Tangle - Raskin's nomination fails.

Episode Date: March 17, 2022

On Tuesday, Raskin withdrew her nomination to join the Federal Reserve's Board of Governors after Sen. Joe Manchin (D-WV) and every Senate Republican indicated they would oppose her confirmation, leaving President Biden one vote short to force a 50-50 tie and push Raskin's nomination through. Plus, a quick explainer on the Federal Reserve, and a reader question regarding "light editing" in journalism. You can read today's podcast here.You can subscribe to Tangle by clicking here or drop something in our tip jar by clicking here.Our podcast is written by Isaac Saul and produced by Trevor Eichhorn. Music for the podcast was produced by Diet 75.Our newsletter is edited by Bailey Saul, Sean Brady, Ari Weitzman, and produced in conjunction with Tangle’s social media manager Magdalena Bokowa, who also created our logo.--- Send in a voice message: https://podcasters.spotify.com/pod/show/tanglenews/message Hosted on Acast. See acast.com/privacy for more information.

Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight.

Interior Chinatown is streaming November 19th, only on Disney+. From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle Podcast, the place where you get views from across the political spectrum, some independent thinking without all that hysterical nonsense you find everywhere else. On today's podcast, we are going to be talking about Sarah Bloom Raskin, whose nomination to serve on the Board of Governors for the Fed was just sunk this week. As always, though, before we jump in, we're going to start with some quick hits. First up, survivors are beginning to emerge from a theater in Mariupol, Ukraine,

where hundreds of civilians were sheltering when Russia bombed the theater. Number two, President Biden announced another $800 million of military aid to Ukraine as part of a $14 billion package Congress passed this week. Number three, a fresh wave of COVID-19 in Europe caused by a sub-variant of Omicron could mean cases are about to begin rising in the United States. Number four, a federal investigation into the business dealings of Hunter Biden remains active even after he paid off a significant tax liability, the New York Times reports. Number five, the Senate Banking Committee approved the re-nomination of Jay Powell as well as two

other members of the Fed Board of Governors just a day after Sarah Bloom Raskin's nomination was withdrawn. Lisa Cook's nomination remains deadlocked at 12-12. All right, that is it for our quick hits today, which brings us to our main story, Sarah Bloom Raskin. On Tuesday, Raskin withdrew her nomination to join the Federal Reserve's Board of Governors after Senator Joe Manchin, the Democrat from West Virginia, and every Senate Republican indicated they would oppose her confirmation, leaving President Biden one vote short to force a 50-50 tie and push Raskin's nomination through the Senate. If confirmed, Raskin would have become the most powerful banking regulator in the nation. A reminder, very quickly, the Federal Reserve is the central banking system of the United States, responsible for pursuing full employment and stable prices. One of the ways the Fed does this is by changing the interest rates, the rate at which someone is charged to borrow money, as they did this week.

The Fed just increased rates in an attempt to tamp down inflation. Raskin was nominated to join the Board of Governors, the seven-person board that serves 14-year terms and oversees the Fed. Three seats on the board are currently vacant. President Biden nominated Raskin and celebrated her experience in cybersecurity, climate change, and consumer protection. But Republicans and Manchin opposed her because they feared she would use her regulatory authority to discourage banks from lending money to oil and gas companies. Specifically, Raskin drew criticism for arguing in 2020 that the Treasury Department and Fed should not provide broad-based emergency lending backstops

to highly indebted fossil fuel companies. The Senate's bipartisan rejection of Sarah Bloom Raskin's nomination sends a powerful message to the Fed and to all financial regulators that it is not their job to allocate capital or stray from their mission to pursue extraneous or politically charged campaigns, Senator Pat Toomey, the Republican from Pennsylvania, said in a statement. Supporters, meanwhile, say Raskin's views were mainstream, and it was a reasonable position to worry about the risks that climate change poses to insurance companies, banks, and financial firms. Sarah was subject to baseless attacks from industry and conservative interest groups, President Biden said. Previously, Raskin had served on the Fed Board of Governors from 2010 to 2014 and as a top Treasury Department official. She served as

Maryland's State Commissioner of Financial Regulation and has worked as a law professor at Duke University. She also happens to be married to Representative Jamie Raskin, the Democrat from Maryland. In a moment, you're going to hear some arguments from the right and the left about Raskin's nomination and then my take. All right, first up is some takes from the right. So Republicans are saying that Raskin clearly wanted to extend the Fed's power beyond its purview. They said she was a dangerous nominee for the energy sector at a time when things are already a mess. And they suggested she may have had ethical red flags because of her ties to a fintech company that received rare treatment from the Fed.

The Wall Street Journal editorial board said Joe Manchin made the right call by opposing Sarah Bloom Raskin. President Biden nominated Sarah Bloom Raskin to be the Federal Reserve's vice chairman for bank supervision because she wants to use financial regulation to redirect capital from fossil fuels, the board wrote. She's the wrong person for the wrong job at the wrong time, as Joe Manchin explained in his own words Monday in saying he opposes her nomination. Ms. Raskin told the Senate that she won't use her powers against any industry, but her public record is clear. In June 2020, she wrote that financial regulators must do all they can, which turns out to be a lot, to bring about the adoption of practices and policies that will allocate capital

and align portfolios towards sustainable investments that do not depend on carbon and fossil fuels, end quote. There are many similar quotes, the board said. Banks, asset managers, and insurers are already bowing to political pressure to cut financing for fossil fuels. AIG announced this month that it will stop investing in or insuring Arctic oil exploration. Progressive groups last week demanded that the six largest U.S. banks stop financing liquefied natural gas export expansions in the Gulf Coast. From the powerful supervisory perch at the Fed, Ms. Raskin could make this financing even harder to obtain. The result would be reduced supply of fossil fuels and much higher energy prices. In National Review, Dominic Pico said climate policy is the proper task of elected legislators, not unelected central bankers. If progressives are unhappy with the state of American climate policy,

they need to win elections and pass laws to address its perceived shortcomings, not appoint central bankers who will use financial regulation to get what they want, he wrote. The Fed hasn't done so great on its actual mandate from Congress, which includes low and stable inflation, and its mission creep into other areas should be opposed. There are also ethical concerns over Raskin, as Tim Carney wrote for the Washington Examiner in February. Raskin is, quote, a revolving door lobbyist who used her access to get special treatment from the Fed for a company on whose board she sat. She thus made more than a million dollars for herself, end quote.

on whose board she sat. She thus made more than a million dollars for herself, end quote. Additionally, her husband, Representative Jamie Raskin, failed to properly report her stock holdings as required by congressional ethic rules, Pino said. Of Biden's Fed nominees, Raskin is by far the most important, and her defeat would be a major victory for Senate Republicans. In Fox News, Chuck DeVore wrote about the four reasons not to confirm Sarah Bloom Raskin. What good is power unless you can use it to enrich yourself, DeVore asked. In Raskin's case, this entailed being invited on the board of Reserve Trust, a financial technology firm that had a big problem. It needed a master account from the Fed for its business model, which is clearing dollar transactions with the developing world without a need to partner with

a traditional bank. No fintech company had ever gotten Fed approval for a master account, and Reserve Trust had just had their first attempt rejected. Enter Raskin and a friendly phone call with the Kansas City Fed, and before you know it, Reserve Trust becomes the first fintech firm with a master account. After some two years of service on the board with Reserve Trust's value now enhanced, Raskin sold the share she was granted for almost $1.5 million to Amaya Scarity, her fellow Obama-era Treasury Department alum. For just a few board meetings and a phone call, $1.5 million is not a bad haul, DeVore wrote. Under questioning from senators, Raskin pledged

that she would not act upon her past repeated threats to defund America's domestic energy industry. The problem is, once confirmed by the Senate and installed as Fed vice chairman, there's little the Senate can do practically to recall her. All right, that is it for what the right is saying, which brings us to what the left is saying. The left argued that Raskin was highly qualified and had bipartisan support until the fossil fuel special interest targeted her. They say she is proof Republicans will obstruct any effort to address climate change, and they worry about what this means for the future of the Fed. In January, the Bloomberg editorial board endorsed Raskin, saying she was a good choice for what will be an immensely challenging assignment.

Raskin herself was Maryland's state commissioner for financial regulation before joining the Fed, where from 2010 to 2014 she helped draft rules to implement the Dodd-Frank reform legislation, the board wrote. She then worked from 2014 to 2017 as deputy secretary of treasury, where she concentrated on issues including financial infrastructure and cybersecurity, relevant experience in an age of cryptocurrency and state-sponsored hacks. Of course, progressive Democrats will be expecting the Fed to do much more for better and worse, the board added. Ideally, this will be facilitating progress in areas such as financial inclusion, containing risks in the crypto realm, updating fair lending rules, and preparing for the potential

repercussions of climate change. Raskin is also well-versed on some of these issues. The danger is that the Fed will get bogged down in partisan battles and overtly prescriptive rulemaking while failing to address the system's broader fragility. Navigating these challenges will require an unusual combination of ambition and restraint. Raskin's record suggests she's well-qualified. The Senate should allow her to get to work without delay. In Grist, Emily Pontecorvo said, The remaining paths for the Biden administration to usher in a new era of federal climate action are crumbling. The president's signature climate legislation to fund clean

energy, the Build Better Act, has been held up in the Senate for months, she said. The Supreme Court is expected to curtail the Environmental Protection Agency's power to regulate greenhouse gas emissions. And now, Sarah Bloom Raskin, a nominee to the Federal Reserve Board who aimed to prevent a climate change-fueled financial crisis, has been forced to withdraw. When President Joe Biden nominated Raskin to be the Fed's vice chair for supervision in January, he called her among the most qualified nominees ever for the position. Raskin had already served on the Fed board for three and a half years under President Obama. The Senate voted her in unanimously in 2010.

Raskin has advocated for federal regulators to assess and mitigate climate risks to the U.S. financial system, she added. Climate change poses not only physical threats to the economy via the damage wrought by drought, wildfires, and storms, but also what's called transition risk. The shift to a low-carbon world is already underway, and banks that continue to fund fossil fuels risk ending up with assets that have no value. Raskin has suggested that financial regulators could help incentivize the shift away from carbon-intensive assets. After her nomination was announced, 41 oil and gas trade associations wrote a letter to the Senate Banking Committee opposing Raskin. They accused her of having an agenda at odds with the president's goal of providing Americans with reliable, affordable energy and of scheming to reshape the entire financial system in ways

Congress never intended. Paul Waldman wrote that her failed nomination shows how excruciating climate policies in Washington can be. Raskin was an obvious choice for top banking regulator at the Fed, having previously served as deputy secretary of the Treasury, a member of the Fed board, and the chief financial regulator for the state of Maryland. Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown.

When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. But her opponents, the fossil fuel industry, the entire Republican Party, and at least one important Democrat, seized on the fact that she had been outspoken about the need to prepare for the continuing effects of climate change on the financial sector and the economy, Waldman said. effects of climate change on the financial sector and the economy, Waldman said.

In substantive terms, Manchin probably would have been completely fine with Raskin serving at the Fed, he wrote. He knows she's not some kind of fanatic, and she probably has similar views to those of whoever will eventually get the job. But by killing her nomination, Manchin got to show folks back home that he continues to annoy his own party, which is deeply unpopular in his state, and then he continues to advance the interests of the dying coal industry. The practical effect was essentially zero, but the political effect was to reinforce Manchin's brand. It was irresistible for him. All right, that is it for the right and the left's take, which brings us to my take. So this was a frustrating one to watch. For starters, it should be said that Republicans

went to unprecedented lengths to stop this nomination. The Republican members of the Senate banking community literally staged a boycott, the kind of obstruction that I don't think has ever happened in this space before, denying Biden a quorum of a vote to even take place. Along with obstructing Raskin, they obstructed Jerome Powell's re-nomination as head of the Fed and the three other vacancies on the board that exist, all just to sink Raskin. This is at a time with inflation running wild, global markets as volatile as ever, and great economic challenges in front of us. And it's been months. This is why Biden called Republicans out for obstructionism in his State of the Union address. I think this kind of politicking is extremely dangerous, even though Republicans

did begin to approve the other nominees last night. And I don't think Raskin is worth the hoopla. The concept she has written about, the idea that regulatory agencies would more strongly consider climate change, is literally novel only in this specific space in the United States. As Raskin herself pointed out in a letter to Biden, we are well behind the rest of the world, and the Fed is further behind than other domestic agencies. Quote, this is not a novel or radical position, she said. The Department of Defense has been systematically analyzing the energy security risk of climate change for years, developing mitigation strategies to confront them. Banks and insurance companies incorporate financial aspects of extreme weather events into

their plans. Farmers, ranchers, and businesses across the country already are struggling to adapt to extreme floods, hurricanes, rising sea levels, and wildfires. Central banks around the world have already begun acting on these issues, end quote. The idea that members of the Fed should or need to be blind to this stuff in order to do their work strikes me as ridiculous. It reminds me of the debate about journalism, as if every reporter needs to also be a robot with no empathy for the subject they're covering. Just as with journalists, the question is not whether Raskin or other members of the board have individual beliefs. That is a given. It's whether they are qualified, do their jobs fairly, or act like hacks. And Raskin is clearly not a hack. Her qualifications

are nearly flawless, and her record on the regulatory side is totally within the norm. This is my long-held position on unelected nominees like her. If they are unqualified, obviously corrupt, violated an ethical standard, or are being nominated for the wrong reasons, i.e. to fire up a political base, those would be good reasons to sink the nomination. But those things aren't true here. They certainly aren't obvious enough to maintain vacancies on the Fed at a time like this and go to the lengths of literally not showing up for work just to sink her nomination. Perhaps most unnerving is that they've now sunk a nominee with expertise in cybersecurity,

which is arguably the single most pressing issue aside from inflation that the Fed faces. By far the most worrisome thing about Raskin was her connection to a company that appears to have gotten preferential treatment from the Fed. Raskin joined the Board of Reserve Trust, a fintech company that had previously been rejected in an application to use the Fed. Raskin joined the board of Reserve Trust, a fintech company that had previously been rejected in an application to use the Fed's payment rails. She quote-unquote guided the company to change its business models in a way that would win its approval and fit in the federal regulations, reapplied, and got what they were looking for. Reserve Trust and the Kansas City Fed have said that everything was above board, though their story has differed from the

Colorado Division of Banking's description of how the acceptance came to be. No matter whose story you believe, though, at the very worst, this looks like your run-of-the-mill DC to private sector revolving door sliminess, where someone at a powerful regulatory agency goes into the private sector, helps them navigate federal law in a way their competitors can't or won't, and then moves back into the government years later. During hearings, Republicans produced little more than insinuations about what happened. There was no smoking gun of foul play and no evidence Raskin had simply made a single call and received such special treatment from the Fed. It certainly stinks a little, and I'm not a fan of this kind of thing, but I don't think it's so risable given Raskin's other qualifications to

the extent that her nomination was worthy of failure. Without all that, it's tough to see a justification for everything that has happened since. Raskin answered hundreds of questions about it, and in normal times that would have been satisfactory for at least a single vote from the other side and certainly full support from Democrats, especially after unanimous approval of her prior service on the Fed. But these are apparently not normal times. Now we're left with a handicapped Fed for another couple weeks at a time when the world is waiting for it not just to wrangle with inflation, but to help the country navigate the major financial disruptions from the war in Ukraine. And yes, while the Fed's purview

is and should remain to be a focus on full employment and economic stability, there are plenty of reasons to want a board of governors thinking about the future of energy, cybersecurity, and much more. Instead, though, we're weeks, maybe even months away from simply having an actual board of governors. All right, that is it for my take, which brings us to your questions answered. This one is from Sandy in Norfolk, Virginia. Sandy said, when quoting guest authors, you have written, quote, and my team lightly edited the piece below, which we've published in full. This seems to me to be an oxymoron.

What am I missing? This is a great question, a good media literacy question, actually. a great question, a good media literacy question actually. So there are usually a few descriptors like this that precede either an interview or a reader submission like the one that we published last week. So when interviewing someone, I will often say that the transcript has been lightly edited for length and clarity. This means that I have included every question and answer in the interview but cleaned up some of the stutters, in-sentence corrections, and redundancy to make sure I'm showing you what the person who is speaking intended to say, but also not including a bunch of stuff that's unnecessary. So an example, an interviewee might say to me verbatim something like, you know, I think that, well, I know some people are worried about

inflation, but it's also just that we're going to have to at some point accept the fact that it's ultimately out of our control. That's kind of how people talk sometimes. I might change an answer like that to say, I think that I know some people are worried about inflation, but we're going to just have to accept at some point that it's ultimately out of our control. That's just a much cleaner, easier to read way and preserves the integrity of both what the person said and the hesitancy of their response, how they sort of started with, I think, and then switched to, I know, a moment that I wouldn't want to leave out. It's the kind of editing that happens in an interview to both make it clear what the person said and what the mood and emotion was, but also preserves the moment and makes it clear to the

reader or the listener what's going on. So for the piece that you're asking about specifically, which was a reader submission, I'm letting you know that we did not remove anything, A, without the author's agreement, or B, that fundamentally took away from the points that we're making. If we had, I may have said something like, our team edited the piece to best fit the Tangle format, or the original piece appeared in full in X publication. But for Lisa Sellen Davis's piece about gender ideology, which we published, it was published in full. We did not cut any arguments we made, though our team did clean up the writing and reorganize the piece a little bit with her participation in a way that we thought made it clearer. Hence, lightly edited and published in full.

All right, that brings us to our story that matters for the day. This one is a pretty interesting exclusive that Axios got. Apparently, President Biden and his administration are reportedly preparing for a mass migration event when COVID-era policies on the border are ended. Right now, officials are using Title 42, a health regulation, to immediately expel migrants at the border without hearing their asylum cases. One million migrants have been sent back across the border this way. And when Biden ends it, agencies are apparently planning for a surge of as many as 170,000 migrants to come to the border, which has already been strained this last year. Internal discussions have raised alarms that human trafficking networks throughout Mexico and Central America will exploit the situation to generate a mass migration event, Axios reported. News of the plans come as Biden is already facing

criticism from the left and right for his handling of immigration, a potent issue in this coming election season. All right, finally, that brings us to our numbers section. These are all from the poll that we took in yesterday's Tangle edition. 72.2% of Tangle readers said that we should change our current daylight saving time to one permanent time throughout the year. 53.1% when picking between which time we should do said we should pick permanent daylight saving time. 46.9% said we should pick permanent standard time. 40.4% is the percentage of people who said we should change to permanent daylight saving time when presented with three options on what to do. 33.9% said we should change to permanent standard time when presented with all three options on what to do, and 25.7% is the percentage

of Tangle readers who said we should just keep what we have now when presented with all three options on what to do. All right, last but not least, our have a nice day section. Ryan Terrell, Yeshiva University star basketball player, announced he was foregoing his senior year of college in an attempt to become the first Orthodox Jew to ever make it to the NBA. Terrell is currently the leading scorer in all college basketball divisions, averaging 27.1 points per game and shooting 47% from three-point range. Being the first Orthodox Jew in the NBA would mean the world to me and a dream come true, God willing, he said.

But, just as importantly, it would mean the world to others that never saw this as a possibility, Terrell told ESPN. Because of his faith, Terrell doesn't travel from Friday night to Saturday night, though he has said he plans on playing on Shabbat and walking to the gym. ESPN has the fascinating story. There's a link to it in today's newsletter. a link to it in today's newsletter. All right, everybody, that is it for today's podcast. As always, check out that episode description to see all the ways you can help us. I'm not going to beg, just do it, you know? And if you want to hear from us tomorrow, please note that you have to be a Tangle subscriber. Tomorrow, we're going to be sending a newsletter only out on why gas prices are the way they are. Is the president really responsible for

how gas prices change? What influences how gas prices change? It's one of the most common questions I get. So we're going to do a deep dive on it tomorrow morning. But you have to subscribe to get it. So go to readtangle.com slash membership to subscribe. Thanks so much. Have a good one. And we'll see you on Monday. Peace. Our newsletter is written by Isaac Saul, edited by Bailey Saul, Sean Brady, Ari Weitzman, and produced in conjunction with Tangle's social media manager, Magdalena Bokova, who also helped create our logo. The podcast is edited by Trevor Eichhorn, and music for the podcast was produced by Diet75.

For more from Tangle, subscribe to our newsletter or check out our content archives at www.readtangle.com. We'll see you next time. book. Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+.