For the second time in less than a year, President Clinton has an opportunity to broaden the vision of the Federal Reserve Board.
Many public interest groups are urging the President to fill two existing vacancies on the Board with persons who understand the Federal Reserve’s rapidly expanding responsibilities in consumer protection, community investment, fair lending and bank regulation.
Similarly, there are calls for the President to find candidates from the ranks of those who recognize that the Federal Reserve’s mandate is not limited to fighting inflation, but includes requirements that the Board pursue policies of “maximum employment, production and purchasing power.”
“Invariably, Presidents have selected the Fed’s decision makers from a narrow few — essentially persons who have been deemed acceptable to Wall Street, banks and other segments of the financial community,” Ralph Nader wrote the President in January. “As a result, the broader interests of the majority of the nation’s citizens have been ignored or given short shrift by the Federal Reserve.”
Nader told the President that a more diverse membership “would do wonders for the Board of Governors, the economy, and the rights of consumers!”
The two vacancies on the seven-person Fed Board were created by the resignations of Lawrence Lindsey and Janet Yellen. Last year, the President had the opportunity to change the direction of the Federal Reserve, but decided, instead, to reappoint Alan Greenspan, a conservative Republican economist and former consultant to financial institutions, to a third term as chairman. The President filled two vacancies on the Board with Dr. Alice Rivlin, Director of the Office of Management and Budget, and Dr. Laurence Meyer, a St. Louis economist, who have followed Greenspan’s positions faithfully.
Nader told the President that there is a “wealth of talent across the nation” from which select nominees that would broaden the Board’s outlook beyond those stamped “pre-approved” by the financial community.
Among possibilities, Nader listed Deval Patrick, former head of the Justice Department’s civil rights division; Dr. James Galbraith, economist at University of Texas; Dr. Robert Auerbach, economist, Banking Committee, U. S. House of Representatives; Dr. Robert Solow, Nobel laureate in economics, Massachusetts Institute of Technology; Dr. James Medoff, Professor of Labor and Industry at Harvard University; Henry Cisneros, former Secretary of Housing and Urban Development
Also, Allen J. Fishbein, General Counsel, Center for Community Change, Washington, D. C.; Calvin Bradford, President of the Community Investment Associates, Chicago; Jean Ann Fox, Director of Consumer Protection, Consumer Federation of America; and Colleen Hernandez, Executive Director of the Kansas City Neighborhood Alliance and a director of the Kansas City Federal Reserve Bank.
The President is expected to send names to fill the two vacancies to the Senate next month. Hearings on the nominations will in the Senate Banking Committee which unanimously approved the nominations of Greenspan, Rivlin and Meyer last March.
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