Imagine if a member of the Federal Reserve Board of Governors said the following:
When governments manipulate exchange rates to affect currency markets, they undermine the honest efforts of countries that wish to compete fairly in the global marketplace. Supply and demand are distorted by artificial prices conveyed through contrived exchange rates.
Or something honest like:
The Fed should focus on stable money as a key factor in economic performance. Given that central banks today are the world’s biggest currency manipulators, it’s imperative that the next chairman prioritize the integrity of the dollar.
And what if they showed an understanding of both history and sound money principles with something intelligent:
For all the talk of a “rules-based” system for international trade, there are no rules when it comes to ensuring a level monetary playing field. The classical gold standard established an international benchmark for currency values, consistent with free-trade principles.
While she’s not a governor yet, the quotes were from Trump’s appointee Judy Shelton, approved this week by the Senate banking committee on party lines, at a vote of 13–12. To be nominated to the board of directors, Ms. Shelton will now be put forward to be voted on by the full senate, fifty-three of the hundred being Republicans.
Yet below we can see everything wrong with the mainstream media (MSM), mainstream economists, and American politics starting with the New York Times article entitled “God Help Us if Judy Shelton Joins the Fed.“ Former counselor to the Treasury secretary during the Obama administration Steven Rattner began with:
Trump’s latest unqualified nominee to the Federal Reserve Board must be rejected.
The defaming article shows Mr. Rattner has no care nor understanding of economics. According to him, Ms. Shelton is known for taking “long-discredited positions in the monetary system,” referring to the gold standard, as he claims it was the “culprit in deepening the Great Depression.” Clearly he is no fan of (or perhaps isn’t educated enough to have heard of) Mises or Rothbard.
Mr. Rattner, fueled by ignorance, continues with what some may describe as laudable on Ms. Shelton’s part:
Among other heretical stances, she has supported the abolition of the Federal Reserve itself, putting her in a position to undermine the very institution she is being nominated to serve.
A similar tone was found in the National Review, a magazine which characterizes itself using the highly nebulous and ill-defined “modern conservative movement.” Going back several months, the “controversy” surrounding Judy Shelton was shared in an oxymoronic write-up called: “The Wrong Kind of ‘Intellectual Diversity’ at the Fed.” It is nothing more than a rant showing that the senior editor also knows little about history or economics but, being in a position to publish, does so with a vociferous opinion. He begins with the usual appeal to popularity:
First, she has been a single-minded advocate of a policy that most economists rightly reject: the revival of the gold standard.
What is popular is not always true, especially regarding economics. The article cites quotes from 2009 in the Wall Street Journal in an attempt to discredit Shelton by showing she has not always been consistent in her stances over the past decade. The rant implies that all other members of the Fed and economists have.
Unfortunately, some people claim to like diversity, but not when it’s different from their own bias. The senior editor who wrote the hit piece can be found on Twitter.
Unlike the New York Times and National Review, surprising as it may seem, CNBC’s position was more neutral when discussing the Senate hearing:
She faced persistent and at-times hostile questions about her support for the gold standard, her beliefs on whether bank deposits should be insured and whether the Fed should be independent of political influences.
Last but not least, the Wall Street Journal wrote it best, much to the chagrin of its rivals:
the news write-ups inevitably described her with adjectives like “controversial.” She should take it as a badge of honor, given how she would provide needed intellectual diversity at the Fed.
Only in a world this backward, where in a supposedly free country socialism is considered good and capitalism bad, could Shelton receive so much scorn. To think that one out of seven members of the board could have ideas other than inflationist dogma but would be shunned for speaking up says a lot about the society in which we are living. Perhaps the real reason is that, if appointed, Judy Shelton could be in line for the position of Federal Reserve chair?
Ironically enough, as long Congress stays partisan, we may see Shelton in one of the most powerful central banking positions in the world. It won’t “End the Fed” overnight, but maybe it’s one step closer!