Fed Up Campaign Condemns Fed’s Coziness with Banks After President Lacker Revelation
Fed Up issues statement from Campaign Manager Jordan Haedtler
Jordan Haedtler, Fed Up Campaign Manager, released the following statement on behalf of the Fed Up coalition:
“"Today’s shocking revelation that Richmond Federal Reserve President Jeffrey Lacker was the source of a leak of market-sensitive information from Federal Open Market Committee (FOMC) deliberations further demonstrates how the privately owned Federal Reserve Banks are too cozy with the industry that they regulate. Through his behavior and his policy, Lacker favored banks at the expense of the public, and we cannot afford another Reserve Bank president like him. Lacker’s resignation bolsters the demand for greater transparency as the Richmond Fed undertakes the search for Lacker's replacement.
“"Reserve Bank presidents are trusted officials and important public policymakers, yet their selection remains an opaque process conducted by privately owned Reserve Banks’ boards of directors, which routinely fail to represent the public. Fed Up has proposed reforms to the process for selecting Reserve Bank presidents, including forums and avenues for public participation in the process, and we echoed the call from members of Congress for an inclusive and transparent process when President Lacker announced his retirement earlier this year.
“"Lacker was selected through a closed-door process in 2003, and re-appointed unanimously last year. Not only did he leak FOMC minutes during his time at the Richmond Fed, he also displayed a dismissive attitude toward the unemployed during the depths of the recession. It is no coincidence that his misconduct aligned with his hawkish policies, ignoring the needs of workers. In the Richmond Federal Reserve district, the public will surely have questions about whether Lacker’s successor will improve upon his legacy.
“"Outgoing President Lacker’s behavior illustrates that we do not need to further strengthen the ties between the Federal Reserve and the financial sector. It is particularly disconcerting to learn about Lacker’s role as a leaker on the same day that the House Subcommittee on Monetary Policy held a hearing where members of Congress suggested the expansion of Reserve Banks and their relationship with financial institutions. Rep. Andy Barr (R-KY) called for increasing the voting power of privately selected Bank presidents like Lacker on the FOMC, and restoring the power of commercial bankers to select Reserve Bank presidents. Barr’s ideas take us in exactly the wrong direction. Later, the same economist who agreed with both of Barr’s ideas lamented the fact that Chair Yellen has met with unemployed people, citing engagement with unemployed individuals as an example of the “politicization” of the Fed.
“"The Board of Governors and the Richmond Fed’s board of directors must conduct a thorough examination of Lacker’s conduct, including Lacker’s 2016 re-appointment. Both the Board of Governors and the Richmond Fed must ensure that the search for Lacker’s successor is transparent and publicly inclusive, and includes a set of candidates from diverse backgrounds."
Fed Up is a coalition of community organizations and labor unions across the country calling on the Federal Reserve to reform its governance and adopt policies that build a strong economy for the American public. The Fed can keep interest rates low, give the economy a fair chance to recover, and prioritize genuine full employment and rising wages for all communities
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda
Anita Jain, 347-636-9761, email@example.com