclined to the lame idea of ​​adding climate change and gender equality issues to the Fed mandate. What do central bankers have to do with climate change? The Fed must stick to its sole mission, which is price stability. Anything that takes the Fed away from that mandate is risky to our financial stability.

So congratulations to Mr. Powell on his appointment to a second term. Control inflation now, immediately. You don’t want to go down in history as the Fed chairman who drowned the US economy in a sea of ​​rising prices.

Stephen Moore is a Senior Fellow of FreedomWorks and a co-founder of the Committee to Unleash Prosperity. He served as a member of President Trump’s economic reform task force.