Swift Pushback on Stephen Moore

Some private-sector economists who’ve generally supported Trump’s efforts to accelerate growth with lower taxes, less regulation and fairer trade deals were nonplussed by the selection of Moore, an official at the conservative Heritage Foundation think-tank and an economic adviser to Trump’s 2016 campaign.

The fact that Stephen Moore gets nominated and has a plausible path to confirmation but Peter Diamond didn’t is truly detestable,” said Neil Dutta, head of economics at Renaissance Macro Research. He was referring to Diamond, a Nobel Prize-winning economist whom President Barack Obama nominated to the Fed but ended up withdrawing from consideration in June 2011 in the face of Republican opposition.

“The upshot is that Stephen Moore will not have much influence if he sat around the table,” Dutta said.

While most presidential nominees keep a low public profile until they’re considered by the Senate, out of respect for the democratic process, Moore took to the airwaves hours after Trump announced his nomination two days ago. In a Bloomberg Television interview he called the Fed’s December rate increase, which was approved in a unanimous vote, “a very substantial mistake.”

.. The difference is they’re all respected Ph.D. economists, so concerns about politicizing the Fed didn’t become a much of a factor in their Senate confirmation hearings.

Moore, who has a master of arts in economics from George Mason University in Virginia, is better known for helping promote a fiscal agenda than he is for monetary-policy expertise. He co-wrote, with Laffer, a 2018 book on Trump’s economic strategy entitled “Trumponomics: Inside the America First Plan to Revive Our Economy.”

He also formerly wrote on the economy and public policy for the Wall Street Journal and is on his second stint at the Heritage Foundation.

Trump Gets Chance to Influence American Life for Generations Through Supreme Court Pick

As the first Republican president to get his judicial nominees confirmed by a simple majority vote, thanks to the abolition of the Senate filibuster rule, Mr. Trump has already broken records in appointing young and highly conservative appellate judges. Now, Mr. Trump can create a new majority bloc on the Supreme Court — one that is far more consistently conservative, and one that can impose its influence over American life long after his presidency ends on issues as diverse as the environment and labor or abortion and civil rights.

If Mr. Trump secures that prospect, he will fulfill the deal that he struck during the 2016 campaign with traditional and movement conservatives who were skeptical of his politics and hesitant about supporting his candidacy. They feared he would pick an idiosyncratic nominee, like a celebrity lawyer he saw on television, rather than an authentic conservative.

But Mr. Trump shored up Republican turnout in the election by promising to select Supreme Court nominations from a list of conservative judges. It was shaped by his top legal adviser, Donald F. McGahn II, now the White House counsel, who worked with advisers like Leonard Leo, the executive director of the Federalist Society, the conservative legal movement network.

.. joking shorthand for what traditional Republicans got in return: “But Gorsuch.” In November, the White House quietly issued a revised version of the list in case another vacancy arose.

.. “The danger is that the Supreme Court, at the behest of this president, will favor the wealthy and powerful and extremist groups at the expense of everyone else — not just for President Trump’s term, but for decades to come,” she said.

.. The prospects for the nominee’s confirmation will most likely come down to how a handful of moderate senators will vote. Senators Susan Collins of Maine and Lisa Murkowski of Alaska, both Republicans who support abortion rights, are considered key votes in a narrowly divided Senate, as are Senators Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota and Joe Manchin III of West Virginia, all Democrats up for re-election in states that Mr. Trump won.

.. the Trump administration’s recent indication that it will try to use the courts to dismantle the law’s popular protections for people with pre-existing conditions.

.. “People get that this is about undoing precedent and advancing the interests of corporations and the wealthy and privileged, not all of us as Americans.”

.. Adding to the court a pick from Mr. Trump’s list creates the “prospect of a conservative majority over a long period of time,” even if Mr. Trump loses to a Democrat in 2020 who could restock the court’s liberal minority

.. he was optimistic that the fight over the new vacancy would help Republicans maintain control of the Senate in the midterm elections by keeping the courts as a primary topic of political conversation in the coming months.

.. Mr. Trump to create an even more enduring achievement if a liberal justice’s seat opened, perhaps for health reasons, in the second half of his term


Trump’s unusual chance to stack the Fed

Due to a confluence of resignations and openings, the president could remake the central bank in just a year or two. That was never supposed to happen.

Fed governors have 14-year terms—only judges serve for longer—and they’re carefully staggered so that one governorship expires every two years. That’s supposed to ensure that each presidential term, the president can nominate two governors, insulating the central bank from political pressures, so that no administration would have too much influence over monetary policy.

But since its inception in 1935, this system has almost never worked. Governors have almost never stuck around for the fully 14 years, and over the past few decades, they’ve spent fewer and fewer years in office. The average Fed governor appointed in the 1950s served more than 10 years. Since 2000, that has dropped to just five. The last person to stay for a full 14 years was Alan Greenspan, nominated in 1987 by President Ronald Reagan.

Why are Fed governors leaving sooner than their predecessors? The simplest answer, experts said, is money. As members of the most powerful financial institutions they’re sought-after by hedge funds, banks, and other financial institutions where they can make far more money than they did on the board. Fed board members make around $200,000 each year, far less than they can make at a private firm—and even less than the presidents of the regional Federal Reserve banks.

“How much the person can earn in the private market is rising and rising and rising,” said Blinder, who said that his time on the Fed board in the mid-1990s hurt his finances. “I don’t want to plead poverty and I’m not poor today, but my net worth was dwindling every year—and unless you are a very rich person, you can’t let that go on forever.”

.. Recently, partisan infighting has begun to infect the process as well. After Republicans took control of the Senate in 2014, they refused to confirm Obama’s two nominees for open Fed governor spots.

In that sense, Senate Banking Committee Chair Richard Shelby is partially the reason why Trump has such an opportunity to remake the central bank today: He refused to schedule a committee vote on two open spots that Trump now gets to fill.

.. The 14-year clock doesn’t reset when a governor resigns, so multiple people can hold one “term.” In fact, Quarles is the fourth person to hold this seat during the single 14-year governorship—and the term ends at the end of January. In other words, Quarles’ appointment expires just a few months after he was confirmed. “That’s ridiculous,” Blinder said.

.. Conti-Brown argued that Quarles’ short term is not just an extra burden for Congress but also is a threat to the Fed’s independence. If Quarles does not act as Trump wants, he worried, Trump could just withdraw his nomination. In other words, until he’s confirmed for another term, Quarles is effectively serving at the pleasure of the president.

.. The Trump administration could have instead nominated Quarles for one of the other open governorships, which don’t expire for multiple years. Conti-Brown said there’s no legal explanation for why Trump chose to fill the short-term opening while leaving the long-term seats unfilled.

.. One simple way to fix these problems with Fed governance is to raise the pay for Fed governors, not necessarily to be competitive with private sector salaries but to be at least competitive with the presidents of regional Fed banks, who typically earn $300,000 to $400,000 annually.

.. Each new governor’s term should start fresh, so that their term never expires soon after they’re confirmed. Blinder, whose term was up just 18 months after he was confirmed, said that he would’ve stuck around longer if his term had started fresh.


Trump Can’t Add Things Up

His budget is out, and it predicts we will have super-duper, excellent, great — no, huge — economic growth based on monster tax cuts for the rich and cuts in spending that will leave the poor with no money to buy anything.

.. We’re being run like a bad Atlantic City casino.

.. It also presumes that a country with an aging population is going to spur economic growth by battling immigration.

.. And it has two names. “Well, it’s called the New Foundation for American Greatness, but I wanted to call it the Taxpayer First Budget,”

.. Thing that Won’t Add Up (TWAUP)

.. Perhaps they were remembering that one of Trump’s casinos went on to a career that involved ultimately being sold for 4 cents on the dollar.

.. Mulvaney claimed the new budget was all about “compassion.” It’s not everybody whose heart bleeds so much for wealthy taxpayers that he’s prepared to feed them the Children’s Health Insurance Program.

.. The goal of dismantling the social safety net, Mulvaney said, was to make recipients of federal aid “take charge of their own lives.” You could certainly do some of this by identifying, say, disabled Social Security recipients who might be capable of working and giving them the right training. But that presumes your goal is actually to make the programs better.

.. an administration that has made more than 54 nominations for the 500-plus top positions requiring Senate confirmation.