I have an approach to how we are going to cut things, but the other thing is you've got to grow this economy. This is why the Federal Reserve has been doing all these creative things to try and be a backstop to the Treasury.
Politicians love numbers.
That was evident this week at the GOP presidential debate in Las Vegas where each candidate was able to toss out an endless stream of numbers to justify their pet positions or programs.
And when it comes to understanding those numbers, presidential hopeful Herman Cain — much like his recent poll numbers — is not behind. A former chairman of the Federal Reserve Bank of Kansas City, Cain was one of the wizards behind the curtain when it came to the data used to diagnose the health of the U.S. economy.
It was his questioning of numbers that first gained Cain attention in the political arena. In 1993 he was president-elect of the National Restaurant Association when he challenged President Bill Clinton over costs imbedded in a proposed health care plan.
When Clinton defended his plan, Cain is reported to have responded: "Quite honestly, your calculation is inaccurate. In the competitive marketplace it simply doesn't work that way."
In addition to his business background, Cain has academic training that helps him understand numbers. He earned a bachelor’s degree in mathematics, and a minor in physics, from Morehouse College in 1967. He also has a master’s degree in computer science from Purdue University.
In a private interview after Tuesday's debate, he told the Deseret News the economy needs some critical care.
Asked about the numbers and whether the American people can trust any of the figures that come from Washington D.C., he said, “It depends on which agency the numbers are coming from, to be perfectly honest."
Cain said he trusts numbers that come from the Federal Reserve, but he doesn’t agree with all of the agency's actions. He said the Fed faces a difficult challenge right now.
“The Fed has two objectives in its mission when it should really only have one,” he said. “It is supposed to control unemployment and inflation by varying the money supply. That’s two targets with one arrow. Congress needs to clip its wings and say, ‘Just focus on price stability — keeping inflation in check.’”
Cain said having sound money is important to the overall condition of the U.S. economy and currently the value of the U.S. dollar is hindered by an enormous debt burden and a lack of economic growth.
“You wouldn’t want to wake up in the morning and read on the front page of the newspaper that an hour has been cut back to 58 minutes,” Cain said. “Just like the measurement of time must be solid, the measurement of weights must be solid, the measurement of money must be solid. And that means we get the Federal Reserve back to one thing and that is controlling inflation.”
Cain told the Deseret News that merely cutting government spending is not the best way to deal with the debt burden. “I have an approach to how we are going to cut things, but the other thing is you’ve got to grow this economy. This is why the Federal Reserve has been doing all these creative things to try and be a backstop to the Treasury.”
Cain said when he served on the Federal Reserve in the 1990s, the Fed was able to control inflation because GDP growth was solid and members did not have to concern themselves with a $14 trillion deficit.
“In the 1990s, more foreign countries were standing in line to buy our debt. With $14 trillion and a downgrade in our currency — in our rating — not as many foreign countries are standing in line as often,” he said. “We’ve got to get our house in order by growing the economy and bringing down the national debt.”
Flint Stephens has a master's degree in communications from Brigham young University. He has been an editor and journalist for newspapers in Utah and Illinois. His blog is www.utahvalleydad.com.