The British weekly Economist compared Kevin Wash, who was named the next chairman of the Federal Reserve (Fed), the U.S. central bank, to a "chameleon," while Nobel laureate economist Paul Krugman slammed him as a "political animal." It is a criticism of his contradictory move in favor of U.S. President Donald Trump's demand for a rate cut, abandoning his hawkish tenet against quantitative easing during the 2008 financial crisis.

This cold assessment cannot be dismissed as another country's business. In South Korea, Lee Chang-yong's term as governor of the Bank of Korea ends in April. Depending on which president Lee Jae Myung appoints, such a cold assessment could be rekindled in South Korea.

The policy stance of the Government of Lee Jae Myung is clear. It is an expansionary fiscal policy that pushes the pedal of "money release" to take care of the lives of ordinary people. The harder the government presses on that pedal, the more the central bank president should act as a breaker to keep that pace in check. The "double expansion" of finances and currencies to release money at the same time could be sweet right now, but at the end of it, the terrible pain of soaring prices and asset inflation awaits.

But most powers want to stimulate the economy. This is to win the election by increasing his approval rating. That's why the head of the central bank wants to lower interest rates. He wants to play a leading actor who moves according to the script of power. However, a truly competent central bank president chooses the path of a "traitor" who boldly tears up the scenario of the director who established him.

In 1992, George H.W. Bush failed to seek re-election as president and expressed resentment toward Fed Chairman Alan Greenspan. "I reappointed him (as Fed chairman), but he betrayed my trust. If interest rates had gone down further, they could have been re-elected." Bush re-nominated Greenspan as Fed chairman in 1991, expressing faith in him. But Greenspan has been slow to cut interest rates and unemployment has continued to exceed 7%. In the end, Bush lost to Bill Clinton, who campaigned "The problem is the economy, you fool." Greenspan may have been a traitor to Bush, but he only made sure he played his original role in protecting the value of the currency. So the betrayal is a 'holy betrayal'.

Under the current government, which is implementing an expansionary fiscal policy, the new BOK governor's path is the same. The pressure to support the president's policy stance should be cut off "strongly." If there is a sign of inflation, betrayal by taking out the sword of "interest rate" is the first duty of the BOK governor.

If betrayal is a break with power, toughness is the solitary patience of the public to put up with the screams of the sweet drugs of lowering interest rates. In the 1980s, Fed Chairman Paul Volcker proved his tenacity with his whole body. When interest rates were raised to 20% to keep prices under control, angry farmers gathered outside the Fed headquarters by tractors. Housebuilders cursed him by sending timber urging the chairman to resign. However, he fought inflation by maintaining high interest rates. This was the driving force behind the prosperity of the United States in the future. As such, the head of the central bank must silently accept today's hatred for tomorrow's prosperity. The title of Volker's autobiography, Keeping At It, symbolically reveals the fate of the central bank president.

Jimmy Carter, the 39th president of the United States, shows what the president's role should be to protect the independence of central banks. Carter nominated Volker to chair the Fed even though he made it clear that he would raise interest rates in front of him. Except for one public criticism, he continued to support Volker. Even though the economic downturn caused by high interest rates was an important cause of the re-election failure. President Lee and the ruling party should also allow the new BOK chief to "sacred betrayal" and "lonely persistence." As soon as the head of the central bank becomes a faithful servant of power, the value of the currency collapses.

[Kim Insoo Editorial Writer]