As expected, President Trump has 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,” says economist
Hunter Lewis. “Perhaps if President Trump had re-nominated
Janet Yellen, that would have represented 100% continuity, but
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.”—Paul Bubny
Economist Sees “Bubble and Bust” Cycle Continuing
UP Front A comprehensive look at what’s trending in the world of commercial real estate
Three words, walkable mixed use, seem to be in the lexicon of
most real estate developers these days. With that theme in mind,
CityLine Sunnyvale in Sunnyvale, CA has signed a lease with AMC
Theaters for a multi-screen theater. The theater will occupy the
same building as a previously announced Whole Foods Market,
with both businesses serving to anchor Sunnyvale’s downtown
district as a pedestrian-friendly mixed-use neighborhood.
The new theater is planned as a 12-screen multiplex with
Dolby Cinema and IMAX upgrades to two screens, and will
include reserved seating and a full-service bar. The bar area will
feature dedicated seating and a balcony overlooking the rede-
signed Redwood Square.
A new two-story building on the corner of Murphy and
McKinley Avenues will house the 52,000-square-foot AMC
Theaters on the second floor, with the 52,000-square-foot Whole
Foods Market on the street level. CityLine Sunnyvale will extend
Murphy Avenue as an area with new residences, shopping, enter-
tainment options and office space planned across 36 acres.
“This is a major step in fostering a thriving and dynamic
downtown that supports a mix of strong, locally oriented businesses,” says Deke Hunter, president of Hunter Storm. The decision to name the project CityLine Sunnyvale was based on the
concept that this area will connect the dots between work, life,
entertainment and leisure with adjacent access to Caltrain. With
residential, retail and office space all in one convenient location, CityLine Sunnyvale will blend the boundaries between
working and living in Sunnyvale.
The project is currently under design with construction
activities to start in the coming months and a grand opening
planned for summer of 2019. CityLine Sunnyvale is being developed by STC Venture LLC, a joint venture between affiliates of
Hunter Storm and Sares Regis Group of Northern California,
which acquired CityLine in 2015.—Lisa Brown
Two Anchors Bolster Downtown Core
BEHIND THE DEAL
A rendering of CityLine Sunnyvale