Trump fails to wreck the US central bank
This first appeared in the New York Daily News.
Grownup monetary policy and Trumpism do not mix. Fortunately, the president’s attempts to put two transparently unqualified allies on the Federal Reserve’s Board of Governors, a move that a year ago would have been the rough equivalent of nominating Michael Cohen to the Supreme Court, have run aground.
First Godfathers Pizza CEO Herman Cain came and went. Then it was political operative and economic policy advisor (and avowed non-expert on monetary policy) Stephen Moore’s turn in “The Gong Show” spotlight.
Superficially, both men lost support among Republican senators for similar reasons: Cain had a history of sexual harassment, while Moore’s years as a financial pundit included comments many saw as misogynistic and racially insensitive.
But the bigger problem was that neither was qualified. Individuals overseeing the central bank ought to be outstanding economists. Of course politics and ideology will play a part, but expertise matters most.
When the economy starts growing at a rapid clip, the Fed’s role is typically to tap the brakes to prevent inflation. In the depths of a recession, the Fed typically makes money cheaper to help encourage spending. Better ideas should be driven by data and rock-solid reasoning, not politics.
And certainly not by the short-term political demands of a mercurial man whose idea of business success was racking up debt and declaring bankruptcy after bankruptcy. Banks from which he borrowed money have good reason to loathe Donald Trump; so now does the U.S. central bank.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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