Stephen Moore’s proposed nomination to the Federal Reserve Board of Governors is collapsing. At least four Republican senators have voiced serious concerns about Moore, and on Tuesday, Sen. Joni Ernst (R-Iowa) told reporters she doesn’t think Moore has the 50 votes needed for confirmation.
This is good news. Moore is a professional right-wing political operative who sometimes dresses up like an economist for TV appearances. He knows how to spout talking points about tariffs and taxes, but that’s about the extent of his economic knowledge. He wrongly predicted hyperinflation in 2009 (and 2010!), advised Kansas Gov. Sam Brownback (R) on a tax cut agenda that ravaged the state’s economy, and was once banned from the editorial pages of the Kansas City Star for sheer incompetence and dishonesty.
After President Donald Trump announced his plan to nominate Moore last month, some of the terrible stuff Moore wrote as a conservative columnist began drawing more widespread scrutiny. He thinks individual states should be allowed to secede from the union. He doesn’t think women should be allowed to work in sports arenas (sports are for men!). He rambles off on weird homophobic tangents.
“The gay rights movement is relentless, they are not going to stop here,” Moore told radio host Larry Kudlow after the Supreme Court legalized same-sex marriage. “They are going to at some point you know arrest priests for not agreeing to marry gay couples. ... The gay rights movement which is so in your face right now has gone too far.”
But Moore’s nomination is not falling apart because he is dumb, or because he is constantly wrong, or because his ideas about gender and economics are stuck in the 19th century ― though all of these do appear to be true. By those criteria, Kudlow would never have been confirmed as director of Trump’s National Economic Council.
No, Moore’s nomination is crumbling because the superrich are divided about his candidacy. And when the superrich can’t reach a consensus in Republican Party affairs, other factors can become politically relevant.
On the far right, anti-government purity calls for opposition to the conventional monetary policy operations of modern central banking. Economic outcomes should be determined by free markets, not government bureaucrats, the thinking goes. Therefore the Fed’s efforts to manage inflation, deflation and the international value of the dollar are crimes against freedom. The solution is a gold standard ― tying the value of the dollar to a certain amount of gold, thus restraining the government’s capacity to meddle. This is what former Rep. Ron Paul (R-Texas) was talking about when he called to “end the Fed.”
As a conservative commentator, Moore repeatedly voiced support for the gold standard, and even talked it up on the campaign trail with Trump in 2016. But there’s a reason no country has used the gold standard for decades: the Great Depression. By limiting governments’ ability to respond to economic shocks like bank failures and stock market crashes, the gold standard fueled a deflation around the world. This deflation, in turn, crushed corporate profits and sparked horrific levels of unemployment. (The classic account is University of California, Berkeley economist Barry Eichengreen’s “Golden Fetters.”)
Some Republican megadonors, including billionaire hedge fund magnates Robert and Rebekah Mercer, love the gold standard. It’s a question of freedom. But for other megadonors who want to keep making money from roaring stock markets and an economy that is not persistently mired in monetary muck, the gold standard is a dangerous threat to profits and stability. Jim Pethokoukis of the conservative American Enterprise Institute voices this perspective when he refers to talk of returning to gold as “crankery.”
So a great deal of Wall Street is rightly worried that Moore’s ultraconservatism would end up actually hurting the interests of the superrich.
It may be the case that Sen. Susan Collins (R-Maine) was being sincere when she told Politico that Moore’s “troubling writings about women and our role in society” were a “concern” for her. But donor interests have a way of making Collins and other Republicans more comfortable with nominees who don’t share their views. Collins still insists that Supreme Court Justice Brett Kavanaugh is going to defend Roe v. Wade, all evidence to the contrary.
Since Republican megadonors don’t agree about Stephen Moore and monetary policy, Republican senators don’t agree either, and Moore has given them plenty of material to cite when justifying their opposition. They might even believe some of it.