I don’t think there’s been a complete slate on the Federal Reserve Board of Governors during the entire Obama Administration. But that would end if they somehow got these two economists past the Senate for confirmation.
The Obama administration has identified two economists, one Democrat and one Republican, for two empty seats on the seven-member Federal Reserve Board, according to several people familiar with administration deliberations.
The two are Jeremy Stein, a Harvard University specialist in finance, and Richard Clarida, an executive vice president at money manager Pimco and professor of economics and international affairs at Columbia University.
Mr. Stein did a stint in the White House at the beginning of Barack Obama’s presidency. Mr. Clarida was a Treasury official in the early years of the George W. Bush administration.
The speculation is that the bipartisan set of nominees is the mix required to get Richard Shelby to sign off on the nominations and get them on the Fed Board. Of course, there’s no actual need for Shelby’s sign-off, as the President can adjourn Congress and make recess appointments at his leisure in the event of obstruction. But he’s clearly made the decision not to go that route.
I’d be lying if I said I knew much about Stein or Clarida. Matt Yglesias has some early thoughts. Stein has apparently done some research on excess reserves. As you may know, the Fed is currently paying banks to keep excess reserves at the Fed, and removing that incentive may actually spur investment and lending. Clarida’s work circa 2009 seemed to discount the value of fiscal stimulus, and even though the evidence shows the stimulus worked I could imagine an elegant way for Clarida to talk his way out of that. He isn’t being chosen for the Senate, however, but the Fed, and he does seem to have a belief in the value of monetary policy to boost recoveries.
I’m not sure if either of these picks will see the world the way Floyd Norris does, where inflation is not seen as evil but as a tool to aid deleveraging and fix balance sheets. And if the Fed remains consumed by the spectre of inflation, they won’t do much to fix the economy.
Still, I could see these two choices falling in line behind Ben Bernanke on most issues, and if Bernanke isn’t driving monetary efforts on the Fed, they won’t happen. So ultimately, while these picks may provide ballast against the inflation hawks, they probably won’t change the balance of power to a major degree.




18 Comments

Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL News Desk
.
“the President can adjourn Congress and make recess appointments at his leisure in the event of obstruction”
I am surprised at the general acceptance herein of stronger executive actions.
there’s no actual need for Shelby’s sign-off, as the President can adjourn Congress and make recess appointments at his leisure in the event of obstruction.
that’s a joke, right?
Only a republican would do such a thing. And Obama is a…ummm…
my head is starting to spin.
Of course, there’s no actual need for Shelby’s sign-off, as the President can adjourn Congress and make recess appointments at his leisure in the event of obstruction. But he’s clearly made the decision not to go that route.
CAVER-IN-CHIEF back at work…
Bush would have put two Rethugs in. You’d think a Democrat would put two Democrats in, but you would be wrong. A Rethug and a Rethug Lite From harvard so Shelby can vote for them.
There was no need or urgency to stack the deck when Dems controlled both houses. Its better to have the drama and “fight” to Stack every agency with Neocons.
I’m voting for Perry. He is a real asshole with no pretense to be anything otherwise.
Not enuff right wing destruction yet. In spite of our suffering, most of us are still asleep or dumb as stumps. We need Rick Perry.
What’s wrong with following the bloody Constitution?
Obama is not using the recess appointments and signing statements because that would facilitate him getting something done for the people of this country.
Some of us already have Rick Perry and feel strongly against inflicting him on the rest of the country. That would truly make us even dumber than the stump that’s under all the Good Hair.
Not that this is in any way an endorsement for Obama, who I consider the most destructive and dangerous president in my lifetime.
How did we get into this mess? You could dump all the presidential pretenders in the ocean and no one would miss them.
It would probably violate some environmental laws with all that hair spray and gel.
Thank you David for yet another outstanding article. I am new to FDL, and have been following you for a long time. The very idea that Obama (or Dubya) are stupid, or incompetent or stand for anything at all, except for the Oligarchy, simply astounds me. There is no class war going on, we lost people, get over it. All you need as proof is to look at how Europe and the Middle East is going up in flames, as the Federal Reserve/and the Banker/Wall St. crowd got fully paid off, and are continually allowed to manipulate the markets, and keep the food prices sky rocketing, and oil/gas. But at least those in Europe and the Middle East have the courage and dignity to march, and to put their lives on the lines. I’ve been around a very long time (45 years) as a Democratic activist, but I keep trying to remember the last time our so called Democracy/Republic worked. What I see happening is this subtle yet, seamless continuation of the Imperial Presidency, but I keep asking myself the same question. Who is really in charge of this nation? My own evaluation of this after so many years, is in fact, the Federal Reserve, the OCC, the SEC, the so called ‘regulators’ that were all paid off to look the other way, simply continue the Controlled Fraud, as William K. Black has stated, (as have so many others). We’ve had so many puppet Presidents in the past 30 years, that now we are full conditioned to expect the same, the next time around. I’ve studied again and again, how this all came to be with the bullshit of Rubin, Greenspan and Clinton. What I find amazing is that some people actually believe there is a difference between the Neo-liberals and Neo-Cons. The reason NO jobs are ever coming back is completely evident: Both parties are very, very busy selling them overseas. And BTW, fuck Richard Trumka and Obama, and the rest of the National Democrats who somehow lost their comfortable shoes, when it mattered most. My money, this year will all go back to Congressman Alan Grayson. He was the smartest Wall Street ferret from hell (besides Eliot Spitzer and now another decent fighter: AG, Eric Schneiderman, of New York.) Sometimes, great, great populist candidates can light an entire fire, if we can support them. The great, great film by Charles Ferguson, Inside Job, told the hole story. But then so has Yves Smith, Simon Johnson, and so many others. No one is fooled anymore, and that is exactly why we are facing the most reactionary politics in our nation, with Obama, but the real question I keep asking myself is this: Wasn’t that the plan in the first place? I know this is speculation on my own part, but there is simply no other excuses left for what Obama has allowed to occur. I love how some people call our Banking System the ‘Shadow Banking System’ but what I believe Obama is, is in fact the ultimate: Shadow President of all time: He has no core principles, no real intrinsic sense of mortality or ethics, no true sense of values or character as to who he is as a leader or human being. He reminds me as lost old burned out haunted house, that the cold winds of his meaningless soul blows through everyday, whereby he dares to show up to give another meaningless speech to those that trusted him the most, and no longer even pay attention to him anymore.
I’m sorry for the long post David, and everyone, but I just wanted to tell you again, David, how much I admire you and Jane and scarecrow for your vigilance and great work. I used to post at DailyKos, as Badabing. I’m done there because of obvious reasons. Carry on, and again thank you for your work, and letting me speak my heart to all.
Ms. B.
FWIW, Nouriel Roubini thinks that both are good choices.
Glad to hear that. I never heard of either of them. What happened to Diamond?
Obama will appoint a Republican to the Federal Reserve Board to placate right wing Republican extremist Richard Shelby of Alabama. There’s really no need to do that but Obama is Obama.
Which raises the question of who he will nominate for Supreme Court justices should seats become vacant and Obama is reelected.
Yes indeed Obama is the most dangerous President so far. He proves to be a closet fascist, so there is no end to the criminal activity he will endorse.
Oh this will fix everything. More Harvard professors and a PIMCO guy. Why not just put Jamie Dimon in charge.
By all accounts Stein and Clarida are great guys, but the Republicans would certainly be justified in blocking their appointments. Clearly both men are currently ineligible for appointment to the Board of Governors under the Federal Reserve Act.
Section 10.1 Appointment and Qualification of Members
“In selecting the members of the Board, not more than one of whom shall be selected from any one Federal Reserve district…”
Jeremy Stein lives and works in Massachusetts, which is in the Boston Fed district. There’s already a Fed governor from there.
“The bill clerk read the nomination of Daniel K. Tarullo, of Massachusetts, to be a member of the Board of Governors of the Federal Reserve System.”
http://thomas.loc.gov/cgi-bin/query/z?r111:S27JA9-0014:
Richard Clarida works in New York and a resident, so far as I can tell, of the part of Connecticut that’s in the New York Fed district (the other part of Conn. is in Boston Fed district, see above). New Jersey is also in the New York Fed district.
“The Nomination of Ben S. Bernanke, of New Jersey, to be a Member and Chairman of the Federal Reserve Board of Governors”
http://banking.senate.gov/public/index.cfm?Fuseaction=Hearings.Hearing&Hearing_ID=0d824f01-baaa-4c5d-bf00-d6aedd8e9c74
Great post David. My questions are very simple: Where is Richard Trumka on this? Oh, right crickets. He comes out of his cowardly whore hole every few weeks, and takes out his wooden sword and uses spit balls, to show his brilliance while doing even less than Obama, if that is possible. (Which is exactly why the Unions are just as guilty and complicit, as is Wall St./the Banks in this ultimate charade of ‘We got ours so fuck you routine,’ My answer is this: We primary Obama with Alan Grayson/Eliot Spitzer, with a promise of naming Eric Schneiderman (AG or New York as the AG or our nation) with another promise of a great new honest economic team. Krugman, Stiglitz, Galbraith, William K. Black, Yves Smith, etc.) We clean the entire fucking house out including the OCC, and the SEC and HUD. If we do not do this now, then we will be fucked forever. I hate to say it but I happen to agree with Bill Maher about getting ‘Face Ripper Monkey’ in charge of our own party, because regardless of who we vote for now, it will continue to snowball into hell as they all drive us off the cliff. What part of that lesson haven’t we learned yet. Thanks. Ms. B.