President Joe Biden’s nomination of Sarah Bloom Raskin to serve as Fed Vice Chair for Supervision represents a danger to American jobs and American energy. The Senate Committee on Banking, Housing, and Urban Affairs should reject her nomination when it comes up for consideration next week.
There are a few traditional reasons for turning Raskin down, centered on her past statements that call into question whether she’d properly execute her duties. But Raskin’s nomination raises even larger questions about America’s elite—how they enrich themselves, how they stay in power, and how they pursue policies that harm average Americans.
The more pedestrian problems with Raskin are simple to understand and come down to a willingness to use an unelected office and regulatory authority in improper ways, usurping the power and will of Congress. Add to that an utter lack of credibility when it comes to her assurances that she won’t abuse this regulatory power once entrusted to her by the Senate.
Raskin has repeatedly urged regulators force banks to starve America’s domestic oil and gas industry of the funds they need to produce more energy. As Republican Pennsylvania Sen. Pat Toomey remarked at Raskin’s confirmation hearing last week, “Unelected officials like Ms. Raskin want to misuse bank regulation to impose environmental policies that Congress has refused to enact.” The Fed’s Vice Chair for Supervision is supposed to conduct stress tests on banks—but the power invested in this position could allow Raskin to remake the banking industry in her own vision.
Raskin, formerly Deputy Secretary of the Treasury under President Obama, denied that she would use her perch on the Fed to do what she has called for regulators to do. But Raskin’s assurances ring hollow. Raskin’s credibility has been damaged in the wake of revelations that she and her congressman spouse, Maryland Democrat Jamin (Jamie) Raskin, delayed reporting a $1.5 million windfall she received for a couple of years’ service as a member of the board of a fintech startup.
Under the Stop Trading on Congressional Knowledge Act, the D.C. power couple had 45 days to report her payout—they took about 270. And the deal itself is as stinky as the Swamp can get.
Reserve Trust, a nonbank fintech, needed a Fed Master Account to be able to move money to third world nations without the aid of a bank. The Fed denied its initial application. Within a month of that denial, Raskin, freshly off her position as No. 2 at Treasury, is invited on the board. She made a phone call to the Kansas City Fed—Raskin was named a member of the Fed’s Board of Governors by Obama back in 2010—and, voila!—Reserve Trust became the first fintech ever to get a Master Account. Raskin ended up getting 195,936 shares for her phone call, which she sold for $1.5 million in 2020 to an Obama-era Treasury Department colleague.
Reviewing Rep. Raskin’s financial disclosure forms show that community organizing, government jobs, and teaching at a college really paid off for the two Harvard Law graduates. Raskin’s 2020 disclosures revealed 68 separate investments worth as much as $6.2 million with outside income of up to $1.55 million on top of Rep. Raskin’s congressional salary of $174,000. Their house in Takoma Park, abutting D.C., is estimated to be worth $1.1 million, about double the average home value in the town. The couple’s 2020 earnings, $1.7 million, are about 21 times Takoma Park’s median household income of $84,591, itself 35% above the national average of $62,843 as many of its residents are richly rewarded for their work for the federal government.
The cultural root of the threat embodied by the Raskins to the American experiment in self-government can be seen in one of Mr. Raskin’s first jobs after graduating magna cum laude from Harvard Law School in 1987. From 1989 to 1990, he served as general counsel for Jesse Jackson’s National Rainbow Coalition. The Raskins married in 1990.
It’s easy to forget in today’s cancel culture and mandatory Critical Race Theory struggle sessions what a revolutionary force Jackson’s Rainbow/PUSH Coalition came to be some 30 years ago. Many of the issues we contend with now were developed by Jackson.
In the late 1990s, Jackson was promoting racial discrimination lawsuits against Boeing, Texaco, Coca-Cola, and others. Common components of the settlement would include separate payments to set up diversity and sensitivity training for employees. Sound familiar?
Jackson’s Rainbow would often benefit too—that was the point, Rainbow would protest, and corporate leadership would simply pay to make them go away. Sometimes though, unseemly practices would come to light. In 2002, a federal appeals court nullified the $15 million award against Boeing, critical of the $4 million in attorneys’ fees in the 1999 settlement. That settlement was itself almost scuttled in 1999 when some of the aggrieved workers hired their own attorney to object. That attorney suggested Jackson engaged in fraudulent and collusive conduct while a “watchdog” appointed to oversee the settlement, Gary Smith, sat on the board of Jackson’s Rainbow Coalition/PUSH Wall Street Project, which received $50,000 from Boeing.
Jackson’s organization sued Freddie Mac in 1998, alleging biased lending and employment practices. The government-backed mortgage firm, then controlled by Clinton appointees, pledged $1 billion in minority loans, more than $1 million for Rainbow/PUSH and became a sponsor of Jackson’s annual Wall Street Project.
A decade later, Freddie Mac would lead the financial meltdown that triggered the Great Recession, largely fed by risky subprime loans to borrowers with poor credit scores.
Rep. Raskin, when asked about his legal work for Jackson, remarked that the organization saw “a number of the breakthrough political successes on the progressive side of the spectrum . . . due to Jackson’s leadership . . . but Jesse still has to find a way to capitalize on that fact.” Given Jackson’s net worth is estimated to be $15 million, he appears to have capitalized.
Sarah Bloom Raskin’s proposals to bend financial institutions to the left represent a continuum of the same tactics pioneered by her spouse. During the onset of the pandemic in May 2020, Raskin wrote for the New York Times that the massive federal intervention to save the economy from the widespread government lockdowns presented an opportunity to maximize the “public’s return on our investment,” noting that “The Fed’s unique independence affords it a powerful role… (and since) Climate change threatens financial stability; addressing it can create economic opportunity and more jobs. The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries — not prop up and enrich dying ones.” (Dying industries in this case being domestic energy.)
The lawsuits pursued by Rep . Raskin and Jackson acted to slightly increase the cost of Coke, Boeing airliners, and Texaco fuels. The regulatory activism that Ms. Raskin advocates would do thousands of times more damage, reducing the supply of oil, gas, and coal and contributing directly to the surging inflation at its highest point in 40 years.
This might not be much of an issue for the Raskins or most of their neighbors in Takoma Park—Rep. Raskin’s district has the 14th-highest household income of 435 House districts in the nation—$109,016 in 2019. This means that Raskin’s constituents are less likely to be concerned about their heating bills or filling up the gas tank or having their electricity turned off for non-payment. The wealthy spend far less of their income on energy than do the middle class or the working poor. The average household in Rep. Raskin’s district spends 7% of its household after tax income on energy vs. 22% for Americans in the lowest earning quintile.
But inflation unleashed by Biden’s spending policies was estimated to have cost the average U.S. household around $3,500 more last year to consume the same amount of goods and services as in recent years. Much of that was due to increased energy costs—costs that would be made far worse if Ms. Raskin gets confirmed to the Fed. These costs aren’t evenly spread though; lower-income households are spending 7% of their limited resources while higher-income households are spending 6% more.
Not to worry, of course. As the anti-energy policies pursued by left choke off domestic oil, gas, and coal production, they’ll be ready to do two things: spend federal money to retrain workers to perform their favored jobs, such as installing rooftop solar panels, and jack up energy subsidies for the poor, placing the burden squarely on middle class American families.