Cain would be Trump’s second proposed addition to the Fed in as many weeks, the other being longtime partisan operative Stephen Moore. Even before this month, though, Trump had ample opportunity to reshape the Fed in his anti-institutional, anti-intellectual image. Thankfully — surprisingly, in fact — he had refrained.
For other executive branch appointments, Trump seems to have selected nominees based on who would be the absolute worst person for any given position. But until recently, his Fed choices seemed . . . totally reasonable. He has picked four out of the five
already-confirmed Fed board members, all of whom are competent, well-qualified professionals — all reliable Republicans, too, but Republicans who have performed their jobs apolitically. Exactly as members of the central bank, which is politically independent, are supposed to do.
Of course, that benign neglect led to some policy outcomes the president has disliked — specifically, higher interest rates. Perhaps hoping to pack the Fed with more pliant appointees, Trump has now homed in on these two.
Like Moore, Cain has some baggage. Way worse baggage, in fact: Cain dropped out of the 2012 Republican presidential primary after at least four women accused him of sexual misconduct. One alleged that he put his hand up her skirt at a convention and tried to pull her head toward his crotch. When she protested, he allegedly said, “You want a job, right?” Cain denied the allegations.
If true, such actions alone would be disqualifying for any major government position. And they may yet derail his nomination. But they’re also hardly the only reasons to object to placing Cain in one of the most important economic jobs in the world.
To put it bluntly: When it comes to understanding pretty basic policy issues, Cain isn’t able.
Most people who remember anything about Cain’s brief political career might know him for the “9-9-9” tax rate plan. Unfortunately, neither did that plan have rates that were actually 9 percent nor did it turn out to be particularly strong in its arithmetic. I recall a perplexing interview back in 2011, during which I spoke with the adviser who had devised the plan with Cain. It turned out the reason his math didn’t make sense was that he was, among other things, claiming credit for eliminating “invisible” taxes and conflating marginal and average tax rates. Apparently neither he nor his boss had noticed.
Cain made other uninformed or impolitic comments during the 2012 campaign, including saying he didn’t think it was relevant for him to know “who is the president of Ubeki-beki-beki-beki-stan-stan.” Or declaring he wouldn’t feel comfortable appointing a Muslim to a Cabinet position or a federal judgeship.
But hey, fiscal policy, foreign relations and, uh, the First Amendment aren’t the Fed’s purview! Monetary policy and financial regulation are. Unfortunately — despite the fact that Cain served as a director of the Federal Reserve Bank of Kansas City from 1992 to 1996 — his documented views on these issues are just as quack-tastic.
Cain is a longtime inflation hawk, which
put him at odds with Trump’s calls for looser money. As recently as December 2017, Cain was even defending higher interest rates. But perhaps Trump assumes that Cain will dutifully flip his views, just as the once-hawkish Moore has done.
In fact, in January, when Cain was already rumored to be in contention for a Fed seat, he told Bloomberg he was concerned about recent Fed rate increases and said the real thing to fear was not inflation but nonexistent “deflation.” This is Moore’s boogeyman du jour, too.
But perhaps the bigger issue is that Cain has said — repeatedly — that the United States should return to the gold standard.
This stance is one Moore has also intermittently espoused, and it has been roundly rejected by actual economic experts. That includes, for instance, every single economist surveyed by the University of Chicago’s IGM Economic Experts Panel.
Then there’s the fact that Cain spent the years following his failed presidential campaign spamming his email followers with snake-oil scams, promising “weird tricks” that would make his followers get rich quick or “naturally” cure their erectile dysfunction. Of course, such grifting might enhance Cain’s candidacy in Trump’s eyes, but it hardly bodes well for a man seeking to join an institution with consumer protection duties.
Cain’s one possible virtue is that, during his aborted presidential campaign, he once complained that the Fed had become too “politicized.” I wonder: What might presidential candidate Cain then say about possible-future-Fed-board-governor Cain now?