Confirm Judy Shelton to the Fed Board of Governors

t’s make-or-break time for Dr. Judy Shelton, President Trump’s controversial nominee to the Federal Reserve Board of Governors. Shelton’s nomination had stalled after some Republican senators said they wouldn’t vote for her. But on Thursday evening, Senate Majority Leader Mitch McConnell announced Shelton would receive a final vote sometime next week. Senator Lisa Murkowski’s (R., Alaska) change of heart seems to have made the difference.

Ever since Shelton came to public attention, she’s drawn fierce criticism from policymakers, the press, and professional economists. This isn’t surprising. Given the power of Board members, potential confirmations are high-stakes. The Board of Governors is the body that oversees the Federal Reserve System. All members of the Board of Governors serve on the Federal Open Market Committee, which is responsible for important monetary-policy decisions.

There are three strikes against Shelton in the eyes of her detractors. The first is her fond view of the gold standard, a decidedly gauche position among monetary economists. The second is her academic background: Her Ph.D. is in business administration, not economics, and was awarded by a non-elite university besides. The third is her perceived partisanship, which Shelton skeptics contend would reduce the political independence of the Fed.

All three of these criticisms are exaggerated: The first two are nonsense, and while there is some truth to the third, it’s not enough of a problem to outweigh the benefits of an outsider on the Board. Shelton’s opponents are motivated by style and status, not substantive arguments. (Full disclosure: I am a senior fellow with the Sound Money Project, which Shelton used to lead. My tenure began after hers ended.)

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.
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