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Westlake Legal Group > Posts tagged "Federal Reserve"

Warwick Lightfoot: The Government must borrow more to boost the post-Coronavirus recovery

Warwick Lightfoot is Head of Economics at Policy Exchange

For the second time in the twenty-first century, there is a full-blown economic crisis that is testing advanced economies in a manner not otherwise experienced since the Great Depression in the 1930s. The adverse shock generated by the public health response to Covid-19 has brought about a loss of economic activity on a scale that will test the foundations of market economies.

What is the best policy response? Policy Exchange has published a paper today, A pro-growth Economic Strategy, that sets out an ambitious agenda of borrowing, reform of the central bank’s remit and supply-side improvements.

At its heart is the recognition based on our polling that the public do not want a return to austerity, and there is no need to do so. Only 16 per cent per cent of people polled support cuts that would affect public services. The Bank of England’s inflation target of two per cent should be ditched, the paper also argues, and replaced with a pro-growth four per cent nominal GDP target.

The context is a decade-long shift in macro-economic thinking. In the crisis that started in 2007, monetary policy run by central banks – which focuses on interest rates and the supply of money and credit – was ineffectual as a stimulus to economic activity.

Central banks have worked hard over the last 10 years to breathe life into monetary policy to make it an effective tool of macro-economic demand. Yet after a decade of forward guidance, credit easing and quantitative easing, it was clear even before the Covid-19 crisis that in the event of an adverse economic shock, requiring a powerful stimulus to stabilise demand, monetary policy had run out of road.

Instead, policy makers would have to turn to fiscal policy to stimulate their economies in the same way that they were forced to do in 2007-8. Governments would have to accommodate budget deficits, tax receipts would have to be allowed to fall and spending would have to rise.

There are people who have serious reservations about government borrowing. It is perceived as a rake’s progress into debt that inevitably leads to higher debt service costs that will result in a future increase in the tax burden. There is a particular concern about the amount or stock of total government debt ,and the way that annual budget deficits incrementally add to it.

This focus on government debt within public finance, however, is at the best of times an erroneous distraction from the true cost of public expenditure. Public debt and budget deficits in themselves are of little concern provided the cost of servicing the debt is manageable, and the cost of debt service does not become an awkward issue in terms of public spending itself.

In the present crisis, the costs for governments of using debt and fiscal policy are at their lowest in modern financial history. The combination of very low inflation and a surplus of international savings has resulted in extraordinarily low interest rates and long-term government bond yields.

This means that governments are able to take fiscal measures that are the equivalent of ten per cent of GDP and more. They will be able to take further measures to ease the restructuring of the economies and to stimulate demand when it is needed.

Over the last ten years, government debt has risen sharply in relation to national income in most advanced economies. Yet the cost of financing the debt service charge involved has fallen. Between 2010 and 2020, the cost of servicing UK debt fell from around 2.5 per cent of GDP to around a little under 2 per cent. In Italy, the ratio fell from over 4 per cent to about 3.25 per cent. For the OECD as a whole, the ratio has come down from around to two per cent to around 1.75 per cent. These falls in debt service costs have taken place over a decade when public debt in OECD countries has risen by 28 per cent to $17 trillion.

At the time of the March Budget, the Office for Budget Responsibility estimated that the cost of servicing the UK debt would be £34 billion or about 1.4 per cent of GDP. Following the impact of the crisis, the OBR revised this estimate. But despite an expected increase in borrowing, it revised down its estimated cost of servicing the debt to take account of a further fall in interest rates and lower inflation, which further lowers the RPI used for the inflation index linked part of the national debt.

In re-estimating the costs of public debt in the context of a large increase in debt, the OBR is not alone as a public authority in lowering its expected cost of debt service. The Congressional Budget Office, for example, has published Interim Economic Projections for 2020 and 2021. It argues that interest rates are expected to remain low because of subdued economic activity, weak labour market conditions, actions taken by the Federal Reserve, and an increase in investors’ demand for low-risk assets.

The level of UK bond yields in the modern world of integrated capital markets are heavily shaped by the international flow of funds, international expectations about inflation and interest rates rather than specific factors affecting the UK. The Federal Reserve and the US Treasury market dominate international capital markets and the level of international rates is determined in New York. Interest rates are therefore unlikely to change for the reasons that the CBO has identified. This is not, in other words, a time to hold back on borrowing.

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Noted Economics Experts AOC Apparently Doesn’t Know What the Federal Reserve Is

Westlake Legal Group Untitled-6 Noted Economics Experts AOC Apparently Doesn’t Know What the Federal Reserve Is Uncategorized Libra House hearing Grand-Standing Front Page Stories Financial Services Committee Federal Reserve Featured Story facebook Economics Expert ebay cryptocurrency Congress AOC Alexandria Ocasio-Cortez

One of the worst parts of Congress are the public hearing. They almost never accomplish anything, nor reveal new information, and simply serve as a visual medium for egotistical, press hungry members to grandstand.

Naturally, that means Alexandria Ocasio-Cortez absolutely loves them.

Because big government is always inherently good, despite millennia of evidence to the contrary, she decided to to go after cryptocurrency.

Now, it may be true that big corporations are motivated to build the Libra as a currency to buy their products. The question should be, so what? As American companies, they’ll still be regulated just like they’ve always been regulated. She might as well have been asking McDonald’s if they serve breakfast burritos. The answer would of been yes and it would have been just as meaningful as this supposed “gotcha” moment.

I say supposed because AOC, despite claiming to have an economics degree and wanting to remake the whole economy in her image, apparently doesn’t how the Federal Reserve operates.

Her defenders will now rush and tell us “well, ACKSHUALLY the President appoints the board of governors for the Federal Reserve and that’s totally what she meant.”

Quick thought exercise. Would any Democrat or AOC herself consider Brett Kavanaugh democratically elected? I’m going to go with a no on that with a confidence level of so high that it’d make Cheech and Chong envious.

The overarching point is that the Fed has essentially no accountability whatsoever. It’s a bunch of a people from the business world with fourteen year appoints that basically do whatever they want and voters can’t check like they can other positions. We can’t even get a bill through that will allow an audit of what they are doing. But AOC thinks he’s just entered the gotcha hall of fame by pointing out that private companies aren’t democratically elected. Well no, but they are subject to market forces, which serve as a much better check on power than a bloated federal government that can’t manage anything properly.

The reason cryptocurrency is gaining popularity is precisely because it’s more open and transparent compared to the secretive gyrations of the Fed. But because it would place monetary policy outside of AOC’s hands within government, she’s against it. That’s really her litmus test for everything.

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The post Noted Economics Experts AOC Apparently Doesn’t Know What the Federal Reserve Is appeared first on RedState.

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Fed chairman Jerome Powell: If Trump fires me, I’ll ignore him

Westlake Legal Group jp Fed chairman Jerome Powell: If Trump fires me, I’ll ignore him Trump The Blog Maxine Waters Jerome Powell Interest Rates fire Federal Reserve Fed chairman article II

Somehow I missed this yesterday. You’d think it’d be bigger news when the chairman of the Federal Reserve tells Congress that he’ll stay on the job whether the executive likes it or not.

Especially when he’s doing it on TV, in response to a question from Trump nemesis Maxine Waters.

I mean, is this guy *trying* to get fired? He’s waving a red cape before the big orange bull here.

“I have the right to demote him. I have the right to fire him,” Trump said of Powell a few weeks ago, still annoyed that the Fed won’t slash interest rates to further goose the economy. Demotion seems to be the first option on his menu at the moment; Bloomberg reported last month that Trump was exploring stripping Powell of his chairmanship and leaving him as a plain ol’ Fed governor. But let’s say he did want to pull the trap door. Could he fire Powell under the law?

Answer: Depends. The Federal Reserve Act says that each Fed governor gets to serve 14 years “unless sooner removed for cause by the President.” What does “for cause” mean? The courts have never had to address the question but it probably doesn’t mean “because the Fed won’t do what the president wants it to do on monetary policy.” The point of the Act is to give the Fed a modicum of independence from politics. Letting the president fire the chairman “for cause” because, essentially, it’s behaving independently would wreck the whole scheme.

But back up. Is the Federal Reserve Act constitutional — or at least this part of it, purporting to limit the president’s authority to fire its officers? My gut reaction is no. Aside from the special case of federal judges, who operate under Article III and are assured life tenure so that they feel free to rule fairly in all cases, it’s difficult to imagine a rationale for letting an *unelected* policy-making federal officer serve with no accountability to anyone. Of course Powell can be removed summarily — or so it seems to me instinctively. The New-Deal-era Supreme Court decided differently, though, ruling in 1935 that laws limiting the president’s power to remove top personnel at independent agencies like the FTC are constitutional. That’s because independent agencies are quasi-legislative and quasi-judicial, the Court said, whatever the hell that means. But this is what Powell is banking on if Trump drops the axe. He’ll ignore him, go to court, and point to the Humphrey’s Executor case from 1935 as a slam-dunk winner for him. Unless Trump can show “cause,” he loses. Simple as that.

We’ll see, though. Conservative legal thinkers have developed a powerful allergy to the idea of “independent” agencies and agents over the last few decades. There may no single judicial opinion in the past 40 years that’s influenced conservative constitutional thinking as much as Scalia’s dissent in Morrison v. Olson, the “independent counsel” case that featured frequently in constitutional commentary about the Mueller probe. Scalia’s point there was that the president is supreme in his constitutional sphere; as a matter of basic accountability, one can’t have an executive officer who’s so “independent” from the president that he can’t be removed. On top of that, the Roberts Court has been eyeing the sprawl of the administrative state over the last few years and making unhappy noises, with Roberts’s own recent opinion in the census citizenship question case delivering a new blow to agency independence. The conservative majority won’t like the idea of an agency head like the Fed chairman being able to tell the president to piss off if Trump wants to remove him. If Trump and Powell forced them to decide whether Humphrey’s Executor is still good law, which way would they go?

The post Fed chairman Jerome Powell: If Trump fires me, I’ll ignore him appeared first on Hot Air.

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BREAKING: Jobs Report Blows Away Expectations, Jobless Rate Hits 49-Year Low

Westlake Legal Group breaking-jobs-report-blows-away-expectations-jobless-rate-hits-49-year-low BREAKING: Jobs Report Blows Away Expectations, Jobless Rate Hits 49-Year Low jobs report jobs Front Page Stories Federal Reserve Featured Story Economy donald trump Allow Media Exception

Westlake Legal Group Register BREAKING: Jobs Report Blows Away Expectations, Jobless Rate Hits 49-Year Low jobs report jobs Front Page Stories Federal Reserve Featured Story Economy donald trump Allow Media Exception

In this Monday, Feb. 25, 2013 photo, a clerk poses for a photo showing cash in the register at Vidler’s 5 & 10 store in East Aurora, N.Y. (AP Photo/David Duprey)

While economists were predicting a meager 190,000 in jobs growth this month, the economy had different plans.

Payrolls jumped up by 263,000, and the jobless rate it a 49-year low of 3.6 percent. The hourly earnings growth stayed at 3.2 percent.

Here’s more from Bloomberg:

The surprising robustness follows months of broad labor market strength. While the expansion is poised to become the nation’s longest on record at midyear, economists expect a deceleration this year even after a strong first quarter.

Revisions for February and March added 16,000 more jobs than previously reported, while the three-month average fell to 169,000.

It’s an overall good sign for the economy, and politically it bodes well for Trump, who has picked up nearly two dozen Democratic challengers ahead of his 2020 re-election bid. While many claim to be running on the virtue of providing more for the middle and lower class, the numbers from this report show that Trump may have the upper hand in that debate, too (emphasis mine).

Average hourly earnings rose 0.2 percent from the prior month after a revised 0.2 percent rise in the prior period. Wages for production and nonsupervisory workers accelerated to a 3.4 percent annual pace, signaling gains for lower-paid employees.

The job creation appears to be coming in the form of construction and health care, while retail jobs actually fell.

The payroll gains were somewhat uneven, with construction, health care, and professional and business services posting gains while retail employment fell by 12,000 for a third- straight decline.

Construction payrolls climbed by 33,000, the most since January, as manufacturing employment rose by 4,000. Factory employment was unchanged in the prior month after a previously reported drop.

But there is one warning for President Trump, who has been calling on the Federal Reserve to lower interest rates:

While the historically tight labor market has pushed companies to raise pay, inflation appears largely subdued, as the fatter paychecks don’t show any sign of fueling faster price gains.

At the same time, the average workweek got slightly shorter, boosting average hourly pay. The average for all private employees decreased to 34.4 hours, from 34.5 hours.

Raising the rates is a sign that the economy is strong. Lowering them shows economic weakness. The Fed knows this, so they’ve resisted his call to drop rates. However, with two nominees for the Fed withdrawing their names, Trump may now be looking for someone more in line with his train of thought on rates. Even if it risks the inflation that this report says is dissipating.

Pessimism in the marketplace appears to have vanished, and there are plenty of reasons to be hopeful about the American economy.

The post BREAKING: Jobs Report Blows Away Expectations, Jobless Rate Hits 49-Year Low appeared first on RedState.

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Stephen Moore “withdraws” from Fed consideration — hours, or minutes, after saying he was “all in”

Westlake Legal Group stephen-moore-withdraws-from-fed-consideration-hours-or-minutes-after-saying-he-was-all-in Stephen Moore “withdraws” from Fed consideration — hours, or minutes, after saying he was “all in” Trump The Blog stephen moore Senate Federal Reserve Fed ernst confirmation advisor

Westlake Legal Group t Stephen Moore “withdraws” from Fed consideration — hours, or minutes, after saying he was “all in” Trump The Blog stephen moore Senate Federal Reserve Fed ernst confirmation advisor

The writing’s been on the wall for days. Almost 48 hours ago, Joni Ernst was signaling to the White House with neon lights to move on from Moore.

Trump finally bowed to reality shortly after noon on Thursday:

“Withdraw” is an interesting choice of words. It turns out Moore was doing the rounds with media this morning, something you wouldn’t expect a candidate who’s contemplating dropping out to bother with. He didn’t seem like he was ready to quit as of two hours ago:

Another reporter at Bloomberg claims to have spoken with Moore less than an hour before Trump’s announcement:

Compare that with Moore’s written statement released this afternoon claiming that the attacks on him are too much for him and his family:

In the span of a few hours, after taking hits for weeks and remaining “all in,” he and his family supposedly concluded they can stand no more. Either Moore’s “withdrawal” was actually a case of Trump yanking the nomination and granting Moore the courtesy of pretending like it was his own decision or the media dug up some hugely damaging new dirt on Moore that only came to his attention within the last hour or so. An interesting follow-up tweet from Green:

If Trump made him walk the plank, though, why now? He’s spent weeks letting the nominee get dinged for everything from bad economic advice to unpaid alimony to dubious writing about women to his obvious cronyist relationship with Trump to once calling Cleveland and Cincinnati, two cities in a Trump state, the “armpits of America.” Presumably Tuesday’s grumbling to the media by Republican senators like Ernst was followed by a private message from McConnell to Trump informing him that, no really, Moore doesn’t have the votes and isn’t going to get them so it’s time to stop the bleeding. Which Trump finally did.

It’s okay, though. He’ll have the last laugh when the next nominees are Diamond and Silk.

I wonder what this means for future presidential nominations. Republicans wouldn’t dare cross Trump on something as momentous as a Supreme Court appointment but what if POTUS tries to slot someone in at the Pentagon now whom Senate GOPers are iffy about? Having just successfully torpedoed Moore and Herman Cain before the confirmation process began with seemingly no ill effects from Trump or his base, they might start getting nervy about executive nominees. To which Trump would likely reply: “Fine. I prefer acting appointees anyway.” By the end of his term I expect most of the cabinet will be filled either by undersecretaries who have been elevated indefinitely to fill a vacancy at the top or by Mick Mulvaney types who have lateraled over from another department under the Vacancies Reform Act whether they’re qualified or not. In all seriousness, I wonder if Trump will ever again have a cabinet of appointees all of whom have been confirmed by the Senate for the jobs they hold. Even if he serves a second term.

The post Stephen Moore “withdraws” from Fed consideration — hours, or minutes, after saying he was “all in” appeared first on Hot Air.

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Trump: Herman Cain is withdrawing from Fed consideration

Westlake Legal Group trump-herman-cain-is-withdrawing-from-fed-consideration Trump: Herman Cain is withdrawing from Fed consideration Trump The Blog stephen moore Senate romney nomination Herman Cain Federal Reserve confirmation

Westlake Legal Group c-1 Trump: Herman Cain is withdrawing from Fed consideration Trump The Blog stephen moore Senate romney nomination Herman Cain Federal Reserve confirmation

Just two weeks ago, notes reporter Bryan Lowry, Cain sounded completely committed to the Fed confirmation process. “You think I’m going to get intimidated by a bunch of yahoos trying to embarrass me?” he said of the members of the Senate Banking Committee (which of course is controlled by Republicans). “They’re the ones that are going to be embarrassed.”

As of today he’s no long a candidate for the position.

Here’s another reason why Romney doesn’t need to feud with Trump on Twitter. He can always get back at him by borking his nominees instead.

I’m surprised. As of Thursday Cain seemed gung ho to proceed with the nomination, appearing on Fox Business to try to drum up support among Trump loyalists and publishing an op-ed in the WSJ insisting that the Fed needed fewer academics and more businessmen. Four days later he’s out. Presumably the White House spent the weekend feeling out the four Republican senators opposed to Cain, one of whom is Romney, to see if anything might change their minds. When the answers came back no, they decided not to press ahead. Especially with stories like this beginning to dribble out:

A woman who has accused Herman Cain of having a long-term consensual affair threatened on Thursday to describe “certain parts” of his body to the Senate Banking Committee “to corroborate her testimony” if he doesn’t withdraw his name from consideration for the Federal Reserve Board…

Allred said on Thursday that both [Ginger] White and [Sharon] Bialek are willing to testify under oath about their allegations.

“Ginger, if asked at the United States Senate Banking Committee hearing, will also be willing to identify certain parts of Mr. Cain’s body to corroborate her testimony,” she continued.

Several women have accused Cain of workplace harassment but White merely claims an affair. I would have liked to see Bill Clinton’s party try to rationalize calling her as a witness and leading her through embarrassing public testimony about consensual sex. Either way, Cain surely knew as of four days ago that Democrats would go dumpster-diving into his personal life to try to block him and embarrass Trump. If anyone here suddenly got cold feet about advancing the nomination, it’s more likely to be the White House than him.

Is this good news or bad news for Trump’s other unconventional Fed pick, former Club for Growth chief Stephen Moore? Some thought the controversy around Cain would be a boon to Moore’s nomination by giving Senate Republicans an outlet for their skepticism of Trump’s picks. Maybe they’d bork one but confirm the other as a compromise with Trump, the argument went. Now that Cain’s out, that leaves Moore looking better — in theory. In practice, he’s taken as many shots as Cain has.

In a CNN appearance, Moore claimed he had never been in favor of the gold standard, where every dollar is backed by some gold. But the network proceeded to play clips from three different speech where Moore clearly supported the policy, which Cain also endorses.

Moore also called for interest rates to rise in the midst of the financial crisis, a policy that many believe would have caused the country more harm. Moore started calling for a cut in interest rates once Trump took office. Recently, Moore has said there is deflation in the United States, even though government statistics and the White House Council of Economic Advisers all say inflation is rising at about 2 percent a year…

Moore has faced similar criticisms about a lack of qualifications and past personal issues, including his failure to pay his ex-wife child support and alimony in 2013.

There’s also a $75,000 tax lien pending against him, which he’s contesting, but the bulk of his confirmation hearing is destined to be consumed with questions about cronyism and his more unorthodox pronouncements on monetary policy, starting with raising rates during the recession. (Less than three years ago he conceded that he’s not an expert on monetary policy.) In the meantime his critics’ strategy seems to be to kill him with a thousand cuts, like this new CNN piece describing columns Moore wrote years ago complaining about “the feminization of basketball” and calling for women to be banned from refereeing men’s hoops games. What does that have to do with Fed policy? Nothing at all, but it raises the political cost incrementally to the White House of proceeding with Moore’s nomination to a full confirmation hearing. The steeper the cost gets, the more likely Trump is to say “forget it” and drop him.

The key point about Cain’s nomination is how predictable this outcome was. Here’s a paragraph from a post I wrote in January, when the rumors about Trump nominating him first began circulating:

Just tell me how he gets confirmed by the Senate. Remember what it was that finally drove him out of the 2012 GOP primaries? Democrats would tear Cain apart over sexual harassment during the confirmation hearings. He’d attract one Democratic vote, Joe Manchin’s, if he’s lucky. Realistically he’d get none, leaving McConnell to start with just 53 yays and faced with instant panic among the moderates in his caucus, most of whom already took a very tough #MeToo-related vote on Kavanaugh four months ago. Murkowski opposed Kavanaugh and would likely oppose Cain. Cory Gardner is fighting for his political life in Colorado and would try to protect himself by voting no as well. Susan Collins has already been marked for defeat by the left for her crucial yes vote on Kavanaugh’s nomination and would try to balance it by opposing Cain this time. If no Democrats vote yes, that’s 50 votes maximum to confirm. Any single remaining member of the GOP caucus could sink him.

I went two for three. Murkowski and Gardner are among the four Republicans who’ve vowed to oppose Cain (Romney and Kevin Cramer are the others), and although Collins has maintained strategic ambivalence, I’d bet good money that she’d have voted no on confirmation as well if forced. That is, Cain’s baggage was full public knowledge when this process began and the fact that it would end up leaving him unconfirmable was obvious even to rank amateurs like me. Yet he and Trump went forward. Why? If they were determined to call the Senate’s bluff, they should have made a pact about that from the start: We’re going to force McConnell’s caucus to vote on this no matter how much dirt comes out and how ugly it gets. You’ve got my back and I’ve got yours. Instead one of them broke that pact at the first signs of trouble. What was the point of floating Cain’s name, then? If all Trump wanted to do was show how mean and RINO-y Senate Republicans are, he should have at least demanded that they bork his nominee in a proper floor vote so that he could make hay of their opposition to his base. I don’t get it.

There’s probably no explanation beyond “Trump wanted Cain, decided to risk a backlash by nominating him, then changed his mind.” He changes his mind a lot. Why not here?

The post Trump: Herman Cain is withdrawing from Fed consideration appeared first on Hot Air.

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Senate GOP nudges Trump: Don’t nominate Herman Cain for the Fed

Westlake Legal Group c-1 Senate GOP nudges Trump: Don’t nominate Herman Cain for the Fed The Blog stephen moore Senate romney republicans mcconnell Herman Cain Federal Reserve Fed cornyn

If I were Trump I’d call their bluff. This cuckish bunch rarely stares him down, especially on domestic policy. They’d be reluctant to embarrass him by rejecting any top nominee but particularly someone like Cain or Stephen Moore who’s known to the grassroots right-wingers whose votes Senate Republicans are counting on next fall.

And of course if they bork one or both they’d be volunteering to serve as scapegoats for Trump in the not unlikely event that the economy slows down before the 2020 election. “If only the Senate had confirmed Cain and Moore,” he’ll say next year, “the Fed would have been able to keep growth going.”

The key point is that their discomfort was foreseeable. Between the overt political-cronyism of Cain’s nomination and the ugly #MeToo battle to come if he makes it to a confirmation hearing, choosing him was destined to give Trump’s caucus in the Senate a headache. Trump didn’t care.

Senate Republicans are warning the White House that [Cain] will face one of the most difficult confirmation fights of Donald Trump’s presidency and are making a behind-the-scenes play to get the president to back off, two GOP senators said.

“There are concerns that are being voiced to the administrations about qualifications,” said Sen. John Thune (R-S.D.), the Republican whip. “They’re probably going to hear from a number of our members about concerns that they have. Whether or not that gets them to make a course change or not, I don’t know.”…

[M]ore troubling to some in the Senate [than the old sexual harassment allegations] is that Cain founded pro-Trump group America Fighting Back.

“Do you seriously want a guy on the Fed that has a whole organization, the only purpose of it is to encourage Republicans to do whatever the president says he’d like you to do?” said one Republican senator distressed about the nomination.

The Fed’s supposed to be insulated from political pressure so that its decisions on interest rates are driven by economic considerations, not the president’s electoral interests. How likely is Cain to stick to that mandate when his Super PAC recently accused righties who opposed Trump’s border emergency decree of being “traitors”? How likely is Moore to stick to it having served as an advisor to Trump? Politico notes that both supported increasing interest rates during Obama’s presidency when growth was slower than it is now; coincidentally, each has come to agree with Trump that lower rates are the way to go at the moment. Moore flatly admitted two years ago during a panel discussion that he wasn’t an expert on monetary policy, the defining feature of a qualified Fed choice. Yet here he is on the cusp of joining the board.

At least one Republican, Cory Gardner, has already said he’ll vote no on Cain. Romney sounds strongly inclined to vote no as well. That would leave Trump and Cain within two votes of defeat, with Susan Collins facing strong incentives to vote no herself ahead of next year’s reelection run in Maine. McConnell is reportedly encouraging Cain skeptics to speak up, no doubt hoping that enough complaints might convince Trump to pull the plug and spare the Senate this fight. One interesting “eight-dimensional chess” possibility is that Trump fully understands that Cain’s nomination is DOA in the Senate but decided to float his name for strategic reasons. He may have calculated that Senate Republicans would be extremely leery of defeating not one but two Trump-backed nominees for the Fed, in which case he chose Cain as a sacrificial lamb so that Senate GOPers could feel better about voting for Moore. They can confirm the latter but block the former and still be able to claim that they stopped Trump from politicizing the Fed. Sort of. Partly.

I think the ongoing purge at DHS might also have the unintended effect of making Republicans less likely to oppose Moore. Trump is depleting the ranks of top officials in one key agency and in no apparent rush to fill the vacancies he’s creating, alarming McConnell’s caucus. If there’s a candidate for the Fed before the Senate who’s at least arguably fit to sit on the board and the GOP borks him, God only knows how many months it’ll be before the president offers them another. It’s not like there are qualified candidates clamoring to be nominated either after seeing how Trump has scapegoated Fed Chair Jerome Powell. Moore may be the best offer they get from Trump for awhile.

Here’s Romney rhetorically wringing his hands yesterday about the purge. Smart money is that he and his colleagues will compromise with Trump by confirming Moore and convincing him to yank Cain.

The post Senate GOP nudges Trump: Don’t nominate Herman Cain for the Fed appeared first on Hot Air.

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