Economy Jake Johnson Politics

Opposing His Renomination, Warren Calls Fed Chair Powell ‘A Dangerous Man’

"Your record gives me grave concern," Sen. Elizabeth Warren told Jerome Powell. "Over and over, you have acted to make our banking system less safe."
The Marriner S. Eccles Federal Reserve Board Building in Washington, D.C. (AgnosticPreachersKid / Wikimedia Commons)

By Jake Johnson / Common Dreams

Sen. Elizabeth Warren of Massachusetts said Tuesday that Federal Reserve Chair Jerome Powell’s record of weakening post-2008 Wall Street regulations makes him “a dangerous man” to lead the U.S. central bank—and should disqualify him from serving a second term.

“Renominating you means gambling that for the next five years, a Republican majority at the Federal Reserve with a Republican chair who has regularly voted to deregulate Wall Street won’t drive this economy over a financial cliff again,” Warren said during a Senate Banking Committee hearing. “With so many qualified candidates for this job, I just don’t think that’s a risk worth taking.”

Warren voiced disagreement with those who have downplayed Powell’s record on financial regulation, arguing that the Trump appointee’s “deregulatory actions” have put “taxpayers at risk for hundreds of billions of dollars.”

“So far you’ve been lucky,” said Warren. “The 2008 crash shows what happens when the luck runs out. The seeds of the 2008 crash were planted years in advance by major regulators like the Federal Reserve that refused to rein in big banks… Your record gives me grave concern. Over and over, you have acted to make our banking system less safe.”

Watch:

Warren is not the only congressional Democrat warning President Joe Biden not to renominate Powell, whose term expires in February 2022.

Last month, as Common Dreams reported, Reps. Ayanna Pressley (D-Mass.), Mondaire Jones (D-N.Y.), Jesús “Chuy” García (D-Ill.), Alexandria Ocasio-Cortez (D-N.Y.), and Rashida Tlaib (D-Mich.) wrote a letter urging Biden to replace Powell. Unlike Warren, the House Democrats focused primarily on Powell’s climate record, which they characterized as badly inadequate.

“Under [Powell’s] leadership, the Federal Reserve has taken very little action to mitigate the risk climate change poses to our financial system,” the lawmakers wrote. “At a time when the Intergovernmental Panel on Climate Change is warning of the potential catastrophic and irreversible damage inflicted by a changing climate, we need a leader at the helm that will take bold and decisive action to eliminate climate risk.”

Some progressives, such as economist Dean Baker, have argued in favor of Powell’s renomination, pointing to his focus on keeping interest rates down and achieving full employment.

But Powell’s critics argue that there are other viable Fed candidates who similarly value full employment while also taking seriously financial regulation and the climate crisis, including Michigan State University professor Lisa Cook and attorney Sarah Bloom Raskin.

“It’s important for Biden to not settle for Powell merely because he’s been strong on monetary policy in the last few years,” the Revolving Door Project’s Max Moran wrote in a blog post in July. “Biden can choose someone more deeply devoted to full employment, and who doesn’t push him into a false choice between being strong on monetary policy and strong on regulatory policy.”

“The president can have his cake and eat it too here, so he should,” Moran added. “Because if he doesn’t, it’s average people who will suffer the most.”

6 comments

  1. PLEASE read the many newsletters “Wall Street on Parade” showing the gross failures and dangers of Jerome Powell. He should be replaced.

    1. Sigh– do you know anything about economics? Do you understand how there is a financial war going on with Europe and China ? Do you understand anything about geopolitics?
      Powell is the last gasp hope for the US. If you put in Yellen– which is what will happen if Liar Warren gets her way (oh yes and AOC the economic brain 🤣) .

    2. I read many and subscribe to the views of the two former wall streeters. Some of their technical stuff is good. They are FAR from having ANY knowledge of the geopolitics that is behind all this push to replace Powell. FOLLOW THE MONEY. This is Pharma/Soros/Gates pushing the agenda. The Davos elite are desperate to destroy NY/US as the financial capital. Just look at what is happening in Germany financially and the fall of the Euro. Money is flowing into the US– this does not help Europe. Also the Chinese are closing rank and kicking out foreign capital (Evergrande etc). Is it going to Europe– no, the US — what does that tell you.

      So you want to get rid of Powell and have Yellen bow down to the Europeans? THIS IS ALL (COVID et al) ABOUT MONEY and CONTROL. Wake up!

  2. If I have learned anything since the invention of social media, it is that Americans do not understand the first thing about economics much less the mechanics of fiscal policy or the influence/power of the Federal Reserve.

    As long as their credit card balance is sufficient to pay for the newest Ultra HD smart TV, and as long as Jeff Bezos can deliver it to their front porch in time to watch the next game of their favorite football team, they don’t care who the next chairman of the FRB may be.

    If Donald tRump had promised the country a new TV and another $600 “stimulus” payment, he would still be President.

  3. The Morgan & Morgan law firm runs ads asking if you would ask your dentist to do your taxes and the like. People connecting the Fed & climate apparently would. The stuff about the Fed and climate is just silly. An amazingly dopy waste of people’s time and effort. Why not berate the head of the Forestry service – Randy Moore – just looked it up -for letting Wall Street run amuck?

    I think such a delusional campaign is a residue of the neoliberal, Greenspan era that build up the Fed Chair into an all-powerful maestro. That and crackpot conspiracy theorists who fantasize the Fed is omnipotent – which feeds into the neoliberal bankster myth of the “independent central bank”. The Fed and its Chair are actually much more of a Wizard of Oz fraud that only pretends to have great power. And it has no more to do with climate than forestry has to do with bank fraud. With a gang who can’t shoot straight like these as enemies, our insane bloodthirsty oligarchs don’t need friends.

    1. Hmm, let’s see. 120 bln per month for QE (for as long as Ican remember), adding nearly 10 trillion to the Federal Reserve’s balancesheet.
      Backstopping or buying corp paper.
      What are corporatations NOT doing?They are not skimping on the chance of borrowing money-for-nothing to buy back their stock.

      Sept. new buybacks total was 2nd best month of the yr with > $85b, bringing YTD total to $612b. –
      Party-on dudes!!
      Many of these center of power conglomerates are use their calcified and disproductive self serving undue influence to stay entrenched. Yes, nuclear brinkmanship and anthropogenic climate catastrophe .
      Biden will have nothing to do with this Fed Chair choice. The real center’s of power do. The various administrations merely serve those centers but hey, thanks for your “common” sense.

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