President Trump drew plenty of criticism when he nominated Stephen Moore to be a member of the Federal Reserve’s board of governors. Moore’s problem? He agrees with Trump about monetary policy.
But why nominate someone to the Fed someone who doesn’t agree with the president about the issues the Fed deals with? To do so would be irresponsible, it seems to me.
Now, however, Trump reportedly will nominate Herman Cain to the Fed. Like Moore, Cain agrees with Trump about monetary policy (these days, at least). But unlike Moore, who has a masters degree in economics and has devoted his career to analyzing economic issues, Cain isn’t an economist and there is little reason to believe he has a high level of expertise in the field.
It’s true that Cain served for four (correction: five) years on the Federal Reserve Bank of Kansas City’s board of directors, and was its chairman for a time. That’s a group of business and community leaders who advise the head of the Kansas City Fed on the state of the economy. I doubt that service on such a board is a substitute for the deep understanding of economics one should expect from a member of the Fed’s board of governors.
Cain is best remembered (at least by me) for his campaign slogan “nine, nine, nine.” The slogan represented his tax policy — eliminating the current tax system all together and replacing it with a 9 percent personal income tax, a 9 percent corporate income tax, and a 9 percent national sales tax. It seemed to me, though I may be wrong, that the number 9 was used across the board to create a catchy slogan, rather than because 9 was the optimal percentage for each category.
I don’t blame Cain for wanting a catchy slogan for his campaign, in which Stephen Moore served as an adviser. More concerning to me are reports that, during the economic downturn of 2008, Cain said the Fed should increase interest rates. Cain reportedly has also claimed that the U.S. is experiencing deflation, which it is not.
There’s also the issue of sexual harassment. Four women accuse him of it. The accusations drove Cain out of the 2012 presidential race, though he denied them. The allegations are serious enough that I think they have to be evaluated before Cain can be confirmed.
Cain may face an uphill confirmation battle. Between his seeming lack of high-level economic expertise and the sex harassment allegations, it’s easy to envisage the four Republican defections that would sink him. Off the top of my head Susan Collins, Lisa Murkowski, and Mitt Romney (whose primary economic adviser in the 2012 campaign has already criticized the nomination of Cain) seem more likely to vote “no” than to vote “yes.”
President Trump’s views on monetary policy aren’t mainstream, but he should be able to find a replacement nominee who shares them, and who has a high level of economic expertise.