Republican senators may have good reason to oppose former presidential candidate Herman Cain for a seat on the Federal Reserve's board of governors, but a supposed lack of qualifications is not one of them. 'they. Indeed, Cain's employment history should make it a welcome addition to the Fed.
Some Republicans may oppose Cain because of allegations of extramarital acts or sexual harassment. This column sets them aside, not with regard to his aptitude for appointment, but not for the narrow question of professional qualifications. Similarly, when Senator Mitt Romney, Utah, says that Cain is a too partisan character rather than an independent analyst, his argument may be valid – but, again, this is not the question I am discussing now.
The question is whether a person without a degree in economics or without experience in the financial sector, such as Cain, has good experience for the Fed. The ordinary answer could be no, but not this time. As President and CEO of Godfather's Pizza, Cain was for many years director of the Federal Reserve branch in Kansas City, Omaha, where he was president and then president of the leading federal bank in Kansas City . This sentence encompasses three distinct roles.
The "directors" of the Federal Reserve are local business leaders who provide data and anecdotal judgment that help Fed policymakers understand what is happening in the "real economy". They play a valuable role, but do not deserve to be appointed to the National Federal Reserve.
But being president of a regional branch board is obviously a more important role. Not only as a consultant, but as an aggregator of advice, the president helps to define the policy of this branch.
Then, being president of one of the 12 regional branches of the Fed is another big step forward. As financial writer Jim Bianco wrote for Bloomberg Opinion: "The Fed's regional banks have large numbers of economists and researchers. Presidents mobilize these resources to support independent thinking and independent policy approaches. In addition, the 12 regional presidents attend the eight annual meetings of the Federal Open Market Committee, the group that carries out the most public work of the Federal Reserve Board, namely setting the "interest rate" of the Federal Reserve. "discount" and the conduct of the Fed's open market operations.
When the headlines say that the Federal Reserve has eased or tightened its monetary policy, these are the decisions of the Federal Open Market Committee he is talking about. Someone like Cain, who has spent years in the Fed's entire system and has been involved in policy-making meetings, is obviously well aware of the relevant issues at stake.
In addition, the 12 regional bank presidents serve four times a year as voting members of the committee. Cain's tenure in 1995-96 coincided with Kansas City voting member status.
In short, though it was confirmed by the US Federal Reserve, Cain would play largely a role that he had already played a quarter of a century ago. An old Latin adage applies: Discimus agere agendo, which means "We learn to do by practice. "If anyone has ever done a job, he obviously has the experience of doing it again.
Finally, if it is logical that most of the seven governors of the Fed are economists or bankers, the Fed could also call on at least one person with business experience in the world of retail or business. the making. After spending nearly ten years as the Fed's system director, Cain will understand how to understand the volume of information filtering into the system.
In summary, if Cain is not confirmed by the board of governors of the Federal Reserve, President Trump should find someone else with a similar profile, without the aforementioned mitigating circumstances.