The United States Federal Reserve (Fed) is an enormously powerful institution that plays a significant role in our economy. Its stated purpose is to conduct United States monetary policy to promote employment, stable prices, and moderate long-term interest rates in the U.S. economy.
The President has the critical task of appointing individuals to key positions within the Fed, subject to the Senate confirmation. Unfortunately, President Joe Biden’s latest slate of nominees poses enormous concerns over the institution’s direction and United States monetary policy in general.
Republicans on the Senate Banking Committee led by Ranking Member Pat Toomey (R-Pa.) have raised serious concerns over President Biden’s selection to key positions within the Fed. They are bringing attention to red flags ranging from a troubling lack of geographic and professional diversity to extraordinarily radical policy positions.
Along with the renomination of Jerome Powell as Chairman of the Federal Reserve, President Biden has also nominated Lael Brainard, Lisa Cook, Sarah Bloom Raskin, and Philip Jefferson to critical positions. All but one of these nominees are from locations within the Federal Reserve’s Fifth District (Richmond).
If President Biden’s current slate of nominees is confirmed, the makeup of the Federal Reserve Board would be such that a majority of members originate from the Fifth District and only two members would have significant private sector experience.
Section 10 of the Federal Reserve Act states that “in selecting the members of the Board, not more than one of whom shall be selected from any one Federal Reserve district, the President shall have due regard to a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.” See 12 U.S.C. § 241.
The purpose of Section 10 is to ensure that no single geographic area receives a concentrated and outsized influence in governing our economy. Despite this clear mandate for geographic diversity in the Federal Reserve Board of Governors, President Biden chooses to ignore the unique economic needs of the vast majority of our country while embracing the far left.
Despite campaigning on a message of national unity, President Biden is spending his days in the White House courting the approval of the most radical members of his party. His nominees to the Federal Reserve are no exception.
- President Biden’s pick for Vice-Chair of the Federal Reserve, Dr. Brainard’s nomination, results from a push by Progressives to increase regulation and weaponize United States monetary policy against climate change.
- She suggested that the Fed should subject banks to a climate scenario analysis, an idea clearly outside of the mission of the Federal Reserve.
Sarah Bloom Raskin
- Nominated to the position of Vice-Chair of Supervision created in 2010 as part of the Dodd-Frank Act to help the Fed with bank regulation and supervision. This position serves a fixed four-year term.
- She has expressed support for increasing the role of the Federal Reserve in combating climate change, and has demonstrated open hostility towards the oil and gas industry.
- In a May 2020 Op-Ed, Raskin referred to the fossil fuel industry as a “dying industry” that should be expressly denied emergency relief.
- She failed to disclose a 2018 letter harshly criticizing the bipartisan Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) to the Senate Banking Committee. Signed into law in May 2018, this legislation reformed the one-size-fits-all regulations of Dodd-Frank that crushed small banks.
- She is nominated to the Federal Reserve Board of Governors, an influential position that serves a 14-year term. The Board of Governors is made up of seven members tasked with overseeing the operation of the 12 Reserve Banks.
- She initially failed to disclose more than 40 items to the Senate Banking Committee, including a March 2021 webinar presentation for the University of California Berkeley, where she expressed support for the radical Commission to Study and Develop Reparation Proposals for African Americans Act (H.R. 40).
- The Federal Reserve is designed to act outside of the influence of partisan politics, yet one look at Lisa Cook’s social media reveals radical far-left convictions. The Federal Reserve Board of Governors is no place for left-wing activists.
Why it Matters
If confirmed, President Biden’s nominees would represent a fundamental shift in United States monetary policy. Transforming the central bank of the United States into a partisan tool to combat climate change and attack industries the left deems problematic is outside the bounds of the mission of the Federal Reserve and should be defeated at every opportunity.
The latest slate of Federal Reserve nominees does a disservice to the unique economic needs that are in large part ignored. President Biden’s selections are disproportionately left-wing academics in and around Washington D.C. with limited to no private sector experience.
The consequences of these nominees are, without a doubt, severe. It’s wholly unsurprising that President Biden has once again abandoned his promises of national unity to favor progressive radicals. Unfortunately, the stakes of transforming our central bank into a partisan tool of the far-left are incredibly high.