With Sarah Bloom Raskin Out, Who Gets That Key Fed Post?

Today on TAP: How about either Lael Brainard or Daniel Tarullo.

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The vice chair of the Federal Reserve for supervision is the most important Fed job other than chair, and arguably the most important financial regulatory job in the government. President Biden’s nominee, Sarah Bloom Raskin, was perfect, having been a progressive Fed governor earlier in her career, as well as deputy Treasury secretary.

But Joe Manchin’s opposition, based on Raskin’s strong views on climate, killed her confirmation prospects. This latest Manchin sabotage was aided by extensive industry lobbying based on Raskin’s views on financial regulation.

What now? One person who could do the job well is Daniel Tarullo, who was the top Fed official on regulation and supervision when he was a Fed governor in the Obama era. He is one of the most savvy regulatory progressives, and could probably get confirmed. Tarullo has said he doesn’t want to go back into government—but his country needs him.

Another idea would be to move Lael Brainard, a strong regulatory progressive who is currently on the Fed, from her new designated position as general Fed vice chair to the key post of vice chair for supervision. She needs to be confirmed in the new job, but got several Republican votes in the Senate Banking Committee, which approved her confirmation earlier this week, 16-to-8.

With Raskin out, Biden has another Fed opening to fill, assuming that Tarullo is not available and he shifts Brainard. William Spriggs has long been on the list of contenders. Now is the time to give him the job.

As the AFL-CIO’s chief economist and a longtime economics professor and mentor at Howard University, Spriggs would bring to the Fed a strong voice for full employment, which risks getting lost as the Fed struggles with inflation. (Disclosure: Spriggs serves on the Prospect board—because he is such a terrific person.)

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