The Bureaucrat Banker Running the Federal Reserve: Jerome Powell
The Bureaucrat Banker Running the Federal Reserve: Jerome Powell
The American economy is imploding and people are giving Powell and the Federal Reserve the side eye.
As the head of America’s most powerful “private” bank, hundreds of millions of people’s livelihoods rest in Jerome Powell’s hands.
Powell is a lawyer and investment banker who has served as the chair of the Federal Reserve since 2018. His Princeton, Georgetown Law, and investment background made him an excellent deep state candidate. Still, as uncertainty over the U.S. economy grows — things look grim for everyday Americans and Jerome Powell is facing serious pressure.
The early days
Powell earned a degree in political science from Princeton University in 1975. From 1975 to 76, he spent a year as a legislative assistant to Republican U.S. Senator Richard Schweiker of Pennsylvania. He earned a Juris Doctor from Georgetown University Law Center in 1979 and was editor-in-chief of the Georgetown Law Journal while there.
After graduating, he moved to NYC and became a clerk to Judge Ellsworth Van Graafeiland of the United States Court of Appeals for the Second Circuit. Powell later worked as an attorney with Davis Polk & Wardwell from 1981 to 1983 and Werbel & McMillen from 1983 to 1984.
The Moneyman
Powell entered investment banking in 1984. He was senior vice president with the investment bank Dillon, Read & Company, Inc. from 1984 to 1990. From there, he became a Treasury bureaucrat.
Powell briefly served as Assistant Secretary of the Treasury for Financial Institutions from 1990 to 1992 and as Undersecretary of the Treasury for Domestic Finance under President George H. W. Bush until 1993. At this time, Nicholas F. Brady, the former chairman of Dillon, Read & Co., was the United States Secretary of the Treasury. Powell then took a break from the public sector.
That same year, Powell began working as a managing director for Bankers Trust. He left in 1995 and returned to Dillon, Read & Co..
From 1997 to 2005, Powell was a partner at The Carlyle Group. He left Carlyle Group in 2005 and founded a private investment firm, Severn Capital Partners. In 2008, he became a managing partner of the Global Environment Fund, a green energy private equity and venture capital firm.
He was a visiting scholar at the Bipartisan Policy Center, a ‘Uni-Party’ D.C. think tank, from 2010 to 2012 and earned a salary of $1 a year due to his prior wealth. He helped Congress raise the United States debt ceiling during the 2011 United States debt ceiling crisis.
The Fed Boy
Powell joined the Federal Reserve Board of Governors in 2012 after being nominated by President Obama the year before. He was renominated for another term and was confirmed by the United States Senate for a 14-year term which would have ended in 2028.
However, President Donald Trump nominated Powell for Fed chairman in 2017, replacing Janet Yellen. He serves as Chairman of the Federal Open Market Committee, the Fed’s main monetary policymaking body. Powell was sworn in as Chairman of the Board of Governors of the Federal Reserve System in 2018.
After being confirmed by the Senate Banking Committee in 2018, one of the first things Powell did as Fed chairman was raise interest rates in response to Trump’s strengthening economy. Powell announced that the Fed would use quantitative tightening, reducing its asset portfolio from $4.5 trillion to somewhere between $2.5 to $3 trillion over four years. This pissed off President Trump who publicly criticized him and expressed regret over hiring him. During the 2019 trade war with China, Trump referred to Powell as an enemy and condemned the Fed’s policy of raising interest rates and cutting back on its quantitative easing as too far and “insane”. Trump called for rate cuts and considered firing Powell, which Powell refused to accept.
Powell spent money like a drunken sailor during the 2020 COVID recession, dramatically expanding the Fed's balance sheet and introducing new strategies like direct lending programs and buying corporate bonds. He and then-Treasury Secretary Steve Mnuchin Powell urged Congress to green-light more stimulus. Trump was very happy with Powell’s actions during COVID and publicly praised him.
In 2021, in light of his term as chair expiring, progressive Democrats like AOC expressed opposition to Powell's reappointment. They called on President Joe Biden to replace him, urging him to “to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice.” Further, they wanted him to change his policies to "mitigate the risk climate change” poses to our financial system. During Powell's 2022 confirmation hearing, he described inflation as a "severe threat" to the US economic recovery due to "higher costs of essentials like food, housing and transportation".
So Here We Are
These days Powell and the Federal Reserve are fighting off the market’s worries. People are increasingly worried about a new recession after a disappointing jobs report caused the Japanese market to panic. Powell insists that he won’t let the market dictate when he cuts rates, but hinted at a possible rate cut in September.
Famous fake news outlet CNN insists that the economy is doing better than we think and laid blame at the feet of both parties who pushed massive spending bumps during the last recession. They advised readers to avoid blaming the Federal Reserve.
However, Powell has been hoping for higher unemployment for a while now, so this was to be expected. The Sahm rule, named after former Fed economist Claudia Sahm, describes a half-point increase in unemployment on a three-month moving average basis as an indicator of recession. We’re in recession territory, but the Biden-Harris administration doesn’t want to admit it because it would hurt Harris and her VP candidate, Minnesota Governor Tim Walz, in the election. Regardless, people are worried about the U.S. economy.
The Wealthy Weirdo or the Woke Wine Aunt
Despite what the Mockingbird media may tell us — America’s economy is falling apart, people are struggling, and the Federal Reserve plays a big part in it. This November, voters will have the opportunity to vent their frustrations and pick who they think is best for the future of the American economy: Kamala Harris and Tim Walz or Donald Trump and JD Vance. If the former are to be believed, then Americans don’t care about the economy as much as they care about who’s the weirdest.
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