The American Spectator : The Spectacle Blog : Herman Cain and the Fed

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Joshua Green at the Atlantic takes note of an interesting situation: Herman Cain, currently undertaking a populist and Tea Party-based campaign for the presidency, is a former Kansas City Federal Reserve chairman.

There are elements of the Tea Party, especially those influenced by Ron Paul, who are against the Fed in general. And the Tea Party has led the wider trend in Republican thought against loose monetary policy. For Cain to have been a member of the Fed and defend it some cases is an obstacle in his attempt to present himself as the Tea Party favorite.

Cain was appointed as a Class C director of the Kansas City Fed board in 1992. In that capacity, he provided advice to the president of the KC Fed (the conservative Thomas Hoenig) about conditions for private, non-bank businesses. According to Green, that particular bank was very conservative at the time, and so was Cain:

I had better luck with Drue Jennings, a Kansas City lawyer who served with Cain on the Federal Reserve Board and succeeded him as chairman. Jennings is quite fond of his old colleague. "Herman was a pleasure to work with," he told me. "His views were pretty consistent with those of the Fed at the time. Alan Greenspan was, of course, chairman and Herman was in lock stop with the policies of the Fed." Jennings added that this was not atypical; he could not recall a single dissent from anyone during this three-year term. Still, he said, Cain was no pushover. "He's a guy you'll never find in a gray area," Jennings said. "He's intelligent, well spoken, and very assertive to the point of almost being aggressive. He's anything but shy."

Jennings said Cain fit the profile of the Kansas City Fed. "Inflation was always the big bugaboo," he told me, "and when it comes to monetary policy, he was an inflation hawk. I'll tell you, that's the most conservative bunch of guys I've ever met."

At a recent Spectator press event I had the opportunity to ask Cain about his views on the Federal Reserve. His view is that the Fed's current dual mandate is overbroad, and that it should not be tasked with promoting maximum employment. He argued that the only role of the Fed should be to stabilize the price level, and suggested that as president he would try to end the dual mandate.

While keeping inflation expectations stable doesn't necessarily entail a specific Fed stance (for instance, during a downturn it would be necessary for the Fed to engage in very loose monetary policy to avoid deflation), Cain made it clear that he favored tighter money for the current economy. In other venues, he's expressed approval of some kind of gold standard or other asset backing for U.S. currency. And he's not impressed by current Fed chairman Ben Bernanke's management of the crisis and weak recovery -- he said flatly that he wouldn't reappoint Bernanke in 2014 if he were president. Cain declined to suggest who he would replace Bernanke with, however. Although he had a few candidates in mind, he chuckled that he wouldn't want to invade their privacy just yet.

View all comments (40) | Leave a comment

victoria_29| 5.27.11 @ 1:20PM

Love how all these push Cain sites gloss over the real issues, like his career as head of lobbying firm-amazing how many "supporters" did not know this. Cain is full of talk that is not supported by actions. Unless someone can explain how TARP is a conservative program...then there is that pesky being good with Nationalizing banks. It is very hypocritical even for Cain to criticize Bernake-when he defended his policies.

CalMark| 5.27.11 @ 3:34PM

Oh, absolutely! Herman Cain is a TOTAL loser!

We'd be MUCH better off with 4 more years of Obama!

Trinacria| 5.27.11 @ 5:29PM

CalMark,

C'mon, sport; surely you can do better than this simple minded assertion that it's either Cain or Obama. Of course he's better than Obama; hell, you'd probably be better than Obama - I, however, have a rather higher standard for electing the Chief Executive of the United States (one, by the way, that requires something more impressive than "ran a pizza chain" on the resume...).

The simple fact of the matter is that you and others are grading Herman Cain on a curve (there, I said it) - don't you think we owe it to him (and our fellow citizens) to hold him to the same high standards as we hold other prosepective candidates?

Tom Osterman| 5.28.11 @ 12:27AM

At least his stint in the Federal Reserve shows he has a good grasp of monetary policy and its importance. Way better an inflation hawk than a quantitative easer.

Ore Gone| 5.27.11 @ 2:10PM

Herman's view of America is a definite positive and he doesn't show a disdain for the people and this country. If this country is truly We the People and you want to change it then fundamentally you don't like the people either. This is what I see from the left and especially the current President. Herman Cain is a good man and has faults like anyone.

Clint| 5.27.11 @ 3:03PM

There are problems with Herman Cain's positions: For The Bailout Scam, Against Auditing The FED, For Propping Up Big Banking With The "Too Big To Fail" Scam.

Snidely Whiplash| 5.28.11 @ 9:19PM

He never said he was against auditing the Fed.
You're a punk ass lying Neo-Nazi scumbag.

Anthony M| 5.27.11 @ 6:38PM

Cain can't win. If the choice is Obama or Cain, he goes the way of McCain. No ideological candidates who make affirmative action lovers feel good about themselves. It's 1968 all over again, we need a Nixon, if only there was one out there.

Corey| 5.28.11 @ 9:33AM

ideological?? McCain? McCain sits near Obama on the ideological fence... very liberal.

Cain is closer to Reagan, and thats what this country is going to need.

Andrew| 5.27.11 @ 6:41PM

"don't you think we owe it to him (and our fellow citizens) to hold him to the same high standards as we hold other prosepective candidates?"

Ok, first off it's spelled: prospective

Secondly, high standards? LOL like the standards Obama was held to in 2008?

"(one, by the way, that requires something more impressive than "ran a pizza chain" on the resume...)."

Really? Is that all you have spelling bee champ?

Do your research, he's a self made man that doesn't owe anything to anyone - that my friend is reason enough to give him a shot at cleaning up this mess.

Again, is he perfect, no.

But hey, feel free to vote again for the Euro-Apologist that makes whitey (you) feel all warm and fuzzy about all of the injustices that your ancestors bestowed upon this earth.

Never underestimate the power of white guilt.

Trinacria| 5.27.11 @ 7:37PM

OK, smartass. I'm a self-made man; I don't owe anything to anyone; I've run a company (though I must confess in the spirit of candor that it was nowhere near as complex and prestigious an operation as Godfather's pizza). By your standards, I'm qualified to be the leader of the free world (I do, however, have that misfortunate typo incident on my record, though I hasten to note that after having studied your criteria with keen attention, I found nothing therein to suggest that this would render me unqualified). By golly, Andrew, I think you're on to something; may I count on your vote?

Now - go back to your video game, you simpleton. And by the way, next time you feel the urge to engage in a battle of wits, please recall that it really is rather unsporting of you to come to the battle unarmed...

All the best,
Spelling bee champ

John Barleycorn| 5.27.11 @ 8:03PM

Well Mr. spelling bee champ, you seem to look down on Mr. Cain's particular business choice. Would you care to put your money where your mouth is and compare the size and scope of your operation to his? We can set aside your logical fallacy for now, let's see the numbers.

Verifiable numbers would be preferable, after all anyone can be the CEO of a gazillion dollar operation in internet land.

Trinacria| 5.27.11 @ 11:37PM

If you could read, Asshat, you would see that I acknowledge that my company is no match for the operation that Mr. Cain ran, but that's rather beside the point, sport. The point (pay close attention, as grasping the point seems to be somewhat of a challenge for you) is that having run a company (regardless of its size and valuation) does not necessarily make one the most qualified candidate for the most powerful position in the world (if that were the case, Ross Perot and Donald Trump would have been extraordinary candidates - surely you don't wish to suggest they were....). Now think about it for a few minutes...I'll wait for you to catch up.

The fact is you've got me all wrong, sport; I'm as conservative as they come - that's why I have such little regard for shallow minded pea brains who get a woody for any lightly credentialed candidate that brings no substantive policy ideas to the table ("Uh, right of return? Right of return?). It's precisely the narrow minded thinking that got us the ass clown who currently occupies the White House.

Think I'm wrong on this one? Read Jonah Goldberg, William Crystal, Charles Krauthammer, et al. (you can do it; just keep your dictionary handy and sound out the hard words...I think I can, I think I can...).

Next...?

John Barleycorn| 5.28.11 @ 7:21AM

I read just fine, and I read your comment precisely as it was intended - a snarky, sarcastic attack on Mr. Cain's business experience. Now you want to claim, through your juvenile name calling, that it was a sincere acknowledgement that the business you allegedly ran isn't in the same class. Your bluff got called and now you're bitter because you're holding a junk hand, so you make personal attacks.

Mr. Cain did botch the RoR question, only in the sense that he needed the phrase explained. His answer was spot on. And so what? It shows he needs some more foreign policy advice, preferably from John Bolton. Unless things go to hell overseas, 2012 is going to be a referendum on spending and the economy.

Who is William Crystal? Were you referring to Bill Kristol of The Weekly Standard? I do read him, and CK, and Goldberg, and many others for that matter. Unlike you, I don't rely on them to tell me what they think. I simply consider their perspective when making my own judgments. For the record, the only columnist who has me regularly seeking my dictionary is Bob Tyrrell. BTW, if you're going to make an appeal to authority (another logical fallacy) at least get the authority's name right.

I would say that you sound like a Ron Paul bedwetter, but that would make me sound childish and thoughtless, like, well, a Ron Paul bedwetter.

Corey| 5.28.11 @ 9:35AM

Obama is a lawyer, we don't have a litigation problem in America, we have a jobs problem in America... what better way to get this economy moving then someone who does have quite a bit of experience with business and jobs... Another 4 years of Obama will be another 4 of stagflation.

Sandy| 5.27.11 @ 6:59PM

Just once I would like to see a post come out about any candidate that the Paulbots don't trash, both the article and the candidate. The 75 year old Ron Paul does enough damage to himself, but, his supporters insure he will never see the keys to the WH.

Clint| 5.27.11 @ 10:17PM

Tell That Crap To The Polls, Victor-Margie-Sybil-Sandy.
Rasmussen Polling:

Obama 42%- Dr.Ron Paul 41%.

Herman Cain 2012| 5.27.11 @ 7:05PM

Herman Cain is a man of honor, integrity, and moral character. As a former President and CEO of Godfather’s Pizza, Mr. Cain proved himself a man capable of turning around a failing company, on the verge of bankruptcy, and returning it to profitability. His 3 point problem plan (1. Work on the right problem, 2. Ask the right questions, 3. Remove barriers to success), which he used as CEO, was proven to work, as the results speak for themselves. As President, his 5 point economic plan (1. Eliminate capital gains tax, 2. Eliminate tax on repatriated profits, 3. Reduce the corporate tax rate from 35% to 25%, 4. Issue a year long payroll tax holiday on both employers and employees of 6.2%, 5. Implement the Fair Tax) will spur economic growth not seen in over a generation.

Mr. Herman Cain is an unwavering supporter of Israel, and his problem solving ideas will be a boon for our foreign policy. A clear, concise and well drawn out plan will put an end to the quagmire in Afghanistan and Iraq, which we so desperately need as a nation.

Those that know Herman Cain, know the kind of man that he is. If we want to restore honor and leadership to this country, we need to nominate Herman Cain in 2012, and subsequently elect him to be our next President.

If you want to know more about the man known as Herman Cain, check out his Facebook page at https://www.facebook.com/THEHermanCain and if you can, please make a donation to his campaign at https://hermancainonline.nationbuilder.com/donate_now

Thank you so much, and G-d bless!

Ore Gone| 5.27.11 @ 10:49PM

I second that!

Trinacria| 5.27.11 @ 11:40PM

Mr. Herman Cain is an unwavering supporter of Israel, and his problem solving ideas will be a boon for our foreign policy.

"Right of return? Right of return?" Oh yeah, he's a foreign policy genius. (Ask the right questions, indeed...)

Herman Cain is a stupid person| 5.29.11 @ 2:22AM

You're as naive as the people who voted for obama were. Close Gitmo? Iraq withdrawal timetable?
End the patriot act? Herman Cain is the epitome of the status Quo and is more of a piece of mold than Bush was to Cheney. He even admitted during a debate that he makes his decisions primarily based on what the people around him suggest because he does not know everything. That's not a leader, that's just another pawn shaped by special interests.

Andrew| 5.27.11 @ 7:05PM

Sandy, that will never happen.

Part of the Ron Paul demographic has always been the career college student or drop out with ample time on their hands to troll during breaks in HALO.

They're all tweaked out gamers and disaffected narcissists who live in an echo chamber...and their parents basements.

Don't feed the trolls.

Trinacria| 5.27.11 @ 7:39PM

Strong words from a simpleton...

Andrew| 5.27.11 @ 10:07PM

...and here we go!

expand on that thought... or more like impulse.

Seriously, please troll - I love it, but bring something to the conversation besides one-liners.

fail.

Trinacria| 5.27.11 @ 11:49PM

But I'm rather fond of one-liners, they're so much less tiresome than your pointless diarrhea; besides, when dealing with a simpleton, best to keep things simple. Wouldn't you agree?

Fail, indeed.

Oldefarte| 5.28.11 @ 1:56PM

There is nothing wrong with the Federal Reserve except it's current Chairman and it's corrupted [for politics] agenda. If it sole purpose is to regulate inflation, it is and will be a useful entity; but its becoming involved in employment is a huge problem needing correction. Bernanke has obviously been co-opted by El Chosen One and his band of Chicago Way thugs. This QE 1, 2 and/or 3 is nothing more than Chosen attempting to accompolish with the Fed's monetary policy what he failed to accompolish by his asinine [non] stimulus legislation. Additionally, this QE crap is flooding the world/country with inflationary money that destroyes the value of our dollar. An explosion of inflation [that will make Carter's double-digit look like Disneyland] is right around the corner, and if you think $4+/gallon gasoline is bad, stay tuned. Cain is correct, in that the Fed operating w/o Bernanke on a single purpose agenda of inflation regulation is extrmely useful/beneficial!!!!!!!!

Sandy| 5.28.11 @ 6:47PM

Great reply oldefart. Yes, Cain has acknowledged that the fed should not be trying to control inflation, and the employment numbers. Don't even use the word Fed to the Paulies, they hear Fed and they see evil, thanks to Der Leader Ron Paul you know that guy that blames America first for everything.

Sandy| 5.28.11 @ 7:04PM

Clint and Trinacria- Were you the Code Pinkos, in the gallery this week when Benjamin Netanyahu presented his historic speech to the Congress? You sure act just like them, and of course Paul is against Israel, and is well loved by the Code Pinkos. Then again he is also supported, even financially, by the KKK, and the skinhead white supremists. Oh, OK, I get it, the article is about a black candidate. I think I just found the answer. Not surprising as Ron Paul would not have voted for the Civil Rights Act.

irish19| 5.28.11 @ 7:42PM

Pretty strong accusations. While I don't care for Paul as he is too much the isolationist and his views on cutting military spending seem too radical for me, I think you need to provide some proof when you accuse him of being funded by the Klan.
Just sayin'.

Snidely Whiplash| 5.28.11 @ 9:16PM

http://www.americanthinker.com.....d_its.html

Clint| 5.29.11 @ 7:59AM

Republican Candidate Ron Paul was the second most successful fundraiser left in his party, after McCain. In that January he raised $4.4 million, bringing his total to $32.6 million.Paul set records for single-day fundraising totals despite being one of the lesser-known candidates.
This dude, Doug Black gives The Paul Campaign an "UNSOLICITED" $500.

Soooo, an unsolicited campaign donation of $500 of $32.6 Million in Paul campaign donations comes in and What ?

Sandy| 5.28.11 @ 9:45PM

Here you go irish19, straight from the KKK website-

http://www.kkk.bz/PRESS RELEASronpaul.pdf

Clint| 5.29.11 @ 8:04AM

Uh Oh ! The Anti-Catholic Israel Firster Fanatic Nutbag Apocalyptic Crank Lady Victor-Margie-Sybil Is Now Posting As "Sandy".

No explanation needed. It's a free country, and Don Black isn't a felon. Paul didn't ask for the money and now it will go towards the more noble cause of spreading liberty in this country. I would ignore the hate mongers that dig up this trivial dirt because they can't argue with Paul's ideas.

"And BTW Paul is the leading Republican among African Americans, and as a doctor he has shown nothing but compassion for all races. He delivered hundreds of minority children as a OB doctor for absolutely NOTHING, because he cares about humanity and their parents couldn't afford to pay. "

Sandy| 5.28.11 @ 10:25PM

Snidely Whiplash- Thank you for that link. That had to be one of the very best analyses of Ron Paul that I have seen yet. I will pass that article on wherever I post. Very, very compelling, particularly with his hate for Jews and Israel. I would have to say, his hate and distaste for blacks is close, if not equal, and I am as lilly white as you can get,

Clint| 5.29.11 @ 8:12AM

You're A Slandering Liar, Israel Firster Fanatic Apocalyptic Crank Lady Victor-Margie-Sybil-Sandy-vicmar-Mardy-Santor......

Now, Anti-Catholic, Anti-Everybody Else's Religions Joisey White Trash Bigot Pig, Victor-Margie-Sandy-Sybil.....tell all the practicing Jews & Muslims where,You say they go when they die.

Snidely Whiplash| 5.29.11 @ 12:29AM

You're welcome, Sandy. But where's irish19~ he said he wanted some facts.

The Ron Paul types who post here, especially Clint's type, are the hateful Neo-Nazi anarchist types. You will always hear them pushing about how we have to FOCUS on the FINANCIAL and and they are anti-war and anti-Christian. The entire Libertarian mindset is this.
Allow a free for all society, legalize drugs and whatever else they see fit to do, exactly like the Left. I read a quote by Stalin the other day that reminded me of these types of people. Animals. They despise good decent men like Herman Cain, and will lie about him just like the Left does. They do not want a real conservative to become President, especially not someone strong on defense.

"America is like a healthy body and its resistance is threefold:
its patriotism, its morality, and its spiritual life.
If we can undermine these three areas,
America will collapse from within."
~Josef Stalin

The Leftist Libertarian mindset seeks to destroy from within. It is poison.

Clint| 5.29.11 @ 8:06AM

Ronald Reagan:
" If you analyze it I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals–if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.

Now, I can’t say that I will agree with all the things that the present group who call themselves Libertarians in the sense of a party say, because I think that like in any political movement there are shades, and there are libertarians who are almost over at the point of wanting no government at all or anarchy. I believe there are legitimate government functions. There is a legitimate need in an orderly society for some government to maintain freedom or we will have tyranny by individuals. The strongest man on the block will run the neighborhood. We have government to insure that we don’t each one of us have to carry a club to defend ourselves. But again, I stand on my statement that I think that libertarianism and conservatism are traveling the same path."

Wat Tyler| 9.24.11 @ 11:29PM

Would John Gotti be a good politician because he ran several businesses? How about Pablo Escobar? He would have been good. Do people not realize that the FED is a cartel? People think Cain understands finance because of his connection to the FED. Really? It is like hiring a bank robber for bank security. The FED is a private bank that charges our gov't (ie, us) interest for the worthless credit currency they print. It is giant Ponzi scheme that has worked since 1913. When I hear people spout garbage about the FED and its abilities (basically what they learned at some point w/out incorporating their own critical thinking) I think the best solution for this country is mass depopulation and let the real idealists battle it out. Amazing! People cheering a private company that steals from them. Way too much TV I am afraid.

Angel Rivera| 10.8.11 @ 5:23AM

After reading the comments, I find this election discouraging. I personally support Ron Paul, I like his views better. Particularly reducing the size of government and storing power to the states and disempowering the already bloated Federal government. I found Herman Cain appealing, but I disagree with allot of his stance on issues. The proposed tax plan 999, although catchy it seems to be the same tax code just reworded. 9%income, 9% sales tax, and 9% corp. tax that gets passed on to the consumer anyways. 27% tax on every American mainly middle class, the n you add social security 10.4% and Medicare 2.9%. then you ad domestic sales tax like in IL 10% and property tax you’re looking at about 55%-60% of your pay. There was not mention of doing away with these taxes. And that’s why Ron Paul Flat tax and decreasing the size of government sounds appealing to me. Herman Cain position on the FED RESERVE is concerning and saying there is no reason to audit is dumbfounding. I like Ron Paul about open transparent government and I have heard no mention of this from Mr. Cain. I dislike it when supports of other candidates attempt to degrade Ron Paul supporters and called the name like “Ronbots” I feel there is a very diverse group of free thinkers whom want to encourage and educate, this does come off wrong at times. We all want the same thing, Ron Paul I feel has been consistent for year and has the necessary EXP. Needed, the main stream media and GOP endorsement of any candidate is concerning and I find it to be a way of force feeding us their views on who to choose. Let’s look past the different and look toward their policy and see where the cards fall. I and other Ron Paul supporters feel Ron Paul the best bet for prosperity. I did not like Herman Cain latest statement “ don’t blame the gov., don’t blame the bank or wall st. , if you’re not rich blame yourself http://blogs.chicagotribune.co.....rself.html . There is plenty of American trying hard to go to school find a job and there not rich, they took student loans trying to better themselves. The economic collapse is the governments fault and refers back to the housing bubble they knew and Ron Paul urged against was going to and did pop. These are Just my views and thoughts.

sha44ss| 10.26.11 @ 11:09AM

Lets face it the FED has been around a long time and has BIG money and BIG Corruption behind it. It is going to be like David slaying Goliath so anyone with a brain and a will to 'survive' knows this especially Herman Cain. I BELIEVE Herman Cain is a Honest man and I Believe him when he Speaks unlike the LIAR in CHIEF! Lets fix one thing at a time People and that is putting Conservatives in the White House and the Senate! Herman Cain is the REAL DEAL!