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Fed Up Coalition, an advocacy group that has pushed for greater diversity at the Federal Reserve System, is perturbed because a white man is reportedly succeeding another white man at a powerful regional branch. According to The Wall Street Journal, John Williams, who is currently president of the Fed Bank of San Francisco, has been selected to replace the retiring William Dudley at the Fed Bank of New York, and it is creating quite the controversy.
The outrage is not because Williams represents the central planning, Keynesian policies of the last several decades. It’s because of his skin color. Rather than advocating for intellectual diversity, the social justice crowd is campaigning to have more minorities in important positions at the central bank.
Even monetary policy isn’t immune from identity politics. As long as you’re black, female, Hispanic, or Native, it doesn’t matter what your policies are. You just need to fill a certain quota.
Since its inception more than a century ago, the Fed has been the chief cause of the boom-bust cycle, the debasement of the U.S. dollar, and the astronomical spending in Washington. In recent years, the Fed has artificially lowered interest rates, bailed out domestic and foreign banks, and created $6 trillion of new money in a short timespan. This should certainly spur outrage from all walks of life, including the left and social justice warriors.
Not a peep from them on this front. They are instead getting riled up by the skin color of those helming the world’s most powerful institution. How racist does that sound?
Pushing Diversity at the Fed
Under former Fed Chair Janet Yellen, having diversity at the Eccles Building and the other 12 regional banks was of paramount importance. With Dudley making his exit after nine years, House Democrats have put the New York Fed under the spotlight to determine if the central bank is serious about diversity.
Senator Cory Booker (D-NJ) wrote in Bloomberg:
“The New York Fed has never had a woman or a person of color at its helm, and the Federal Reserve Bank only just last year added its first black regional bank president. If we’re serious about creating an inclusive and sustainable economy, no one should be left on the sidelines.”
Booker conveniently ignores how the Fed and its members create economic instability and hurt those who sit on the sidelines. The potential 2020 presidential candidate only cares about racial quotas.
The senator has found support from Fed Up, which sounded the “white male” alarm. The group said in a statement:
“The search for the next New York Fed president began with commitments to diversity and gestures toward public engagement and has ended with the appointment of Williams, a white male.
The public clearly articulated what we wanted in a New York Fed president, and we were ignored.”
This isn’t the first time that politicians have demanded more minorities at the central bank.
In May 2016, a group of 127 lawmakers, including Senator Bernie Sanders (I-VT) and Senator Elizabeth Warren (D-MA), penned a letter to Yellen. They grieved that 10 of the regional bank presidents are men, 11 of them are white, and only one-quarter of Fed bank board members were minorities. To Sanders and Warren, this is deeply troubling. They wrote:
“Given the critical linkage between monetary policy and the experiences of hardworking Americans, the importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country cannot be understated.”
Seeing a political opportunity, Hillary Clinton sent her own letter to The Washington Post soon after. Her presidential campaign confirmed that she wants to increase diversity within the Fed by making it “more representative of America as a whole and that common-sense reforms … are long overdue.”
Why is the FRBNY Important?
Why is there so much focus on the FRBNY? It’s simple: like George Orwell’s Animal Farm, the New York Fed president is more equal than other presidents.
He always has a vote on interest rates – other presidents rotate. He leads the operations on Wall Street, buying and selling securities. As history has shown, he also influences monetary policy.
It is apparent that politicians are indifferent to the policies enacted by the central bank. Rather than take a page out of the Ron Paul playbook or partnering with Senator Rand Paul (R-KY), Democrats and leftist parties are focusing on skin color and genitalia. The left is apathetic about policy, integrity, and genuine intellectual diversity.
Why don’t they, for instance, call for Austrians to sit at the Fed? Why don’t they demand more Fed critics lead policy? The answer might be elementary: politicians still want their stimulus, but they just want the money printer to be black or female. Here is the ultimate compromise that should satisfy conservatives and liberals: nominate Thomas Sowell or Walter Williams!
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