AEA, CEI Send Joint Letter Opposing Confirmation of Sarah Bloom Raskin to the Federal Reserve

“The world is witnessing an energy crisis. On one hand, the White House has begged OPEC and Russia to supply additional oil on global markets and on the other hand he nominated Ms. Raskin who has stated that “even in the short term, fossil fuels are a terrible investment.” It is unclear why fossil fuel production is fine when it occurs in the OPEC countries or Russia, but not in the United States.

Investing in conventional energy — the source of 79 percent of energy consumption in the United States — is not a terrible investment, it is necessary to keep the lights on, keep our houses warm, and keep our transportation system moving.

Ms. Raskin endorses using the powers of the Federal Reserve outside of its statutorily-defined role. Anyone confirmed by the Senate should be committed to executing the law, rather than to pursuing a personal vendetta against certain types of energy.”

If Ms. Raskin is successful siphoning away necessary investments in fossil fuels we will see even higher energy prices and even more offshoring of energy intensive industries. If President Biden wants a stronger economy, he needs withdraw the nomination of Ms. Raskin. If he refuses to do so, the committee should vote against her confirmation.”

“The Senate should not confirm Ms. Raskin to the Federal Reserve, where she appears eager to misuse the Fed’s considerable authority to try to destroy the coal, oil, and gas industries.”

“As late as 2020, Sarah Bloom Raskin called for the Fed to actively discriminate against oil, gas, and coal firms in its lending programs. If confirmed as Vice Chair for Supervision, she could force banks to deprive these sectors of financial services to the detriment of the economy as a whole. The Senate must reject her nomination and stand up for ordinary American consumers, investors, and entrepreneurs still reeling from the pandemic and the onslaught of inflation.”

Ms. Raskin endorses using the powers of the Federal Reserve outside of its statutorily-defined role. Anyone confirmed by the Senate should be committed to executing the law, rather than to pursuing a personal vendetta against certain types of energy.

Ms. Raskin was incorrect when she stated in May 2020 that “even in the short term, fossil fuels are a terrible investment.” The stock prices of many oil companies have doubled since then. The stock price of Peabody Energy, the largest private coal company in the world, has tripled since then. Generally, fossil fuels have become a great investment in the brief time period since Ms. Raskin claimed they were a terrible investment.

Ms. Raskin’s terrible investment advice is one reason why the Federal Reserve should not be in the business of trying to pick winner and loser industries. The Federal Reserve Act did not charge the Federal Reserve with trying to pick winners and losers and there is no reason to believe it would choose wisely.

We urge President Biden to withdraw the nomination of Ms. Raskin, and if he does not do so, we urge the committee to vote against her confirmation. Congress has charged the Federal Reserve with maintaining a stable environment for the effective operation of the financial system, but this is very different from actually directing the flow of capital as Ms. Raskin would like to do. Ms. Raskin’s confirmation would be a recipe for financial instability.