What the Obama administration could actually do about jobs
My pick for "most important article of the day" is Neil Irwin's piece looking at Barack Obama's opportunity to reshape the Federal Reserve. The resignation of Vice Chairman Bob Kohn opens a third slot on the Federal Reserve Board, not to mention the No. 2 spot behind Ben Bernanke. When people talk about the need for Democrats and the administration to focus on jobs, nothing they could get through Congress could plausibly be half as important as maximizing their long-term impact on the composition of the Federal Reserve. But the political press isn't treating the Federal Reserve openings that way, and neither is the administration.
Kohn's resignation is the fifth possible opening on the Federal Reserve Board. Two other possible slots were filled: The first went to Daniel Tarrulo, a banking expert who advised the campaign and is now overseeing banking regulation at the Fed. The second was Ben Bernanke's renomination, and whatever you think of the merits of reappointing Bernanke, it certainly did not represent the administration's decision to try to leave their imprint on the Federal Reserve.
Every smart economic observer I know is baffled by the administration's failure to nominate anyone for the two slots that have been empty for months. Those are votes and arguments that the administration could have put at the Fed's table and has simply chosen not to. Now they've got three open positions and no nominees. One of those positions is the vice chairmanship, which can go to an inside candidate (speculation centers around Janet Yellen, governor of the San Francisco Federal Reserve), although that would mean replacing that candidate on the board.
According to Irwin, two will be macroeconomists and one will be a financial markets specialists. I'm not versed enough in this stuff to have any candidates in mind. But the critique of the administration's strategy on jobs that I find compelling is that they've not had any coordinated strategy when it comes to the Federal Reserve. Bernanke's renomination was a missed opportunity, and so too are the empty seats on the board. It's hard to look at that sluggishness and be confident that the administration has a vision for this going forward.
Photo credit: Reuters
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