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Trump nominated Marvin Goodfriend (pictured above) to serve on the Federal Reserve's board of governors. Goodfriend is a economics professor at Carnegie Mellon and a known conservative. This shouldn't come as a surprise following Trump's selection of Jerome H. Powell, a moderate Republican. Goodfriend has long critiqued the work of the Federal Reserve, claiming that its work is counter intuitive.
I think that Goodfriend's placement may bring a positive change in economic policy, as he can bring a level of economic expertise that the other board members couldn't in the past. He certainly seems to have already thought of ways that the Federal Reserve can improve. However, seeing that Trump is leaning towards creating a board of conservatives, I don't anticipate a broad enough spectrum of policy opinions.
What do you think? Do you think that filling the board with only conservatives is a bad idea? How do you think Goodfriend will effect change in economic policy?
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Before we start the debate, I should probably explain what the Federal Reserve actually does. The Federal Reserve is the central banking system of the United States, which makes it the spiritual successor of Hamilton's Bank of the United States. Primarily, the Federal Reserves' three main objectives are to maximize employment, stabilize prices, and moderate long-term interest rates. Another responsibility they maintain is to maintain, and control if need be, the value of the US dollar. However, despite the fact that it has an enormous amount of sway over the world economy, and despite the fact that the President appoints a board of governors, the Federal Reserve considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government...it does not receive funding appropriated by the Congress."
That's scary. They control the dollar, and yet they answer to no one. This even scares libertarians like me. I personally feel that the value of the US dollar should either be set by the government through the United States Treasury, or independently valued by the free market. Even our lord and savior, Ron Paul, wrote a book entitled End the Fed. You can guess what the book is about.
All in all, I'm pretty optimistic about fiscal conservatives on the Board of Governors. Conservatives (especially an economics professor at Carnegie Mellon!) obviously know what they're doing. This won't be the activist, stimulus package-friendly Fed that bailed out the institutions that let the 2008 financial crisis happen. This will be a Fed that, in Goodfriend's words, will "focus on controlling inflation using a minimalist set of tools." A bunch of conservatives undoing Yellen's economic activism? I have a good feeling about this.
I think it is scary for one group of people to control our finances. Yes, the people that were appointed most likely know what they are doing (the econ professor) however, remember that Trump is a business man. I feel like he only has the interests of the rich in mind, so I think that everyone needs to stay on top of this story to make sure that the middle class does not get slided.
Having an entire group of conservatives control the federal reserve is not necessarily a good thing. Since they are mainly composed of conservatives now, their broad scope of opinion is limited. At least the people who are elected to control the federal finances have a well-established foundation. They are experts in this field, and that should enough. The only problem is that their decisions will most definitely side with conservatives, which will make many liberals upset with certain decisions.
I don't really have a problem with the conservatives having control of the Federal Reserve. Republicans have control of both Congress and the presidency. The voters have spoken, and now the Republicans have their chance to govern the nation. It is only fair that they are allowed to control the Federal Reserve. The people serving on the board have the know-how and experience to make the changes they feel are necessary. If they don't work well, then the public will have something to say about it in 2018, 2020, and beyond. Obviously the minority party should still keep an eye on what the other party is doing, and serve a voice for the minority, but that doesn't have to mean vetoing every action the Republicans try to take. (Even if the Republicans don't have the same respect--> Supreme Court nominations anyone?)I think it is obvious that an economics professor at a prestigious university is qualified to serve on the Federal Reserve Board, which is much better than what Trump has given us in the past.
I think that trump´s choice is a fine one. Clearly Goodfriend knows what he is doing and he is obviously not trying to destroy the country, so I believe he wont do any harm. I also think that since both liberals and conservatives have the same goal of not going through a greater depression, the difference between liberals and conservatives on the federal reserve is minimal and does not make a huge difference.
Goodfriend appears to be a good nominee. Considering his credentials and the fact that he is an economics professor at Carnegie Mellon, we would hope he knows his field very well. He is well acquainted with economics and has done lots of research. Of course, we cannot assume that a professor at a prestigious college would be perfect or correct all of the time, but he is highly qualified for this position. I do not believe filling the board of conservatives is going to be a terrible idea. However, I do see the point that there is the issue of representation for the ideologies of the other side of spectrum. They will just have to make their voice heard once they do something disagreeable. If other ideologies are not represented in the Federal Reserve it does not mean they are muted. There should still be ways for them to be heard and influence policy.
The danger of choosing all conservatives to fill the Presidential Cabinet is that it will be difficult to tap into liberal opinions on issues. Therefore, President Trump will likely have a harder time forming bipartisan compromises that can pass through congressional gridlock. This will particularly become a more pressing issue if the Senate and House loses majorities in the 2018 Congressional Elections. In comparison, when President Obama first came to office, he selected a Republican, Emmanuel, as his top aide. It signified that President Obama was out to bring bipartisan agreement, and was not willing to be one-sided in his approach to achieving his goals. If anything, Trump would show himself as a stronger leader if he placed a few Democrats in his cabinet. Doing so would show him to be a fair-minded person...but then again, that's ne who he actually is in the first place, correct?
Goodfriend seems to have the credentials and expertise needed to serve on the Federal Reserve’s board of governors; as the article states, Goodfriend had previously worked for the Federal Reserve Bank of Richmond. Given that Goodfriend is critical of the Federal Reserve’s previous actions -- for instance, surrounding the 2008 financial crisis -- his addition to the board of governors will likely bring some change to its functioning. Whether this change will be positive or negative is more of a partisan issue. Like Frank stated, filling the board with only conservatives would limit the spectrum of viewpoints represented and may make bipartisan compromises more difficult, the latter of which is crucial to policymaking in Congress. However, I find it unlikely that Trump would fill the board any other way, given precedent.
I am relieved to see that Trump has chosen a well-educated and clearly qualified man to take this position. Although, I do see trouble in having a board composed of only conservatives. There will be a lack of awareness of minority groups and other national issues, it will in no way be representative of the population, and they are likely to make decisions that will lean towards benefitting conservatives, and lastly will leave no room for Liberals to have a voice.
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