Trump may pick Cain for Fed board
Former pizza CEO ran for president in 2012.
WASHINGTON – President Donald Trump is considering former Republican presidential candidate Herman Cain for the Federal Reserve board, the latest indication that the president hopes to significantly alter the central bank's direction.
Trump will consider Cain for the post if the former Godfather’s Pizza CEO clears a background check, according to an administration official speaking on the condition of anonymity. Cain, known to millions of Americans for the “9-9-9” tax plan he touted during his 2012 run for the GOP presidential nomination, has repeatedly been accused of sexual harassment.
Trump, a fierce critic of the central bank, named Reagan-era economist Stephen Moore to a spot on the sevenmember Federal Reserve board last month. Taken together, the appointments underscore Trump’s desire to make significant chances to Fed policy. Cain's potential appointment was first reported Thursday by Axios.
The Fed, an independent board whose members are appointed by the president, raises interest rates to cool down a hot economy and cuts them to stimulate a sluggish one. The rates affect how much it costs to use a credit card, sign a car loan or buy a home.
In December, the Fed said it had penciled in two rate hikes this year following four increases in 2018 as part of a campaign to bring rates back to more normal levels as the economy has improved since the Great Recession. Trump has argued that those increases have slowed growth in an otherwise strong economy.
"Despite the unnecessary and destructive actions taken by the Fed,” Trump wrote on Twitter on Thursday, “the Economy is looking very strong."
Fed officials defend the need to raise interest rates at times to prevent the economy from overheating. They point to economic instability that has occurred when credit is too cheap, such as the era of double-digit inflation in the late 1970s or the housing bubble in the mid-2000s that helped spawn the Great Recession.
Cain is perhaps best known for the "9-9-9 plan" to overhaul the tax code by calling for a 9% flat tax on household income, 9% corporate tax and 9% national sales tax. The former candidate drew wide support from the tea party movement. But his campaign was derailed after several women said he had sexually harassed them and one alleged a longterm extramarital affair. Cain denied the allegations.
Cain was the chairman of the Federal Reserve Bank of Kansas City, Omaha Branch, from 1989 to 1991.