The problem with putting Stephen Moore and Herman Cain on the Federal Reserve Board — as President Trump aims to do — isn’t merely that these lackeys have been wrong about nearly every economic claim they’ve ever made.
They’re also rabid conspiracy theorists, at least when such theorizing has proved convenient to their partisan agenda.
That Trump would choose candidates with such proclivities should be no surprise. After all, in addition to the alternative-factualizing that the president is perhaps best known for (birtherism, crowd size, carcinogenic windmills), he has also regularly attacked government economic statistics, such as the unemployment rate, calling them phony, fake or cooked to make Democrats look good.
Unless those same, independently produced statistics made him look good, of course. “They may have been phony in the past, but it’s very real now,” then-White House press secretary Sean Spicer quoted Trump as saying about employment numbers his boss had previously questioned.
Moore is a career political operative whose singular motivation is helping Republicans cut taxes. In service of that goal, he sometimes fabricates economic factoids entirely, including during a Thursday radio interview in which he falsely claimed that wages just began to grow for the first time in 20 years. Usually though, he either cherry-picks or misrepresents (real) government data — e.g., by not adjusting figures for inflation, or claiming that a decline in soybean prices driven by China’s decision to stop buying from American farmers means that prices across the U.S. economy overall are falling. (They are not.)
Cain, on the other hand, does not appear to have sufficient facility with economic statistics to know which cherries to pick. During a recent episode of his Web show, he appeared genuinely confused by the differences between, say, jobs vacant and jobs filled. (This is arguably an important thing to know if you’re on the Federal Reserve Board, where half the legal mandate concerns maximizing the number of jobs filled.)
But when all else fails — that is, when they run out of real numbers to spin or mischaracterize — both Moore and Cain have a tendency to invoke Trump-style data trutherism: that is, to simply claim the official government data are phony.
During the depths of the financial crisis, for instance, Moore urged the Fed to raise interest rates — an action that would have hurt the U.S. economy, and by extension the Democrat then sitting in the White House. Moore declared that such measures were necessary because “hyperinflation” was nigh.
The scary hyperinflation never arrived. Rather than acknowledge his error, however, Moore joined the leagues of conspiracy theorists who argued that official government price data were bogus.
“Nobody believes the statistics out of Washington and often for good reasons,” Moore wrote in a 2015 Fox News column, one of several public comments during the Obama era in which he suggested the official inflation numbers were artificially low. “A 2% inflation rate. Ha.”
Cain for his part has questioned not only the veracity of the official government price data but also — like Trump — the official unemployment data.
In fall 2012, some right-wing, conspiracy nuts claimed that the independent Bureau of Labor Statistics was releasing doctored data to help President Barack Obama’s reelection chances. More than a year later, Cain was still propagating this false claim.
“They faked the pre-election unemployment report & the employee who did it says he was under orders from superiors,” Cain said in one of multiple tweets promoting an episode of “The Herman Cain Show” that has since been taken down.
To be clear, such comments were not nuanced critiques of whether various government surveys or data collection efforts capture the best possible measures of economic activity, or whether the methodology could be improved upon. These would be legitimate questions for discussion and, indeed, have been debated by actual economists.
No: What Moore, Cain and Trump espouse is merely lazy conspiracy theorizing.
Moore has actually taken things a step further, calling for the elimination of the entire Commerce and Labor departments, and other departments that he claims “don’t do much that’s useful.” As Moore surely knows, this would mean eliminating the independently run statistical agencies — including the Bureau of Labor Statistics, Census Bureau, Bureau of Economic Analysis — that collect and tabulate nearly all major economic data releases.
This is a strange position for anyone who calls himself an economist, let alone someone in contention for a seat on the Fed board, to adopt. The Fed relies on such government data to evaluate how the economy is performing and calibrate monetary policy — as do investors, businesses and families when making critical decisions every day.
There’s an old economics joke about “torturing the data until it confesses.” What happens if you just execute the data instead?