Banks and trade groups reject Biden’s new currency regulator Sol Omarova – Reason.com

Some people who survived the Soviet Union accepted the failures because the lessons were learned hard, not like copying. But not Saul Omarova, President Joe Biden’s decision to act as currency regulator.

Born in the Kazakh Soviet Socialist Republic, Omarova is someone you can expect to be wary of how state power can distort the market at the risk of consumers. Instead, the colonel is a professor of law Tweets “Whatever you say about the old USSR, there was no gender pay gap. The market doesn’t always ‘know best.’ .

How beautiful that communism can degrade both sexes equally! Refraining from compensating people for quality work across 11 timezones does not seem to be a productive, advanced economy recipe and in fact it was not. But that gaff was not external. Omarova really wants to expand state power extensively, even if not at the full Soviet level.

One of Omarova’s most educational ideas is to instruct the Federal Reserve to manage consumer deposits, removing that power away from banks. “Keeping Americans parked their money in the Fed enables the central bank to pull the levers of monetary policy more directly and efficiently when it is able to credit individual citizens’ accounts when the economy needs stimulation,” notes Politico.

Rob Nichols, president of the American Bankers Association, said such policies would “effectively nationalize American community banks.” New York Bar. Omarova “agrees to eliminate the banks that are being hired for regulation,” agrees The Wall Street Journal Editorial Board. Groups representing both large and small banks, including the American Bankers Association, the Consumer Bankers Association and the Independent Community Bankers, have approached more moderate Democrats to oppose the decision. The members of this association have to pass the rules that have to be followed later.

“Remember that the big banks are always fighting against the regulation and claiming that they are on the main road,” he said. Tweeted In July, with an excerpt from an article including: “JPMorgan and Citi are now lending more to a small number of ultra-high net worth customers than to their millions of credit card customers.” (Note that JPMorgan and Citi Bank actually still lend to Main Street.) Like other recent picks in this administration, he has identified himself as a cryptocurrency enemy, saying that digital currencies are “incomplete” from the real economy. Ironically, President Joe Biden probably sees his nomination as a safe haven designed to please moderates, which is why he has worked in the George W. Bush administration.

Currency regulators certainly do not have the power to do what Omrova has thought about in his academic writings, and stupid tweets are not considered ineligible here. But the general hostility of the nominee to the market, in the belief that the Federal Reserve should be given more prominence, should give any freedom-loving break.

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