Kevin Dietsch/Pool via AP
Sen. Elizabeth Warren (D-MA) greets Federal Reserve Chairman Jerome Powell before a Senate Banking Committee hearing on Capitol Hill, September 28, 2021, in Washington.
Elizabeth Warren’s courageous questioning of Fed Chair Jerome Powell, who has been working to orchestrate his renomination by President Biden, included the memorable description of Powell as “a dangerous man.” To his face, no less.
Some felt that Warren had overreached. I don’t think so. Powell is a dangerous man because his use of his post to weaken policies of bank regulation and supervision has left us with a shakier financial system, one that is more reliant on bailouts by the Fed and the Treasury.
Powell supporters inside the administration and out have tried to keep the focus on Powell’s loose money policy and his commitment to full employment, as if that were the Fed’s only job. Warren’s tour de force makes that pretense a lot harder.
By coincidence, Biden has just nominated Saule Omarova to another key banking regulatory post, that of comptroller of the currency, which is the chief regulator of national banks. As David Dayen and Lee Harris have detailed in this piece, Omarova is the first progressive ever appointed to this post. And the financial industry has already begun a fierce campaign to block her confirmation.
Which raises the question: At the Biden White House, does one hand know what the other is doing? The Omarova nomination is in keeping with the appointment of one regulatory progressive after another to top posts at the SEC, the Federal Trade Commission, the Consumer Financial Protection Bureau, the Labor Department, and other agencies.
Omarova seems to represent the true compass of the Biden administration—the consumer-friendly future rather than the industry-friendly past. Unless Biden is asleep at the switch, and allows the appointment of the next Fed chair to proceed by inertia, it’s hard to see how the same president can appoint Jerome Powell and Saule Omarova.
