It was great meeting a wide range of Edge readers in Washington this week. I also managed to persuade the inimitable Natalie Jaresko to come into Axios HQ in Virginia, where we recorded a podcast. Check it out if you're interested in how she went from the Chicago suburbs to become the finance minister of Ukraine and then the fiscal overseer of Puerto Rico.
And for the teachers out there: Charles Schwab is throwing a bunch of money at financial literacy projects on Donors Choose. I wonder what proportion of, say, high school students could understand Axios Edge.
Illustration: Sarah Grillo/Axios
Donald Trump wants to politicize the Fed. One White House source explained his thinking to the WSJ:
"Mr. Trump has selected candidates like Messrs. Moore and Cain in recent weeks because he believes they have the interests of his presidency in mind, the person said.
Describing Mr. Trump’s views, the person said, 'I want people who care about me and my presidency and economic growth…because that’s important to the health of the country and his re-election chances.'”
The big picture: Ken Rogoff, one of the most respected technocrats in the economics profession, warned this week that Trump is effectively pushing at an open door. Giving a lecture at the IMF this week under the auspices of the G30, Rogoff warned that the world might be facing "the beginning of the end of central bank independence." None of his four main reasons had anything to do with Trump.
Rogoff's proposed solution to all these problems is for central banks to embrace negative interest rates as a policy tool, with a system of subsidies that prevents regular depositors losing money in their checking accounts. "The countries that do it first will be glad they did it," he said. The central banks that don't? They risk losing their independence entirely.
The bottom line: Central bank independence is almost never enshrined in a country's constitution; it can be lost easily and needs to be fought for. Politicians now have the wind at their back if they want to take back control of their central banks. But, says Rogoff, "countries that do that, including the U.S., if it chooses to go down that path, will live to regret it."
Donald Trump isn't shy about criticizing the Fed, as we saw most recently this morning. He doesn't like rates as high as they are (which isn't high), and he doesn't like quantitative tightening. Maybe he should have attended Rogoff's lecture.
How it works: Rogoff doesn't think that quantitative tightening really counts as monetary policy, nor does he think that the Fed's balance sheet is meaningfully different from the overall fisc: "It is a wholly owned subsidiary of the central government," he says.
Stephen Moore is still on track to be nominated to one of the Fed's open board seats. He went on CNN this week to say that "a gold standard would certainly be better than what we have right now" and that surging oil prices in mid-2008 were caused by loose monetary policy.
CNN's Andrew Kaczynski has found older statements from Moore, including:
Markets are the world's greatest mechanism for turning enormous amounts of information into a single agreed-upon valuation. Price discovery, as it's known, is one of the most important things that any market does. But it doesn't always work efficiently.
My thought bubble: The SEC is doing a pretty bad job of ensuring that companies provide genuinely useful financial transparency to their investors. The limitations of a "more information is always better" approach are becoming obvious. What's really needed is a significant expansion of the agency's structured data framework, so that analysts and investors can easily download a spreadsheet where all the important information can be found and modeled.
It's tax day tomorrow, and 70% of the U.S. population is eligible to file their taxes online for free, through the IRS Free File program. In reality, however, you can be forgiven for not knowing about it. If last year is any guide, fewer than 2% of all tax returns will take advantage of this service.
The big picture: In countries like Japan and Britain, most taxpayers do not need to fill out any kind of tax return at all. The IRS has enough information on taxpayers' income to be able to implement a similar system here. But Congress won't let it.
Medscape has an annual survey of physicians' salaries, and this year, once again, saw them reaching new record highs. The average physician's annual take-home pay is now $313,000. That's 99% of the median U.S. house price.
The interior dash of Tesla’s new Model 3. Photo: Salwan Georges/The Washington Post via Getty Images
When you buy a Tesla, you're not buying a car, you're buying a computer. A Tesla blog post this week explains that the entry-level $35,000 version of the Model 3 is henceforth going to be physically identical to the Standard Plus version, which costs $39,500. Certain features will just be "software-limited."
There are lots of reasons not to like Hudson Yards, the vast new city-within-a-city on the west side of Manhattan. Among them: $1.2 billion of the funding for the project came from the EB-5 visa program, with even more money on the way.
By the numbers: Hudson Yards has received some $6 billion of taxpayer assistance to date, including New York City paying $359 million of bond interest payments when the developer didn't have the money.
Illustration: Rebecca Zisser/Axios
China will release first quarter GDP on Wednesday. Though the report's accuracy is questioned, it's still closely watched, writes Axios' Courtenay Brown.
On the earnings front, look for an update on Netflix's cash burn on Tuesday. Multinational conglomerate Honeywell reports on Thursday: Its earnings generally give a good indication of the health of the market as a whole.
2 big tech IPOs are coming this week: Pinterest and Zoom. Thought bubble by Axios' Dan Primack:
Apple and Tesla will be in court this week.
Photo by VCG/VCG via Getty Images
Zaha Hadid's Wangjing SOHO development, completed in 2014 in Beijing, is described by the architecture firm as resembling three mountains that "fuse building and landscape to bring together the surrounding community."
A final word of thanks to Courtenay this week, who pulled the data for the wonderful IRS Free File chart in item #4 above. When it just sits there in the middle of a newsletter it looks incredibly easy. It isn't.