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Politics

It's obvious what we don't want in a Fed nominee. Here's what we do.

Catherine Rampell on

It's pretty easy to identify what we don't want in a Federal Reserve Board member. So let's talk about what we do want.

Last week, President Trump told us that one of his announced-though-never-formally-nominated choices for Fed, Stephen Moore, had withdrawn from consideration. This came just 10 days after another Fed pick, Herman Cain, bowed out.

Both men were unfit for one of the world's most powerful economic policymaking jobs. That was obvious from their confused and often self-refuting economic commentary, not to mention personal baggage and troubling attitudes toward women.

While some saw Moore and Cain as merely the latest in Trump's pattern of selecting the worst possible people for any given job, in a key way, they were a departure from trend.

Trump's earlier Fed nominees had actually been reasonable, competent professionals. Four of the five sitting Fed governors were selected by Trump (one, Jerome H. Powell, was originally appointed to the board by President Barack Obama and then elevated to chair by Trump). All four easily sailed through Senate confirmation.

Which means the Trump administration has proven itself capable of identifying and nominating qualified Fed candidates. So, what makes a qualified Fed candidate in 2019?

 

First -- and I can't believe this is controversial -- expertise and experience.

Career-wise, good Fed candidates generally fall into one of two buckets. They're either serious economic researchers (not necessarily with a Ph.D., though it doesn't hurt) who spent their careers studying issues relevant to monetary policy or financial regulation and have been published in peer-reviewed journals. Or, alternatively, they have extensive experience as a financial market participant.

And sorry, my fellow greenroom denizens: playing an economist on TV does not count as sufficient experience.

Second, candidates should be consistent and intellectually honest in their reasoning, and transparent about their policy priorities.

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