Another likely candidate to succeed Yellen was economist John Taylor, who once opined in the Wall Street Journal that Fed policy served as a drag on the US economy. “Taylor would have been an excellent candidate, and I felt the Fed was really in need of an overhaul,” says Lewis.

The appointment of Powell not only maintains continuity from Yellen, but also continues a “bubble-and-bust, bubble-and-bust” cycle that has repeated itself since Ronald Regan picked Alan Greenspan to chair the Fed in the 1980s, says Lewis. “We didn't really have this bubble-and-bust pattern for almost 70 years after the Great Depression,” he says. “Over the past few decades, we've been having it again and again,” a cycle he attributes to failed Fed policy.

“Since the last crash, economic growth has been extremely slow,” he says. “The only period in which it has been nearly as slow was the Great Depression. You had 10 years of the Depression, nine years since the 2008 crash—similar growth rates.”

Should the slow-albeit-steady pace of growth falter, and in fact start reversing itself, “there's any number of radical steps the Fed could take in the face of a decline in the economy or even the stock market,” says Lewis. “The Fed really should not be backstopping the stock market, but it is, and it's doing so in the theory that somehow that will help everybody else. There's no real evidence that this is true.”

Among the remedies the Fed could effect are negative interest rates, the eliminating of cash and buying other assets—such as stocks—with newly created money. “In Japan, the central bank has not only bought stocks; it's bought real estate, it's bought all kinds of things,” Lewis says.

These steps theoretically could be taken “in addition to the radical steps that have already been taken in the past 10 years,” says Lewis. “But there's no evidence that any of those things help. In fact, there's some evidence that they make things a lot worse.”

In Economics in Three Lessons, “I try to explain to people that you've got to think long-term in economics, not just short-term,” Lewis says. “You've got to think about how things are affecting everybody, particularly the poor and middle-class. And you've got to apply policies that are sustainable.

“And that's the problem: the policies that have been applied are not sustainable,” he continues. “So I'm worried that we're just in another bubble, and that at some point, that bubble will burst.”

Lewis

WASHINGTON, DC—As expected, President Trump on Thursday nominated Jerome Powell, a member of the Federal Reserve Board of Governors, to succeed Janet Yellen as the central bank's chair. Having hinted at the need for reform in the Fed, Trump instead tapped a one-time partner at the Carlyle Group who is expected to deliver little change from the course maintained by his predecessor.

“It doesn't represent any departure at all,” economist Hunter Lewis tells GlobeSt.com. “Perhaps if President Trump had re-nominated Janet Yellen, that would have represented 100% continuity, but this is like 99% continuity.”

Maintaining what in effect is an unbroken line appears to run counter what Trump had implied. “Certainly, he had been a critic of the Fed during the campaign,” says Lewis, author of 11 books including, most recently, Economics in Three Lessons and One Hundred Economic Laws.

Lewis sees issues with preserving the status quo at the nation's central bank. “It's possible to see the Fed as the financier of much of the crony capitalism that's taking place in the United States today,” he says. In addition, he notes that Trump the Presidential candidate promised to “drain the swamp” of Washington corruption. “But if you're leaving the Fed unreformed and not making any changes there, it's a little hard to see how you're draining the swamp in any way.”

Another likely candidate to succeed Yellen was economist John Taylor, who once opined in the Wall Street Journal that Fed policy served as a drag on the US economy. “Taylor would have been an excellent candidate, and I felt the Fed was really in need of an overhaul,” says Lewis.

The appointment of Powell not only maintains continuity from Yellen, but also continues a “bubble-and-bust, bubble-and-bust” cycle that has repeated itself since Ronald Regan picked Alan Greenspan to chair the Fed in the 1980s, says Lewis. “We didn't really have this bubble-and-bust pattern for almost 70 years after the Great Depression,” he says. “Over the past few decades, we've been having it again and again,” a cycle he attributes to failed Fed policy.

“Since the last crash, economic growth has been extremely slow,” he says. “The only period in which it has been nearly as slow was the Great Depression. You had 10 years of the Depression, nine years since the 2008 crash—similar growth rates.”

Should the slow-albeit-steady pace of growth falter, and in fact start reversing itself, “there's any number of radical steps the Fed could take in the face of a decline in the economy or even the stock market,” says Lewis. “The Fed really should not be backstopping the stock market, but it is, and it's doing so in the theory that somehow that will help everybody else. There's no real evidence that this is true.”

Among the remedies the Fed could effect are negative interest rates, the eliminating of cash and buying other assets—such as stocks—with newly created money. “In Japan, the central bank has not only bought stocks; it's bought real estate, it's bought all kinds of things,” Lewis says.

These steps theoretically could be taken “in addition to the radical steps that have already been taken in the past 10 years,” says Lewis. “But there's no evidence that any of those things help. In fact, there's some evidence that they make things a lot worse.”

In Economics in Three Lessons, “I try to explain to people that you've got to think long-term in economics, not just short-term,” Lewis says. “You've got to think about how things are affecting everybody, particularly the poor and middle-class. And you've got to apply policies that are sustainable.

“And that's the problem: the policies that have been applied are not sustainable,” he continues. “So I'm worried that we're just in another bubble, and that at some point, that bubble will burst.”