On April 16, we interviewed Stephen Moore, President Trump economic advisor, at the Heritage Foundation in Washington DC. Moore was to be nominated to one of two vacancies of the Federal Reserve Board of Governors.

President Trump said on Twitter on 22th March, “It is my pleasure to announce that @StephenMoore, a very respected Economist, will be nominated to serve on the Fed Board. I have known Steve for a long time – and have no doubt he will be an outstanding choice!”

It is my pleasure to announce that @StephenMoore, a very respected Economist, will be nominated to serve on the Fed Board. I have known Steve for a long time – and have no doubt he will be an outstanding choice!

— Donald J. Trump (@realDonaldTrump) Mar 3,2019

Counterargument to the Nikkei newspaper

Fujii: Japanese newspaper the Nikkei (Nihon Keizai Shimbun) posted on 1st April an article titled “The U.S. President is taking over the Fed”.

Moore: I think Trump has put some excellent people for the Federal Reserve Board, and that includes chairman Jerome Powell. Trump is not “taking over” the Fed. He is just putting people on the Fed who believe that growth will not cause inflation. He wants the economy to grow faster and wants stable prices. I don’t think they should be afraid of that. They should applaud it.

Fujii: In the article you are criticized as being no better than a yes-man to Trump. Do you have any comment on that?

Moore: My ideas are not that controversial. They basically try to continue to grow the economy like Trump has done. I don’t believe that growth or higher wages cause inflation. I don’t believe that government spending causes growth. I don’t think you can create growth by printing money. I am not a dove. I am actually someone who wants to keep prices stable. I don’t want inflation or deflation.

The U.S. economy is the envy of the world under Trump

Fujii: Not only in the U.S. but also in Japan, the mainstream media are a little bit hostile to President Trump.

Moore: He is different and that’s why he got elected by the people who are tired of the go along and get along. He is an outside the box thinker. That’s a great thing for America and his record speaks for itself. We got two years of real economic renaissance in this country. That’s happened. While Europe is not growing, Japan is not growing and China’s economy has faltered, the U.S. is now the envy of the world under Trump. So, my view is that more countries should do what Trump is doing.

Fujii: In the Nikkei article, the editorial writer is skeptical about your views on the U.S. economy.

Moore: I don’t think it’s too controversial about the view for tax cuts. To prefer stable currency, to be for responsive government and for being pro-business, that’s all the things. I am pro-business, pro-investment and pro-worker. We can grow the economy faster than 3 percent, and closer to 4 percent without inflation. We got that last summer with very little unemployment. Unfortunately, the Fed started raising rates, which I think was a mistake.

Fujii: What is your plan for the possible 4 percent growth?

Moore: With the right set of public policies, lower tax rates, less government spending, less regulation, welfare reforms and that kind of thing, the U.S. economy could grow at 4 percent for 5 years. That would be a gigantic lift for American workers and American businesses and for the stock market. Japan can do the same thing. If you move to lower tax rates and less regulation, Japan could grow more rapidly too.

I just think that the rest of the world should be looking at what the U.S. is doing and try to imitate our policies. Because they’re working and our country right now is the envy of the world. So, we are firing on all cylinders right now with Trump’s policies. When the U.S. grows faster, it benefits everyone. Most other countries are sort of pegged against the dollar. So a stable dollar is not just in our interest, but it’s in the whole world’s interest.

Abe administration’s consumption tax rate hike

Fujii: Now in Japan, the Abe administration is going to raise the consumption tax rate to 10 percent in the near future.

Moore: That’s a terrible idea. I mean, raising tax now is the worst possible thing. Given the lack of growth, raising taxes is a really bad idea. It will suck the money out of the economy. It will not restore growth.

Fujii: Why do you think a tax raise policy is bad for economic growth?

Moore: Because you’ll take money out of the productive private sector and give the money to the unproductive government sector. That’s always a mistake. I’ve never seen a country get rich by raising taxes. The growth could be a lot higher with the right policies. Raising taxes would be exactly the wrong thing to do right now. You should cut your business taxes and income taxes. It’s just too bad, if you are moving away from growth policies.

The right policy for the Fed

Fujii: What do you think is the problem with the Fed now?

Moore: Too many people at the Fed believe that growth causes inflation and that higher unemployment leads to less inflation. These are just dumb ideas. I am going to help cast them aside, because growth causes less inflation, not more inflation. It will help everyone. If we get the Fed’s policy right, we will have a stable dollar and solid growth.

The problem recently with the Fed is that they’re raising rates when we don’t have inflation. It doesn’t make any sense to me. Nobody has ever been able to explain that our commodity prices are still down 10 percent. I think they have made a mistake and it cost us some growth. I want more growth. I want people to be more prosperous. I want people at the bottom to be risen up. But that can’t happen if the Fed rate is too loose or too tight. It has to be right.

Fujii: Even now, “Trumponomics” seems to be controversial among those in the mainstream media.

Moore: He is different thinker and is not a usual politician. He is counter-conventional. That’s what we like about him. He has his eyes on making America great again and growing the economy. He is focused on American workers and businesses. That’s what the president should do. I’m very proud of working for him and proud that he is nominating me to be on the Federal Reserve Board.

Make Japan Great Again

Fujii: Ryuho Okawa, Happy Science Group founder and CEO, has been an enthusiastic supporter of Donald Trump from the days of the presidential election campaign.

Moore: Thank you so much for your support for Donald Trump. I think it’s paying off for the American people. I think it’s paying off for the American workers. I wish that Japan could have the same policies, because Trump has made America great again. Now we want to make Japan great again.

 
After this interview, Moore announced that he would withdraw from the Fed nomination.

President Trump said on Twitter on 2nd May, “Steve Moore, a great pro-growth economist and a truly fine person, has decided to withdraw from the Fed process. Steve won the battle of ideas including Tax Cuts and deregulation which have produced non-inflationary prosperity for all Americans. I’ve asked Steve to work with me toward future economic growth in our Country”.

Steve Moore, a great pro-growth economist and a truly fine person, has decided to withdraw from the Fed process. Steve won the battle of ideas including Tax Cuts….

— Donald J. Trump (@realDonaldTrump) Mar 23,2019

….and deregulation which have produced non-inflationary prosperity for all Americans. I’ve asked Steve to work with me toward future economic growth in our Country.

— Donald J. Trump (@realDonaldTrump) Mar 23,2019