The Federal Reserve is a rarity in the bureaucratic maze of the federal government.
It is singularly responsible for keeping the financial systems of the United States on track. The world’s financial institutions depend on it nearly as much. And it’s supposed to remain outside the politics of the moment that seem to rule nearly every other arm of the federal government.
As a result, any threats to its independence, expertise and partisanship-free decision-making endanger the stability of the national and international economy, not to mention the safety of our banking system.
That’s why President Donald Trump’s latest choices to fill two of three vacancies on the Fed’s board of governors are so disturbingly and irresponsibly unqualified.
Neither Stephen Moore, a conservative commentator, nor Herman Cain, a 2012 Republican presidential candidate known for his 9-9-9 tax plan, has the experience, knowledge, academic stature or professional reputation to be a Fed governor. Both have troubling economic positions and personal complications. Moore’s position on interest rates and inflation changes depending on which party is in office, and he reportedly owes $75,000 to the Internal Revenue Service in back taxes. Cain is a former chief executive of a pizza chain. Both have expressed interest in the gold standard, the concept of tying the value of the dollar to gold. Cain is particularly gung-ho on the idea, which most economists pan, and which might be best known for sinking the nation deeper into the Great Depression.
And both are active warriors for Trump’s re-election.
While two bad governors wouldn’t be able to affect Fed policy on their own, because there are seven seats on the board, they could be inside hecklers to Chairman Jerome Powell. Although Powell was Trump’s pick, the president has soured on him. That, combined with the nominees’ lack of expertise, certainly could undermine the Federal Reserve’s credibility.
It’s not unusual for U.S. presidents to try, at least indirectly, to guide Federal Reserve policies, or to encourage policies that fall in line with their own economic goals. Trump has been more direct with his criticisms, hearkening back in some ways to how President Richard Nixon handled then-Fed Chairman Arthur Burns, who was pressured to keep interest rates low, and did, leading to significant inflation. But long-term policy choices shouldn’t be made for short-term political goals, like the next election.
The stakes are so high that even some GOP senators within the Republican-controlled U.S. Senate are balking at confirming these choices. That’s how reckless it would be to put these two partisans on the Federal Reserve. No senator should put politics before the nation’s economic and financial security. No senator should say yes to Moore or Cain. A no vote would force Trump to try again, to choose apolitical governors with the experience and gravitas to handle the job. — The editorial board