Stephen Moore, President Trump’s pick to serve on the Federal Reserve’s board of governors, defended shifting his views on major economic issues since working with Trump, saying Saturday that he favors stable prices and economic growth.
“Certainly I’m in favor of most of the policies that this president has put forth,” Moore said in a phone interview with the Washington Examiner.
During the Obama administration, Moore, a fellow at the conservative Heritage Foundation, criticized the Fed’s post-financial crisis policy of setting interest rates near zero to spur spending, suggesting in 2015, for instance, that “easy money policy” risked a repeat of the 2008 crisis.
But Moore did an about-face after Trump’s criticism of the central bank for raising rates, calling on the Fed to keep its target rate as low as possible. Moore went as far in December as to call on Fed Chairman Jerome Powell, another Trump nominee, to resign for raising rates.
Moore said Saturday that he would not take political considerations into account if he were confirmed to the Fed, despite his proximity to Trump. “I get that the Fed has to be independent of what the president wants,” he said.
When questioned about the discrepancy between his views on interest rates before and after Trump’s presidency, Moore said that he favors changing Fed policy to tie interest rates to the prices of oil and other major commodities. He explained that he supported “a rules-based monetary policy that would have exceptions during a time of economic crisis.”
“Keep those stable over time, and you’ll have a stable price system,” Moore said.
According to data from the Federal Reserve, the price of oil is about 40 percent lower than it was before the recession that began in late 2007, while the average price of gasoline per gallon is approximately 60 cents lower.
Jim Pethokoukis, an economic policy analyst for the American Enterprise Institute who has known Moore for years, said that Congress will look skeptically at Moore’s closeness to Trump and his reversals on policy.
“That’s certainly an accusation that he’s going to hear,” said Pethokoukis, a frequent guest on Moore and Larry Kudlow’s old radio show. “I think it’s OK to change your mind on things, but I think you have to provide a logical coherent path” as to what caused that change, he said.
Before Trump’s election, Moore also positioned himself as a fiscal hawk.
In 2015, Moore argued that the debt ceiling, a legal borrowing limit for the federal government, should not be raised without significant spending cuts. The Trump administration has asked Congress to raise the debt ceiling without any spending cuts in return.
In comments since Trump’s election, Moore has downplayed the need to cut spending, arguing that all that matters is economic growth.
“I don’t think, by the way, there is any particular relationship between the debt and interest rates or deficits and rates,” Moore said in a 2018 interview with the Christian Broadcasting Network. “But I want to reduce the debt burden on the economy, so growth — you have debt, numerator, GDP denominator — get that GDP up.”
Deficits are rising significantly during Trump’s presidency, accelerated by the tax cuts and spending increases he’s presided over. The Congressional Budget Office projects that the federal deficit will approach $900 billion this year, over $100 billion more than last year, and will rise indefinitely in the years ahead.
On Saturday, Moore pushed back on the notion that he doesn’t care about the government spending more than it takes in. “Deficits reduce growth, they don’t stimulate growth,” he said before adding that “I’m a big growth hawk. Whatever you can do to create economic growth.”
“We just need a Fed policy that permits the economy to grow without inflation,” Moore said. “In my mind, the most important thing is growth. There’s no way you can possibly bring the deficit down without growth.”
Despite the discrepancies between his own views over the years, and likely universal opposition from Democrats, Moore has the advantage of a winning personality, said Pethokoukis.
“He is a super friendly guy,” said Pethokoukis of Moore. “We got into it, but it was always very congenial, [if] spirited.”
Economic experts on both the Right and the Left panned Moore’s nomination after Trump announced his intent to pick the former Club for Growth president, driven largely by Moore’s unorthodox background for the Fed.
“Steve is a perfectly amiable guy, but he simply does not have the intellectual gravitas for this important job,” wrote Greg Mankiw, a Harvard economist and a former chairman of the Council of Economic Advisers during the George W. Bush administration. “It is time for senators to do their job. Mr. Moore should not be confirmed.”
