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In the past couple of weeks, President Donald Trump is reported to have settled on two choices for open seats on the Federal Reserve Board of Governors: former Club for Growth president and Heritage Foundation economic policy analyst Stephen Moore, and former Godfather's pizza boss and 2012 GOP presidential hopeful Herman Cain. Cain from 1989-96 served in various capacities, including chairman of the board, with the Federal Reserve Bank of Kansas City, though Cain doubters argue such positions are more honorary for local business leaders than proving any monetary policy savvy.
Neither Cain nor Moore are technically trained academic economists, which alarms many, although, as has been argued by former Federal Reserve Bank of Dallas analyst Danielle DiMartino Booth, board members with more varied real-world experience might be useful voices in central bank decision-making.
It is less lack of academic/technical training that's disturbing as the clear sense that both men are being appointed not for expertise but for team-playing loyalty to Trump. Cain has recently been running a pro-Trump political action committee, America Fighting Back; Moore was a former Trump economic adviser during his 2016 campaign.
The president is on record as not caring about any long-term debt troubles as he believes he'll have gotten out of Dodge by the time the world stops wanting to loan the U.S. government money. That doesn't mean that he doesn't want the Federal Reserve to keep the interest costs on his books right now as low as possible, and he's said that out loud plenty. Trump doubtless believes Cain and Moore have heard him and will react accordingly.
Trump himself used to understand the bubbly dangers of constant low-interest rate policy from the Fed, as did Cain, who used to love the gold standard for its very power to keep short-term political priorities out of our money.
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