Look, I don’t think this is really going to happen, because there still seem to be a few faint embers of rationality glowing within the White House, at least when it comes to economic decision-making. But Bloomberg reported on Thursday that the president is currently considering Herman Cain, of all people, for a seat on the Federal Reserve’s Board of Governors.
Cain, you likely recall, is the former Godfather’s Pizza CEO who ran a gimmicky outsider campaign for the Republican presidential nomination in 2011 that briefly launched him to the top of the polls, before sexual harassment allegations forced him out of the race. Remember the 9-9-9 tax plan? Remember the smoking ad? He was a proto-Trump, the guy who made a lot of Republicans at least consider the idea of voting for a hucksterish former executive who tried sell a tax policy like it was takeout pie.
Cain, who stumped for Trump in 2016 (he called him a “shucky-ducky kind of candidate” and defended him from charges of racism), does not have many of the qualifications one would usually associate with this Fed position, such as a Ph.D. in economics, deep experience in financial markets, or a background in banking regulation. He did, however, spend several years chairing the Federal Reserve Bank of Kansas City’s board of directors. The title is more impressive than the role. Each of the Fed’s 12 regional banks has a board made up of local banking and business luminaries who meet monthly to chat about economic conditions and offer their on-the-ground wisdom to the Fed bank’s president. They also make recommendations about what the Fed should do with its discount rate—which is what it charges overnight for loans—that the board of governors can choose to ignore. Technically, regional Fed directors also get to search for and appoint their bank’s president, which is a significant responsibility. But Cain never really had the opportunity because the Kansas Fed was led by the same man for almost the entire 1990s. As David Weigel wrote for Slate years ago, “Cain’s role was chiefly as a charismatic guy who ran meetings well and corralled good advice. He was not an economist.”
One obvious reason why someone might hesitate to appoint Cain is that multiple women have accused him of committing sexual harassment during his time running the National Restaurant Association, an industry lobbying group. One alleged victim, Sharon Bialek, held a public press conference where she said that Cain had groped her in a car after a dinner together. She had asked him for help finding a job. Per Reuters:
Bialek, appearing with celebrity lawyer Gloria Allred, said that after the dinner in July 1997, Cain drove her toward the restaurant association offices, parked nearby and offered what Allred called his version of a “stimulus package.”
“Instead of going into the offices, he suddenly reached over and he put his hand on my leg, under my skirt and reached for my genitals. He also grabbed my head and brought it toward his crotch. I was very, very surprised and very, very shocked,” Bialek said.
“I said: ‘What are you doing? You know I have a boyfriend. This isn’t what I came here for.’ Mr. Cain said: ‘You want a job, right?’ I asked him to stop and he did. I asked him to take me back to my hotel, which he did right away.”
But is Trump, who has been accused of harassment by a small army of women at this point, going to hold that against Cain? Of course not. He defended the man in 2011, suggesting that Cain’s accusers were likely just looking for fame.
No, what makes this story extra bizarre is actually Cain’s past record on monetary policy. Trump has spent much of his term publicly fulminating at the Federal Reserve for hiking interest rates too quickly and rocking the markets and economy. The president has been so furious at the central bank that he’s asked staff whether it would be possible to take the unprecedented step of firing Fed Chair Jerome Powell. (Short answer to a complicated question: He can’t really.) I mean, he called the Fed “loco!”
And here’s the thing: Cain has always been an inflation hawk, the sort of guy who constantly wants to raise rates higher. “Inflation was always the big bugaboo,” one of his fellow board directors told the Atlantic in 2011, “and when it comes to monetary policy, he was an inflation hawk. I’ll tell you, that’s the most conservative bunch of guys I’ve ever met.” During his 2011 run, Cain’s comments about the Fed and monetary policy tended to be odd and conspiratorial. He said he would fire then-Chair Ben Bernanke, whom he said had been “politicized” by the Obama administration. (Trump later said much the same about former Chair Janet Yellen, before warming to her during his presidency). Cain has also fulminated about the soundness of the dollar and fumed that the Fed’s attempts to keep interest rates low had weakened the currency’s exchange rate—Trump generally likes a weak dollar, because it helps exports—and suggested Bernanke was doing these things in order to make it easier to pay interest on the national debt. Perhaps most importantly, he said he would jettison the Fed’s dual mandate, which requires it to maintain stable prices and maximum employment, in favor of a singular focus on keeping down inflation (which is basically the opposite of what Trump would like).
His views on central banking only seem to have gotten a bit weirder since. But the bottom line is that Cain has a public history of espousing monetary policy beliefs that are the exact opposite of what Trump would like.
So, why would Trump be interested in maybe picking him for a prominent Fed role?
One possibility is that Trump still can’t be bothered to do the basic due diligence necessary to find potential Fed members whose policy views align with his own, and he sees Cain as a friendly face with some tangentially Fed-related experience.
Another is that now that a Republican is in office, Cain has decided to let go of his hard-money views on monetary policy and has decided he can live with low interest rates. That’s what many conservatives, who were warning about hyperinflation and demanding the Fed increase rates during the early recovery years, seem to have done.
Or, finally, maybe Trump senses that Cain would just be a lackey willing to follow whatever instructions he tweeted on a given day, and he might as well interview the man. Hopefully, this doesn’t all end in a job offer.