Mr. Trump seems restless with current Fed monetary policy, which is too tight for his liking, though Chairman Jerome H. Powell is a respected figure the president himself appointed — and the economy remains in good shape, as demonstrated by Friday’s jobs report, which put the unemployment rate at only 3.8 percent. For a president to couple such criticism with an attempt to appoint two new governors known mainly for their ideological and personal loyalty to him raises the hideous specter of a Trump-packed Fed that would be constantly wary of rubbing the politician in chief the wrong way.
This is doubly true when the latest announced appointee, after tax-cut enthusiast Stephen Moore, is Mr. Cain, the former 2012 GOP presidential primary candidate, whose bid flamed out amid charges of sexual harassment. Mr. Cain’s conservative Republican activism followed a relatively conventional career in corporate America, including stints as chief executive of Godfather’s Pizza and of the restaurant trade association. For four years in the mid-1990s, he served in a largely honorific and advisory position as a director of the Federal Reserve Bank in Kansas City. Mr. Cain more recently has headed something called Americans Fighting Back PAC, whose purpose, according to its website, is “to carry out a National Messaging & Public Relations Campaign to facilitate and grow a national grassroots movement of educated and informed voters to engage and fight for the President’s policies and freedom agenda to win in 2020.”
So Mr. Cain’s political fealty to Mr. Trump is ironclad — stronger, certainly, than his expertise in economics or financial markets, usual qualifications for the Fed Board of Governors. For example, Mr. Cain in 2012 called for a return to a gold-linked dollar, writing: “Gold is kryptonite to big-spending politicians. It is to the moochers and looters in government what sunlight and garlic are to vampires.” Even unembellished by demagogic rhetoric, Mr. Cain’s idea contradicts the consensus among economic professionals that the gold standard — under which the Fed would agree to exchange some of its gold for paper dollars at a fixed rate — is destructive and outmoded. It would limit the Fed’s ability to expand the money supply to fight recessions, with potentially catastrophic results. Many blame the gold standard of the 1930s for deepening the Great Depression.
The Fed’s integrity has been threatened before, by presidents and by members of Congress seeking to bend its awesome powers to their short-term partisan advantage. So far, it has generally withstood those attempts, arguably emerging even stronger. Mr. Trump seems determined to mount another attack, which might succeed unless the Republicans who control the Senate put the nation’s interest above his and refuse to go along.