Politicizing the Fed
The Wall Street Journal has an excellent article today about Congress's latest attempts to politicize the Fed:
[Rep. Maxine] Waters and the House are hunting bigger game—to wit, the political allocation of credit. They want to put a network of operatives at the highest level of government who are responsible for making sure that regulators put the hiring of, and lending to, minorities at the top of their priority list. The House provision makes that very clear by making each diversity officer a Presidential appointee who must be confirmed by the Senate. The post, says the bill, will be "comparable to that of other senior level staff."
Mull over that one for a minute. Having recently lived through a financial mania and panic caused in part by political pressure for "affordable housing," Congress will now order regulators to allocate credit by race and gender. Isn't the point of this financial reform supposed to be to make regulators better judges of systemic risks, which means focusing on financial safety and soundness? If the Waters provision passes, federal regulators will have to put racial and gender lending at the top of their watch list when they do their checks on the banks and hedge funds they are regulating.
You can read the rest of the article here.
This is in the wake of the equally asinine "Audit the Fed*" garbage that has been eminating from the House. We seem to be witnessing a resurgence of William Jennings Bryan-like economic populism.
* This is redundant. The Fed is already auditied.