Powell pick positively piques progressive politicians

President Joe Biden is renominating Republican Jerome Powell for a second term as the 16th chair of the Federal Reserve and will put forth Fed Governor Lael Brainard as vice-chairman.

Critics have argued that Biden must appoint a Fed chair who will ensure the central bank is safeguarding our financial system by fighting climate change as well as inflation and inequality.

Powell was first nominated to the Board of Governors in 2012 by President Barack Obama, and subsequently nominated as chair by President Donald Trump, confirmed in each case by the United States Senate.

In early 2020, Powell launched an unprecedented series of actions to counter the impact of the COVID-19 pandemic on financial markets. Among these actions were a dramatic expansion of the Fed’s balance sheet and the introduction of new tools, including the direct purchase of corporate bonds, and a direct lending program.

The move reappointment made a number of progressive leaders very angry.

“Jerome Powell refuses to recognize climate change as an urgent and systemic economic threat,” said Senators Sheldon Whitehouse and Jeff Merkley), who issued a joint statement.

“The economic fallout from climate change is already underway,” said Whitehouse and Merkley. “Rising temperatures and sea levels are making hurricanes, droughts, and other weather events more severe, frequent, and destructive. These events are destroying homes, roads and bridges, and other physical and financial assets. As FreddieMac warns, ‘rising sea levels and spreading flood plains […] appear likely to destroy billions of dollars in property and to displace millions of people. The economic losses and social disruption […] are likely to be greater in total than those experienced in the housing crisis and Great Recession.’ Climate is not a long-term challenge for the Fed; it demands action now.”

“It’s no secret I oppose Chair Jerome Powell’s renomination, and I will vote against him,” said Senator Elizabeth Warren. “Powell’s failures on regulation, climate, and ethics make the still-vacant position of Vice Chair of Supervision critically important. This position must be filled by a strong regulator with a proven track record of tough and effective enforcement – and it needs to be done quickly.”

“American taxpayers have bailed out large financial institutions enough times. It’s the job of the Federal Reserve to ensure large financial institutions do not put our economy at risk. As we move forward, I will use every oversight tool within reach to make sure that the Federal Reserve works for American families and not Wall Street,” said Warren, who indicated that she will support Brainard.

Representatives Alexandria Ocasio-Cortez, Rashida Tlaib, Ayanna Pressley, Mondaire Jones and Jesús G. “Chuy” García also released a statement urging Biden to appoint a new Federal Reserve Chair instead of letting Powell remain in the job.

Powell substantially weakened many of the reforms enacted in the wake of the Great Recession regulating the largest banks, including capital and liquidity requirements, stress tests, the Volcker Rule, and living will requirements even though millions of Americans who lost their homes and jobs during the 2008-financial crisis have failed to fully recover.

“When COVID hit our shores, American families and businesses were ten years into a historic economic expansion, with a robust jobs market that was reaching even those who had traditionally been left out. The pandemic, however, brought an immediate and painful recession. Fortunately, American resilience, along with strong policy actions and vaccines that enabled the economy’s reopening, cushioned the blows and set the stage for a strong recovery,” said Powell, in a statement thanking Biden. “Today, the economy is expanding at its fastest pace in many years, carrying the promise of a return to maximum employment.

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