Friday, August 21, 2020

Federal Reserve Alumni Losing It Over Potential Senate Confirmation of Judy Shelton as Fed Board Governor

Judy Shelton
As I have pointed out before, President Trump's nominee for a Federal Reserve governorship, Judy Shelton, is not exactly consistent in her monetary policy views. See: The Wacky Monetary Policy Thinking of Judy Shelton.

That said, she does occasionally come down on the side of sound money, including sometimes calling for a return to a gold standard.

This has the establishment Keynesian Fed alumni in a panic over the possibility that Shelton might get confirmed by the Senate for a Fed board of governor's seat.

An open letter, signed by 38 former Fed employees, singles out her gold standard, anti-central bank position:
She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all. 
But they also note her erratic stance on these issues, especially since she was nominated by Trump:
[S]he appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House — at least as long as the White House is occupied by a president who agrees with her political views.
Then they give away the real concern:
The Fed has serious work ahead of it. While we applaud the Board having a diversity of viewpoints represented at its table, Ms. Shelton’s views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand.
So much for diversity of viewpoints at the Fed.

What the alumni really fear, and to put it in terms of modern-day lefty Critical Theory parlance, is that Shelton may apply Critical Theory to the Fed itself and deconstruct the money printing operation.

Of course, Shelton is political as evidenced by her willingness to throw any previous positions she has held under the bus to gain the nomination and it is difficult to think she wouldn't stay in line with other Fed members and stay political if she gets one of the money printing votes. Still, it is fun to see the money printing alumni in hysterics. I am sure they would make the argument that she is more dangerous to the country than COVID-19.

But if she is confirmed by the Senate and does act as irresponsible as other Fed members and call for more mad money printing, perhaps she could vote while standing on her head to signal to the country just how mad Fed members are.



  1. Here's a C-Span interview with Shelton from 1989 regarding her book,"The Coming Soviet Crash".

  2. Sounds like maybe she can think!