Our Powerless Fed

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I move sort of slowly when it comes to rearranging my reading habits, and it was only about a month ago that I finally added Economics of Contempt to my RSS feed list. And then I forgot about it. Why? Because EOC, it turns out, only puts up a new post once every few weeks or so, and nothing had popped up since I moved it from bookmark land to RSS land.

But today something finally popped up, and it was….intriguing. Thanks to Barack Obama’s delays nominating new members to the Fed and to Richard Shelby’s mindless obstructionism of the ones he has nominated, the Fed Board of Governors currently only has four members:

The Fed’s emergency lending authority (the famed Section 13(3)) requires that any emergency lending facility to non-banks be approved “by the affirmative vote of not less than five members” of the Fed Board of Governors. Currently, there are only four members of the Fed board: Bernanke, Warsh, Elizabeth Duke, and Dan Tarullo. Donald Kohn retired earlier this month, and the Senate has yet to vote on Obama’s three nominees (Janet Yellen, Peter Diamond, and Sarah Bloom Raskin).

So if an emergency crops up and the Fed needs to take action, it won’t be able to. The odds of this happening are low — that’s why they call them emergencies, after all — but then again, if it does, we’ll really, really need to do something quickly — another reason we call them emergencies. So Shelby is playing with fire here, all because he’s still nursing a grudge over Democrats passing a financial reform bill that he didn’t like. Nice work, Dick.

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And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

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