Courtesy of Pam Martens
(Left to right): Robert Kuttner, Senator Elizabeth Warren, Matthew Yglesias.
“Will he” or “won’t he” has become the favorite chatter among the Wall Street elites, progressives, and the business press. We’re talking about whether President Biden will, or will not, give Fed Chair Jerome Powell a second term at the helm of the Federal Reserve. Powell’s current four-year term as Chair ends in early February, 2022.
The debate heated up last week. On Wednesday, Robert Kuttner, co-founder and co-editor of The American Prospect, and professor at Brandeis University’s Heller School, wrote this about Powell:
“As a Republican, he partly bulletproofs Biden against the charge of being soft on inflation, and serves as an administration olive branch to Republicans in Congress.
“But Powell has been dismal on the Fed’s other job—financial regulation. My sources say the decision hasn’t been made yet, but Biden is likely to name a new Fed chair.”
The very next day, during a Thursday Senate Banking Committee hearing with Powell, Senator Elizabeth Warren further drove home the message that Powell has been “dismal” on financial regulation. Warren criticized Powell for loosening regulations on the serially charged mega banks on Wall Street. Warren said that Powell has weakened the rules on living wills for banks (how the bank would be unwound if it became insolvent) and also weakened the Volcker Rule by allowing the banks to take on more proprietary trading risks and expand their investments into private equity and hedge funds.
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