Trump picks former presidential candidate Cain for Fed board

By Steve Holland and Ann Saphir

 

 

(Reuters) - U.S. President Donald Trump plans to nominate former pizza chain executive and Republican presidential candidate Herman Cain for a seat on the Federal Reserve Board, where he will help set interest rates for the world's biggest economy.

 

"I have recommended him highly for the Fed," Trump said in a press conference on Thursday. "I've told my folks that's the man."

 

Trump has been a vocal and strident critic of the Fed's rate hikes under Jerome Powell, whom the president picked two years ago to chair the U.S. central bank. Trump's other Fed appointees have also supported the Powell Fed's rate hikes, which the president has said hurt the economy.

 

This year the Fed has put rate hikes on hold, citing a slowing economy and risks from overseas. Trump, meanwhile, has continued to rail against the Fed, even as he has said he will nominate conservative commentator Stephen Moore, a proponent of rate cuts, for a second vacant seat on the Fed Board.

 

Asked if he is sending a signal to the Fed with the pair of nominations, Trump said: "None whatsoever. He's a highly respected man. He's a friend of mine. He's somebody that gets it, and I hope everything goes well - but Herman Cain is a very good guy."

 

Board members have a vote on setting interest rates every time U.S. central bankers meet, making them among America's most powerful officials for economic policy. At full strength there are 19 Fed policymakers, including 12 regional Fed bank presidents.

 

Cain in February told Fox Business Network he believed deflation is a bigger worry, a view that suggests he is not inclined to support rate hikes aimed at keeping inflation in check.

 

Still, Cain's policy views are not entirely clear: in the same February interview, he said he wanted to use wages as a factor in deciding monetary policy, which in the context of recently rising pay could suggest he would support rate hikes.

 

Cain, who is 73, has little direct experience with monetary policy, but what track record he does have suggests a penchant for tighter, not looser, policy.

 

In the 1990s he served as a director at the Kansas City Fed, one of the 12 regional Fed banks that help process payments in the U.S. banking system and whose presidents take turns voting on rate policy. He chaired the board from 1995 to 1996, when its president was the famously hawkish Thomas Hoenig.

 

Minutes of meetings during that period, obtained by Reuters from the Fed, show that the bank's directors were among those who repeatedly asked the Washington-based Board of Governors to raise rates when most of the boards of directors for the other Fed banks opposed any hike. The concern, according to the minutes, was that continued economic growth could produce price pressures that needed to be contained by tighter policy.

 

PIZZA MOGUL, PRESIDENTIAL RUN

Cain made his fortune as chief executive of Godfather's Pizza before launching a bid for the Republican presidential nomination in 2012.

He led opinion polls for a while during the Republican nominating contests, buoyed by his signature 9-9-9 tax proposal, which would have levied a flat 9 percent corporate, income and sales tax.

 

But his popularity slipped amid sexual harassment allegations from several women, which he denied as "completely false."

 

Cain's likely nomination drew criticism from Utah Republican Senator Mitt Romney.

 

“I doubt that will be a nomination," Romney told Politico. "But if it were a nomination, you can bet [what] the interest rates he would be pushing for ... If Herman Cain were on the Fed, you’d know the interest rate would soon be 9-9-9."

 

(Writing by Ann Saphir; with reporting by Jeff Mason; editing by Jonathan Oatis and James Dalgleish)

 

-- © Copyright Reuters 2019-04-05

I guess insofar as his record doesn't prove him to be incompetent like Trump's other picks, I guess he's an improvement. But since there's nothing in his record to show that he has any deep understanding of macroeconomics, he's still a lousy choice.

3 hours ago, webfact said:

Cain, who is 73, has little direct experience with monetary policy,

Not a surprise.

 

He was the Republican presidential candidate who proposed the "nine, nine, nine" economic plan during the 2012 presidential campaign.  Even his fellow Republican candidates, as shown in the attached video just below, courteously criticized it as a far from a good economic plan.  Even a non-economist has to be suspicious of any plan that just happens to work out with all "nines."  

 

https://www.youtube.com/watch?v=cEJ-KvAOXsU

 

Just to show that this was not a blip in his grasp of public policies, there was also that gaffe he made during a TV interview about the situation in Libya, which was a hotter issue back then than it is now.  I'll attach a video just below that shows that interview.  However, I must confess I could only bear to watch the beginning, because it was just much too embarrassing to witness.  Although, I recall watching all or most of it back then.  I am not one of his fans, but he is a fellow human being.  FYI, the video is at the top of the article.  

 

https://www.jsonline.com/story/news/politics/2019/04/04/herman-cain-possible-fed-pick-remember-his-libya-viral-video/3369075002/

 

I thought that Trump promised us only the best.  Maybe Herman Cain is, as Trump claims, a very good man.  But jeez, Cain surely hasn't shown a great grasp of public policy issues. 

 

Edited April 5, 20197 yr by helpisgood
added a sentence

"he owes tax-related debts exceeding $75,000 to the federal government. He was also held in contempt of court by a judge in Virginia for failing to pay $300,000 in spousal and child support to his former wife"

 

Add to that "allegations of sexual harassment and infidelity".

 

Obviously the right man for the job.  A fine, upstanding gentleman - just like the president.

 

https://www.ft.com/content/7d9483f2-5708-11e9-91f9-b6515a54c5b1

 

 

37 minutes ago, Oxx said:

"he owes tax-related debts exceeding $75,000 to the federal government. He was also held in contempt of court by a judge in Virginia for failing to pay $300,000 in spousal and child support to his former wife"

 

Add to that "allegations of sexual harassment and infidelity".

 

Obviously the right man for the job.  A fine, upstanding gentleman - just like the president.

 

https://www.ft.com/content/7d9483f2-5708-11e9-91f9-b6515a54c5b1

 

 

you may have the wrong person referenced

2 minutes ago, elmrfudd said:

you may have the wrong person referenced

 

Mea culpa.  I was thinking of another of Trump's candidates.

Because of him I didn't eat Little Caesar's pizza for two years. I got it mixed up which mobster moniker he was linked with. Now I know; Trump.

I did love his 9-9-9 tax plan. Of course, I doubt it would have worked with the US military budget being so high, but I would have liked the tax experts/economists to go through it with a fine tooth comb eliminating all tax deductions for companies promoted by special interest groups/lobbyists. Things like, flow through interest, tax rebates for electric/hybrid vehicles and solar panels, wind turbines, charitable institutions, and political parties/super PACs. Let business ideas and products be based on merit, and charitable donations be made with after-tax dollars. The tax code really does need to be simplified to a single sheet of paper not the thousands of pages of deductions and special programs. I will be interested to see which way this candidate leans when it comes to the fed board. Hawk or dove, we all know what Trump wants. 

They're both even worse than I thought:

 

Trump’s Fed Picks Have Fond Memories of the Gold Standard

Stephen Moore and Herman Cain are outside the economics mainstream in wanting to peg the dollar to gold.

https://www.bloomberg.com/news/articles/2019-04-05/stephen-moore-and-herman-cain-are-warm-toward-the-gold-standard?srnd=premium-asia

 

 

 

Stephen Moore is truly an idiot, one of the most moronic of the cable news talking heads, noteworthy years before DT entered politics. 

Herman Cain would be best as ambassador to Uzbekistan. 

 

shucky ducky!

 

 

The question is, will Cain be able?

This nomination is extremely concerning.

 

Cain is an open critic of the Fed’s interest policies and is very likely picked by Trump in order to use interest rates to rig the stock market in the run up to 2020.

 

 

 

 

18 hours ago, Lacessit said:

The question is, will Cain be able?

No he is a Donald hand puppet picked for fealty to emperor Donald and willing to debase himsielf in service to this train wreck