Trump’s Ideal Nominee for the Fed
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
It looks like this could be the moment at which President Trump makes his move in respect of the Federal Reserve. We say that because the chatter we hear is that he’s considering nominating to its board of governors the economist Judy Shelton. The Sun endorses her heartily. It would mark a brilliant start to redeeming his campaign promises in respect of monetary policy and our central bank.
Ms. Shelton is no stranger to readers of Sun editorials — or the editorial page of the Wall Street Journal. She has long since emerged as one of the most articulate, but measured, advocates of the idea that our economic troubles spring in large part, if not exclusively, from the fiat nature of our currency. And that we need to bring back into our political economy the idea of sound money.
We wrote about Ms. Shelton when she delivered at Jackson Hole a speech challenging the notion that the gold standard was “crazy.” And also when, two years ago, she issued in the Wall Street Journal an op-ed piece about how Mr. Trump is right in suggesting that monetary manipulation is a real problem. We called her “The Woodpecker” for the way she has kept hammering away at the issue.
The opening on the Fed board for which Ms. Shelton is apparently being eyed is the one for which Mr. Trump had put up the economist Nellie Liang. That nomination had met resistance (her views on bank regulation were askew of the President’s and Republicans in the Senate); in January, Ms. Liang withdrew. Nothing personal, but Ms. Shelton is a far better fit.
Not that Ms. Shelton is the only possibility. Just the other day she was interviewed on CNBC with another potential nominee for the Fed, James Grant. The famed editor of Grant’s Interest Rate Observer had once been mooted as a potential chairman of the Fed by no less a figure than Congressman Ron Paul. That was back in 2012, when Dr. Paul was making his mark in the Republican presidential primary.
So highly regarded is Mr. Grant that even though he’s a critic of the Federal Reserve (on the CNBC clip above he argues that it’s insolvent) he’s been invited in to the New York Fed to speak to the central bankers themselves. He sketched for them the problem of what, to get to the pith, he calls the “Ph.D. standard” of a dollar backed with but the figuring of economists.
We haven’t heard that Mr. Grant is being eyed for the open governorship. He would, though, also be an ideal candidate. Mr. Trump is said to be interviewing Herman Cain, who made a game run for the Republican presidential nomination in 2012. He is also a former chairman of the Kansas City Fed, but monetary reform of the kind we need hasn’t been his central passion.
The thing to remember in all this is that the platform on which Mr. Trump ran for president included monetary reform — pointedly endorsing a monetary commission. It endorsed “Audit the Fed,” to give to the Congress greater oversight of the Fed, and a monetary commission, to begin a strategic review of our monetary system. Nominating Judy Shelton to the Fed board would be a fabulous first step in redeeming those promises.