WASHINGTON, DC - JULY 24: U.S. President Donald Trump and Federal Reserve Chair Jerome Powell tour the Federal Reserve’s $2.5 billion headquarters renovation project on July 24, 2025 in Washington, DC. The Trump administration has been critical of the cost of the renovation and Federal Reserve Chairman Jerome Powell. (Photo by Chip Somodevilla/Getty Images)

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On economic matters, Donald Trump and Jerome Powell aren’t very far apart, if at all. This would likely bother both, but it’s true nonetheless.

Still, before getting to why Trump and Powell are economic doppelgangers it’s useful to get the basics of their confrontation out of the way. Powell surely wants an admission from Trump that he did nothing criminal, and that any pretense of investigation will cease immediately. And in a recall of FDR, Trump wants Powell’s Fed seat to “pack the Fed.” What’s that they say about the “difference” between Democrats and Republicans?

Trump arguably has the upper hand over Powell when it’s remembered that Powell’s proverbial clock is ticking. In other words, his value as a former Fed Chair is highest right now in a speakers’ circuit sense and memoir sense. Same in a consulting sense. The longer Powell stays, the less his story will matter to domestic and global audiences, the less interest readers will have in his memoirs, and the fewer people he’ll seemingly know at the Fed on the path to selling that knowledge to global clients.

Of course, those close to Powell will say he’s got the upper hand in that he can continue to vote against Kevin Warsh’s lower rate desires, and in doing just that Powell’s profile will, if anything, rise. And then Trump being Trump, he’ll keep Powell in the news with routine critiques of his obstreperous ways in a way that will keep Powell in the conversation for much longer, all while extending the shelf life of Powell’s books, speeches, and alleged insights into what the Fed will do in the future.

The bet here is that both sides will soon blink. Trump wants another Fed appointment, and Powell will want to profit from what he endured as a Fed appointee. A deal will be made.

Which brings us to the foolishness of the whole Trump vs. Powell discussion, and just how similar their economic views are. To see why, a basic principle of borrowing must be rolled out: no one borrows money, rather they borrow what money can be exchanged for.

It’s a reminder that borrowers of money are borrowing production for a price. Trucks, tractors, computers, desks, paper clips, and labor in return for principal paid back plus interest. Put another way, all loans are production in return for production. Lenders offer production through the exchange medium that is money, and borrowers pay production back through the same exchange medium.

In Trump’s case, his desire for low rates of interest is an implied desire for cheaper access to resources. Powell’s reticence is rooted in the idea that cheaper access to resources leads to inflation.

Both are expressing their Keynesian mysticism when it’s remembered that governments have no resources. Implied in an “easy” Fed preferred by Trump is that governments do have resources, after which Powell’s reticence about “ease” implies the same. They’re both wrong. Just as government spending isn’t an economic stimulant since governments have no resources that they haven’t already taken from us, neither does the Fed have an ability to discharge resources absent it substituting itself for the marketplace in the way government spending does.

It’s a comment that Fed fiddling with rates, just like government spending, is rooted in the belief that governments can extract resources from an economy only to allocate them more effectively, and more stimulatingly than the private economy in which they were created. Which is nonsense. Keynesianism is nonsense.

All of which explains the battle between Trump, Powell and their partisans on both sides. Ultimately they’re all Keynesians now, and that’s sad.