Cain withdraws name as Fed nom­i­nee

The Prince George Citizen - - Money - Christo­pher RUGABER

WASH­ING­TON — U.S. Pres­i­dent Don­ald Trump’s ef­forts to re­shape the Fed­eral Reserve stum­bled on Mon­day, with one of his po­ten­tial nom­i­nees for the Fed’s board with­draw­ing from con­sid­er­a­tion and an­other be­ing en­veloped by fresh doubts.

Her­man Cain, a for­mer CEO of God­fa­ther’s Pizza, asked to be taken out of the run­ning for an in­flu­en­tial post at the U.S. cen­tral bank, Trump tweeted. Cain had dropped out of the 2012 pres­i­den­tial race af­ter fac­ing al­le­ga­tions of sex­ual ha­rass­ment and in­fi­delity – is­sues that resur­faced af­ter Trump said ear­lier this month that he planned to nom­i­nate Cain for the Fed.

Trump tweeted that “My friend Her­man Cain, a truly won­der­ful man, has asked me not to nom­i­nate him for a seat on the Fed­eral Reserve Board. I will re­spect his wishes.”

Sep­a­rately, CNN on Mon­day un­earthed opin­ion col­umns that Trump’s other pick for a Fed board va­cancy, con­ser­va­tive com­men­ta­tor Stephen Moore, wrote in the early 2000s. Among the opin­ions Moore as­serted in those col­umns was that women should be barred from ref­er­ee­ing, an­nounc­ing or even sell­ing beer at men’s col­lege bas­ket­ball games.

Those writ­ings ap­peared on the con­ser­va­tive Na­tional Re­view web­site.

Moore told CNN that the ar­ti­cles were “a spoof.” “I have a sense of hu­mour,” he added.

Cain’s nom­i­na­tion had al­ready ap­peared doomed af­ter four Re­pub­li­can se­na­tors said ear­lier this month that they wouldn’t vote to con­firm him if he were nom­i­nated. Repub­li­cans hold just a three-seat ma­jor­ity in the Se­nate, so the op­po­si­tion of those se­na­tors, on top of uni­fied Demo­cratic op­po­si­tion, made Cain’s prospects ap­pear im­pos­si­ble. Se­nate Ma­jor­ity Leader Mitch McCon­nell de­clined to say two weeks ago whether the cham­ber would con­firm Cain.

Sev­eral other con­tro­ver­sies have also dogged Moore. A lien of more than $75,000 was filed against him in Jan­uary 2018 for un­paid taxes. Re­ports have also in­di­cated that he has fallen be­hind on al­imony and child sup­port pay­ments to his ex-wife.

The CNN re­port Mon­day also noted that Moore once wrote, “Is there no area in life where men can take va­ca­tion from women?”

On top of that, both Cain and Moore have faced wide­spread crit­i­cism that they are un­qual­i­fied for a crit­i­cally im­por­tant role on the world’s most in­flu­en­tial cen­tral bank and that Trump chose them mainly for their al­le­giance to him and his pri­or­i­ties.

On Mon­day, Se­nate Demo­cratic Leader Chuck Schumer warned the Repub­li­cans against us­ing Cain’s with­drawal as a “path­way” to ap­proval of Moore, call­ing him “equally un­qual­i­fied and per­haps more po­lit­i­cal.”

“Mr. Moore, like Mr. Cain, poses a dan­ger to the eco­nomic sta­bil­ity of our coun­try,” Schumer, D-N.Y., said in a state­ment. “Mr. Cain clearly saw the writ­ing on the wall and with­drew his name from con­sid­er­a­tion; hope­fully Se­nate Repub­li­cans will again voice their deep con­cerns and force Mr. Moore to do the same.”

Carl Tan­nen­baum, chief economist at North­ern Trust and a for­mer Fed of­fi­cial, said Moore “has been overly par­ti­san” in his com­ments about the Fed. Moore has lav­ished praise on Trump’s tax cut poli­cies and has ac­cused Chair­man Jerome Pow­ell of un­der­cut­ting the econ­omy with in­ter­est rate hikes.

Those crit­i­cisms “don’t sit well, cer­tainly with peo­ple in­side the Fed, and with the fi­nan­cial mar­kets,” Tan­nen­baum said. “The Fed’s cul­ture is con­sen­sus­driven and apo­lit­i­cal.”

In­deed, Trump’s picks of Cain and Moore have sparked wor­ries about the Fed’s abil­ity to re­main po­lit­i­cally in­de­pen­dent. Last fall, Cain co-founded a pro-Trump su­per po­lit­i­cal ac­tion com­mit­tee, Amer­ica Fight­ing Back PAC. It features a photo of the pres­i­dent on its web­site and says, “We must pro­tect Don­ald Trump and his agenda from im­peach­ment.”

“There were so many things about (Cain) that were red flags,” in­clud­ing his lack of un­der­stand­ing of mon­e­tary pol­icy, said Diane Swonk, chief economist at Grant Thorn­ton and long­time Fed watcher. Cain has served on the board of the Fed­eral Reserve Bank of Kansas City but didn’t par­tic­i­pate in any in­ter­est rate de­ci­sions in that po­si­tion.

The po­ten­tial nom­i­na­tions sur­faced af­ter Trump spent months at­tack­ing Pow­ell, his own pick to lead the Fed, and other Fed of­fi­cials for rais­ing rates four times last year. Trump has con­tended that those rate hikes hurt the stock mar­ket and were un­nec­es­sary be­cause there was no in­fla­tion threat.

At a meet­ing in March, Fed pol­i­cy­mak­ers in­di­cated that they ex­pected to keep rates un­changed this year, a sharp change from De­cem­ber, when they sug­gested that they would lift short-term rates twice more this year. The Fed board, along with pres­i­dents of the Fed’s re­gional banks, plays a crit­i­cal role in the U.S. econ­omy, hold­ing meet­ings to de­bate and vote on whether to raise their bench­mark in­ter­est rate. That rate, in turn, af­fects ev­ery­thing from mort­gage rates to the in­ter­est rate on auto loans and the in­ter­est paid on sav­ings ac­counts. The Fed typ­i­cally in­creases its bench­mark rate when it wor­ries in­fla­tion is about to ac­cel­er­ate, or cuts it to ac­cel­er­ate growth.


Her­man Cain speaks dur­ing Faith and Free­dom Coali­tion’s Road to Ma­jor­ity event in Wash­ing­ton on June 20, 2014. Cain has asked to be with­drawn from con­sid­er­a­tion for a seat on the board of the U.S. Fed­eral Reserve Board.

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