‘No’ on Fed Chairman Jerome Powell
While Jerome Powell was a better choice than Lael Brainard for Federal Reserve chairman, that alone isn’t a good reason to confirm Mr. Powell for a second term. The Senate should not support his reappointment.
The Fed’s core mission is to ensure stable prices and a sound currency. No one can seriously argue that it accomplished this mission under Mr. Powell’s leadership. After years of reckless policy, inflation now exceeds 6%— the highest rate in 30 years.
Mr. Powell has insisted for months that inflation was only “transitory.” This week he conceded we should “retire” the word. If only American families could so blithely retire the devastating effects of inflation.
In the worst- case scenario, an inflationary economy can collapse the value of money, endangering society itself. In less catastrophic but still serious conditions, Americans who have played by the rules suffer as the value of the money they have painstakingly saved slowly erodes.
Likewise, 6% inflation has wiped out any nominal wage gains for workers. Inflation- adjusted weekly earnings are down 1.6% compared with a year ago. And there’s no guarantee that 6% inflation is the ceiling.
Mr. Powell also maintained the Fed’s radical emergency monetary policies a decade after the end of the 2007- 08 financial crisis. The Fed had thereby already exhausted the normal tools of monetary policy when the pandemic hit and was forced to use unprecedented levels of government intervention to prop up the U. S. economy. As a result, the Fed’s balance sheet is nearly $ 9 trillion and continues to grow by more than $ 100 billion a month. For perspective, the Fed’s balance sheet barely surpassed $ 2 trillion after the financial crisis.
The chief result of these policies during the pandemic has been to boost asset prices— especially the stock- market values of large corporations. But the cost has been inflation, which especially harms working- class Americans.
Mr. Powell’s Fed has forced millions of American families to choose whether to pay the mortgage, feed their families, fill up their gas tanks, heat their homes or buy Christmas presents. Instead of taking immediate action to address this crisis, the Fed has hidden behind its “transitory” talking point, all while pushing irrelevant woke agendas like climate change and critical race theory.
Most Americans live in a world of accountability and consequences, the lack of which is one of the things they hate most about Washington. Failure is too often rewarded. The Fed has manifestly failed during Mr. Powell’s tenure, further rigging our economy in favor of the wealthy while working people suffer. There must be consequences for such failure. Mr. Powell is not the right choice to lead the Fed.