A FEATURE, NOT A BUG
Trump Nominates Clowns Herman Cain and Stephen Moore to Bring the Fed to Heel
The president with a gift for undercutting his own institutions is laying the groundwork to strip the most important central bank in the world of its political independence.
“When you think it can’t get any worse, it does,” servile Senate Republicans keep whimpering.
The sentiment came up when Trump announced his latest choice for an open Federal Reserve Board seat—former presidential candidate and Trump super PAC head Herman Cain.
Until then, Trump’s previous selection for another open seat, Stephen Moore, think tank executive, pundit, and author of Trumponomics, a homage to the president whom he also recommended for the Nobel Prize in Economics, held the record for least credentialed person up for a seat on the Fed board.
Together, these two amateurs are a critical part of Trump’s re-election strategy, which is not just to build a wall, close the border, and deter asylum-seekers by making orphans of their babies. It’s also to keep those lured by tax cuts and an (Obama) economy to stay the course. Should the economy slow, Trump won’t just need someone to blame. He’ll need someone to juice it.
Right now that means laying the groundwork to undercut the independence of the most important central bank in the world. Thus the campaign for Cain and Moore—an heir, and a spare, ready to become chair should anything happen to the current one.
Cain made his name turning around Godfather Pizza with two large pies, extra toppings, for $20. As head of the restaurant trade association, he lobbied against raising the minimum wage, health care, non-smoking regs, and stricter blood-alcohol limits for drivers. His wildcat presidential campaign presaged Trump’s, as the pizza man shot to the top of the polls in the 2012 Republican field by offering catchy but meaningless phrases, like his 9-9-9 tax plan, and singing Uzbeki-beki-beki-stan to cover up not knowing where it was.
It ended when five women charged him with sexual misconduct, one on the record about a 13-year affair, and the other about the job interview from hell during which he pushed her head south. That, and the grifter promoting penny stocks and erectile dysfunction drugs that might repel another president simply endeared him to Trump.
The White House unveiled its weak defense of Cain last Sunday: that not all sexual allegations “pan out” and that he’d served on the Kansas City Federal Reserve Bank. In a way, he did—but not in a banking capacity. He was a Class C director chosen from the community in a position specifically reserved for non-bankers. He wasn’t there for his insights into open-market monetary policy.
Should Cain be confirmed, even as Republican whimpers about him get louder, his job along with Moore would be laying the groundwork to undercut the independence of the apolitical Fed. That’s a task Trump himself is well qualified for, as an amoral small-time businessman with an appetite for permanently wounding treasured institutions from NATO to the FBI, one tweet at a time.
Yesterday, with every breath he takes, Trump’s carefully chosen Attorney General William Barr showed how much independence he gave up to win his appointment. By jumping out ahead of the actual Mueller report or even its summary, Barr’s short letter secured public opinion that Trump was exonerated when he wasn’t. On Wednesday, he caved in to another item on Trump’s bucket list and confirmed that he’s initiated an investigation into whether the deep state at Justice spied on the president’s campaign as part of what the president himself has already prejudged as an “attempted coup.”
Now, it’s the Fed’s time in the barrel. Trump’s soured on its too-independent chairman Jay Powell, whom the president elevated after he found former chair Janet Yellen too short (and too female and too independent) for the job. Powell, who served in the first Bush administration, didn’t jump fast enough when Trump began blaming the Fed's interest-rate policy for drops in the stock market, Trump’s applause meter for how the economy is doing. After Powell said rates would remain steady, Trump rewarded him with a Comey-like dinner at the White House. Immediately after, the Fed assured the public that the chairman “did not discuss his expectations for monetary policy.”
That’s all it took for Trump to resume trashing him, and to nominate the two stooges. Trump has asked his lawyers how he could fire Powell, according to Bloomberg. To avoid being yelled at, as former White House counsel Don McGahn was when giving unwelcome legal advice, his lawyers only cited the inevitable court challenge that would follow any dismissal for “cause”—a standard not defined since no prior president has ever tried to remove a Fed chair.
But Trump doesn’t have to worry about being tangled up in a district court he hasn’t yet packed. He has his own insidious way of ridding himself of people without firing them. Aides who are insufficiently servile get public floggings, endure temper tantrums at meetings, and suffer snide, schoolyard insults (former AG Jeff Sessions is an idiot, Secretary Wilbur Ross nods off and drools; the head of Secret Service has Dumbo ears). The resignations flow like wine at Mar a Lago parties attended by a Chinese massage parlor owner.
It worked this week. Kirstjen Nielsen, the recently departed Secretary of Homeland Security head Kirsten did everything to keep her job but snatch babies from mothers at the border herself, yet she couldn’t stop Trump’s public ridicule and early-morning hate calls. She and a raft of other DHS officials “resigned” this week so Trump could install more pliable “acting” replacements. Stacking his cabinet with “actings” is another innovation Trump brags about, since it gives him near absolute control. Watch acting chief of staff Mick Mulaney capitulate to all of Trump’s whims as he auditions to be appointed permanently.
Which is why there will be no need for Trump to fire the Fed chair who the president compared to “a powerful golfer who can’t score because he has no touch, he can’t putt!" You’d think he’d avoid golf metaphors after a popular new book by former Sports Illustrated columnist Rick Reilly, Commander in Cheat: How Golf Explains Trump, shows Trump colluding with caddies to move his balls out of difficult lies onto the green, where he can take a gimme.
As interest rates rose so did the jabs. At some point, Powell will ask himself, as decorated warriors H.R. McMaster, John Kelly, and John Mattis each did before fleeing the madness, “Who needs this?” Trump’s accused the bank of of “going loco” after a half-point rate hike, of being his “biggest threat, and how he “maybe regrets” hiring Powell whom he thought would be a “cheap money” chair. Moore sealed his nomination when he said in an interview that he and Trump were “furious” at Powell over the December rate increase and wanted to fire him for “wrecking our economy.”
It won’t be surprising if Powell is taken by a sudden urge to spend more time with his family and accept one of many high positions that await him in the private sector. The president can then exercise his authority to pick the chairman from the seven members already confirmed and currently serving, two of whom, if he gets his way, will be Cain and Moore.
Trump may well have chosen Cain to make Moore look like Paul Volker, albeit one who shares Cain’s ignorance of monetary policy. Their appointments would be like putting swimmers still in floaties on a 100-meter relay team. That’s not to mention Moore’s checkered personal past, including a tax lien for $75,000 against him for brazenly deducting non-deductible child-support payments, $330,000 of which he hadn’t actually paid to his first wife, who accused Moore of subjecting her to “emotional and psychological abuse,” according to The Guardian, which saw the divorce records. Moore’s P.R. person says the two are “cordial” now. To Trump, character deficits like these are features, not flaws.
Trump knows that close to the election, senators will be more reluctant than ever to deny Trump what he wants. Even if they reach deep inside their weak spines to find the wherewithal to deny one of them a seat, they won’t be able to vote down two.
And so that’s how Trump brings the mighty Fed to heel, as he’s done to so many other hitherto solid institutions. When you think it can’t get any worse, it does.