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ACCORDING TO LIZ - Long after bankers’ hours on the last Friday in April, the Republican-majority Senate Banking Committee scheduled a vote five days later to push forward appointment of a Trump stooge as chief of the Federal Reserve Board of Governors.
Approval for the president’s choice had been denied advancement until earlier that day when Republican Senator Thom Tillis received assurances from federal prosecutors that the vengeance-motivated criminal investigation against current Fed Chair Jerome Powell had been dropped.
And the underlying threat against the Fed’s independence by a president bent on subjugating it to his rule.
After the Senate Banking Committee approved the Warsh based on those assurances to Tillis that the scrutiny of Powell would cease, U.S. Attorney Jeanine Pirro did a shocking about-face on CNN’s “State of the Union” this past Sunday.
In what may hopefully throw a wrench into the confirmation process, Pirro reversed her purported promise and averred that her office might continue to persecute, oops, prosecute Powell based on the results of a legally questionable probe by the Inspector General.
Defiant to the ongoing drama, Powell has elected to stay on as a Governor once his term as Chair ends on May 15 in order to better face the spurious legal threats against him and the fight to preserve the integrity and independence of the Federal Reserve system.
What Tillis was anxious to preserve.
During a previous stint on the Federal Reserve Board, Trump choice Kevin Warsh used his Morgan Stanley-acquired mergers-and-acquisitions experience to help Ben Bernanke address the 2008 financial crisis – none too well for the common folk, as financial mergers have never been in the interest of ordinary people and serve to protect and concentrate wealth in the hands of the haves.
But his wheeling and dealing clearly impressed the art-of-the-deal yet-to-be president.
But not Elizabeth Warren, the ranking Democrat on the Senate Banking Committee.
Her interrogation of multi-centi-millionaire Warsh during the April 21 hearing was incisive.
Pursuant to his Senate filings, Warsh has assets worth between around $135 and $226 million but refused to provide specifics on more than $100 million of his holdings, citing confidentiality agreements.
These undisclosed financial investments raise red flags of potential conflicts of interest. Particularly regarding investments potentially linked to companies affiliated with Trump or his family, entities involved in money laundering, Chinese-controlled firms, and financial vehicles associated with Jeffrey Epstein.
As Warren reports, Kash Patel’s FBI made “zero investigation into any of Mr. Warsh’s financial holdings, including those that he is refusing to disclose, and that they made zero investigation as to why [Warsh] appears in the publicly available Epstein files and whether he appears in other files that have not been made public.”
The feisty Warren also grilled Warsh on why he’s not a Trump sock puppet, and would he make his promised divestments public.
Warsh asserted that he would act independently and not allow any political pressures to dictate monetary policy decisions, but his credibility is on more than slightly shaky ground given Trump nominated him specifically to advance the president’s agenda, an agenda that Powell as the current Fed Chair, has consistently blocked.
And played dodgeball during the hearing by virtue-signaling Trump about how much of the blame for the country’s economic problems should be put on Powell and his monetary decisions of the last decade.
Making it clear that he intends to slash the Central Bank's balance sheet. Which should make Wall Street and the lending markets, already reeling from Trump’s wars and tariff misadventures, quake in their hand-crafted loafers.
Would Warsh look at building cost overruns on construction of Trump’s mega-ego projects?
Would he even support the concept of the Federal Reserve as a public good?
Ah, that’s why Trump nominated him. The president wants a yes-man.
As was demonstrated during the committee hearings when Warsh refused to concede that Biden won the 2020 election.
This is the man who in May of 2018 proposed the Fed consider using blockchain technology to establish its own cryptocurrency.
We all know how the president’s crypto adventure at the behest of its bang-and-bust promoters whose deep pockets helped put him back into office.
Trump’s $TRUMP token has plunged more than 95% in value since last year.
The date for the vote by the full Senate to coronate Warsh as the next Chair of the Federal Reserve Board has not been set but will almost certainly take place in the next couple of weeks, before Powell’s term expires.
Warsh will have to demonstrate effectively to the entire, albeit Republican-weighted, Senate why he’s not the president’s puppet and make good on divesting his assets and, hopefully, be forced to reveal exactly what has been hidden so the Senate – and the public – can see exactly the kind of man Trump wants running the Fed.
One pliant to presidential whims.
One who supports the president’s jonesing to cut interest rates.
Who fantasizes that rates concerns can be magically addressed by A.I. increasing productivity…
Who wants to shrink most volatile items – energy and food – in the Consumer Price Index which would make for a rosier report on the country’s economic health going into the mid-terms but would be a far less balanced, far less representative account of what people are actually facing.
Who said during his committee hearing: “If the Fed were to execute on a series of policy reforms, then I believe the economy can be stronger... Had the balance sheet not been brought from the $800 billion level when I showed up at the Fed in 2006 to an order of magnitude higher... I think interest rates could be lower, inflation could be better, and the economy could be stronger.”
In his – and the president’s – dreams.
If Warsh is confirmed, Americans can expect to see the wanna-be King president with his fat fingers directly on the purse-strings of the nation.
Like his puppeteer, Warsh will surely lavish attention on short term stock market and interest rates at the expense of the cost-of-living crisis and overall economic health – or lack thereof – for the country.
At odds to those of us with a deeper understanding of ordinary Americans and their kitchen table economic view: that for decades economic policy has been increasingly skewed in favor of the corporations, the powerful and the very rich.
Warsh is an avowed inflation hawk and any significant slashing in support of his views would drastically impact an already shaky economy most notably for those who lack savings to cushion blows to fall.
Under the guidance – or lack thereof – of Warsh, the country can expect further financial blunders like Trump tariffs, the uncapping of the Treasury to pay for his illegal wars, and indiscriminate policies with fallout impacting not only once-allies of the United States but with exploding cost-of-living increases, the ability of the American people to have any quality of life.
And will further enable Trump’s side-hustle thievery from the public purse to enrich the president and his family.
(Liz Amsden is a former Angeleno now living in Vermont and a regular CityWatch contributor. She writes on issues she’s passionate about, including social justice, government accountability, and community empowerment. Liz brings a sharp, activist voice to her commentary and continues to engage with Los Angeles civic affairs from afar. She can be reached at LizAmsden@hotmail.com.)
