September 17, 2019

An Inconvenient Truth About Money

“President Trump’s next Federal Reserve pick could pose an existential problem for the central bank.

Judy Shelton, a former economic advisor to Trump, has not been officially nominated. But her opinions are already making waves. She wants to return to some sort of a gold standard. And in a recent interview, Shelton described the Fed’s power to set interest rates as a kind of Soviet-style central planning: “How can a dozen, slightly less than a dozen, people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate?” she asked, “We might as well resurrect Gosplan,” referring to the agency of the Soviet government that ran its economy.

That’s all brought Shelton plenty of criticism. “She falls well below [Herman] Cain or [Stephen] Moore as a potential Federal Reserve governor,” said Lawrence Summers, a prominent economist and former Obama advisor. Herman Cain and Stephen Moore were Trump’s two previous potential picks, who so horrified the mainstream they never even got nominated. “Hers would be a dangerous appointment,” Summers continued.”

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