While the Federal Reserve was founded to work toward “maximum employment, stable prices, and moderate long-term interest rates,” President Biden’s nomination of Lael Brainard as Vice-Chair shows he is much more focused on implementing a radical, left-wing agenda rather than sound monetary policy, stabilizing prices, and growing the economy.
Instead of serving as an impartial arbiter, Brainard’s past statements show that she will push for an aggressive left-wing political agenda. Brainard’s Fed would punish banks who don’t push the Left’s climate change agenda, redefine old issues unrelated to the Federal Reserves’ core mandate to be politically correct, attempt to establish a centralized cryptocurrency and reimpose burdensome regulations. If confirmed, Brainard will bring her woke agenda to one of the Fed’s most important roles.
She tried to change the narrative during her confirmation hearing, saying, “I will bring a considered and independent voice to our deliberations, drawing on insights from working people.” In reality, she wouldn’t be a moderate voice, but the dream nominee of radicals like Sen. Elizabeth Warren, D-Mass. Senators howled when Biden renominated Jerome Powell to be Fed Chair but praised Brainard.
Brainard also attempted to assuage concerns about her past views on inflation, arguing, “But inflation is too high, and working people around the country are concerned about how far their paychecks will go.” Unfortunately for Brainard, she has a long record of being dovish, and experts think that if Brainard ended up leading the Fed, inflation projections would shoot upward.
The Brainard we saw during the hearing and the Brainard we know based on her recent speeches are two entirely different nominees. It is important to analyze her past remarks to see what she would do once confirmed.
Brainard positioned herself as a climate change activist in an October speech at the Federal Reserve Bank of Boston. “As part of our prudential and financial stability responsibilities, we are developing scenario analysis to model the possible financial risks associated with climate change and assess the resilience of individual financial institutions and the financial system to these risks,” she said.
Beneath the academic language, Brainard is saying that the Fed is working to enact rules that ensure banks are carrying out the administration’s climate change agenda. These rules, enacted without legislative action or consent, would arbitrarily force banks to divest from energy companies and reallocate money to green energy schemes.
If action needs to be taken to address climate change, Congress should take it, not unelected Fed officials. Brainard has expressed disagreement with America’s climate policies in the past, but if she wants to change them, she should run for public office.
Similarly, Brainard is willing to change how the Fed evaluates full employment to mesh with the Left’s divisive equity agenda. In a speech to Harvard students, she claimed, “I will be looking for indicators that show the healing in the labor market is broad based, rather than focusing on the narrow aggregate U-3 unemployment rate.” The problem with this position is that it turns measuring unemployment into a subjective and political exercise. As long as the Fed can find a subgroup whose unemployment rate is too high, it can justify economic policies that hamstring the economy as a whole.
If Brainard is confirmed, she will also pursue the development of a centralized cryptocurrency tightly controlled by the Fed. This policy would be good for the bureaucrats managing the currency, but not the American people. A centralized cryptocurrency would create serious privacy concerns as it could enable the government to track every transaction a consumer makes. A cryptocurrency controlled by the Fed would also curtail competition and end rapid innovation in the digital currency field.
Additionally, Brainard’s actions during her tenure on the Fed’s Board of Governors demonstrate her progressive partisan-political priorities. Brainard was consistently the only dissenting vote against rolling back some of the more harmful regulations passed after the 2008 financial crisis. She has also pushed for more invasive reviews of banks.
Brainard’s track record shows that she wants the Fed to continue to threaten economic recovery in order to promote a woke agenda. Instead of appointing an accomplished economist Biden selected a partisan activist.
David McIntosh is the president of Club for Growth the nation’s leading group promoting economic freedom through legislative involvement, issue advocacy, research, and education. He led regulatory relief efforts during the 1st Bush Administration. He is also a former Congressman from Indiana and cofounder of the Federalist Society.