As the Trump administration has trudged along, a disturbing pattern has emerged: The quality of the president’s appointees has tended to erode. No one thinks that John Bolton is running the National Security Council better than H.R. McMaster, who was not exactly great at the job. Jim Mattis was widely respected as defense secretary. Patrick Shanahan, his acting replacement, has underwhelmed and is now facing an investigation from the department’s inspector general. The basic difference between the first wave of Trump appointees and the second is that the former group felt they could say no on occasion, while the latter group proved to be better sycophants.
If there was an exception to this rule, it was at the Federal Reserve. I was underwhelmed with the choice of Jay Powell to replace Janet L. Yellen, but overall the pick was well received. Trump’s other confirmed appointments have been uncontroversial.
Eventually, however, the Iron Law of Trump Appointments has come to the Fed.
Based on the reactions to this announcement, I think it is safe to say that Trump proved to be wrong in many ways with this tweet. The most obvious errors are that Stephen Moore is neither respected nor an economist.
Seriously, Moore is an economist in the same way that former interior secretary Ryan Zinke claimed he was a geologist. Moore holds an MA in economics from George Mason University, but not a PhD, which is the standard calling card. Furthermore, actual economists do not think that he’s an economist. Seriously, Talking Points Memo’s Nicole Lafond has assembled a lovely collection of economists and former Treasury officials who reacted to Moore’s nomination with nothing but disdain.
Greg Mankiw literally wrote the textbook in introductory economics, but blogged last Friday, “Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job.... It is time for Senators to do their job. Mr. Moore should not be confirmed.” Mankiw based this assessment in part on his critical review of “Trumponomics,” Moore’s co-authored book with Art Laffer. The Post’s Carlos Lozada would likely agree. In reviewing that book, he wrote, “Moore and Laffer are single-issue thinkers. Cutting taxes is the siren that lured them to Trump, and for which they appear willing to make any substantive or intellectual sacrifices.”
That highlights another oddity about Moore’s nomination. To the extent that he writes about economics, it is primarily about fiscal policy — i.e., cutting taxes — than monetary policy. When he has weighed in on the latter, he has been wrong on matters big and small. On the small, watch my Post colleague Catherine Rampell correct Moore on … well ... pretty much everything:
On the big, it is hard to understate how wrong Moore has been on Fed decisions. As Rampell tweeted, he wanted the Fed to raise interest rates in February 2009, when the economy was contracting by more than seven percent, because he was worried about hyperinflation. Now, on the other hand, Moore has called for Federal Reserve chairman Jay Powell to resign for the sin of raising interest rates in a time of full employment. According to Bloomberg, that’s how he got on Trump’s radar for the Fed position. Moore’s writings have been so God-awful that one op-ed editor has vowed never to publish a Moore column again.
How has Moore handled the critical pushback? Not well. Bloomberg’s Brendan Murray noted that in Moore’s first media appearances after the announcement, he did not exactly sound like the most qualified nominee. He told Bloomberg TV: "I’m kind of new to this game, frankly, so I’m going to be on a steep learning curve myself about how the Fed operates, how the Federal Reserve makes its decisions. It’s hard for me to say even what my role will be there, assuming I get confirmed.”
One must stand back and gaze in awe at a man who has had no problem excoriating the Fed for decades but then acknowledge that he’s “on a steep learning curve” about how the Fed operates.
Moore’s mistakes and errors guarantee that he will have minimal influence on the Fed. Nonetheless, this is a disturbing precedent. The only reason Trump has nominated him is that he has demonstrated fealty to Trump. GOP senators like Ben Sasse are saying they’ll vote for Moore because his nomination “has thrown the card-carrying members of the Beltway establishment into a tizzy.”
I don’t know which economic doctrine recommends selecting central bank advisers based on whether they will own the establishment, but I am pretty sure it is not a solvent one. One can only hope that GOP senators who have more intellectual heft than Sasse decide to block the beclowning of the Fed.