A Missed Opportunity for the Fed

The President had in mind two bold and imaginative prospects for appointment to the Federal Reserve Board of Governors. Herman Cain and Stephen Moore would have been exciting opportunities for different reasons, and both would have added much-needed diversity of thought and dynamism to the development of monetary policy.

Herman Cain talked and wrote about the misguided “professor standard” at the Fed, the notion that pure academics primarily from the economics profession are the only qualified backgrounds for Fed appointments and whose policy playbook holds that strong economic growth, particularly wage growth, causes inflation. The Board would have profited greatly from his background as a very successful and entrepreneurial CEO, not to mention a black one, who understands first hand how investment growth creates jobs and how important dollar value stability is to business confidence and investment growth.

As he has for over 20 years, Stephen Moore would have been an outspoken critic of much of the conventional wisdom at the Fed, which is very close to “groupthink” with such models as the discredited Phillips Curve, the trade-off between inflation and unemployment. And some of this groupthink crowd can’t get over Moore’s support for the Trump supply-side policies of deregulation and tax rate cuts which have taken the economy to a new level of growth thought impossible by many in the professorial pundit class.

Unfortunately, neither of these candidates will have a chance to serve, both having been brought down not primarily based on their qualifications, but by more of the politics of personal destruction, which seems now to be the weapon of choice of the left over legitimate differences in policy advocacy. Too bad for Fed policy, but even worse for our civil society.