Freedom First Society

Issue:  PN921 Confirmation Janet L. Yellen, to be Chairman of the Board of Governors of the Federal Reserve System. Question: On the nomination (1/2 required).

Result: Confirmed 58 to 26, 18 not voting. GOP and Democrat selected vote.

Vote Summary: On confirmation of Janet L. Yellen to be Chairman of the Board of Governors of the Federal Reserve System.   President Obama nominated Yellen, then vice chair of the Board of Governors, to succeed Ben Bernanke, whose second 4-year term as Fed chairman expired on January 31, 2014. (Bernanke’s board membership lasts until January 31, 2020.)

Analysis: Pursuant to the Banking Act of 1935, presidents appoint replacements for the seven-member Board of Governors of the Federal Reserve to staggered 14-year terms. The president also appoints a chairman and a vice chair from among the sitting governors to 4-year terms. The Senate must approve each of these appointments.

In view of the Fed’s role in supporting Insider goals, Dr. Yellen’s Establishment credentials are hardly surprising. Like two of her colleagues on the Board of Governors (Daniel K. Tarullo and Jerome H. Powell) Janet Yellen is a member of the Establishment’s Council on Foreign Relations.

Dr. Yellen earned her Ph.D. in economics at Yale in 1971. From 1971 to 1976, she found employment as an assistant professor at Harvard. From 1978 to 1980, Dr. Yellen served on the faculty of the Fabian Socialist London School of Economics and Political Science. In 1980, she joined the faculty of the University of California at Berkeley, where she is listed as a professor emeritus.

Any constitutionalist or free-market conservative has plenty of grounds for opposing the Federal Reserve and presidential appointments to its Board of Governors. Presidential appointments can be expected to support: open market purchases of government debt with funny money (federal reserve notes); manipulation of interest rates; and the ostensible function of a Central Bank in fighting recession through monetary inflation.

Historically, the lack of serious opposition to Fed appointees speaks volumes regarding Senate subservience to Wall Street and the get-along attitude of “top conservative groups” acceptable to the Establishment. According to Roll Call (11-13-13): “[N]o nominee to lead the Fed has ever been filibustered or rejected by the Senate.” And Janet Yellen was no exception.

According to the same Roll Call (“Conservative Groups Taper Views on Yellen Confirmation”):

“[I]t looks like Republicans may be able to vote for her without tarnishing their records with top conservative groups, helping to ensure she’ll have the 60 votes needed to overcome a filibuster.

“The Club for Growth and Heritage Action for America, two prominent organizations that have not shied away from battles with the pro-business wing of the Republican party, appear ready to spend the Yellen fight on the sidelines.

“‘There’s no mystery and it’s not complicated. We just almost never take a position on monetary policy,’ said Club for Growth spokesman Barney Keller in an email. ‘Thus, we probably won’t be involved in the Yellen nomination.’”

         No position on monetary policy? Okay. But how about a position that there shouldn’t be a Federal Reserve buying unlimited government debt? Perhaps, the “respectable conservative” Club for Growth should rename itself, the Club for Growth in Government.

Here’s what Roll Call had to say about the other “prominent organization”:

“Salim Furth, an economist with the Heritage Foundation, which is affiliated with Heritage Action, said he is skeptical of quantitative easing and other Fed policies, but that inside his organization economists take different views.

“The Fed, he said, is ‘reinventing monetary policy. Clearly, there’s a lot we don’t know about what’s being tried now.’”

         So the economists at Heritage cannot agree that secret monetary management is bad. We are not surprised. Although Heritage claims to support the principles of limited government and a sound economy, any organization regularly heralded by the Insider Establishment as a major conservative player should be suspect.

Indeed, a principled economist should be more than skeptical of the Fed’s $85-billion-a-month buying spree in Treasury and mortgage-backed securities, commonly known as quantitative easing. In a November 11th op-ed for the Wall Street Journal, Andrew Huiszar, the former manager of the Federal Reserve’s $1.15 trillion agency mortgage-backed security purchase program, wrote:

“I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.”

         In 2010, President Obama appointed Dr. Yellen to a 14-year term on the Board and a 4-year term as vice chair. She has supported the Fed’s monetary stimulus program.

Looking closer at the lack of Senate opposition to the Yellen nomination, we saw 16 senators sit this one out, including Senate Minority Leader Mitch McConnell and, surprisingly, Senator Rand Paul, the current champion of an audit of the Fed.

While an audit of the Fed, promoted by Senator Rand Paul, might uncover scandalous actions and influences, the real objective of constitutionalists should be to abolish the Fed — on principle. If opinion leaders don’t champion the principle, then the Establishment can easily redirect outrage over scandals into harmless calls for reform, not abolition, as it has with scandals uncovered at the United Nations.

No Democrat challenged the Yellen nomination on the Senate floor. However, 11 Republicans broke ranks and joined the Democrats in support. Earlier, three GOP senators serving on the Senate Banking Committee voted to advance her nomination to the full Senate: Republicans Bob Corker of Tennessee, Mark S. Kirk of Illinois and Tom Coburn of Oklahoma.

We have assigned (good vote) to the Nays and (bad vote) to the Yeas. (P = voted present; ? = not voting; blank = not listed on roll call.)

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