Sarah Bloom Raskin

The Biden administration has nominated Sarah Bloom Raskin to be the vice chair for supervision on the Federal Reserve.

That is not one of the best known positions that it is a President's duty to fill, but it is an important one. In coordination with the Office of the Comptroller of the Currency within the US Treasury, the Federal Reserve has supervisory authority over the banks that the federal government insures. The vice chair for supervision has no special role in the monetary-policy part of the Fed's remit, but she is in charge of its regulatory role.

Still, this is rarely the stuff of confirmation fights. Why are the Republicans making an unholy fuss about this appointment? There are two bad reasons, and one kind-of good one. The first bad reason is that Sarah Bloom Raskin is the wife of Rep. Jamie Raskin (D - Md). To stop her ratification would be to deal a blow to him and he, to his lasting credit, has done nothing to endear himself to the Republicans of the upper house, indeed he was the leader of the (second) impeachment prosecution of Donald Trump. I will not pause to explain why I classify that as a good thing, and avenging Trump via Rep. Raskin's wife is a bad reason.

Second, there is opposition to what the Republicans see as the misguided cause of reducing carbon emissions. Ms Raskin certainly believes that climate change is a real problem and reduced emissions is part of the solution. The Republicans have sought to make the case that she will use bank supervision as a lever to promote such policies. Which they, in their coal-is-clean moods, think is a fast pitch to the middle of the strike zone.

It isn't a very strong lever. I suppose she could press to see to it that banks that are publicly insured and owned by corporations that are publicly listed keep track of the carbon-related consequences of the business loans they are making, and make that information available to actual or potential investors -- i.e. to the public at large. But it isn't clear she'd be able to do even that, or that such a thing would be terrible were it done. So ... two bad reasons.

There is a good one, though. Or at least a better one. Raskin has played the usual revolving-door game to riches one associates with Washington and cronyist capitalism at its worst.

She has been on the Fed board before, as an Obama appointee, 2010 - 2014. During that a Colorado fintech company called Reserve Trust sought a master account with the Federal Reserve. (I won't get into the weeds here -- just assume with me that having a master account for such a company is a good thing, and being denied the account is a bad thing, from the point of view of the bottom line of the company and its shareholders.)

Reserve Trust was denied its master account. After Raskin left the Fed, she became a member of the board of directors of Reserve Trust. Hmmm, is there any specific reason they could have wanted here?

Oddly, after she had gone over to Reserve Trust, Reserve Trust re-applied a master fund. This time, apparently through some discreet lobbying by the new corporate director with her old friends still at the Fed, they got that account. As part of her compensation for the director's job, Raskin acquired stock in Reserve Trust which she later (2020) sold for $1.5 million.

Republicans have been saying that such a leveraging of the revolving door for personal gain from public functions ... this stinks. They are right. That it also stinks when they and their friends do it does not change the fact that Ms Rankin perfumed herself with this odor.

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere. At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...

Recent Controversies Involving Nassim Taleb, Part I

I've written about Nassim Taleb on earlier occasions in this blog. I'll let you do the search yourself, dear reader, for the full background. The short answer to the question "who is Taleb?" is this: he is a 57 year old man born in Lebanon, educated in France, who has been both a hedge fund manager and a derivatives trader. He retired from active participation from the financial world sometime between 2004 and 2006, and has been a full-time writer and provocateur ever since. Taleb's writings for the general public began where one might expect -- in the field where he had made his money -- and he explained certain financial issues to a broad audiences in a very dramatic non-technical way. Since then, he has widened has fields of study, writing about just about everything, applying the intellectual tools he honed in that earlier work. As you might have gather from the above, I respect Taleb, though I have sometimes been critical of him when my own writing ab...

Jamesian Philosophy Refreshed

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