Donald Trump takes fresh shot at Federal Reserve, picks fierce critic for its board

WASHINGTON – President Donald Trump fired his latest shot at the Federal Reserve on Friday, naming a TV commentator, Reagan-era economist and fierce central bank critic to one of the most important jobs dealing with the U.S. economy.

By choosing Stephen Moore for a position on the seven-member Federal Reserve board, Trump has underscored his long-standing dissatisfaction with the Fed, which he accuses of bungling the U.S. economy and acting like a "golfer who can't score."

The Fed, an independent board whose members are appointed by the president, raises interest rates to cool down a hot economy and cuts them to stimulate a sluggish one. The rates affect how much it costs to use a credit card, sign a car loan or buy a home.

Moore, an early Trump supporter who argued the president deserves a Nobel Prize in Economics, embraced Trump's tough rhetoric on the Fed. Trump's criticism was central to his economic message long before he ran for president, and he has continued those attacks on the central bank from the White House – particularly when markets slow.

"The only problem our economy has is the Fed," Trump tweeted on Christmas Eve. "They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!"

Those remarks, which came amid reports that he might fire Fed chief Jerome Powell, followed a Wall Street sell-off. The Dow Jones Industrial Average had fallen nearly 3 percent on a trading day that was shortened by the Christmas holiday. The markets later rebounded and Trump backed off his threats to shake up the board.

For anyone following Trump's career as a New York real estate magnate, the remarks were little surprise.

"The Fed continues to flood the market with US dollars," Trump tweeted in 2011, as the nation was still just beginning its recovery from the recession. "Wrong move."

Trump had also reportedly considered former pizza company executive and 2012 GOP presidential candidate Herman Cain for the Federal Reserve.

Like Trump, Moore is a colorful figure with strong opinions about how the economy should be managed that often fly in the face of more traditional views. He argued in a column last year that Trump's decision to ease Obama-era restrictions on vehicle emissions would make drivers safer because gas guzzlers tend to be larger.

When Trump faced criticism before his inauguration for calling Taiwanese President Tsai Ing-wen – a move that Chinese leaders viewed as a provocation – Moore used salty language to support the move.

"That is a country that we have backed because they believe in freedom," Moore told a radio station, according to CNN. "We oughta back our ally, and if China doesn't like it, screw 'em."

If confirmed by the Senate, Moore would fill one of two vacant seats on the seven-member board. Moore had been a CNN contributor since 2017, but the network terminated that arrangement upon the news of his nomination Friday, CNN’s chief media correspondent, Brian Stetler, said on Twitter.

In December, the Fed said it had penciled in two rate hikes this year following four increases in 2018 as part of a campaign to bring rates back to more normal levels as the economy has improved since the Great Recession.

Fed officials defend the need to raise interest rates at times to prevent the economy from overheating. They point to economic instability that has occurred when credit is too cheap, such as the era of double-digit inflation in the late 1970s or the housing bubble in the mid-2000s that helped spawn the Great Recession.

Unemployment is near a 50-year low.

But amid a slowing global economy, the U.S. trade war with China and the fading effects of federal tax cuts and spending increases, markets sold off late last year on the aggressive rate-hike plans, hurting consumer and business confidence. As a result, the Fed abruptly reversed course. This week, the central bank said it plans no rate increases this year and just one in 2020, depending on the course the economy takes.

Here's are five things to know about Moore:

Fierce Fed critic

Moore argued during the Obama administration that the Fed sought to keep interest rates too low. More recently he has touted Trump's position that raising the rates have slowed economic growth. In a Wall Street Journal column published last week, Moore wrote that the Fed's "goal should be to avoid excessively loose or tight money by seeking stable commodity prices."

In December, Moore called the central bank a “swamp” and said Trump should consider firing Powell because, in Moore’s view, the Fed chairman is “wrecking the economy.”

Founded Club for Growth

Moore, a longtime advocate for a flat tax, created the conservative group Club for Growth in 1999. The group helps elect conservative members of Congress and has supported lawmakers such as Rep. Jim Jordan, R-Ohio, and Sen. Marco Rubio, R-Fla. Moore left the group in 2004 and went to work for the Wall Street Journal as a senior economics writer for its editorial board.

Trump's tax plan

Working with Larry Kudlow, director of the White House National Economic Council, Moore was an architect of the tax overhaul Congress approved at the end of 2017. Trump often touts the measure as a top legislative achievement as he speaks to supporters on the campaign trail. The law significantly increased the standard deduction, which has made it more advantageous for many Americans to skip itemizing deductions.

Taxes vs. debt

Moore co-authored a 2018 book "Trumponomics" alongside Arthur Laffer, another conservative economist who was a member of President Ronald Reagan's Economic Policy Advisory Board. Laffer became known as the "father of supply-side economics," for pressing the idea that lowering federal taxes would spur economic growth.

Government agencies 'irrelevant'

After the historic, 35-day government shutdown ended in January, Moore said the episode demonstrated how the U.S. could get along just fine without much of the federal government. In a National Review column titled "the Real Lesson of the Shutdown," Moore wrote that "the partial shutdown, with agencies such as the Transportation, Agriculture, and State Departments, as well as other independent agencies, closed for business, demonstrated how irrelevant so much of our $4 trillion government is to the everyday lives of Americans."

This article originally appeared on USA TODAY: Donald Trump takes fresh shot at Federal Reserve, picks fierce critic for its board