So much for President Donald Trump ending the Fed or even auditing it.
The President has just nominated Jerome “Jay” Powell to head the Federal Reserve following the expiration of Janet Yellen’s term on February 3, 2016.
Powell has operated his entire career inside the top levels of the establishment.
In 1979, Powell moved to New York City and became a clerk to Judge Ellsworth Van Graafeiland of the United States Court of Appeals for the Second Circuit. From 1981 to 1983, he was a lawyer with Davis Polk & Wardwell, and from 1983 to 1984, he worked at the firm of Werbel & McMillen.
From 1984 to 1990, Powell worked at Dillon, Read & Co.,
Between 1990 and 1993, Powell worked in the United States Department of the Treasury, at which time Nicholas F. Brady, the former chairman of Dillon, Read & Co., was the United States Secretary of the Treasury. In 1992, Powell became the Under Secretary of the Treasury for Domestic Finance after being nominated by George H. W. Bush
In 1993, Powell began working as a managing director for Bankers Trust.
From 1997 to 2005, Powell was a partner at The Carlyle Group.
After leaving Carlyle, Powell founded Severn Capital Partners, a private investment firm focused on specialty finance and opportunistic investments in the industrial sector.
In 2008, Powell became a managing partner of the Global Environment Fund, a private equity and venture capital firm that invests in sustainable energy.
Between 2010 and 2012, Powell was a visiting scholar at the Bipartisan Policy Center, a think tank in Washington, D.C., where he worked on getting Congress to raise the United States debt ceiling during the United States debt-ceiling crisis of 2011
In December 2011, Powell was nominated to the Federal Reserve Board of Governors by President Barack Obama.
I am concerned about several troubling proposals that would subject monetary policy to undue political pressure and place new limits on the Fed’s ability to respond to future crises. My remarks will address three such proposals. The first goes by the somewhat misleading name of “Audit the Fed,” and would subject the Federal Reserve’s conduct of monetary policy to unlimited congressional policy audits
[The proposal is] motivated by the belief that the Fed’s response during the crisis was both ineffective and outside the bounds of its traditional role and responsibilities. In fact, the Fed’s actions were effective, necessary, appropriate, and very much in keeping with the traditional role of the Fed and other central banks.
Second, these proposals are based on the assertion that the Federal Reserve operates in secrecy and was not accountable for its actions during the crisis, a perspective that is in violent conflict with the facts. The Fed has been transparent, accountable, and subject to extensive oversight, especially during and since the crisis. We have also taken appropriate steps since the crisis to further enhance that transparency.
Third, and most importantly, I believe these proposals fail to anticipate the significant costs and risks of subjecting monetary policy to political pressure and constraining the Fed’s ability to carry out its traditional role of providing liquidity in a crisis.
Reprinted with the author’s permission from EconomicPolicyJournal.com