by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The Washington policy guild often operates like a medieval guild in its effort to screen out “ignorant” heretics who hold disruptive ideas. Just look at their hysterical overreaction to President Trump’s appointment of economist Stephen Moore to the Federal Reserve Board, whose primary role is setting the level of interest rates in the economy.
Moore has been a senior economist on the Congressional Joint Economic Committee, served as an economist at the Heritage Foundation, and been a member of the editorial board of the Wall Street Journal, where I got to know him well. He is known for his sunny disposition and ability to work with others.
But to Beltway guild members, he is a member of the hated school of supply-side economics, which holds that economic incentives matter a great deal. Supply-siders assert that tax cuts and sound fiscal policy can help boost the U.S. economy out of the economic doldrums it fell into after the recession of 2008. The supply-side tax cuts of the Reagan administration fueled the booming economy of the 1980s. Trump’s tax cuts have helped ignite a surge in jobs and wages accompanied by a stable, strong dollar.
But to Washington’s policy guild, this record is all the more reason to oppose and belittle Moore. Because Moore has been an architect of President Trump’s policies and authored a book called “Trumponomics,” he can’t be expected to maintain the independence of the Fed, his critics say. He has backed Trump’s 2016 campaign call for the establishment of a monetary commission to look under the Fed’s hood. Yet another sin is that he has called for the Fed to follow a “price rule” that tracks oil and other commodities in setting interest rates.