If you’re curious about what the bare-knuckle wielding of political power by special interests looks like, look no further than the torpedoing of Sarah Bloom Raskin’s nomination for high office at the Federal Reserve.
Raskin withdrew her nomination by President Biden as the Fed’s vice chair for oversight on Tuesday.
His withdrawal was not prompted by questions about his qualifications or experience. That could hardly be the case: Raskin had won overwhelming Senate approval when she was appointed to the Fed’s Board of Governors in 2010 and again when President Obama named her Assistant Treasury Secretary in 2014.
All U.S. regulators can — and should — examine their existing powers and consider how they might be leveraged to mitigate climate risk.
Sarah Bloom Raskin
No, Raskin’s nomination was killed by the fossil fuel industry and its Senate caucus.
The final decisive blow came Monday from Sen. Joe Manchin III (DW.Va.), who said she “did not satisfactorily address my concerns about the critical importance of funding a comprehensive energy policy to meet our nation’s critical energy needs.
Get the latest from Michael Hiltzik
Commentary on economics and more than one Pulitzer Prize winner.
You may occasionally receive promotional content from the Los Angeles Times.
For those who need a translation, Manchin’s goal was to protect the role of fossil fuels in US energy policy. That’s important to know, because when it comes to energy policy and the need to fight global warming, Manchin is the dictionary definition of a walking conflict of interest.
Manchin is the founder of Enersystems, a coal brokerage firm now run by his son. His holdings of Enersystems stock, according to his latest Senate disclosure statement, are $5 million and his earnings from the company in 2020, the last year reported, were at least $500,000 and up to $1. million bucks.
Manchin has been a strong supporter of the fossil fuel industry. It may not be strange for a senator from a coal-producing state like West Virginia, but his political positions have not always reflected the interests of the coal miners who are his constituents.
In December, when Manchin’s opposition condemned a version of Biden’s Build Back Better program, the United Mine Workers leader urged him to back down because the program included several provisions that “will help keep miners out of coal to work and will have a significant impact on our members, their families and their communities. It did not work.
But Manchin is a favorite of fossil fuel managers. He is the top Senate recipient of contributions from the oil and gas industry, raising nearly $743,000 in the current election cycle, nearly five times as much as runner-up James Lankford (R-Okla.).
For another window into the Manchin family’s dedication to the public interest, remember that Heather Bresch, whose decision as CEO of pharmaceutical company Mylan to raise the price of her EpiPen, an anti- allergic rescuer, by nearly 500% bathed her and the company in infamy, is the daughter of Manchin.
Bresch retired from Mylan in 2020 when the company merged with Upjohn to create a new company named Viatris. It must be just coincidence that Mylan was a top contributor to Manchin’s campaign throughout his career, donating more than $358,000 from 2009 to 2018 to him and his political action committee. . In the 2020 election cycle, Viatris added an additional $80,425 to the total.
Nobody could say that Manchin doesn’t get what he pays for. At the CERAWeek industry conference on March 11, Manchin disdained electric vehicles, the proliferation of which is key to reducing the West’s dependence on oil.
“I’m very reluctant to go the EV route,” Manchin told attendees. “I’m old enough to remember queuing in 1974 trying to buy petrol – I remember those days. I don’t want to have to wait in line waiting for a battery for my vehicle as we are now dependent on a foreign supply chain, mainly China.
He also rejected the idea of the government funding electric vehicle charging stations, another element of Biden’s proposed program. “I read history and remember Henry Ford inventing the Model T, but I certainly don’t remember the gas stations built by the US government,” he said. “The market did that.”
Raskin’s nomination is not the first target of an industry campaign against a Biden nominee.
Since last summer, an industry coalition has withheld confirmation of David Weil, a pro-union academic and former Labor Department official, who has been nominated to return to the agency. As we’ve reported, industry lobbies say Weil’s advocacy of workers’ rights makes him “unfit” to regulate labour-management relations.
Big companies like Amazon and Meta Platforms (formerly Facebook) have also sought to weaken Lina Kahn, chairwoman of the Federal Trade Commission, which oversees FTC investigations into their operations.
The fossil fuel industry’s distaste for Raskin stems from his view that financial regulators must factor the costs of global warming into their calculations of the safety and soundness of institutions under their jurisdiction.
“These costs are no longer theoretical or distant,” Raskin wrote in September. “They’re here now, and while they’re supported all the way, the people who feel them most intensely have less access to information, work outdoors, or live in insufficiently protective conditions. Those who don’t cannot easily relocate or afford sufficient property and casualty insurance are increasingly vulnerable.
She added: “Despite these rising costs, US financial regulators have yet to show they are thinking creatively about potential solutions… All US regulators can – and should – examine their existing powers and consider the how they might relate to efforts to mitigate climate risk.
In other wealthy countries, she observed, “policies and processes are being redesigned to accelerate a rapid, orderly and just transition to a renewable, biodiverse and sustainable economy.”
Raskin, who since leaving government in 2017 has been a professor at Duke Law School, repeated those comments when stepping down.
To her credit, she didn’t go quietly. She walked away with a blunt, searing and completely truthful letter to Biden, blaming the death of her nomination for “relentless attacks by special interests” opposing “my candid public discussion of climate change and climate change.” economic costs associated with it”.
Raskin noted that assessing the risks of extreme weather conditions driven by global warming has become routine — even imperative — for banks and insurers, farmers, corporations and central banks around the world. “Any oversight vice president who ignores these realities,” she wrote, “would be guilty of a gross dereliction of duty.”
Instead of engaging in an informed discussion of the issues, Raskin said, Senate Republicans boycotted committee votes to advance not just his nomination, but those of four other Fed nominees, including renewals. Fed Chairman Jerome Powell and Board of Governors member Lael Brainard.
One would have some respect for the industry’s campaign, marginally, if it dealt frankly with its real problems. This was not the case. Instead, Raskin’s opponents sparked a scandal by suggesting she used her influence as a former Fed official on behalf of a financial firm of which she was a director. The claim was debunked by the Fed.
But the truth is that fossil fuel interests opposed Raskin because she would be a smart and effective regulator. In other words, it would not serve their interests, but the public interest. And who needs that?