Sarah Bloom Raskin Does Not Belong at the Fed

The nominee’s record suggests she merely told senators what they want to hear 

Letter to The WSJ. 

"Alan Blinder defends Sarah Bloom Raskin’s nomination for the Federal Reserve’s vice chair of supervision (“Sarah Bloom Raskin Belongs at the Fed,” March 3). Surprising for an economist of Mr. Blinder’s caliber, his argument is quite weak.

To begin, Mr. Blinder assumes facts not in evidence. He incredulously asks, “Does anyone doubt” climate change poses a major risk to the financial system? Actually, yes. A great many economists doubt it. There is no scientific consensus that the effects of climate change, such as extreme weather or natural disasters, cause financial crises. Strike one.

Next, Mr. Blinder reassures us that Ms. Raskin won’t act as a climate cop at the Fed (despite her record) because she said she wouldn’t in her confirmation hearing. Of course, a nominee has an incentive to say what senators want to hear. Econ 101: People respond to incentives. Strike two.

Third, Mr. Blinder dismisses fears about Fed mission creep: “The Fed has no such authority” to allocate credit based on partisan goals, he writes. Yet it has in the past, and if Ms. Raskin is confirmed, it will be much more likely to do so again. She got the nod as part of a plan to do an end run around the Fed’s statutory limitations. Ms. Raskin’s career as an “experienced public servant” makes her more likely to push for mission creep, not less. Strike three.

Mr. Blinder is right that these are “rancorously partisan times.” That’s why Ms. Raskin shouldn’t be confirmed. The Fed is too important to politicize. As a former Federal Reserve vice chair, Mr. Blinder should know better.

Assoc. Prof. Alexander William Salter

Texas Tech University

Lubbock, Texas"