Business Maverick

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Seven Nobel Winners Sign Letter Opposing Shelton Fed Nomination

Judy Shelton, U.S. President Donald Trump's nominee for governor of the Federal Reserve, speaks during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S, on Thursday, Feb. 13, 2020. Shelton, a former economic adviser to Trump's campaign, has challenged whether the institution should regulate the value of money and whether its mandate, as set by Congress.

A group of more than 100 prominent economists, including seven Nobel Prize laureates, have signed a new open letter to U.S. senators urging them to reject President Donald Trump’s nomination of Judy Shelton to the Federal Reserve’s Board of Governors.

The letter is nearly identical to one published in August by former Federal Reserve officials and staffers. That version now has 70 signatories, including four former regional Fed presidents and a former Fed governor.
Confirmation Hearing For Federal Reserve Governor Nominees Judy Shelton And Christopher Waller
Judy Shelton, U.S. President Donald Trump’s nominee for governor of the Federal Reserve, speaks during a Senate Banking Committee confirmation hearing in Washington, D.C., U.S, on Thursday, Feb. 13, 2020. Shelton, a former economic adviser to Trump’s campaign, has challenged whether the institution should regulate the value of money and whether its mandate, as set by Congress.

Like its predecessor, it calls Shelton’s views on monetary policy and economics “so extreme and ill-considered as to be an unnecessary distraction from” the tasks facing the U.S. central bank as it deals with fallout from the coronavirus pandemic.

Shelton declined to comment in an email.

The new letter’s 106 signatories include seven winners of the Nobel Memorial Prize in Economic Sciences: 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 MIT, and Joseph Stiglitz of Columbia University.

Diamond was nominated to serve on the Fed Board by President Barack Obama but withdrew in 2011 in the face of Republican opposition.

Republican Senator Richard Shelby, who still sits on the Senate Banking Committee and voted to approve Shelton’s nomination, at the time said he didn’t think Diamond was qualified for the post.

That committee advanced Shelton’s nomination on a party-line vote in July, and she now awaits approval by the full Senate. No vote has been scheduled for her or fellow nominee Christopher Waller, research director at the St. Louis Fed.

Shelton, an informal adviser to Trump’s 2016 campaign, has drawn significant criticism for policy views well outside the mainstream — including a history of admiration for the gold standard — and for being a political loyalist who might bend to Trump’s will.

She appeared to abandon her advocacy for ultra-tight monetary policy when she emerged as a Fed candidate, publicly aligning herself with the president’s calls for lower interest rates.

During her testimony at a February hearing, Shelton insisted that no one will tell her what to do.

“I wish to emphasize my commitment to honor the constitutional authority of Congress to regulate the value of U.S. money,” she said. “I believe that the independence of the Federal Reserve is a vital aspect of its credibility with the public.”

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