Economist John Tamny pushed back forcefully on conventional views about monetary policy, tariffs, and government spending—challenging not just central bankers and presidential candidates, but also popular talking points within his own conservative circles.
Tamny, editor of RealClearMarkets and author of The Money Confusion, joined host Dan Proft to respond to recent remarks by former Federal Reserve Governor Kevin Warsh, a potential Trump nominee for Fed Chair. Warsh had argued for interest rate cuts and criticized excessive government spending as a driver of inflation. Tamny rejected both claims, stating that inflation has only one true cause: the devaluation of currency.
“Government spending is a tax, yes,” Tamny said. “But it’s not inflation. That’s monetary illiteracy.” He also dismissed the idea that the Federal Reserve has any meaningful control over interest rates, arguing that markets—not central banks—determine the true cost of borrowing. As an example, he pointed to Elon Musk’s early business struggles during periods of near-zero interest rates, arguing that access to capital depends more on trust and creditworthiness than artificial rate settings.
Tamny also lambasted what he sees as a bipartisan obsession with Fed policy, questioning why so many wealthy individuals seek the Fed chairmanship. “It’s like they’ll say anything to get the job,” he said, referencing Kevin Hassett and Scott Bessent by name. “They’re willing to abandon basic economic principles just to gain status.”
On tariffs, Tamny was equally skeptical. Citing recent praise for tariffs generating record-high customs revenue, Proft asked whether that should be seen as a Trump-era policy win. Tamny pushed back. “That’s just more taxation,” he said, arguing that tariffs harm global cooperation and productivity by limiting trade and specialization. He warned that the long-term effects are largely unseen: jobs never created, technologies never developed, and prosperity never realized because of economic inefficiency.
Tamny also responded to a classic Milton Friedman clip played by Proft, in which the economist argued that government spending—not the method of financing—is the real tax on the economy. Tamny enthusiastically agreed. Whether funded through taxes or borrowing, he said, the key issue is how much government extracts from the economy. “It doesn’t matter how they take it,” he said. “What matters is what we’re not doing with the money they’ve taken.”
While Tamny refrained from defending Fed Chair Jerome Powell, he emphasized that the identity of the chair is irrelevant. “No Fed chair can change economic reality,” he said. “Setting the price of credit is no different than trying to dictate the price of Apple laptops—it’s detached from how real markets work.”
Throughout the interview, Tamny called for a renewed focus on first principles, arguing that both political parties increasingly ignore basic economics in favor of short-term narratives and status games. His message: stop obsessing over interest rates and deficit gimmicks, and start paying attention to what government spending takes away from private innovation and growth.