Today, John Cochrane explains the limited virtues of Federal Reserve independence; H.R. McMaster outlines the US policies that should follow the Maduro raid; and Larry Diamond calls on the Trump administration to promptly facilitate the transition of power to Venezuela’s democratic opposition forces.
Freedom Frequency
In this week’s Grumpy Economist rant, Senior Fellow John H. Cochrane takes on the debate over Federal Reserve independence. Is the Fed too political—or not independent enough? Cochrane argues that independence isn’t an absolute virtue. It only works when paired with a narrow mandate and limited tools. As the Fed’s power expands into areas like financial regulation, climate policy, and crisis management, Cochrane says, its claim to independence becomes harder to defend. In his view, the real question isn’t today’s interest rates—it’s whether the Fed should return to basics or become more accountable to elected government. Watch or read more here.
US Foreign Policy in Venezuela
Senior Fellow H.R. McMaster joined CNBC’s Squawk on the Street broadcast to discuss the implications of the recent American military and law enforcement operation in Venezuela. “You don’t want to contribute to any kind of fragmentation of the opposition,” said McMaster, cautioning the Trump administration against collaborating with the remnants of Maduro’s government. “It’s time to empower the Venezuelan people with a change in the fundamental nature of that government.” McMaster noted the strength of the indictment against Maduro for employing the Venezuelan government in the service of drug trafficking. The former national security advisor also said that the Maduro extraction is likely just the first part of a larger campaign to isolate the current regime from its key sources of support. Watch here.
Writing at The UnPopulist, Senior Fellow Larry Diamond argues that President Trump “must be persuaded to not anoint himself Venezuela’s new overlord, but to help it to transition into the democracy for which its people clearly long.” Diamond says that “Maduro is gone but his predatory dictatorship lives on,” with the Trump administration showing “no sign of a plan or strategy to induce this awful regime to negotiate a transfer of power to [former successful Venezuelan presidential candidate Edmundo] González and the democratic coalition of which [María Corina] Machado is the political and moral leader.” Diamond concludes that now is the time for “a transition to the government elected in 2024” to restore “a competent, pro-American, rule-of-law state in Venezuela.” Diamond also addresses the challenge of dealing with Maduro regime loyalists within key institutions. Read more here.
Confronting and Competing with China
In a new short clip from Uncommon Knowledge, Hoover Institution Director Condoleezza Rice explains the important differences between America’s Cold War rivalry with the Soviet Union and today’s geopolitical competition with China. Unlike the USSR, Rice says, China has an economy that is more closely matched with that of the United States—and benefits from deep integration into the global economy. China also has shown an ability to innovate in key areas of technology. Rice concludes that today’s international situation is more dangerous than the Cold War, in part because the United States is less sure whether it “really wants to lead” on the world stage. Watch here.
Military History
Distinguished Visiting Fellow and retired British general Nick Carter argues at War on the Rocks that “all militaries are naturally keen to learn lessons from the war in Ukraine, but we should be careful not to focus too much on technology.” Carter notes that the technological revolution involving drones in particular is just one characteristic of the conflict among others, including “doctrine, tactics, and the military culture of the protagonists.” Carter says that NATO militaries, “as servants of Western democracies,” should “recognize that their tolerance for casualties is somewhat less than our authoritarian enemies.” This leads him to conclude that “envisioning how NATO countries want to fight is the first and most important step” in implementing any innovations or doctrinal changes on the basis of observations of the war in Ukraine. Read more here.
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