Herman Cain: Herman Cain, a Businessman and Banker, Is Concerned with the Status Quo for Banks and Corporatists-With a Hint of Reform

Article excerpt

Until recently, Herman Cain was a largely unknown businessman whose major claims to fame included a high-level appointment in the Federal Reserve System and some degree of success in the private sector. But after an early GOP primary debate hosted by Fox News, his name exploded into the headlines as that of a serious contender for the 2012 Republican nomination.


Some elements of the Tea Party movement quickly latched onto Cain's candidacy--basking in his relatively conservative rhetoric, his harsh criticism of President Obama, and his perceived status as a political outsider. Some of that early enthusiasm, however, began to fade as Cain made the rounds on TV and talk radio.

His position on the war in Afghanistan has been one of the main issues dogging his candidacy. That's because he has repeatedly refused to explain what it is, claiming he would need access to "classified information" before deciding what to do. "Ever since the South Carolina Republican presidential debate, reporters have continued to challenge me for not having a specific plan for our nation's involvement in Afghanistan," he explained in a statement. "They continue to think that if you are running for president then you must have an answer for everything. I don't!"

But on some issues, Cain has expressed his thoughts unambiguously. And for many conservatives, particularly strict constitutionalists, the picture is troubling--especially when it comes to the Federal Reserve and adherence to the Constitution.

Cain served as the chairman of the Kansas City Federal Reserve Bank during the mid '90s, emerging as a vocal defender of the central banking system in the years since then. During a radio interview earlier this year, he insisted that the institution is not unconstitutional because it was created by congressional statute.

While acknowledging that he didn't agree with all of its current policies, Cain has been firm in his defense of the Fed as an institution, insisting that it cannot be abolished. "What would you replace it with?" he asked rhetorically as justification for his position. Cain also criticized Ron Paul's opposition to the Fed by falsely claiming that the Texas Republican and fellow 2012 contender had not proposed an alternative.

On top of his advocacy on behalf of the Fed as an institution, Cain has also expressed opposition even to a congressional audit of the Fed that would allow Congress and the American people to find out what exactly is going on at the central bank. He suggested contacting one of the Fed's "PR people" if Americans wanted answers. Making matters worse for supporters of the growing anti-Fed movement, Cain said an audit was "not necessary" and that calls for government oversight were simply the product of ignorance.

In recent years and months, a great deal of secret information about the Fed has become public. The institution was, for example, clandestinely bailing out foreign banks--including one owned by the Libyan dictatorship of Moammar Gadhafi--with trillions of dollars. Meanwhile, it was manipulating the markets for stocks, bonds, real estate, precious metals, and more.

A bipartisan bill to audit the institution was cosponsored by about three-fourths of the House and supported by more than 80 percent of Americans. But presumably a President Cain would veto such a measure. Candidate Cain did eventually say that he would support some sort of gold standard managed by the Fed. But few details have been supplied, and first, Cain explained, the national debt would have to be reduced.

In addition to central monetary planning, Cain has also been an ardent supporter of various bailouts, especially the so-called "banker bailout" of 2008, officially known as TARP. An opinion column he wrote during the height of the debate blasted "free market purists" for opposing the S700 billion program. "Wake up people! Owning a part of the major banks in America is not a bad thing," Cain opined, claiming opposition to the plan stemmed from "economic illiteracy. …