Shelton’s critics “accuse her of flip-flopping to oppose low interest rates during Barack Obama’s term and then support low rates once Mr. Trump was in office. But the Fed flipped too… The Fed is abandoning in all but name the discredited Phillips Curve that posited low unemployment would trigger inflation. Instead policy makers will wait to see inflation rising for some time before raising rates…

“Ms. Shelton differs from Fed orthodoxy in preferring that the central bank eschew attempts to micromanage the economy and focus instead on stability as measured by exchange rates and asset and commodity prices. The Fed has gone in the opposite direction in adopting an ‘average inflation target’ that effectively gives it carte blanche to do whatever it wants for whatever reason. If you worry about politicized central banking, this is a far greater danger than any interest-rate policy Ms. Shelton has advocated…

“The fury unleashed against Ms. Shelton is far out of proportion to the power she’d have. She’d be one of seven board members and one of 12 on the Open Market Committee. Yet Washington’s political-media class treats her like an invading vandal… Ms. Shelton’s monetary views used to be considered a policy disagreement, but nowadays they’re heresy. All the more reason to confirm her as an independent voice.”
Editorial Board, Wall Street Journal

“It’s true that Shelton has said positive things about the gold standard. As a monetary economist, I know how risky it is to question the conventional wisdom. Monetary economists, especially ambitious ones, hate the gold standard, because the Fed has an outsized influence on monetary-economics research, and the last thing an economist looking to move up in the world wants to do is say nice things about a system that works just fine without a central bank. And let’s be clear: It does work just fine. Specifically, the ‘classical’ gold standard, which prevailed from 1879 to 1914, in many respects outperformed the system we have now…

“In an important paper comparing the pre- and post-Fed periods, George Selgin, William Lastrapes, and Lawrence White found that ‘the Fed’s full history… has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment.’ In a subsequent study, Thomas Hogan found that GDP growth was better in the pre-Fed period, while inflation and inflation volatility (a key measure of purchasing power predictability) were worse…

“The Board is a deliberative body, and we should want a wide range of views represented to stave off insularity and groupthink. Shelton’s contrarian views would ensure that the Board confronted hard questions head on. Rather than impede effective monetary policy, Shelton would improve it by raising the level of debate and discussion.”
Alexander William Salter, National Review

Critics note that “For many years, Shelton tirelessly advocated a gold-backed dollar, 0 percent inflation, and higher interest rates. After the financial crisis, when the U.S. had a prolonged spell of low inflation and high unemployment, she argued that the Federal Reserve’s efforts to foster a recovery posed too great a risk of raising prices…

“President Trump has very different views. He wants low interest rates, does not worry about inflation, and shows no sign of caring about the gold standard. During his presidency, these views have been right in their practical upshot more often than not. What is worrisome is the extent to which Shelton has echoed Trump’s views without even acknowledging how they differ from the ones she has expressed in the past, let alone explaining her change of mind…

“The Fed, especially in recent years, has prized collegiality and consensus. If Shelton reverts to her earlier views once confirmed, she might exert a gravitational pull toward a tighter policy than the economy needs. The best argument against that concern is that her recent statements make her unpredictable rather than doctrinaire. That is not a recommendation for a part of the government that requires sober and steady judgment above all.”
The Editors, National Review

Returning to the gold standard “would risk price instability, which one would think would be of great concern to the self-styled populists of the new GOP — Marco Rubio, Josh Hawley, Tom Cotton. As others noted this afternoon, if they really are building a multiethnic, multiracial working-class party, as Rubio likes to say, they should be gravely worried about what inflation might do to cannibalize the wages of working-class Americans and what influence Shelton might have in blocking the sort of monetary stimulus the Fed has engaged in to help workers during the pandemic.”
Allahpundit, Hot Air