Economy, Politics, Trump

Just Say No…

Idaho Sen. Mike Crapo is about to get his moment in the wacky spotlight of U.S. Senate confirmation politics.

Barring some last-minute change of heart, something never to be dismissed in Trump World, the president of the United States will nominate to the Federal Reserve Board a guy whose ethical and financial baggage would have immediately disqualified him during any other time in modern history. In the past, would-be cabinet secretaries or senior administration appointees have seen their appointments collapse for lesser transgressions than those hovering around Trump’s latest ethical outrage.

Federal Reserve Building in Washington, D.C.

It seems almost quaintly secondary that Stephen Moore, a frequent Fox News gabber and Trump idolater, is also demonstrably unqualified for the job of overseeing the U.S. banking system and assuring the economy remains sound.

If Trump goes through with Moore’s appointment, Crapo will preside over his confirmation before the Senate Banking Committee and we’ll see how the mild-mannered Idahoan straddles the stupidity of the president’s nominees and the senator’s fealty to the big banks and financial interests, whose water he carries and whose campaign cash he hordes.

Will Crapo go with Trump and the Tea Party wing of the GOP or will he stand with the sane, sober financial realists who openly scoff at Moore’s lack of qualifications to serve on the Fed, not to mention his long record of incompetence?

Let’s review the “accomplishments” of the man who could be a heartbeat away from chairing the Federal Reserve by acknowledging that Moore is no Alan Greenspan, no Paul Volcker, no Ben Bernanke and certainly no Marriner Eccles, the Utahan who presided over the central bank during the Great Depression.

Stephen Moore, Donald Trump’s candidate for a seat on the Fed

Rather, Moore owes $75,000 in back federal taxes and was held in contempt for failing to pay $330,000 in spousal support to his ex-wife. As the New York Times noted, “In 2013, (a Virginia) court ordered him to sell his home to raise money to pay the debt and forced him to set up an automatic bank transfer each month. After Mr. Moore paid $217,000 toward the debt, Ms. Moore asked the court to revoke the order to sell his home, which it did.” Moore calls his dispute with the IRS “a misunderstanding.”

So much for ethics. How about competence? Economics columnist Catherine Rampell assembled a “greatest hits” list of Moore’s crazy theories and predictions, including the old favorite that big tax cuts pay for themselves. The Congressional Budget Office said recently that the Trump tax cut, supported enthusiastically by Crapo, would add $1.5 trillion to the deficit during the next decade.

During the Great Recession, Moore predicted runaway hyperinflation like that visited on Weimar Germany in the 1920s, with people needing “wheelbarrows full” of cash to visit Albertsons. Moore was a principal architect of the disastrous tax policy implemented in Kansas in 2013, a policy he promised would miraculously lift that state’s economy, but instead slowed economic growth and crashed the state budget. As Rampell has suggested, Moore has been wrong so often — he’s not an economist by the way, but merely plays one on Fox — that he obviously doesn’t know how to use Google to check basic facts.

Moore was so often wrong in his pronouncements about the Kansas economy that he was banned from the editorial pages of the state’s largest newspaper. His lack of political independence was on full display when he said Trump deserved the Nobel Prize in economics. You can’t make this up.

Moore’s appointment comes, of course, in the wake of Trump’s continuing assaults on Fed Chairman Jerome “Jay” Powell, a respected conservative who seems determined to continue the Federal Reserve’s long struggle to remain independent of the kind of partisan meddling the president has raised to an art form. The Wall Street Journal reported this week that Trump, who has publicly contemplated firing Powell — he legally can’t fire Powell who serves a fixed term — criticized the chairman on three different occasions recently before mumbling to Powell in a phone call, “I guess I’m stuck with you.”

Outside of the Fox News echo chamber, few people who know anything about the Fed and the economy think having Moore on the job makes any sense.

“Steve is a perfectly amiable guy,” says Harvard economist N. Gregory Mankiw, “but he does not have the intellectual gravitas for this important job.” Before Trumpers dismiss Mankiw as just another pointy-headed Ivy League academic, we should note he is a conservative Republican who worked for both George W. Bush and Mitt Romney.

But back to Crapo’s dilemma. In a normal political world, a senator in Crapo’s position — the conservative Republican chairman of the Banking Committee, a favorite of Wall Street and big banks, the 15th most senior member of the Senate — would have everything to say about this kind of appointment. A genuinely powerful chairman might even be expected to have his own candidate for the Fed, perhaps a trusted conservative economist with a track record of real accomplishment. There must be a few hundred of them available.

Banking Committee chairman Mike Crapo, an Idaho Republican

A real power in the Senate would have quietly signaled the White House that spouting sound bites on television just wasn’t adequate preparation for such an important job. A senator with a shred of independence would have never allowed a Stephen Moore to get in front of his committee.

All Crapo has said is that it’s a priority to fill vacancies on the Federal Reserve and he would not prejudge Moore’s nomination, while giving “it prompt attention.”

Maybe Crapo will yet head off this economic train wreck, potentially one of the most consequential, indeed disastrous of all Trump appointments. Or maybe he’ll do what Idahoans have come to expect of him and he’ll go along to get along and, in the process, further concede senatorial power and prerogatives to a man Crapo once said was so abundantly unfit for the office that he couldn’t support him for president.

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(This piece originally appeared in the Lewiston, Idaho Tribune on April 5, 2019)

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