As a candidate, Donald Trump told voters he would “get the best people” to join the government. Now the president is on the verge of nominating Stephen Moore, a third-rate political hack, to the Federal Reserve Board. Moore has enough trash trailing him to make it laughable that he is even being considered for such an important position.
It’s not an overstatement to say a seat on the Federal Reserve Board is one of the most important positions that a president appoints. That’s why many political observers are gobsmacked by the White House floating Moore’s trial balloon.
As a member of Congress, I got a lot of questions thrown my way in public discussions and private conversations. While I can’t recall most of the queries, one having to do with the Fed I can readily recall.
I had a constituent, a successful businessman, who often asked me what I thought the Fed would do in setting the nation’s monetary policy. Since I was not on the Banking or Ways and Means Committees, I could only speculate what the Fed might be up to. My constituent asked the question because he knew the Fed is one of the most important players in our government when it comes to setting economic policy, its impact on business, jobs, and the rate of inflation Americans might experience.
That’s why having someone as unqualified as Stephen Moore having a seat at the table is very concerning. There are character issues at play here as well as the extreme economic views Moore holds.
Here’s a look at what the media has reported about Moore since the balloon went up.
- The IRS alleges Moore owes the government $75,000 and has a tax lien against a house owned by Moore to satisfy the judgment against Moore for $75,328.80;
- During his tenure as president of the nonprofit Club for Growth, Moore paid a $350,000 penalty to settle a claim brought by the Federal Election Commission for violations of election laws;
- While informally advising Kansas Governor Sam Brownback on what turned out to be a financial crisis in cutting state taxes, Moore wrote an op-ed in the Kansas City Star that contained false job data to support his argument that Brownback’s tax cuts were working; and,
- Moore has called for Fed Chairman, Jerome Powell — appointed by Trump — to be fired for “economic malpractice.”
Some of these matters, like national security clearances, are important to consider when approving a person for high office. Carrying this much baggage is a clue that an individual could be compromised to the extent of influencing an official decision.
As if these legal and ethical entanglements weren’t bad enough to sink Moore’s nomination, consider his extreme views on the economy, interest rates and the Fed itself. His schemes, outlined below, would spell disaster for the economy along with likely deep-sixing Trump’s re-election. They would jeopardize the Fed’s independence and rightfully call into question the validity of the central bank’s decisions.
Moore has called for the United States to return to the gold standard that was abandoned in 1933. The theory was based on having every dollar backed by so much gold. Today no industrial nation has adopted the gold standard. Proponents—often referred to as gold bugs—refuse to give up on this outdated and discredited fringe idea.
Congress has given the Fed a dual mandate to maximize employment and stabilize inflation. Moore has apparently aligned himself with senior officials in the Trump administration who want to drop the focus to reduce unemployment. It’s hard to discern how that idea would get traction. Members of congress of both parties would understandably object to adopting such an out of the mainstream proposal.
Moore can’t seem to make up his mind whether the Fed should adopt a low-interest rate policy or raise interest rates. In a matter of months he has changed his mind on the subject that is one of the most important matters that the Fed determines.
Moore recently pushed the idea that the U.S. economy is experiencing deflation (falling prices). While the Fed has successfully kept the rate of inflation under its 2 percent target, we are not experiencing deflation. The annual rate of inflation is approximately1.5 percent. One of the few areas of the economy that is experiencing a slow down is the farm economy where the administration’s trade wars have reduced the sale overseas of American agricultural products.
For almost 40 years, the Fed has worked to achieve a level of independence from everyday politics. The reason is obvious. Presidents and their congressional allies know that juicing the economy by moving interest rates in their political favor will help them in their re-election efforts.
President Nixon facing re-election in 1972, privately pressured Arthur Burns, then chairman of the Fed, to adopt a policy that would help Nixon in the election. Burns did, Nixon won and inflation surged.
Moore has provided critics with a trail of punditry from his appearances on cable news shows. His past is filled with sharp-edged partisanship and a bare-knuckles argumentative style. He is much more a partisan than he is versed in the intricacies of the economy.
Putting a pundit like Moore in a position to set monetary policy is like putting a baseball announcer on the mound to pitch. What could go wrong?
If this is a trial balloon, it should be losing air fast.
Tom Coleman is a former Republican Member of Congress from Missouri and has served as an adjunct professor at New York University’s Robert F. Wagner Graduate School of Public Service and at American University.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller