Federal Reserve

“Michael Barr was too close to fintech and cryptocurrency schemers to be the Comptroller of the Currency, and he is still too close to them to be Vice Chair for Supervision.”

After a stream of stories throughout the pandemic revealed seemingly rampant congressional insider trading, laughable disclosure practices, and nonexistent enforcement, Congress appears finally to be feeling the pressure to clean up its act. In recent weeks, lawmakers have introduced a flurry of new bills to limit conflicts of interest and help restore public trust in our governing institutions.

As they begin to forge a piece of consensus legislation, they should consider that members of Congress were not the only political leaders to violate public trust throughout the pandemic period. The trading scandals within the Federal Reserve system, for example, revealed material ethical deficiencies that have yet to be satisfactorily addressed. It’s important to recognize that these deficiencies are not unique to the Federal Reserve and that they represent an ongoing threat to public trust in other powerful corners of the executive branch as well. To rebuild that trust in government, lawmakers must learn the lessons of the Federal Reserve scandals and develop fixes for these deficiencies there and elsewhere.

Biden is still married to reviving a long-lost vision of bipartisanship. Never mind that the same Republicans he’s desperate to welcome into the fold literally did not applaud the ideal of bipartisanship he is pushing.

Quaadman’s letter is full of technical language and oozes elite respectability, but underneath all of the jargon, it’s just a bunch of Wall Street banks scared that someone might hold them to account.

Federal Reserve officials’ conduct has cast doubt on the institution’s credibility to provide these answers. It is, therefore, critical that members of the media and of Congress seek independent answers. 

In the fall of 2021, a series of trading scandals rocked the Federal Reserve and cast doubt on every aspect of its ethics program, from disclosure practices and vetting standards to enforcement mechanisms. The message to the public was clear: under chairman Jerome Powell, the Federal Reserve’s sole executive officer and the official to whom the institution’s staff reports, ethical conduct was not a priority. After initially brushing off the seriousness of these revelations, Powell seemingly sought to change that impression by instituting new ethics standards and launching an Inspector General’s investigation.

“We are extremely disappointed to see Biden renominate Jerome Powell as Chair of the Federal Reserve Board. Biden’s endorsement of Powell’s deregulatory agenda will greatly harm American families. Biden has an ambitious and urgent agenda on climate, financial stability, and addressing racial and economic inequality. Powell as Chair of the Federal Reserve will make it more difficult for Biden to ultimately be a successful president. Today is a win for the conventional wisdom and Establishment and a defeat for the planet and Joe Biden’s ultimate legacy.”

An inquiry from the Revolving Door Project has revealed the absence of any records of any communications of any kind between Powell and the Office of Government Ethics,

Congressional selfies and self-congratulations inaugurated the week, but a lot of hard work remains to translate the Infrastructure Investment and Jobs Act’s (IIJA) policies into real-life results. Given that those policies are (generously) middling and that the most promising ones are underfunded, turning these into winning programs will demand energy, creativity, competence, and a strong commitment to the public interest.

Powell did not meet with any non-governmental individuals who are not members of or aligned with the financial industry. This stands in stark contrast to Powell’s predecessor, Janet Yellen, who is now the Secretary of the Treasury.

There is no assurance whatsoever that Quarles’ successor will have anything close to Quarles’ own power, should Biden refuse to nominate a new Federal Reserve Chair.

President Biden is nearing a decision on a Federal Reserve Chair nomination, but the Revolving Door Project’s work will not end with the conclusion of the reappointment fight.

It is very possible that President Biden will show up empty-handed to COP26 in Glasgow next week. And that isn’t just because of the apocalyptic vanity of two Senators from Arizona and West Virginia. Many executive-led policies that are just a matter of political will have not been done, and some of those which have are pure paper tigers. Biden’s administration failed last week to take advantage of a lesser known, but extremely meaningful climate action opportunity. The Financial Stability Oversight Council (FSOC) released its long-awaited report on climate-related financial risk, which the President personally ordered months ago. And it was a complete flop. 

We hope that these one-pagers help political professionals, the press, and onlookers to better understand the facts surrounding the reappointment debate.

It’s highly probable that Powell guessed in advance that October would be a rough month for stocks, and made a multi-million dollar choice to get out.