Trump Considering Herman Cain for Federal Reserve Board, Sources Say
Two seats on the Fed board are vacant.
(Bloomberg) -- Herman Cain, the former pizza company executive who ran for the 2012 Republican presidential nomination, is being considered by President Donald Trump for a seat on the Federal Reserve Board.
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 asked not to be identified discussing Trump’s private deliberations. Cain was also under consideration for other unspecified senior government posts, they said.
The president’s top economic adviser, Larry Kudlow, said last week that the White House wants Fed governors “who understand that you can have strong economic growth without higher inflation.”
Cain in September co-founded a pro-Trump super PAC, America Fighting Back PAC, which features a photo of the president on its website and says: “We must protect Donald Trump and his agenda from impeachment.”
Cain had a long corporate career and is also familiar with the Federal Reserve system. From 1992 to 1996, he served as a director of the Federal Reserve Bank of Kansas City, as well as deputy chairman and then chairman. He advocated for the U.S. to return to the gold standard during his presidential campaign and as recently as December 2017 defended higher interest rates, a position that contrasts with Trump’s repeated criticisms of the Fed last year.
“The first year of the Trump Administration has not produced everything we wanted, but the overall economic performance has been triumphant, and we’re just getting started,” Cain wrote in a column published online. “That’s why interest rates are rising, and that’s why you should understand it’s very good news.”
Cain declined to comment on whether Trump is considering him for a job. He told Bloomberg News in an interview that he’s concerned the Fed was overly aggressive with interest rate increases in the last year, but didn’t respond to follow-up questions about his column defending higher rates.
“I am not as afraid of inflation as I am of deflation,” he said. “You can stop inflation faster than you can decelerate in deflation mode.”
Trump has repeatedly attacked U.S. Federal Reserve Chairman Jerome Powell for raising interest rates, and Bloomberg News reported last month that the president had even discussed firing him. One way the president can directly influence monetary policy is through nominations to the Fed board, though anyone he picks must be confirmed by the Senate.
America’s central bankers find themselves at a pivotal moment. They concluded their quarterly meeting on Wednesday with a signal that they were pausing rate hikes, and expressed more flexibility to alter their balance sheet runoff plans, which have been criticized by Trump. The policy rate was left unchanged.
At his press conference following the meeting, Powell said the American economy will grow at a “solid pace’’ this year, though he cited “cross-currents and conflicting signals’’ about the outlook as reasons for caution.
Cain, the former chief executive of Godfather’s Pizza Inc. and an ordained Baptist minister, attracted national attention when he turned a forum on health care reform into a debate with President Bill Clinton in 1994. He’s a graduate of Morehouse College and received a master’s degree from Purdue.
Cain ran for the 2012 Republican presidential nomination but dropped out in late 2011 after allegations he engaged in sexual harassment when he led the National Restaurant Association in the 1990s. An Atlanta woman said she had had an extramarital affair with Cain for more than 13 years.
He called the allegations false but said he had “made mistakes in my life.” Although his candidacy was considered a long shot, he had led in some national polls.
He built the campaign around his personality -- even trademarking the phrase “The Hermanator Experience” -- and policy proposals like his “9-9-9” tax plan. That would have replaced the U.S. tax system with flat 9 percent business and income taxes and a 9 percent national sales tax.
Kudlow said last week that the Fed board has “a couple open seats,” suggesting Trump won’t renominate economist Marvin Goodfriend. Trump’s other previous nominee, former Fed economist Nellie Liang, removed herself from consideration earlier this month.
Goodfriend didn’t appear on a list of dozens of renominations the White House submitted to the Senate earlier this month.
Cain’s syndicated radio show on Cox Media ended last year. In addition to Godfather’s, he was a top executive at the Coca-Cola Co. and Pillsbury Co.
To contact the reporter on this story: Jennifer Jacobs in Washington at jjacobs68@bloomberg.net
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu
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