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Herman Cain and "The Fed"

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Friday, May 27, 2011
Herman Cain and the Fed

Herman Cain and the Fed
By Joseph Lawler on 5.27.11 @ 12:45PM
Joshua Green at the Atlantic takes note of an interesting situation: Herman Cain, currently undertaking a populist and Tea Party-based campaign for the presidency, is a former Kansas City Federal Reserve chairman.
There are elements of the Tea Party, especially those influenced by Ron Paul, who are against the Fed in general. And the Tea Party has led the wider trend in Republican thought against loose monetary policy. For Cain to have been a member of the Fed and defend it some cases is an obstacle in his attempt to present himself as the Tea Party favorite.

Cain was appointed as a Class C director of the Kansas City Fed board in 1992. In that capacity, he provided advice to the president of the KC Fed (the conservative Thomas Hoenig) about conditions for private, non-bank businesses. According to Green, that particular bank was very conservative at the time, and so was Cain:
I had better luck with Drue Jennings, a Kansas City lawyer who served with Cain on the Federal Reserve Board and succeeded him as chairman. Jennings is quite fond of his old colleague. "Herman was a pleasure to work with," he told me. "His views were pretty consistent with those of the Fed at the time. Alan Greenspan was, of course, chairman and Herman was in lock stop with the policies of the Fed." Jennings added that this was not atypical; he could not recall a single dissent from anyone during this three-year term. Still, he said, Cain was no pushover. "He's a guy you'll never find in a gray area," Jennings said. "He's intelligent, well spoken, and very assertive to the point of almost being aggressive. He's anything but shy."
Jennings said Cain fit the profile of the Kansas City Fed. "Inflation was always the big bugaboo," he told me, "and when it comes to monetary policy, he was an inflation hawk. I'll tell you, that's the most conservative bunch of guys I've ever met."
At a recent Spectator press event I had the opportunity to ask Cain about his views on the Federal Reserve. His view is that the Fed's current dual mandate is overbroad, and that it should not be tasked with promoting maximum employment. He argued that the only role of the Fed should be to stabilize the price level, and suggested that as president he would try to end the dual mandate.
While keeping inflation expectations stable doesn't necessarily entail a specific Fed stance (for instance, during a downturn it would be necessary for the Fed to engage in very loose monetary policy to avoid deflation), Cain made it clear that he favored tighter money for the current economy. In other venues, he's expressed approval of some kind of gold standard or other asset backing for U.S. currency. And he's not impressed by current Fed chairman Ben Bernanke's management of the crisis and weak recovery -- he said flatly that he wouldn't reappoint Bernanke in 2014 if he were president. Cain declined to suggest who he would replace Bernanke with, however. Although he had a few candidates in mind, he chuckled that he wouldn't want to invade their privacy just yet.

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Comment by Debrajoe Smith-Beatty on May 27, 2011 at 11:24pm: Obama may not be the democratic candidate. Some states will not put his name on the ballot in 2012, because his father was a British subject, therefore, Obama is not eligable to run.

Comment by Ms Independent on May 27, 2011 at 11:24pm: ok.. so i do have a couple of questions...

one - I have looked through all the posts - I am not seeing a racist or post that makes me think bigot - could someone please point that out.

two - we are not running out of time. we need to stop saying that. when we panic we do not vet properly... the right / wrong decision is in our hands - we know that politicians lie - period does not matter if they have an R or a D or an I - they lie. they need to go on the record answering SPECIFIC questions - not some gradiose answer about immigration. I am undecided at this point and quite ok with that - my kids and grandkids future is at stake - my livelihood is at stake - my freedoms are at stake

three could someone please send a link where Cain said he would appoint muslims in his cabinet

thank you - I am grateful for the banter, the education and the forum!

Comment by Mary Allen on May 27, 2011 at 11:23pm: I do not know who will get the nomination for the Republican ticket but even if I don't like who it will be; I will vote for them. We all need to stick together to defeat O. This is imperative. Anyone will be better than that un-American in our White House at the present time.

Comment by Michael H. Howell on May 27, 2011 at 11:22pm: I am to the point that I don't care who the Conservatives put up I am going to send my vote for anyone I think can defeat Obama

Comment by Conch on May 27, 2011 at 11:21pm: I was strongly FOR Cain, until I read his statement that he would put a muslim in his cabinet and not apologize.... I find this very distrubing... I hope he can clarify this statement in the near furture.

Comment by Dee on May 27, 2011 at 11:21pm: If you would support a 3rd party candidate over the Conservative choice.....this is clearly not the place for you. We do not in any way encourage a 3rd party bid that would hand Obama a 2nd term because of a split conservative vote.

There is NO PERFECT CANDIDATE.....since all candidates are human and flawed.....

Again, if you are looking at a 3rd party, your goals are not ours.

Comment by TJZ on May 27, 2011 at 11:18pm: No to Obama if Cain were the nominee of the party, but more candidates are on the horizon.

Comment by Karl E. Peters on May 27, 2011 at 11:16pm: I am a fan of NumbersUSA and support them as I can, but their criteria are many and there are quite a few that a newly announced candidate would not have been gauged yet. Listen to his announcement speech, however, and he was VERY clear about enforcing current law, state's rights to enforce their own law and NO NEW path to citizenship for illegal aliens, that the path we have has worked for millions and no new one is required. That is a pretty clear start for an announcement speech. Keep listening. Listen to the others, too and tell me who is MORE clear on illegal aliens, I haven't heard them yet...

Director Comment by Darla Dawald, National Director on May 27, 2011 at 11:16pm: I am so surprised at some of your answers. Bigoted comments are not becoming on conservatives... Have some of you forgotten your manners? I want you to rethink your comments and if you cannot say something decent with out the bigotry or racism then you do not belong on this network. Furthermore, you better have FACT not opinion to back it up.

Comment by Debrajoe Smith-Beatty on May 27, 2011 at 11:15pm: If Herman Cain is the candidate, I will write in a name. I will not vote for Herman Cain.