Column: Fossil fuel barons killed Biden’s Fed pick because she talked sense on climate change
If you’re curious about what the bare-knuckled exercise of political power by special interests looks like, go no further than the torpedoing of Sarah Bloom Raskin’s nomination to a high post at the Federal Reserve.
Raskin withdrew her nomination by President Biden to be the Fed’s vice chair for supervision on Tuesday.
Her withdrawal wasn’t prompted by questions about her qualifications or experience. That could hardly be the case: Raskin had won overwhelming approval from the Senate when she was appointed to the Fed’s board of governors in 2010 and again when President Obama named her a deputy Treasury secretary in 2014.
All U.S. regulators can — and should — be looking at their existing powers and considering how they might be brought to bear on efforts to mitigate climate risk.
— Sarah Bloom Raskin
No, Raskin’s nomination was killed by the fossil fuel industry and its caucus in the Senate.
The final decisive blow was delivered on Monday by Sen. Joe Manchin III (D-W.Va.), who said that she had “failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation’s critical energy needs.”
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For those needing a translation, Manchin’s goal was to protect the role of fossil fuels in U.S. energy policy. That’s important to know, because when it comes to energy policy and the need to combat global warming, Manchin is the dictionary definition of a walking conflict of interest.
Manchin is the founder of Enersystems, a coal brokerage now being run by his son. His holdings of Enersystems stock, according to his latest Senate disclosure statement, come to as much as $5 million and his income from the company in 2020, the latest year reported, was at least $500,000 and as much as $1 million.
Manchin has been a sedulous supporter of the fossil fuel industry. That may not be strange for a senator from a coal-producing state such as West Virginia, but his political positions haven’t always reflected the interests of the coal miners who are his constituents.
In December, when Manchin’s opposition doomed a version of Biden’s Build Back Better program, the head of the United Mine Workers of America urged him to reverse course because the program included several provisions that “will help keep coal miners working, and have a meaningful impact on our members, their families, and their communities.” It didn’t work.
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But Manchin is a favorite of fossil fuel managements. He’s the leading recipient in the Senate of oil and gas industry contributions, collecting nearly $743,000 in the current election cycle, nearly five times as much as the runner-up, James Lankford (R-Okla.).
For another window into the devotion of Manchin’s family to the public interest, remember that Heather Bresch, whose decision as chief executive of the drug company Mylan to jack up the price of its EpiPen, a life-saving anti-allergy medical device, by nearly 500% bathed her and the company in infamy, is Manchin’s daughter.
Bresch retired from Mylan in 2020 when the company merged with Upjohn to create a new company named Viatris. It must be just a coincidence that Mylan was one of Manchin’s top campaign contributors throughout his career, donating more than $358,000 from 2009 through 2018 to him and his political action committee. In the 2020 election cycle, Viatris added an additional $80,425 to the total.
No one could say Manchin doesn’t deliver value for money. At the CERAWeek industry conference on March 11, Manchin disdained electric vehicles, the proliferation of which is a key to reducing the West’s reliance on oil.
“I’m very reluctant to go down the path of electric vehicles,” Manchin told attendees. “I’m old enough to remember standing in line in 1974 trying to buy gas — I remember those days. I don’t want to have to be standing in line waiting for a battery for my vehicle, because we’re now dependent on a foreign supply chain, mostly China.”
He also dismissed the idea of the government funding electric vehicle charging stations, another element of Biden’s proposed program. “I’ve read history, and I remember Henry Ford inventing the Model T, but I sure as hell don’t remember the U.S. government building filling stations,” he said. “The market did that.”
Raskin’s nomination isn’t the first target of an industry campaign against a Biden nominee.
Business and the GOP think the Labor Department should be anti-labor. To them, that makes Biden nominee David Weil a dangerous radical.
Since last summer, an industry coalition has held up the confirmation of David Weil, a pro-union scholar and former official of the Department of Labor, who has been nominated to return to the agency. As we reported, industry lobbies assert that Weil’s advocacy of worker rights makes him “unfit” to regulate labor-management relations.
Big corporations including Amazon and Meta Platforms (formerly Facebook) have also sought to weaken Lina Kahn, chair of the Federal Trade Commission, who is overseeing FTC investigations of their operations.
The fossil fuel industry’s distaste for Raskin derives from her view that financial regulators must incorporate global warming costs into their calculations of the safety and soundness of the institutions under their jurisdiction.
“These costs are no longer theoretical or far off,” Raskin wrote in September. “They are here now, and though they are being shouldered across the board, the people who feel them most intensely have less access to information, work outdoors, or live in insufficiently protective conditions. Those who cannot easily relocate or afford sufficient property and casualty insurance are increasingly vulnerable.”
She added, “Despite these growing costs, U.S. financial regulators have yet to show that they are thinking creatively about potential solutions.... All U.S. regulators can — and should — be looking at their existing powers and considering how they might be brought to bear on efforts to mitigate climate risk.”
In other rich countries, she observed, “policies and processes are being reimagined to accelerate a rapid, orderly, and just transition to a renewable, biodiverse, and sustainable economy.”
Raskin, who since leaving the government in 2017 has been a professor at Duke Law School, repeated these observations upon her withdrawal.
Facing a tough regulator for the first time, Facebook and Amazon are trying to sideline FTC Chair Lina Khan.
To her credit, she did not go quietly. She withdrew with a candid, scorching and utterly truthful letter to Biden blaming the death of her nomination on “relentless attacks by special interests” objecting to “my frank public discussion of climate change and the economic costs associated with it.”
Raskin noted that the assessment of the risks of extreme weather driven by global warming have become routine — indeed, imperative — for banks and insurers, farmers and businesses and central banks across the world. “Any vice chair for supervision who ignored these realities,” she wrote, “would be guilty of a gross dereliction of duty.”
Instead of engaging in an informed discussion about the issues, Raskin said, Senate Republicans boycotted committee votes to advance not only her nomination, but those of four other Fed nominees, including reappointments of Fed Chair Jerome H. Powell and board of governors member Lael Brainard.
One would have some respect for the industry’s campaign, marginally, if it dealt candidly with its real issues. It didn’t. Instead, Raskin’s opponents ginned up a scandal by suggesting she had used her influence as a former Fed official on behalf of a financial company on which she served as a director. The assertion was debunked by the Fed.
But the truth is that fossil fuel interests opposed Raskin because she would be a smart, effective regulator. In other words, she would serve not their interests, but the public interest. And who needs that?