More than 100 economists, including at least seven Nobel winners, have signed an open letter urging the Senate to reject Federal Reserve nominee Judy Shelton, calling her views “extreme and ill-considered.”
Shelton was nominated for the Fed’s seven-member board of governors by President Donald Trump earlier this year, and the Senate Banking Committee gave her the green light on a party-line vote in July. The full Senate is expected to take up her nomination soon. Shelton was an adviser to Trump’s 2016 presidential campaign and has criticized the Fed over its interest-rate policy and influence over the U.S. economy. Critics claim she’s too partisan and would endanger the Fed’s independence.
In their letter, the economists said the Fed needs to preserve its “nonpartisan approach,” and questioned Shelton’s qualifications.
“Ms. Shelton has a decades-long record of writings and statements that call into question her fitness for a spot on the Fed’s board of governors,” they wrote. “She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all. Now, she appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House — at least as long as the White House is occupied by a president who agrees with her political views.”
In her nomination hearing in February, Shelton backed away from some of her previous writings, but Democrats charged she has not changed her views and would have worsened the economic impact of the pandemic if she had been sitting on the Fed board at the time.
The letter’s signatories include seven winners of the Nobel Prize for economics: Robert E. Lucas and Lars Peter Hansen of the University of Chicago, Christopher Sims from Princeton University, Eric Maskin and Oliver Hart of Harvard University, Peter Diamond of the Massachusetts Institute of Technology, and Joseph Stiglitz of Columbia University.
A separate, nearly word-for-word letter was signed by 70 former Federal Reserve officials and staffers, urging senators to reject Shelton’s nomination.
Originally published on MarketWatch