Her notion that the Fed must consult with Congress, rather than act independently as is considered the best practice among developed countries, would have introduced damaging delays, politics and, likely, policy misfires as ill-equipped members of Congress tried to grapple with the intricacies of monetary policy.
Then there’s the gold standard, a significant culprit in deepening the Great Depression and abandoned decades ago by every country in the world (including the United States in 1973). By rigidly fixing prices to a single commodity, a gold standard exaggerates economic swings, on balance for the worse.
Between 1880 and 1933, the United States experienced at least five full-fledged banking crises; in the past 87 years, we’ve had two. Though promoted as smoothing price movements, a gold standard in fact magnifies them, as a comparison of the pre-Depression period to the post-World War II era makes clear.
In a 2012 poll, not one of 40 prominent economists supported disinterring this misguided policy.
A few other weird ideas from Ms. Shelton: She has questioned the accuracy of government statistics. She wants a single currency for North America. (Does she not know how badly the euro has worked?)
On at least two existential issues, Ms. Shelton has shown a willingness to not let principles stand in the way of career advancement. Until her confirmation hearing, she backed getting rid of federal deposit insurance, a key protection for individual savers. Her long opposition to low-interest rates notwithstanding, last year she flip-flopped to Mr. Trump’s view that low rates are, in fact, a great idea.
Concern within the Senate Banking Committee was obvious during its protracted consideration. “Nobody wants anybody on the Federal Reserve that has a fatal attraction to nutty ideas,” John Kennedy, Republican of Louisiana, said in February. But then, like so many Republicans unwilling to cross a revengeful president, Mr. Kennedy capitulated.
To be sure, one iconoclastic and outspoken member of a seven-person board (who are part of a 12-member committee that sets interest rates) may not change the Fed’s decisions. But if Mr. Trump wins re-election, he will have the chance to nominate a new chair of the Fed when Jerome Powell’s term expires in 2022.