FOR IMMEDIATE RELEASE
Contact: Kenny Stancil, [email protected]; Timi Iwayemi, [email protected]; Jeff Hauser, [email protected]
The annual Jackson Hole Economic Symposium (JHES) will be held from August 22-24. The theme of the forum is “Reassessing the Effectiveness and Transmission of Monetary Policy.”
Ahead of this year’s JHES, Revolving Door Project Executive Director Jeff Hauser said: “With the possible exception of Attorney General Merrick Garland, Federal Reserve Chair Jerome Powell is the worst appointee in President Joe Biden’s administration. The sad irony is that Biden didn’t have to renominate a Republican private equity executive to lead the Fed in 2022; in fact, we implored him not to. Our concerns about Powell’s ethical shortcomings, fickle commitment to full employment, and fealty to deregulation have, sadly, been borne out by his actions.”
“Should she win the upcoming election, Democratic presidential nominee Kamala Harris must heed the lessons of the Powell era and nominate a central bank leader without compromising ties to Wall Street who is dedicated to maximizing employment and strengthening financial regulation,” Hauser added.
Revolving Door Project Senior Researcher Kenny Stancil said: “As central bankers gather this week in Wyoming to discuss the effectiveness of contemporary monetary policy, they should conclude that the Fed as currently constructed is ill-equipped to deal with the challenges of the 21st century. The simple fact is that climate change is already making necessities more expensive, with worse disruptions yet to come. Given that the climate crisis is a cost-of-living crisis that poses huge threats to macroeconomic stability, steering monetary and lending policies towards clean energy (and away from fossil fuels) is among the Fed’s most important duties.”
Background
At the start of the 2023 JHES, we wrote that “Jay Powell’s legacy depends on whether he steps up on climate risk.” In the intervening 12 months, Powell has not only refused to step up on climate risk, but he has also failed to fulfill the Fed’s responsibilities in other ways. Here’s a sampling of our work on Powell over the past year:
- In “The Federal Reserve Could Be a Powerful Weapon Against Climate Change,” we summarized the tools available to the Fed to mitigate climate-related financial risks while highlighting Powell’s refusal to even acknowledge relevant policy recommendations made by a Basel Committee on Banking Supervision task force.
- In “To Save the Planet, Biden Should Not Renominate Powell,” we laid out an early case against giving the current Fed chair a third chance when his term expires in 2026. As we explained, Powell has refused to curb lending to planet-wrecking fossil fuels while imposing interest rate hikes that have a) impeded the green transition, b) worsened the housing affordability crisis, and c) boosted Donald Trump’s electoral prospects.
- In “Will Jay Powell’s Cheerleaders Ever Admit They Were Wrong?” we reviewed why we opposed Powell’s renomination throughout 2021 and asked whether the Fed chair’s prominent defenders were willing to provide a mea culpa given that the nominee they said would be an ally in advancing Biden’s green agenda has actually hampered it.
- In “The Fed’s FOIA Office Is Obscuring Its Trading Scandals,” we described how RDP and the public have been denied access to information about the scandalous trading activities of Powell and other Fed officials during the Covid-19 pandemic.
- In “Jerome Powell’s Fingerprints Are on the Next Banking Crisis,” we described how, even in the aftermath of a major banking crisis caused in part by Powell’s regulatory rollbacks and supervisory blunders, the Fed chair is currently obstructing the finalization of tougher capital requirements for big banks.
- In “When It Comes to Climate-Related Financial Risk, the Fed Needs to Get Its Head Out of the Sand,” we criticized Powell for thwarting an international effort to require lenders to disclose their plans to meet emissions reduction targets.
- In “Powell Goes Soft on Wall Street Again? Can’t Say We Didn’t Warn You,” we criticized Powell for refusing to join other federal regulators in proposing long-delayed limits on the incentive-based compensation model that has led bank executives to take excessive risks.
- In “What Jamie Dimon Gets That Matt Yglesias Doesn’t,” we debunked the idea—promoted by Powell’s supporters during the renomination fight of 2021—that the Fed chair would defer to the Fed’s vice chair for supervision. As we explained, Powell’s moves to undermine regulatory initiatives led by VCS Michael Barr demonstrate the wrongheadedness of that view.
- In “Jay Powell Is Trying to Get Donald Trump Elected,” we slammed Powell for keeping interest rates at a 23-year high for the twelfth consecutive month even though the high cost of credit increases expenses for consumers and even though evidence of falling inflation and rising unemployment reveals the need for an immediate cut.
- In “The Fed Chair Thinks Wall Street Should Have Veto Power over Financial Regulations. That’s a Mistake,” we detailed Powell’s effort to equate “broad support” for the proposed Basel III framework with “bank support.” By instructing regulators to acquiesce to the big bank CEOs who have led a historically fierce campaign in opposition to bank capital hikes, Powell effectively invited the financial industry to quash, through negative public feedback, any rule proposal it doesn’t like.
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