Herman Cain and the Secret Life of the Fed

My new piece – the next in a surprisingly long series about Herman Cain – looks at the candidate’s little-understood days at the Kansas City Fed. He’s sometimes referred to as “chairman.” That’s only somewhat true. He was chairman of the board of advisors, a super-team of bankers and business leaders that meets to give research and insights that economists can use if they like.

What does the board of directors actually do? Every month that Cain was there, board members would meet, talk through the economic developments and data in their areas, and offer some advice. Fed economists would listen. The research would be taken up to Kansas City Fed Chairman Tom Hoenig, who could use it however he deigned to use it. “They’re a source of economic information for the bank,” explains Bill Medley, public information director for the Kansas City Fed. What’s their single biggest contribution? They recommend the discount rate, or what the Fed charges for loans. “But that,” says Medley, “has to be approved by the board of governors.”

Ben Smith talked to at least one of the same people for a different take on the Fed Years.