Fed's Leadership Is Best Left to the Economists

The case is being made these days, especially in light of President Donald Trump’s selection of many business leaders to head various government departments, that more executives should be appointed as Federal Reserve Board governors. The underlying idea is that business people have dealt with tough real-world decisions, in contrast to formally trained academic economists, who are commonly selected from universities and lack such experience. There’s no doubt that good business people could manage well, but good economists should have a somewhat easier time.

Choosing business people or academic economists need not be mutually exclusive. In fact, Bloomberg News reported June 2 that Trump is considering nominating Marvin Goodfriend, a widely respected monetary economist, as a finalist for a seat on the Fed's Board of Governors. Randal Quarles, a former Treasury official under President George W. Bush, is also said to be a candidate.