Well, duh...
It's good to see this demand by both Elizabeth Warren and Joe Manchin. But, there's an important point missing.
They co-write an opinion piece where it actually might be noticed (as opposed to The Nation, for example): The Wall Street Journal.
Quick background: the president has two vacancies to fill on the Federal Reserve Board of Governors. The Fed has been basically been run in the interests of banks, and has not lifted a finger to investigate banks--certainly not at the regional bank level where none other than Jamie Dimon, who runs a "one bank crime spree", continued to sit on the NY Fed Board even after the financial crisis in which he played a central role, as Bernie Sanders pointed out.
Warren and Manchin want this to stop:
We joined the Senate Banking Committee to try to make the banking system work better for American families. That’s why we’re concerned that the Federal Reserve—our first line of defense against another financial crisis—seems more worried about protecting Wall Street than protecting Main Street. Fortunately, this is one problem the Obama administration can start fixing today by nominating the right people to fill the two vacancies on the Fed’s Board of Governors.[emphasis added]
And:
Two recent reports highlight that the Fed isn’t very good at supervising certain banks. In September, Carmen Segarra, a former bank examiner at the Federal Reserve Bank of New York, released secret recordings she had made of meetings at the New York Fed in 2012. The recordings revealed that New York Fed employees had identified concerns with a proposed Goldman Sachs deal with Banco Santander , calling it “legal but shady.” The New York Fed didn’t attempt to make Goldman address these concerns. The recordings also showed Ms. Segarra’s superiors pressuring her to soften her finding that Goldman did not comply with federal regulations on conflicts of interest. While the recordings offered important new insights, they ultimately confirmed the old suspicion that the Fed is too cozy with big banks to provide the kind of tough oversight that’s needed.
An October report from the Fed’s Office of Inspector General provided additional confirmation that the Fed is failing to oversee the big banks. The report found that the New York Fed had failed to examine J.P. Morgan Chase ’s Chief Investment Office—the office that incurred over $6 billion in losses in the infamous 2012 “London Whale” incident—despite a recommendation to do so in 2009 from another Federal Reserve System team. The report concluded that the New York Fed needed to improve its supervision of the biggest, most complex banks.
And:
The five sitting governors have a variety of academic and industry experience, but not one came to the Fed with a meaningful background in overseeing or investigating big banks or any experience distinguishing between the greater risks posed by the biggest banks relative to community banks. By nominating people who have a strong track record in these areas and who have a demonstrated commitment to not backing down when they find problems, the administration can show that it is taking the Fed’s supervision problem seriously. Nominating Wall Street insiders for the Board of Governors would send the opposite message.[emphasis]
Putting aside for a moment the important question whether this president, or his attorney general, had any interest in holding the banks accountable for the financial crisis, Warren and Manchin missed an important point:
The Fed has had a long recent history of ignoring an important part of its mandate: ENSURING MAXIMUM EMPLOYMENT.
Here, from its actual mandate:
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.[emphasis added]
"Maximum" has always been viewed as "Full employment."
But, when was the last time you heard a Federal Reserve Board Governor use the words "full employment"...or any politician for that matter--with the regular exception of Bernie Sanders. When the Fed, the president, and most politicians elites, including Democrats, talk about “full employment” today, they mean 5.5 percent or so–which, back in the day, would be seen as unconscionably high; full employment, at worse, was pegged at 4 percent (and could probably go a bit lower). But, there is an acceptance of a certain level of desperation now and exploitation that would have been seen as immoral say 30-40 years ago.
So, my point is this. It's great that Warren and Manchin are making a demand for a different kind of appointment. And there is no question that, if there is real oversight of the banks, there is a higher likelihood that we might avert another financial crisis (count me as skeptical but that's another story).
What tens of millions of Americans need, however, is a Federal Reserve Board of Governors that actually follows its legal mandate and, for fuck's sake, makes jobs, jobs, jobs and real full employment the priority--which none of them seem to be focused on.