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January 11, 2023

Fed Chair Powell goes beast mode on greenie wokery

By Monica Showalter

Well, here's one we didn't see coming.

After months of wokery coming out of the Federal Reserve, with leftists promoting weird ideas like the importance of making global warming the primary consideration in assessing how the nation's money supply is to be managed, Federal Reserve chairman Jerome Powell called out the crap and restated how monetary policy actually works.

According to the Daily Mail:

Federal Reserve Chair Jerome Powell cautioned that institutions like the Fed must 'resist the temptation' to try and tackle social issues such as climate change in a speech in Sweden Tuesday. 

Powell, 69, gave his remarks to a forum on central bank independence sponsored by the Swedish central bank.

The Federal Reserve's independence from political influence is central to its ability to battle inflation, but requires it stay out of issues like climate change that are beyond its congressionally established mandate.

'Taking on new goals, however worthy,' such as climate or social policy, he said, 'without a clear statutory mandate would undermine the case for our independence.'

...and...

Though Powell said the Fed's regulatory powers give it a 'narrow' role to ensure financial institutions 'appropriately manage' the risks they face from climate change, 'we are not, and will not be, a 'climate policymaker.''

'Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals,' Powell said. 

'Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public's will as expressed through elections,' he told the forum in Stockholm.

He also hinted that more rate hikes are coming to wring the inflation out of the system, because wringing inflation out of the system after an extended hog wallow of money-printing is not easy.

He's not a guy who buys into the Biden line, promoted by White House chief of staff Ron Klain, yesterday that with inflation at 2.5% on the month, it's time to cheer up.

He's a guy going for all the inflation, the kind that makes organic eggs clock in at $8 a dozen, not just the latest addition to the price at the top.

Here are some other highlights:

The Heritage Foundation says he hasn't gone far enough:

But in the wake of those remarks, the markets went up.  The yield curve flattened.  And the lefties are plenty annoyed:

The backdrop here is that the Fed has up until now been immersed in climate change as its substitute for monetary policy.  It's been a total roundheels to the whims of politicians who have commissioned so much money-printing for global warming boondoggles, and other greenie payouts, that the net result has been inflation, brought on by too much money in the system for the existing economy.

But more than that, climate change has been embedded into Fed orthodoxy on monetary policy itself in the last few years. 

Here's a piece describing this nonsensical establishment orthodoxy from the Brookings Institute:

Central banks have a choice when it comes to confronting climate change, BlackRock's Isabelle Mateos y Lago said at a recent Hutchins Center on Fiscal & Monetary Policy event. They can navigate climate change and the transition to net zero carbon emissions, or they can go further and drive the transition to net zero. But ignoring climate change is not an option.

Mateos y Lago, global head of BlackRock's Official Institutions Group and a former senior International Monetary Fund official, spoke at a Hutchins Center forum in early March 2022 on challenges facing Jerome Powell in his second four-year term as Fed chair. Climate change is a particularly contentious issue. Senate Republicans are blocking the nomination of Sarah Bloom Raskin to the Fed to be vice chair for (bank) supervision in part because of she has said in the past that the Fed should take an aggressive role in fighting climate change. 

Get the picture?  Powell's predecessor at the Fed, the current Treasury secretary, Janet Yellen, was big on money-printing to promote the climate-change agenda.  Tucker Carlson criticized her for that baloney in this item here:

"We must look ahead at emerging risks," Yellen proclaimed, "Climate change is obviously the big one." She sent a letter to the World Bank telling them the same thing. As for inflation, which traditionally was a core concern of government economists, that was the emerging risk they were worried about, Yellen Just shrug that off. Inflation? If that happens, she told us in a now-famous quote, it'll be "transitory." 

Powell's job is to control inflation, and there's one way to do it: by hiking interest rates.  That's monetary policy done Volcker-style, the way he killed it off from the Nixon/Ford/Carter era and launched the Reagan Revolution.  Any global warming priorities in setting monetary policy inevitably mean more money-printing for Solyndra-type projects.  That's inflationary.  Powell's job, once again, is to control inflation.  You don't control inflation by printing money, any more than you put out a kitchen fire by spraying gasoline on it.

So in saying these severely politically incorrect remarks now, the only thing this guy is thinking about is controlling inflation and apparently he means to do it.

That's frankly a favor to Joe Biden, even if none of his surrounding wokesters will think it is.

This global warming talk as a Fed priority has been going around with a straight face for several years now.  It's a major reason why we've got the inflation we've got.

Now, with midterms over, and the 2024 race for the presidency beginning in earnest, apparently, some kind of results are needed, which means pitching the global warming nonsense over the side.  Whether Joe Biden and his minions will tolerate this and not fire Powell is an open question.

Image: William Warby via Flickr, CC BY 2.0.

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