Stephen Moore, President Trump’s choice for the board of governors for the Federal Reserve, has remained in the spotlight in terms of economic policy advocacy, despite a questionable track record when it comes to actual economic predictions, as HuffPost reports. Moore’s gravitation towards media appearances has given him many opportunities to speak on the record about the potential positive or negative impacts of various economic policy positions, including those advocated by presidents ranging from Bill Clinton to Donald Trump.
As Moore prepares for a role that could have a substantial influence on United States economic policy, here’s how he fared on five major predictions over the years.
Bill Clinton’s tax plan (1993)
Moore’s prediction, per The New Republic: In response to a modest increase in income taxes on the wealthiest Americans, Moore predicted that the Clinton tax plan would “torpedo” the economy.
What happened: It didn’t. Through a combination of factors, the health of the U.S. economy improved substantially following that time period.
A recipe for hyperinflation (2009)
Moore’s prediction, per Fox News: A combination of low Federal Reserve interest rates and expanding federal budget deficits would usher in a period of hyperinflation.
What happened: It didn’t. As many in the media described in apocalyptic terms the danger of inflationary effects, concerns about the economy of the time were unrealized.
Gold headed to $2,000 an ounce (2010)
Moore’s prediction, per Newsmax: Inflationary pressures will devalue the dollar, sending investors to gold as a hedge, pushing gold prices to historic highs.
What happened: In August 2011, gold did indeed peak at just over $2000.
Kansas tax cuts (2012-2013)
Moore’s prediction, per the Center on Budget and Policy Priorities: Substantial tax cuts for the wealthiest in Kansas would lead to an “immediate and lasting boost” to the state’s economy.
What happened: The immediate drop in tax revenue nearly bankrupted the state and the cuts were reversed by the state legislature in 2007.
Trump tax cuts (2017)
Moore’s prediction, per Bloomberg: Trump’s tax cuts will be “death to Democrats.”
What happened: Moore’s prediction here is essentially a political one, rather than economic. Whether the tax cuts will indeed starve Democrats of political strength going forward remains to be seen.
Of note: Moore has only a master's degree in economics. The GOP in 2011 blocked an Obama nominee who had earned a Nobel Memorial Prize in economics. https://t.co/urgy52IMVL
— Glenn Kessler (@GlennKesslerWP) March 22, 2019
The responsibility of the Federal Reserve is essentially to manage the U.S. economy. The overall goal of that management is to provide a maximum level of employment across the country and to create reasonable pricing stability as well. The Fed is the primary banking regulator and is, as a result, largely responsible for avoiding (or managing) a large-scale financial crisis.
Moore’s new role on the organization’s board of governors provides him with (potentially) substantial influence on the future health of the U.S. economy.