WASHINGTON – Add U.S. Shelley Moore Capito to the list of officials opposed to one of President Joe Biden’s key Federal Reserve nominees.
“I think Sarah Raskin would be a disaster at the Federal Reserve,” Capito (R-W.Va.) said February 17.
Raskin has been nominated for Vice Chair for Supervision at the Federal Reserve Bank. A Duke University law professor, Raskin has been outspoken in pushing the Fed and other financial agencies to use regulatory powers to stifle the flow of capital to the coal, oil and natural gas industries. She was questioned earlier this month by the Senate Committee on Banking, Housing and Urban Affairs.
And in a 2020 New York Times opinion piece titled “Why is the Fed Spending So Much Money on a Dying Industry?,” Rasin said the Federal Reserve should use its power to withdraw capital from traditional energy sources such as coal, oil and natural gas and direct it toward emerging technologies.
“She has publicly and in her written and oral statements previous to being nominated has said the fed should discourage all financial institutions in this country to not invest or have any business dealings with our fossil fuel industry,” Capito said. “So, she thinks the Fed should get in and regulate her own environmental views.
“We don’t need somebody like that at the Fed. And then, when she got into committee and was asked about this, she tried to walk away from these statements. But these were not tweets. These were written op-eds. These are speeches she’s given. I think her preconceived notions would not only disadvantage our industries in West Virginia, but they really harm a lot of people who are employed in those industries.”
On January 15, Senate Republicans blocked a vote on five Biden nominations to the Fed. The focus of the GOP block, however, was Raskin and her views about fossil fuel industries.
Republicans also question if Raskin used her Fed connections to gain access to a central bank master account for Reserve Trust, the financial tech company for which she served on the board of directors. She also is married to Rep. Jamie Raskin (D-Md.).
Sen. Pat Toomey (R-Pa.) said he and his colleagues were ready to vote on the other four nominations besides Raskin. He also warned Raskin would “choke off credit” to fossil fuel companies.
The Fed is facing pressure to combat inflation as well.
On February 10, the federal Bureau of Labor Statistics issued its latest Consumer Price Index. It rose 7.5 percent in January, the highest since it hit 7.6 percent in February 1982. The CPI – which measures a number of goods ranging from gasoline and health care to groceries and rents – jumped 0.6 percent in the one-month period from December.
Food and energy prices both increased 0.9 percent from December to January, and the 12-month rolling average for energy shows a 40 percent increase.
“Wages haven’t gone up to meet inflation, so people are behind,” Capito said. “They’re on that escalator belt, but they’re moving backward. I think one of the things we can do is try to get ourselves back to pre-pandemic employment levels as soon as we can.
“We see it happening daily … people are calling workers back in and lifting vaccine mandates that have been too strict. We also need to quit pumping federal dollars into the economy. We’ve got so much money out there through the stimulus packages that we passed for COVID and through the infrastructure bill.
“And yet, folks around here – Chuck Schumer and others – want to pump trillions more in, and we absolutely cannot do that. It floods the system, prevents people from going back to work, and it causes inflation. I think we need to get our supply chain, lift regulations to get things back to normal.
“The Fed may have to raise interest rates in the short term to try to tighten the money supply. I think those announcements will be forthcoming.”
Sen. Joe Manchin (D-W.Va.) expressed similar concerns last week.
“Everyone should be wound up,” Manchin (D-W.Va.) said February 10 on MetroNews’ Talkline radio program. “This is avoidable. This is self-inflicted. Now is not the time to be putting more fuel on the fire, let’s start putting the flames out.”
Manchin also issued a statement about his concerns.
“For months, I have been ringing the alarm bell about inflation,” he said. “Once again, we are witnessing that the threat of inflation is real. There is not a corner of this nation where hard-working families are able to escape the noticeable impact of this ‘inflation tax.’
“Inflation taxes are draining the hard-earned wages of every American, and it’s causing real and severe economic pain that can no longer be ignored. It’s beyond time for the Federal Reserve to tackle this issue head on, and Congress and the Administration must proceed with caution before adding more fuel to an economy already on fire.”
Manchin said it’s time to get serious about the nation’s finances.
“As inflation and our $30 trillion in national debt continue a historic climb, only in Washington, D.C., do people seem to think that spending trillions more of taxpayers’ money will cure our problems, let alone inflation,” he said. “It’s time we start acting like stewards of our economy and the money the American people entrust their government with. Now, more than ever, we must remember it is not our money, it’s the American people’s money.
“It is not our economy, it’s their economy. We all have a responsibly to do all that is possible to roll back inflation and manage our debts because the longer we or the Federal Reserve waits to act, the more economic pain will be caused.”
Manchin cited inflation as a key reason he couldn’t support President Joe Biden’s Build Back Better plan.
“If you get behind the eight ball in debt, you’re going to make cowardly decisions,” he told Talkline host Hoppy Kercheval. “We’re getting to the point we’re not managing the debt of the nation. Make corrections now before it becomes too painful, which is everything I’ve been saying for the past year.”
Manchin also said the Fed needs to look at raising interest rates.
“It’s the only way they’ve ever been able to control it (inflation),” he told Kercheval. “If you don’t, it’s just going to continue to run. It’s the highest in 40 years and we’re not doing anything about it. We’re just sitting back and watching it.”
