Stephen Moore is a Terrible Choice for the Fed

Only the best people, dontcha know.

Via the NYT:  Trump Taps Fed Critic Stephen Moore for Board Seat.

President Trump said on Friday that he had offered a position on the Federal Reserve’s Board of Governors to Stephen Moore, a conservative economic adviser who has become an outspoken critic of the Fed’s interest rate policy.

Mr. Moore has blamed the Fed’s rate increases over the past year for slowing economic growth and recently began calling on the central bank to begin cutting rates. An economist at the conservative Heritage Foundation, Mr. Moore helped draft Mr. Trump’s tax proposals in the 2016 campaign and has served as an informal adviser ever since.


Mr. Moore, who has a master’s degree in economics, was the founder of the conservative Club for Growth and a past member of The Wall Street Journal’s editorial board.

The problem this this? Moore is a hack.  As Jonathan Chait bluntly put it:  Trump Nominates Famous Idiot Stephen Moore to Federal Reserve Board.

I first started writing about Moore in 1997. Four years before, President Clinton had raised the top tax rate to 39.6 percent, and supply-siders had insisted this would without question cause tax revenues to drop. This prediction was a necessary corollary of supply-side economic theory, which holds that tax revenue moves in the opposite direction of the top tax rate. The prediction was spectacularly wrong — revenue not only rose, it rose much, much faster than even the most optimistic advocates of Clinton’s plan had predicted.


In the years since, I have continued following his career, and he has shown no intellectual growth at all. He is capable of writing entire columns that contain no true facts at all. He made so many factual errors he achieved the rare feat of being banned from the pages of a Midwestern newspaper. He has sold his policy elixir to state governments which have promptly experienced massive fiscal crises as a direct result of listening to him. He believes what he calls “the heroes of the economy: the entrepreneur, the risk-taker, the one who innovates and creates the things we want to buy” should be lionized, and that the idea that a recession might be caused by anything other than excessively high rates on these heroes defies “common sense.” He was pulled into Trump’s orbit during the 2016 campaign and co-wrote a ludicrous hagiography of Trump and his agenda. By all appearances, Moore opposes mainstream fiscal theories because he simply doesn’t understand them.

In 2010, Moore was still predicting hyperinflation and urging his audience to buy gold. Even by 2015, Moore was still urging the Federal Reserve to raise interest rates. ”We’ve had seven years of zero interest rates and the lousiest recovery in 75 years,” he said, “So that’s one reason a lot of us feel like it’s time to get off the zero interest rate policy.”

That last bit is amusing and speaks to the hackery, as now he wants the Fed to cut rates.

A more polite, but no less worrying, tone is set by The Economist:  Why Stephen Moore is unfit for the Fed:

Mr Moore is certainly not alone in thinking the Fed erred by raising interest rates last year. The Fed itself has become more doveish since then. Last December the board reckoned 2019 would see two interest rate rises. On March 20th they revised that down to none. A bigger concern is the winding path Mr Moore has taken to arrive at his conclusions. It raises serious doubts about his judgment and ability to provide politically neutral advice.

During the Obama administration he railed at the Fed for keeping interest rates too low, and also urged it to shrink the size of its balance sheet. But then he became an advisor to the Trump administration’s election campaign (he recently published a book entitled, “Trumponomics” with Arthur Laffer, an economist). And suddenly he turned from monetary policy hawk to dove. It appears his instincts are informed less by sound principles of economic policy than by whatever he thinks most likely to please Mr Trump.

Mr Moore’s nomination therefore appears to signal a worrying turn in Mr Trump’s approach to the Fed. His previous nominees to its ranks have all been mainstream picks. His last nominee to the Board, Nellie Liang, an economist at the Brookings Institution, was strongly endorsed by the Fed’s chairman, Jerome Powell. By contrast, Mr Moore holds some views that amount to a rejection of mainstream macroeconomics.

(Emphasis mine).

Or, if one prefers, BloombergStephen Moore Is the Wrong Person for the Fed Board.

Moore has been a think tank researcher and pundit for most of his career, having worked at the conservative Heritage Foundation and the libertarian Cato Institute. He served as chief economist for the former, though he is not a trained academic economist (he has a Master’s in economics from George Mason University). He has co-founded multiple right-leaning lobbying groups, such as the Club for Growth and the Free Enterprise Fund, as well as serving on the Wall Street Journal’s editorial board. At every stage, he has advocated tirelessly for conservative policies — tax cuts, lower government spending and deregulation.

Moore has made a career of what law professor James Kwak calls “economism” — a mix of simplistic economic models, convenient assumptions and rhetoric designed to make it appear as if economics provides scientific support for conservative policy priorities. There are many examples where wishful thinking appears to have distorted his assessments of economic conditions.

In 2015, for example, he claimed that tax cuts in North Carolina had caused a decline in the unemployment rate. But as Paul Krugman quickly pointed out, the reduction in unemployment was no greater than in the country as a whole, and was in large part driven by workers dropping out the labor force.

In 2012, Moore claimed that federal workers were paid 50 percent more than comparable private-sector workers, because their wages are 2 percent higher and their benefits are 48 percent higher. This, of course, is a math error — the pay difference is not the sum of the differences in wages and benefits, but their weighted average, and is thus much smaller than Moore argued.

As a commentator, Moore has regularly made dubious economic claims, such as the assertion that 2015 saw the “strongest economy in 20 years” (the late 1990s would beg to differ) or that the deficit was $1 trillion in 2017 (it was slightly more than half of that). When writing about the effects of state-level tax cuts on employment in 2014, Moore overstated recent job gains in low-tax states and understated the gains in high-tax states. He has also made a number of unfounded claims regarding the outcomes of the Affordable Care Act.

One of Moore’s biggest departures from the economic consensus is his belief that tax cuts mostly or completely pay for themselves, through increased economic growth. This belief, sometimes cited by advocates of supply-side economics, is shared by almost no academic economists…

It goes on and on and on.

He is not an economist, he is an ideologue and a pundit.  He is not fit for the position to which Trump wishes to nominate him.  But, of course, Trump’s approach to complex issues is far more driven by pundits than experts.

Indeed, CNBC reports  Here’s how Trump decided to nominate Stephen Moore to the Fed – and what it means for Jerome Powell

President Donald Trump decided to choose Federal Reserve skeptic Stephen Moore for the central bank’s board after a discussion about a column in which Moore argued the Fed is stifling economic growth, a senior administration official told CNBC on Friday.


Earlier this week, Trump spoke to National Economic Council Director Larry Kudlow. The president had seen a column in The Wall Street Journal, co-written by Moore, with the headline: “The Fed Is a Threat to Growth.” In it, Moore argued that the “last major obstacle to staying on this path [of economic growth] is the deflationary monetary policy of the Federal Reserve.”

Trump asked his top economic advisor whether he had seen the column. Kudlow replied that he had and “liked it a lot.”

“Why isn’t [Moore] the Fed chairman?” Trump asked rhetorically.

After Kudlow answered that the Fed board had two openings, the president asked his advisor to talk to Moore about one of the posts. Kudlow asked whether Moore was interested, and he said he was. Trump offered Moore the Fed board job, which will not become official until he goes through a vetting process.

Sounds like an excellent, dare I say tremendous, process for selecting a person for such an important position.

If you need more, Vox has an explainer:  Stephen Moore, the Trump loyalist nominated to the Fed, explained.

FILED UNDER: Donald Trump, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is Professor of Political Science and Dean of the College of Arts and Sciences at Troy University. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter


  1. CSK says:

    Well, really, why all the shock and indignation? Everyone knows this is how you go about hiring the best people.

  2. mattbernius says:

    One would hope that this will turn into a Harriett Meyers situation (thought based on what I have read, Ms Meyers was more qualified for the position she was offered).

    Let’s not forget that time Senate Republicans blocked Peter Diamond, Obama’s nominee for the Fed due to lack of qualifications (and he had a Nobel prize in economics). Hopeful they are as consistent with their guy in office.

  3. Teve says:

    There was a newspaper, I forget which one, that published an article by him that was so bad, so full of errors, that they publicly stated they would never publish him again.

  4. gVOR08 says:

    Every Prez wants loose money going into an election. Moore will push for loose money, whatever the consequences. And the inflation won’t show up til later. Sounds like a plan. A Trump plan, so it probably won’t work.

  5. Teve says:

    @Steven L. Taylor: thanks! I didn’t know how to even begin looking for that.

  6. mattbernius says:

    Here’s another critique of Moore to add to the list:

    Memo to Senate: Just Say No

    A couple of weeks ago, I gave a talk at the Federal Reserve Bank of Dallas. I said that, although I am not a fan of President Trump, I have to give him credit for making good appointments to the Fed. I was thinking about people like Jay Powell, Rich Clarida, and Randy Quarles.

    Then today the president nominates Stephen Moore to be a Fed governor. Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job. If you doubt it, read his latest book Trumponomics (or my review of it).

    It is time for Senators to do their job. Mr. Moore should not be confirmed.

    Greg Mankiw , Robert M. Beren Professor of Economics at Harvard University

  7. Kit says:

    Trump is hoping to juice the economy for the election. It’s that simple. A roaring economy means a tight job market and so rising wages. It also means inflation, which means that real debts get eaten away. People with money don’t like this. Might be interesting to see how that plays out.

    Maybe we will start hearing about investment in infrastructure. Trump has a lot of levers he could pull that would put a smile on voters’s faces.

  8. wr says:

    If you cut the last three words off the headline I would be even more accurate…

  9. Hal_10000 says:


    Trump is hoping to juice the economy for the election

    I think that implies a lot more thought going into it. He’s noticed the economy, while good, isn’t what he promised. So he blames the Fed. Because clearly it can’t be his trade wars. Moore is telling him what he wants to hear and Trump LOVES people who tell him what he want to hear.

    As for Moore, he’s been a fiasco. The Laffer Curve is real but the peak of the Laffer Curve appears to be much higher than the point of taxation we are at right now. By claiming all tax cuts pay for themselves, he’s discredited any real debate about taxation levels.

  10. grumpy realist says:

    @Hal_10000: It’s people like Moore that make me want to institute a policy of forcing such idiots to defend their theories in public in front of a board of noted experts from whatever field they’re claiming proficiency in.

    With, of course, the proviso that if they can’t hack the thesis defence, they have to remain silent, never get interviewed and remain unpublished for the next five years.

  11. DrDaveT says:

    A non-rhetorical question: how much damage can one Fed governor do? Can the Chair and the rest of the Board just ignore him?

    Also, who has the authority to remove someone from the Fed?

  12. @DrDaveT: The good news is that one member probably can’t do too much damage.

    As far as removal is concerned, IIRC impeachment is the pathway, but I may not be recalling correctly.

  13. An Interested Party says:

    Stephen Moore is a Terrible Choice for the Fed

    Hardly surprising…Donald Trump is a terrible choice for president, but he ended up with the job anyway…

  14. MarkedMan says:

    @Steven L. Taylor: the real nature of the conservative think tanks is best revealed by the fact that this moronic clown, this spewer of whatever nonsense he feels his paymasters will best appreciate, was the “premier” think tank’s TOP economist.

  15. Teve says:

    Andre Kenji de Sousa just showed up in my Twitter feed, getting replied to by Josh Barro.

    I was disoriented for a minute. My worlds are colliding.

  16. de stijl says:

    Trump, big business genius that he is, only hires the best people. My brain hurts.

    The reason that people step away and back off from politics is because it’s psychologically painful. You have to pick an ethos and a mandate and then live with the trade-offs. It makes you make hard choices.

  17. de stijl says:

    Remember when Kramer recreated the Merv Griffin Show in his basement?

    Same deal, but Trump is trying to create a simulcrum of his favorite network (Fox News, btw and lol) in his basement, while also being President Of The United States Of America.

    Yeah, our President is just channeling Kramer. And some asserted we did not choose wisely.

    I would be very pleased if Trump showed up at his next interview in a puffy shirt.

  18. Leland says:

    I’m guessing the liberals object to the President’s choice because liberals use a different method of calculating the use of tax money. With democrat liberals, there is never enough tax money and they are always clamoring for more. Obama the incompetent doubled the debt because he didn’t understand what a budget is for, and the democrats still blame Bush for it. Democrats are much too stupid to lead or guide this nation.

  19. @Leland: Via Bloomberg: U.S. Posts Largest-Ever Monthly Budget Deficit in February

    The U.S. posted its biggest monthly budget deficit on record last month, amid a 20 percent drop in corporate tax revenue and a boost in spending so far this fiscal year.

    The budget gap widened to $234 billion in February, compared with a fiscal gap of $215.2 billion a year earlier. That gap surpassed the previous monthly record of $231.7 billion set seven years ago, according to data compiled by Bloomberg.

    February’s shortfall helped push the deficit for the first five months of the government’s fiscal year to $544.2 billion, up almost 40 percent from the same period the previous year, the Treasury Department said in its monthly budget report Friday. The release was delayed a week by the government shutdown earlier this year.

    All of which is the context of a budget and tax bill passed by a Republican controlled Congress and signed by a Republican President (his primary piece of major legislation, in fact.

    So, you were saying?

  20. @Leland: And I object to Moore based on lack of qualification and a track record (links to evidence galore above) the show a person who is consistently wrong and often quite sloppy in public pronouncements.

  21. MarkedMan says:

    @Steven L. Taylor: I suspect Leland is part of the Republicans 50 Cent Army that I mentioned on another thread. It’s good that you correct the disinformation but I wouldn’t expect a reply.

  22. Teve says:


    Here’s no less than Stephen Moore arguing for “Atlas Shrugged” as the blueprint out of the financial crisis in January 2009. His nomination to the Fed must be withdrawn.
    wsj link

  23. @MarkedMan: Trust me, not expectations (or, more accurately, the only expectations I have of a reply, should it come, is that it will be a non sequitur).

  24. al Ameda says:

    Over the years I’ve seen heard and read too much of and about Moore, and I long ago concluded that he is a charlatan. He is to economic policy as medieval surgery, with leeches and bloodletting, is to modern medicine.

    His predictions? Even a broken military clock is right once a day. Moore operates at a much lower level.

    How many Republicans will decline this nomination? I put the over/under at 2.

  25. Kathy says:

    We all know Trump responds favorably to flattery. But it seems now that Dennison’s base favors more such officials or appointees who also flatter Trump. If so, we have a very bad feedback loop going on.

    It’s bad enough when qualifications are given less importance than ideology, but one can see the (misguided) sense in that. To give them less importance than ass-kissing is just plain stupid.

  26. Just nutha ignint cracker says:

    @MarkedMan: Ouchie!

  27. SC_Birdflyte says:

    @Leland: By your standard, Reagan was 50% worse than Obama. He tripled the national debt in his eight years.