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Trump Fed Reserve nominee Judy Shelton [who backs gold standard] confirmed by Senate committee


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Controversial Trump Fed nominee Judy Shelton confirmed by Senate committee

 

A controversial Trump Federal Reserve nominee who has backed a gold standard is headed for a Senate vote after the Senate Banking Committee approved her nomination in a party-line vote.

 

The nominee, Judy Shelton, has generated opposition for her pointed criticisms of the Fed and her advocacy for a return to the gold standard as a monetary system.

In the past few months, her nomination faced several challenges after multiple Republicans on the Senate Banking Committee indicated her views made her unusual and unsuitable for a seat on the Fed's board of governors.

Shelton said in 2011 that the Fed is "almost a rogue agency" and asked whether it could be trusted in having oversight of the dollar. She has also called for a 0% inflation target, as opposed to the bank's current 2% target, and has raised the "fundamental question" of, "Why do we need a central bank?"

She has raised concerns on both sides of the aisle for her view that the Fed should have less power and independent discretion and instead have closer ties to the White House.

Just before Tuesday’s vote, committee Chairman Mike Crapo of Idaho said Shelton had provided clear answers related to her opinions on the independence of the Fed, the right response to economic crises, and the gold standard.

“Many have tried to characterize Dr. Shelton’s views of the gold standard and monetary policy as outside of the mainstream thought and disqualifying for this position, and I strongly disagree with these characterizations,” Crapo said.

After Shelton's confirmation hearing in February, Sen. Pat Toomey, a Pennsylvania Republican, said he was not confident Shelton could uphold the bank's independence. Republican Sen. Richard Shelby of Alabama said Shelton "could be an outlier" for the role. Both senators since backed Shelton.

All 12 of the Democrats on the panel have been strongly opposed to Shelton's nomination from the beginning.

“When we have no leadership from our president and the Federal Reserve chair is one of the only leaders trying to guide our recovery, putting one of the president’s close advisers on the Fed board will only make things worse,” said Sen. Sherrod Brown, the top Democrat on the banking panel, before the vote.

In February, Sen. Elizabeth Warren penned a six-page letter questioning a “history of statements and actions” by Shelton and critiquing her “inability to make economic judgments divorced of political calculations.”

Before the Tuesday morning vote, Warren said, “Confirming Judy Shelton to the Federal Reserve is a mistake, and it will endanger our economy."

Shelton has been accused of abandoning her old positions in favor of views more aligned with President Trump.

Shelton called for higher interest rates during the Great Recession of 2008 and as recently as 2016. Since Trump’s election, however, she has spoken in favor of cuts to the Fed's interest rate target, just as Trump has.

She has a master's and a doctorate in business administration from the University of Utah and was a fellow for many years at Stanford's Hoover Institution.

Shelton was on Bob Dole's 1996 presidential campaign and in 2016 was initially on Ben Carson's presidential campaign but joined the Trump campaign in August 2016 after writing a flattering Wall Street Journal opinion piece about Trump.

Trump appointed her to be executive director of the European Bank for Reconstruction and Development early in his presidency.

Edited by Theseus
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