While I have disagreed with Sumner on some important issues the last few posts I concede that Obama and his team have seemed too passive in fighting for their nominees and shaping the Fed. While the GOP has managed to shape the Supreme Court to it's desires since Reagan, Obama actually has had the opportunity to shape the Fed and hasn't seemed to really appreciate this.
While we can agree to disagree about just what the Fed does or doesn't have the power to do-and we'll discuss this disagreement at other times-no question that the Administration should relish the chance to shape who's on the Fed as Obama has had particularly during a bad recession and a gridlocked Congress. It has been questioned why Obama wouldn't do a recess appointment for the Fed. Such questions are now academic as his nominees were confirmed yesterday in the Senate:
"The Senate confirmed President Barack Obama's two nominees to the Federal Reserve Board of Governors, filling the seven-member panel for the first time since April 2006."
"The Senate approved the nominations of Harvard economics professor Jeremy Stein on a 70-24 vote and former private-equity executive Jerome Powell by a vote of 74-21."
"Mr. Obama nominated the two late last year. The White House had hoped that by pairing Mr. Powell, a Republican, with Mr. Stein, a Democrat, it could more easily win Senate approval. The Senate Banking Committee approved them in March, but confirmation by the full Senate was held up by Sen. David Vitter (R., La.), who has opposed the Fed's easy-money policies."
"Messrs. Stein and Powell "clearly also support the current direction of Chairman [Ben] Bernanke and the Fed and for that reason I cannot support the nominations," Mr. Vitter said on the Senate floor Thursday."
Senate practices allow any one senator to force long delays before a vote and Mr. Vitter exploited this prerogative to the hilt. Still he's kvetching:
"Republican Senator David Vitter, whose earlier objections had nearly scuttled the nominations, complained during the brief debate on the nominations that Bernanke's "extremely easy money policy" could be dangerous to the health of the economy."
http://www.cnbc.com/id/47465112
"Vitter also argued that the two could strengthen Bernanke's hand in issuing new regulations under the Dodd-Frank financial reform law that many Republicans oppose. "These two new members change the map," he said. "I think that will significantly push these regulations to the left."
Yes David, eat your heart out. Meanwhile the fact that we still have to even say "Senator Vitter" is a moral travesty. The late Andrew Breitbart only smeared Democrats of course which leaves us with the absurdity that Anthony Weiner is out of politics and Vitter isn't.
He wasn't the only disapproving GOP chicken hawk yesterday:
"Sen. Bob Corker (R., Tenn.) said that while the nominees might not be as focused on price stability as he would prefer, he deemed them qualified for the board. The Fed has a dual mandate that charges it with pursuing both steady prices and maximum employment. Critics of the Fed have worried that its policy of super-low interest rates could spur inflation."
"These two nominees candidly do not represent the kind of more hawkish position that I would like to see the Federal Reserve take where they're concerned about price stability over the long haul," Mr. Corker said on the Senate floor Thursday.
http://online.wsj.com/article/SB10001424052702303360504577409953189797484.htmlmod=WSJ_WSJ_US_News_5
Absolutely Senator Corker let the people eat price stability. Yum. Turns out the bank pressure worked.
"Although Mr. Stein has pushed for banks to hold greater cushions of capital, several Wall Street firms supported the nominees and privately pressed Mr. Vitter to drop his objections."
I can understand Vitter's misgivings. It must really be dismaying to see the government functioning right for once. Gridlock and dysfunction is what conservatism is all about.
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