You might remember Herman Cain from such fiascos as the 2012 Republican Presidential Primary. During his fleeting stint as that race’s front-runner, the pizza magnate gained notoriety for:
• Promoting cigarettes in his campaign commercials.
• Popularizing the “9-9-9 tax plan,” a monstrously regressive scheme that would have set national income, state, and corporate tax rates at the flat, arbitrary level of 9 percent.
• Saying, of Barack Obama’s intervention in Libya, that he disagreed with the way the president “handled it for the following reason — nope, that’s a different one.”
• Noting, at a Republican debate, that “a poet once said, ‘Life can be a challenge, life can seem impossible, but it’s never easy when there’s so much on the line’” — lyrics from Donna Summer’s “The Power of One,” an original song she contributed to the soundtrack of Pokémon: The Movie 2000.
• Arguing that it is unfair to expect him to know the name of the president of “Ubeki-beki-beki-beki-stan-stan,” because “How’s that going to create one job?’”
• Responding to a question about his alleged sexual harassment of two female employees during his tenure at the National Restaurant Association thusly:
New York Times reporter Jonathan Martin: Have you ever been accused, sir, in your life of harassment by a woman?
Presidential candidate Herman Cain: Have you ever been accused of sexual harassment?
That last bit more or less ended Cain’s quest for the presidency. But it didn’t necessarily end his bid for high government office: According to Bloomberg News, Donald Trump just might appoint Cain to the Federal Reserve Board of Governors:
Cain, 73, was in the White House on Wednesday, according to people familiar with the matter. Two seats on the Fed board are vacant, but nominating Cain raises the prospect of a Senate confirmation hearing focused on the sexual harassment and infidelity accusations that ended his presidential campaign.
The people declined to be identified discussing the matter because Trump hasn’t made a decision. Cain was also under consideration for other possible top government posts.
On first glance, nominating a pizza magnate with a history of sexual harassment — who once assured voters that he was “not a reader” — to one of the most powerful technocratic posts in the U.S. government might seem crazy. But upon reflection, it’s actually totally nuts.
Now, it’s true that Cain does actually have some experience in the Federal Reserve system. For a brief period in the 1990s, Cain chaired the board of directors at the central bank’s Kansas City branch. But as Dave Weigel explained back in 2011, the gig Cain held, and the job of an actual Federal Reserve governor, are two very different things:
There are 12 regional Federal Reserve Banks. Each has a nine-member board of directors, composed of three commercial bankers (Class A, in Fed jargon), three people from nonbanking sectors of the economy (Class B), and three captains of industry from the region (Class C). Cain was Class C. In 1992, he joined the board of directors at the Kansas City branch of the Federal Reserve. In 1994, he was chosen to chair the board.
What does the board of directors actually do? Every month that Cain was there, board members would meet, talk through the economic developments and data in their areas, and offer some advice. Fed economists would listen. The research would be taken up to Kansas City Fed President Tom Hoenig, who could use it however he deigned to use it.* “They’re a source of economic information for the bank,” explains Bill Medley, public information director for the Kansas City Fed. What’s their single biggest contribution? They recommend the discount rate, or what the Fed charges for loans. “But that,” says Medley, “has to be approved by the board of governors.”
That means that Cain’s role was chiefly as a charismatic guy who ran meetings well and corralled good advice. He was not an economist. In This Is Herman Cain!, the candidate recalls the Fed job as a Frank Capra-esque affair; a lunch with the branch manager turned into a pitch for an unexpected job.
“I thought: Wow, the Federal Reserve wants me to serve on one of its boards!” writes Cain. “That was something I had never really thought about, but it seemed pretty prestigious.” It was a learning experience, too. “Looking back on my time at the Federal Reserve, it gave me the opportunity to be exposed to macroeconomics.”
Ultimately, Cain’s experience at the Kansas City fed doesn’t make him a more logical candidate for the Board of Governors, but rather, a more absurd one. Nothing in the businessman’s decades-old experience at that institution should allay anyone’s concerns about the sophistication of his economic thinking. But the views on monetary policy that Cain did develop during that time run directly counter to Donald Trump’s own preferences: In Kansas City, Cain was known as an inflation hawk who was constantly lobbying for higher interest rates. Even during his presidential run in 2011 — when the unemployment rate sat near 9 percent, and inflation was virtually nonexistent — Cain argued that the central bank must raise interest rates to protect the value of the currency, and leave job creation to the job creators.
Trump, by contrast, is so viscerally opposed to interest-rate hikes — even in our present period of (relatively) low unemployment — that he has publicly scolded Fed chair Jerome Powell for lifting rates (in defiance of norms against threatening the central banks supposed “political independence), and even briefly considered firing his own appointee for being too concerned about inflation.
It’s possible that Cain’s views on monetary policy, like those of so many other Republicans, would be different under a GOP President than they were under a Democratic one. But surely, Trump can find a monetary dove who doesn’t have a history of sexually harassing underlings, bragging about his ignorance, and advocating for hawkish monetary policies.
There’s just no reason for Lord Cain to have a second coming.