“The best people”
In August 2016, with the election bearing down, then-candidate Donald Trump promised to hire “only the best people.” Then earlier this year, he chose Herman Cain and Stephen Moore for seats on the Federal Reserve Board, or Fed. Seem a bit discordant? Senate Republicans agree.
On Thursday, without ever being officially nominated, Moore withdrew from consideration for a seat on the board — a position requiring Senate confirmation — amid crumbling GOP support in the Senate. Cain, a candidate in the 2012 GOP presidential primary, bowed out in April after saying that “God was giving me my answer.”
Both Moore and Cain’s short-lived selections were highly unusual. The Federal Reserve Board, one of the key arbiters of monetary policy in the U.S., is rigidly nonpartisan, and its members are generally well-respected economists. Moore and Cain, not to put too fine a point on it, are neither.
So let’s just go one by one, and then we’ll get to the larger issue of Trump and the Fed.
Ah, Stephen Moore. Where to start?
To begin, Moore is a partisan’s partisan, with long tenures at the libertarian Cato Institute and the conservative Heritage Foundation. He’s also a former Fox News commentator and economic analyst who worked on the Trump campaign in 2016.
All of those are problematic when you consider the traditionally nonpartisan, independent nature of the Fed, but it doesn’t stop there.
He also has a distinctly dubious record when it comes to actual economics. In the words of Washington Post columnist Catherine Rampell, “it’s not only his forecasts for the future that have proved chronically incorrect; it’s his characterizations of past and present, too.” Also, in 2014, Moore was blacklisted by the Kansas City Star for submitting an op-ed premised on blatantly incorrect economic data.
More on his economic policies can be found in Rampell’s latest piece, which does an excellent job of chronicling Moore's long history of many, many factual errors.
But Moore’s questionable economic bona fides weren’t enough to torpedo his Fed selection. Instead, it was his blatant, rabid sexism that was the final straw for Senate Republicans (but not for Trump, who on Thursday called Moore a “truly fine person”). Case in point: his 2002 comments on March Madness, of all things.
“Here's the rule change I propose,” Moore wrote. “No more women refs, no women announcers, no women beer venders, no women anything.”
And no, before you ask, that quote isn’t out of context. That’s just what Moore believes, though he’s since told CNN that it was a “spoof.” If you want to read more — and be warned, it only gets more vitriolic and misogynistic — check out this story by CNN’s Andrew Kaczynski.
Herman Cain, a one-time pizza magnate and presidential candidate, unsurprisingly had an even shorter tenure as a prospective Fed nominee than Moore did. Cain’s White House aspirations crashed and burned after he was repeatedly accused of sexual assault in 2012. Last month, four Senate Republicans preemptively came out against his nomination, essentially ending his chances of being confirmed.
However, it’s still worth mentioning one of his more zany economic policies: Cain is pro-gold standard. On that particular topic, The Atlantic has this to say: “There might be worse ideas than [returning to the gold standard], but they generally involve jumping off the Brooklyn Bridge because everybody else is doing it.”
Even Senator Mitt Romney, R-Utah, has expressed concern about Cain’s partisanship: “I would like to see nominees that are economists first and not partisans. I think it’s important that the Fed be a nonpartisan entity,” Romney told Politico in April. “The key is that someone is outside of the political world and is an economic leader not a partisan leader.”
Hear, hear, Mitt. And with that, let’s focus on the big picture of Moore and Cain’s selections.
The short of it is this: monetary policy is important. Interest rates can have a huge effect on the economy, and the Fed sets the interest rates. Since slashing interest rates can boost the economy, Trump desperately wants the Fed to do exactly that to kickstart his 2020 reelection campaign. After all, in the words of Bill Clinton campaign strategist James Carville, “it’s the economy, stupid.”
But slashing interest rates to boost the economy is a terribly bad idea, because these kind of things tend to have long-term consequences. That’s why the Fed is, as a rule, fiercely independent, even if its members are nominated by the president. Among other things, it prevents presidents from playing with the economy to help their reelection prospects.
But Trump doesn’t really appear to care about that, as his Twitter demonstrates. Thus far, Fed Chairman Jerome Powell has ignored the president, but the selection of Moore and Cain is just the latest in Trump's crusade for lower interest rates. And while it appears he’ll have to go back to the drawing board after Moore’s withdrawal, it’s a safe bet that he’ll continue playing with fire. Ivanka Trump for the Fed, anyone?