The WSJ reports Biden Nears Endgame on Fed Chair Decision
One group of Democratic lawmakers, which includes Massachusetts Sen. Elizabeth Warren, has called on Mr. Biden to install a new Fed chair because they want the central bank to take a tougher approach on bank regulation and to use those supervisory powers more aggressively to address climate change. They are also eager to see more diversity at the senior ranks of the U.S. government.
Other Democrats have lauded Mr. Powell’s response to the coronavirus pandemic and his focus on elevating the importance of tighter labor markets, which they say greatly benefits minorities and other potential workers that typically struggle to find jobs. These backers have said strong and unique bipartisan congressional support for Mr. Powell has insulated the central bank’s policies against more intense partisanship across Washington.
Sen. Jon Tester (D., Mont.) said on Sunday that it would be a mistake for Mr. Biden not to renominate Mr. Powell. “I think he would be confirmed by a large margin if the president appointed him,” Mr. Tester said on NBC’s “Meet the Press,” arguing that Mr. Powell has a “proven track record.”
Why the Delays?
The WSJ snips are self explanatory. But why the delays? Here are the scenarios.
- Biden wants to nominate Powell
- Biden is clueless. He does not know who he wants.
- Biden wants to nominate Brainard.
I rule out #1.
If Biden really wanted to nominate Powell, he would have done so already.
Biden has now extended an "announcement soon" message several times.
He may have done that once to appease the progressives like Warren (making it look like Brainard was in play). However, repeating such a tactic adds no value.
Is Biden Clueless As to Whom He Wants?
That is certainly easy to believe, but there are other issues that make things unclear.
For starters, Biden is pulled in two different directions, one by Warren, the other by Tester.
The key reason for the delay could be as simple as this question: "Can my nominee be approved by the Senate?"
This leads us to my top choice.
Biden Wants Brainard
The pieces all fit. Whereas Powell would easily be approved by the Senate, Brainard is iffy.
Biden wants Brainard but is one or two senators short. The delays are due to incessant hounding of the Democrat holdouts to get them on board.
Tester, are you being hounded?
Warren probably wants a Brainard nomination regardless of the outcome, but whoever is actually calling the shots for Biden (or Biden himself) likely doesn't.
Opinions of the House Progressive Caucus don't matter. This is a Senate only determination although it's possible, if not likely, that someone like Obama is applying further pressure along with Warren.
If so, further outside pressure could add to Biden's indecision.
If Biden nominates Brainard, it's a signal that he, his staff, or Senate Majority Leader Chuck Schumer believes they have 50 votes with Kamala Harris casting the tie breaker.
If Biden nominates Powell, I suggest it's because Brainard does not have the votes.
It's also remotely possible Biden ultimately concludes Brainard has the votes when she really doesn't. A Brainard nomination that fails would be messy.
Brainard will fall short of the needed 50 votes. I expect this to be evidenced upfront by a Powell nomination. We need to reassess if Biden does nominate Brainard.
If Biden nominates Powell for Chair, expect Brainard to become vice chair for supervision replacing Randal Quarles, a Trump appointment. Quarles term expired in October.
The vice chair of supervision is the Fed’s top banking cop.
Progressives want more regulation and and they want more climate change activism from the Fed.
Biden's Bank Regulatory Nominee Espouses Helicopter Money and Praises the Old USSR
Saule Omarova is President's Biden's Marxist nominee for Comptroller of the Currency.
I expect Omarova to go up in flames. Biden will not want another nomination mess, thus the delays on the Fed Chair.
In case you missed it, please see Biden's Bank Regulatory Nominee Espouses Helicopter Money and Praises the Old USSR
Fed to Turn Markedly Left
One way or another, Progressives rate to get their wishes for more regulation as well as more climate activism.
Look for the supposedly independent Fed to turn markedly Left.
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