And it shows. Just consider the fact that Moore went from saying that we needed to raise rates to fight nonexistent inflation under Obama to now, in what’s a particularly conspicuous 180, saying we need to cut rates to fight nonexistent deflation under Trump. There are only two possibilities here: Either Moore actually isn’t able to tell whether prices are rising or falling, or he bases his economic recommendations entirely on which party controls the White House. Which is why there is real concern that he wouldn’t be anything other than a political foot soldier who would just vote to do whatever he thought was in the Republican Party’s short-term interests, rather than the economy’s long-term ones. That type of behavior, when it has happened in Argentina or Venezuela, has reliably led to higher inflation and weaker currencies. And the problem is compounded by Trump’s other planned board nominee: Herman Cain, a reliable partisan with questionable qualifications.
It’s enough that one of the most prominent voices in Republican policymaking circles, Harvard economist Greg Mankiw, who was George W. Bush’s Council of Economic Advisers chairmain from 2003 to 2005 before becoming one of Mitt Romney’s top advisers during the 2012 campaign, has publicly come out against Moore’s candidacy. In particular, he hasn’t been impressed with what he calls Moore’s “rah-rah partisan” style of analysis, and, as a result, thinks that Moore simply lacks the “intellectual gravitas” for the job at the Fed.
Other Republican policymakers haven’t been quite as vocal in their criticisms — if they’ve had any — but, reading between the lines, it’s clear that at least a few of them share a lot of the same concerns. Frederic Mishkin, a professor at Columbia Business School who was a Fed governor himself between 2006 and 2008, told The Washington Post that, first and foremost, you want someone who “actually understands the logical thinking of monetary policy" in the job. Two ways to tell if they do, he said, were whether they correctly understood that you often “have to be preemptive” about raising rates and can’t “always just pursue economic growth,” and, second, whether they had incorrectly predicted that the Fed’s “zero interest rates and quantitative easing were going to be very inflationary.” (Moore, of course, thinks the Fed should be cutting rates right now even though unemployment is at multi-decade lows, and warned in 2009 that the Fed’s actions might spark hyperinflation).
The real question, then, is whether Moore would be willing to learn how the Fed works. Kent Smetters, a professor at the University of Pennsylvania, the faculty director of the Penn-Wharton Budget Model, and the deputy assistant secretary for economic policy in the Treasury Department from 2001 to 2002, told me that, speaking for himself, it seemed like Moore had “just been shooting from the hip” when it comes to monetary policy, and what he needed to do was familiarize himself with the topic enough that he could “have a rational discussion about it, and understand that there are truly tradeoffs” involved. That last part is especially important, Smetters said, because Moore’s history of believing in “free lunches in fiscal policy” — he’s an aggressive proponent of the false idea that tax cuts fully pay for themselves — means that you’d have to wonder if he “thinks there are free lunches on the monetary policy side, as well.” In other words, whether he’s convinced himself that lower rates won’t lead to higher inflation as long as the president is someone he likes.
Now, if all of this sounds harsh — that Moore just doesn’t understand the subject — that’s because sometimes the truth is. After all, it was none other than Moore himself who said that he faces “a steep learning curve” about “how the Fed operates.” That’s what makes it all the more puzzling that more top Republican policymakers haven’t said anything about his nomination. Some of them, such as Douglas Holtz-Eakin, the Congressional Budget Office director from 2003 to 2005, and later John McCain’s top economic adviser during the 2008 campaign, told me that they have a blanket policy against commenting on personnel decisions. Others, such as Glenn Hubbard, the dean of Columbia Business School, George W. Bush’s Council of Economic Advisers chairman from 2001 to 2003, and one of Romney’s top advisers in 2012, told me they were too busy to say anything right now.
But for the sake of the Fed’s independence, they might need to.