The New York Fed chairmanship typically has gone to prominent Wall Street executives or academics. The ascension of a labor leader is a new twist for the New York Fed and a sign of the public pressure the Fed has been under to loosen its close ties to Wall Street.The current brilliant financial tactician and Treasury Secretary Timmy Geithner honed his multiplication skills there.
Hughes is plainly and simply a hack. He is there to protect organized labor and shake down business. He has no history of acting outside of type. His appointment can do nothing but solidify the dysfunction and cynicism that has captured New York finance. He is the typical Obama appointee - a radical whose radicalism is somehow not indicative or emblematic of Obama's radicalism, who for some bizarre reason is still viewed as a go-go moderate. Oh, well Hughes represents organized labor, so he is not outside the mainstream. When organized labor represents but 11 percent of American workers, he most definitely is outside the American mainstream. He has no financial expertise to speak of. He's a shill and a jack boot.
Investor's Business Daily sums up the problems with this appointment:
Perhaps there is hope in the limited nature of the appointment, as the Fed will choose 2010's replacement sometime in November or December. At the top of the list is the Fed's newly named Vice Chairman, Lee Bollinger. Bollinger is another leading financial expert and wunderkind, as evidenced by training as a lawyer, his tenure as Columbia University's 19th president, his abuse of affirmative action at University of Wisconsin, and his noted free speech advocacy, including ensuring that Iranian terrorist leader Mahmoud I'mmadinthehead was given a podium at Columbia University.
Denis Hughes, president of the AFL-CIO in New York, has served as interim head of the New York Fed board since May. His ascent to one of the world's most important financial posts is another troubling sign of this administration's too-tight embrace of organized labor.
Understand, this is a time of great financial peril. That's the main reason why Bernanke was renominated. The idea of changing Fed leaders in the middle of a financial crisis was too much.
Bernanke has printed close to $2 trillion in new money to help refloat the economy. President Obama is no doubt happy — if for no other reason than it will let the White House claim its $787 billion "stimulus" is the real reason the economy's starting to grow again.
But the naming of Hughes as the top banker at the New York Fed is the real news. And it's quite astounding.
He has no significant finance experience. Nor does his educational background — "Brother Hughes," as the AFL-CIO's Web site calls him, has a B.S. degree from the Harry Van Arsdale School of Labor Studies at Empire State College — reassure us.
Of greater concern is his career as a bought-and-paid-for union official and political operative. The New York Fed chairmanship is hardly a place for a person whose entire career has been spent fighting and strong-arming the very people he'll now be regulating.
As American Thinker editor Ed Lasky put it, Hughes is someone "who may be more schooled in extracting concessions from corporate America than the intricacies of high finance."
Exactly. More to the point, can those on Wall Street who come before him in routine regulatory matters expect fair treatment? Will union issues become part of the New York Fed's agenda? Will banks find requests to expand or merge stymied because unions fear a loss of jobs somewhere?
These are more than just academic questions. The New York Fed is the primus inter pares, the first among equals, of all the Fed banks. It is the bank that executes the Fed board's will in the marketplace. It is the on-site regulator of Wall Street, playing, as its Web site says, "a leadership role in monetary policy, financial supervision and the payments system." Now it's headed by a union shill.
Putting this key Fed bank in the hands of a person whose experience suggests a bred-in-the-bone hostility to capitalism strikes us as bizarre at best and dangerous at worst. And it bears the unmistakable imprint of the White House. Just last week we wrote about plans to elevate former United Steelworkers adviser Ron Bloom from head of the auto task force to "industrial policy czar."
Putting so many union people in powerful positions of economic policymaking is a recipe for disaster. Since 1955, the share of the workers belonging to unions has plunged from 33% to about 11%. Still, though increasingly unpopular, unions have helped wreck two major industries: autos and steel. Not much of a track record.
But now, through politics, unions are getting rewarded with control of the economy — a very bad omen for American capitalism.
Isn't it bliss?
Don't you approve?
One who keeps tearing around
And one who can't move
But where are the clowns?
Send in the clowns