A perfect choice

Trump is rumored to be considering Herman Cain for a position on the Federal Reserve Board. For a number of reasons, this would be Trump’s single most perfect nomination.

Cain has an ultra-hawkish position on monetary policy:

In Kansas City, Cain was known as an inflation hawk who was constantly lobbying for higher interest rates. Even during his presidential run in 2011 — when the unemployment rate sat near 9 percent, and inflation was virtually nonexistent — Cain argued that the central bank must raise interest rates to protect the value of the currency, and leave job creation to the job creators.

Trump is an ultra-dovish person, at least while he is President. That makes Cain perfect, as Trump often nominates people with diametrically opposed views on the key policy questions.

You might argue that Cain is corrupt and will do Trump’s bidding. But that would also make him perfect for the job.

Cain has other qualifications as well. Like Trump, Cain is “not a reader”. Reading can interfere with one’s understanding of monetary policy, better to leave reading to the staff.

Cain was also responsible for my all-time favorite campaign commercial, involving a cigarette.

Unfortunately, his nomination may be tripped up by some minor sexual scandals:

He was then asked, “Have you ever been accused, sir, in your life of harassment by a woman?”

He breathed audibly, glared at the reporter and stayed silent for several seconds. After the question was repeated three times, he responded by asking the reporter, “Have you ever been accused of sexual harassment?”

PS. I wonder how long it takes for someone who doesn’t realize this post is a spoof to rake me over the coals for not being politically correct. There are times I wish I lived in France, where a top official who doesn’t read is considered a bigger scandal than smoking in a campaign commercial.

PPS. Off topic, I wonder if this would allow me to monetize my blog.

PPPS. The new wage growth numbers (up 3.2%, yoy) continue to impress—still no sign of a slowdown in the economy.



9 Responses to “A perfect choice”

  1. Gravatar of John Hall John Hall
    1. February 2019 at 11:36

    The annual pace of wage growth slowed in January to 3.2% from 3.3% in December. I mean still good, but weaker.

  2. Gravatar of Matthew Waters Matthew Waters
    1. February 2019 at 11:52

    I like how Herman Cain supported gold standard in 2012 and in 2017 said Fed raised interest rates too quickly.

    Cain also served on the Kansas City Fed board, which says something about the issues of local Fed bank governance.

  3. Gravatar of Justin Justin
    1. February 2019 at 12:42

    Sumner then:
    ‘Trump is a fool for leaving Fed posts unfilled’

    Sumner now:
    ‘Trump is a fool for picking someone semi-popular and liable to vote in a way good for Trump’

  4. Gravatar of ssumner ssumner
    1. February 2019 at 12:49

    John, Month to month changes are noisy, indeed December was originally reported as 3.1%. (Edit, I meant 3.2%) If you take three month averages, the trend is strongly upwards.

    Justin, Nice try, but both quotes are made up, and total lies. A new low for you. Let’s review:

    I never said Trump was a fool for leaving posts unfilled.

    I never said Trump is a fool for picking Cain.

    I never said Cain is someone semi-popular.

    I never said Cain is liable to vote in a good way for Trump.

    What else you got?

  5. Gravatar of Brian Donohue Brian Donohue
    1. February 2019 at 13:24


    You said:

    “I never said Trump is a fool for picking Cain.”

    I mean, you kinda did. And you’d be correct. Isn’t that the point of this post?

  6. Gravatar of Benjamin Cole Benjamin Cole
    1. February 2019 at 18:56

    From the same Bloomberg article on Cain:

    “The president’s top economic adviser, Larry Kudlow, said last week that the White House wants Fed governors ‘who understand that you can have strong economic growth without higher inflation.'”


    If Kudlow speaks for Trump, then Trump has better understanding of the economy than the bulk of the professional and credentialed Federal Reserve economics staff.

    Trump is a nut, but so far on economic policy he might get a B+.

    The corporate tax cut was a positive by most accounts, and his appointments to the Fed have been okay, and very good in the case of Richard Clarida (formerly of Pimco, and who I think who is influencing Powell in the right direction).

    The federal budget deficit is probably too large, but then the Congress runs the show on that. You could criticize Trump for having a very weak legislative liaison staff, but really whenever the GOP controls Congress you get huge budget deficits, no matter who is President.

    Besides, the still-taboo heretical question is whether federal budget deficits mean anything.

    The Bank of Japan has bought back 45% of that nation’s heroic national debt level (225% of GDP) without inflationary consequences.

    The freshwater St. Louis Federal Reserve staff once opined that Fed QE would have had to have been four times larger than it was to have much of an impact on interest rates or inflation.

    The St. Loo Fed opined back in 2016, “Thus, based on our model the Federal Reserve’́s total asset purchases must be more than quadrupled and remain active for several more years if the Fed intends to eliminate the 10% output gap caused by the financial crisis.”


    However, in the Temple of Macroeconomics, this question of whether national debts can be vaporized by QE (as they are in real life; see Japan, or the US 2010-2014) is not even to be theorized about.

    And economists are criticizing Trump?


  7. Gravatar of John Thacker John Thacker
    1. February 2019 at 20:53

    WSJ quotes him saying
    “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,”

    Which makes him a perfect pick in another way, being hawkish when a Democrat is President and dovish when a Republican is.

  8. Gravatar of ssumner ssumner
    2. February 2019 at 10:05

    Brian, The post is a joke. I even said that at the end. Let’s suppose that Cain is Trump’s poodle, as John Thacker claims in his comment (and as I suggested might be the case in my post). Why would Trump be a fool for picking a lackey?

  9. Gravatar of J Mann J Mann
    5. February 2019 at 08:28

    I realize that this post is a joke, but just for grins, I think that Trump would be foolish for picking a lackey in cases where he would profit from knowledgeable advice or administration.

    For example, if I pick a doctor because I want someone who will tell me it’s a great idea to eat what I want and exercise when I want rather than someone who will give me knowledgeable medical advice, I’ve made, IMHO, a foolish decision.

Leave a Reply