President Joe Biden says he plans to nominate Michael Barr as caretaker chairman of the Federal Reserve.
WASHINGTON – President Joe Biden said Friday he plans to nominate Michael Barr, dean of the University of Michigan’s School of Public Policy, as vice chairman of the Federal Reserve’s oversight.
Biden’s first choice for the Fed post comes after Sarah Bloom Raskin, a Republican and a Democrat, withdrew her nomination a month ago in the face of opposition from Sen. Joe Manchin of West Virginia. Critics of Raskin argued that he would apply the Fed’s regulatory authority for climate change and perhaps discourage banks from lending to energy companies.
With the bar, however, Biden noted the importance of politics in a statement Friday that said his nominee had previously cleared the Senate on a bipartisan basis.
“Michael brings the skills and experience needed for this important position at a critical time for our economy and family across the country,” Biden said.
The Democratic president said Barr “has spent his career protecting consumers, and while at the Treasury, has been instrumental in creating both the Bureau of Consumer Financial Protection and the position for which I am nominating him.”
Gerald R. Ford of Michigan Dean of the School of Public Policy. During the Obama administration, he was the Assistant Treasury Secretary for Financial Institutions who helped design the 2010 Dodd-Frank Regulations after the catastrophic financial crisis of 2008.
Barr, a Rhodes scholar who worked as a clerk for Justice David Souther in the Supreme Court, also served in the White House, the Treasury Department, and the State Department during the Clinton administration.
Despite this credentials, some liberal critics last year blocked the Biden administration’s candidacy for control of the currency, a position responsible for controlling national banks. These critics are skeptical of Bar’s role on the advisory boards of financial institutions Lending Club and Ripple Labs. They further stressed that during the Obama administration he helped weaken proposals for stricter banking regulations.
But Ohio Sen Sherrod Brown, the Democratic chairman of the banking committee, has given his full support to the bar.
“Michael Barr understands the importance of this role at this crucial time in our economic recovery,” Brown said. “I strongly urge my Republican colleagues to abandon their personal attacks and the old playbook of demagoguery and to put Americans and their pocketbooks first.”
Others praised the bar and said it seemed appropriate for the Fed’s position.
David Dwarkin, president of the National Housing Conference, which advocates for affordable housing, suggested that the bar’s understanding of Wall Street gives him the right mix of “central competencies and progressive policy views” to win the confirmation of a closely divided Senate.
Barr will join the Fed at a particularly challenging and high-risk time for the central bank and the economy.
The Fed will aggressively raise interest rates next month in an effort to reduce persistently high inflation. However, Fed Chair Jerome Powell – who is awaiting Senate confirmation for a second term – said it would be difficult to slow inflation by increasing the cost of borrowing without weakening the economy and possibly even creating a recession.
“It’s about getting a very complex plane to land smoothly on the runway,” Dwarkin said. “It’s very difficult to do.”