President Trump hits huge home run nominating Judy Shelton for the Fed

President Trump has chosen a huge winner for the Federal Reserve Board: economist and monetary expert Judy Shelton.

Start with her achievements: same as our friend Herbert Meyer, she forecast with near-date accuracy the economic collapse of the Soviet Union based on economic reading alone.  It was a bold prediction, made two years before it actually happened, in 1987.  She was criticized for it, but she knew she was right and doubled down.  In 1990, she wrote a book called The Coming Soviet Crash: Gorbachev's Desperate Pursuit of Credit in Western Financial Markets."  The book drew naysaying, too.  They called her an extremist...except that she was right.

She also warned about the currency meltdowns in emerging markets that occurred through the 1990s.  Her 1998 book Money Meltdown is a classic of the genre, explaining how these disruptive events occur and can occur — coming out right when Mexico, Asia, and Russia were going down.  Someone with this kind of forecasting firepower alone is worth paying attention to.  She's exactly the kind of person you want at a place like the Fed.

So naturally, she's already being subject to all kinds of criticism from the conventional-wisdomers and swamp aficionados — same people who told her she was nuts for forecasting the Soviet meltdown.  They criticized her then and got left with egg on their faces, so off they go, criticizing her nomination again now.  Not even the real leftists, such as Paul Krugman or maybe Joe Stiglitz have weighed in yet, but they will.  The current ones holler at Shelton for pointing out the value of a stable money standard, such as gold, something she has stuck to her guns about — defying even Milton Friedman.

Thomas Franck, a lefty over at CNBC, paints her ideas as "unusual."  While she has supported a gold standard, as a lot of us have, they fail to mention that she's never been blind about the idea — what's important to her is whether the cash supply is stable.  Why is that?  Because the private sector (and all the deplorables out there) need "stable."  She's never been an utter absolutist as to how it's to be done.  A gold standard is a certain way to do it.  There may be others, but they want to pin her to gold and then argue she's unsuitable for the Fed, which runs on fiat money.  It never occurs to them that she might be able to bring lessons from the importance of maintaining stable money to the table at the Fed.

At least the criticism (unlike that endured by previous nominees Stephen Moore and Herman Cain) is over policy, not personality.  But it's no less obnoxious.  In every single criticism I've read so far, and there are lot of them coming out of the woodwork now — they all ignore those forecasts, those Shelton forecasts...Shelton knows how to forecast, because she knows how to read economic data, and she understands how economies work, in toto, something a helluva lot of people at the Fed have only pieces of, not the whole picture on.

Way back in 1998, the Far East Economic Review dispatched me to Washington from my then-base in Singapore to report on China's treasury-buying practices.  There I met the wonderful Ed Timperlake (now an American Thinker contributor, among other things), who took me around Congress to discuss the role of China, and I met many interesting lobbyists and economists, as well as a few obnoxious and ignorant congressmen, as well as some good ones.  But I had an urgent side mission.  I really wanted to meet the woman who forecast the decline of the Soviet Union and the then-ongoing crash of Asia...economist Judy Shelton.

What was she like?  What would she have to say about the current crisis?

Well, for starters, she was kind, very kind, and quite unlike the swamp things I had been meeting.  She met with me for probably a couple of hours and explained to me how to read the Asian crisis going on back at my home base then of Singapore.

My own view of what was happening at the time, why countries such as Thailand, Indonesia, Malaysia, and South Korea were crashing, was, "well, the idiots deserved it, look how badly their central banks behaved...let the IMF have its way with them, it's the only way to teach them."

She said I was wrong.  I don't recall how, but she was gentle about it, explaining to me that actually, it's the people we needed to care about — the small-time Asian saver, the people whose savings were burned up in the Asian meltdown and whose innovations and businesses would never get off the ground, and all the people who wouldn't be employed.  It flipped my entire worldview.  And it's endured for me since.

The critics are now yelling that she's a gold standard absolutist and is now taking an unprincipled position as a job at the Fed.  It's 100% unadulterated garbage.  Shelton is not a gold standard absolutist; she's a people-standard absolutist.  Monetary policy matters only insofar as it helps people, the deplorables, the little guy out there.  That's what makes her tick.  And that, actually, jibes well with what President Trump stands for, too.

We absolutely need a genius of this caliber and character on the Federal Reserve Board now.