The Senate confirmation of President Biden’s nominee to be the Federal Reserve’s Vice Chairwoman for supervision of banks, Sarah Bloom Raskin, ran into some rough waters recently. The Senate Banking Committee should reject Raskin’s nomination this month for four reasons: swampy corruption, a lack of trust, wrongheaded policies, and strategic cluelessness.
If confirmed by the Senate, Raskin would manage the Fed’s annual bank stress tests. Because of Rankin’s past remarks arguing that financial institutions should starve oil and gas companies of the cash they need to operate, there’s a likelihood she’d use her position to do far more than impartially review bank safety and liquidity.
Raskin, a veteran of the Obama Department of the Treasury, is married to powerful Maryland Democratic Rep. Jamie Raskin— together they are a quintessential D.C. power couple. Of course, what good is power unless you can use it to enrich yourself?
In Raskin’s case, this entailed being invited on the board of Reserve Trust, a financial technology firm that had a big problem—it needed a Master Account from the Fed for its business model (clearing dollar transactions with the developing world without the need to partner with a traditional bank) to work.
No fintech company had ever gotten Fed approval for a Master Account and Reserve Trust had just had their first attempt rejected. Enter Raskin and a friendly phone call with the Kansas City Fed and, before you know it, Reserve Trust becomes the first fintech firm with a Master Account.
After some two years of service on the board with Reserve Trust’s value now enhanced, Raskin sold the shares she was granted for almost $1.5 million to Amias Gerety, her fellow Obama-era Treasury Department alum.
For just a few board meetings and a phone call, $1.5 million’s not a bad haul.
This feeds into the second problem—trust. Raskin’s spouse, U.S. Rep. Raskin, was under obligation to report the family’s windfall within 45 days under a federal conflict-of-interest law known as the Stop Trading on Congressional Knowledge Act. Instead, the filings were made about 270 days later. To be fair, as reported by Fox Business, the Maryland Democrat has acknowledged the late filing and told Business Insider that the omission occurred because the transaction happened just before their 25-year-old son, Thomas, died on Dec. 31, 2020.
Under questioning from senators, Raskin pledged that she would not act upon her past repeated threats to defund America’s domestic energy industry. The problem is, once confirmed by the Senate and installed as Fed vice chairwoman, there’s little the Senate can do, practically, to recall her.
Sen. Pat Toomey, R-Penn., raised an additional point in the hearing earlier this month, noting, "Unelected officials like Ms. Raskin want to misuse bank regulation to impose environmental policies that Congress has refused to enact."
Raskin’s long record of hostility to American energy—oil and gas—is a particularly bad policy in the best of times and even more so now as the nation, and the Fed grapples with accelerating inflation. The benchmark West Texas intermediate crude is up 57% year on year, and Henry Hub natural gas is up 45%.
Raskin’s favored policies would put Americans out of work and make America, and its allies, more dependent on energy imported from nations like Russia and Iran.
And this last point highlights Raskin’s stupendously poor strategic vision. America—and our friends around the world—are far more secure when the U.S. is energy independent and our energy industry is robust and able to export critical fuels. This reduces a dangerous dependency on Russian oil and gas, to list one very current example.
With Raskin and her congressman husband raking in the dough, it’s not a shock that they feel immune from rising prices at the pump or to heat the house—after all, you can’t make an omelet without breaking some eggs (with the eggs in this case being high paying American energy jobs).
Chuck DeVore served as vice chairman of the California Assembly Committee on Revenue and Taxation and is now a vice president with the Texas Public Policy Foundation.