Moneybox

Trump Is Close to Nominating Herman Cain to the Federal Reserve. God Help Us.

Herman Cain holds a microphone and gestures with his other hand.
Former presidential candidate Herman Cain, speaking at a 2012 rally in Tampa, Florida.
Robyn Beck/Getty Images

In case you needed further proof that we are, in fact, living through the dumbest of all possible timelines, Donald Trump is reportedly close to nominating former Godfather’s Pizza CEO and failed presidential candidate Herman Cain to the Federal Reserve’s Board of Governors. According to Axios, the president is “ready to move ahead” with the pick as soon as the administration wraps up a background check. “He won’t formally announce until the vet is completed. … But he likes Cain and wants to put him on there,” a senior White House official told the site.

The administration reportedly hopes that, by doing some basic due diligence on Cain, it can avoid the sorts of surprise news stories that cropped up after Trump announced that he would nominate conservative economics commentator Stephen Moore for one of the Fed’s two open board seats. (If Cain and Moore are confirmed, they will both have votes on the 12-member Federal Open Market Committee, which makes decisions on interest rates.) Journalists have discovered that Moore, a notoriously partisan former Wall Street Journal editorial writer who is basically considered a clown among actual economists, owes the IRS $75,000 in unpaid taxes and penalties, and was held in contempt of court after failing to pay his ex-wife more than $300,000 in child support and alimony. As CNBC reported, the records from Moore’s divorce also paint him “as a brazen philanderer who openly talked about his mistress in front of his kids.”

So far, Trump has stuck by Moore, who advised his presidential campaign on taxes, co-wrote an entire book praising his policies titled Trumponomics, and suggested the president should be considered for the Nobel Prize in economics. With Cain, who defended Trump from accusations of racism in 2016, he would be nominating yet another political supporter with a checkered personal history and lackluster qualifications for the Fed. Cain’s 2012 presidential campaign, during which he briefly led in the Republican primary polls, unraveled after multiple women accused him of sexual harassment. (Presumably, the background check is just meant to make sure that he hasn’t done anything other than allegedly shove a woman’s head toward his crotch.) He is not an economist or a financial markets veteran. The closest thing he can claim to monetary policy or regulatory experience was a stint chairing the Federal Reserve Bank of Kansas City’s board of directors, a group of local business leaders who meet periodically and offer advice to the bank’s president.

What he lacks in a traditional central banking résumé, though, Cain may make up for in a willingness to follow orders from the president. For most of his public life, Cain was an obsessive inflation hawk who harped on the soundness of the dollar; in a 2012 Wall Street Journal op-ed, he advocated a return to the gold standard. Nowadays, though, he has started echoing the president’s own calls for easy money. In February, shortly after it was first reported that he was being considered for the Fed, Cain told the WSJ : “If I were offered the job, I would try to encourage the Fed not to make inflation a fear factor because deflation … is more of a fear factor than inflation.” His inflation flip is yet another thing he has in common with Moore, who spent most of the Obama years warning that the Fed’s loose monetary policies could lead to hyperinflation or a new financial crisis, but under Trump has accused the central bank of stifling growth by hiking rates too quickly.

Trump’s early picks for the Fed were surprisingly mainstream, generally respected figures. But over time he has come to see his choice of Jerome Powell for chairman as a profound mistake (he’s called the Fed’s interest rate hikes, which it paused after its last meeting, the “biggest threat” to his presidency.) Rather than look for traditional candidates who more closely align with his dovish views on monetary policy, however, the president has clearly decided that his best bet is to nominate reliable lackeys to the central bank. It took a while, but we could finally be seeing the Trumpification of the Fed.