Thread by @shawnsebastian

Yesterday @NickTimiraos broke the news that John Williams is the frontrunner for president of the @NewYorkFed.

If true, a compromised process ignored the public & resulted in a white, male insider, more hawkish than Dudley, and an ineffective regulator.

wsj.com/articles/san-f…

I told @bencasselman that selecting Williams for the @NewYorkFed would be "deeply disappointing and a missed opportunity.”

This is the most powerful position that Trump doesn't control.

We deserve better.

nytimes.com/2018/03/24/bus…

In this thread I'll cover:
1. How the process was compromised by Wall St and shut out the public
2. Why the @NewYorkFed matters for our jobs and wages.
3. Williams's history of underestimating maximum employment
4. How Williams failed to stop @WellsFargo
5. What we can do next

1. The @NewYorkFed presidential selection process was plagued with conflicts of interest and dominated by the financial industry.

Early talk of diversity and public engagement ended with the selection of a previously unmentioned white, male, Fed insider

nytimes.com/2018/01/18/us/…

The New York Federal Reserve failed to prevent the 2008 crisis because of its deference to the financial industry. Just #10YearsAfter that failure, the @NewYorkFed again allowed conflicts of interest with Wall Street to shape its most important decisions.

propublica.org/article/carmen…

Dodd-Frank reformed the Fed presidential search process to minimize the role of banks.

Anomalously, and inexplicably @hutchins_glenn, a private equity billionaire selected by the banks, co-chaired the @NewYorkFed search committee.

Why?

dealbook.nytimes.com/2014/07/11/sil…

Hutchins and only 3 other private citizens served on the @NewYorkFed search committee. David Cote, who stepped down due to conflicts a few days ago, appears to have chosen the next President while simultaneously negotiating career moves on Wall Street.

newyorkfed.org/newsevents/new…

According to @NickTimiraos, Powell, a formerly of @OneCarlyle had an uncharacteristically heavy hand in the process.

In a closed, black box process, including only 4 people, two white males from private equity exerted uncharacteristic influence and another bailed for Wall St.

Powell's involvement is also significant and troubling. The @NewYorkFed should choose a president subject to Board of Governors veto.

Was Powell instead elevating and eliminating candidates during the process?

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An independent @NewYorkFed could have chosen a check on Powell who would challenge his declarations that there are no banks that are too big to fail and push back on rate hikes. Let Powell dare to veto a woman or POC.

Is Williams the @NewYorkFed's choice, or Powell's?

Powell's involvement strikes to the independence and credibility of the entire @federalreserve system. Trump passed over Williams for Vice-Chair. Did Powell circumvent to get Williams the @NewYorkFed presidency?

Or did he use his influence to carry water for Trump and Mnuchin?

Because the @NewYorkFed presidential selection process was completely closed we don't know what lines were crossed, who was exerting influence, and how.

A closed process leaves working people most affected out and amplifies the power of Wall St and @federalreserve insiders.

Despite early gestures, the public was completely shut out by the @NewYorkFed. We said:

1. Commitment to maximum employment
2. Effective regulator of Wall St.
3. Reflecting diversity of district
4. Opportunity for public input.

We were ignored.

populardemocracy.org/news-and-publi…

We told the @NewYorkFed our demands directly in meetings, in statements from the House and Senate, messages from City and upstate electeds. @SenGillibrand, @SenWarren, @CoryBooker, @RepMaxineWaters @NYCMayor, @bradlander and more all echoed our calls.

bloomberg.com/news/articles/…

We released comprehensive reports marshaling data showing the need for a president committed to full employment and detailing the history of conflicts of interest at the @NewYorkFed. We collected stories and even started a hashtag: #10YearsAfter.

populardemocracy.org/10YearsAfter

We even protested on the @NewYorkFed's doorstep demanding a zealous advocate for full employment, a tenacious regulator #10YearsAfter the crash, and someone who represented the diversity of our communities.

They didn't listen.

bloomberg.com/news/articles/…

2. The @NewYorkFed president is the 2nd most powerful position in the Fed and they could support more jobs for more people, more power at the workplace, and higher wages. But Williams is voting to raise rates and stop that

@LHSummers tells @bencasselman:

nytimes.com/2018/03/20/bus…

The Fed is raising rates and slowing down the economy, but the debate rages.

@jeannasmialek, @BenSpielberg, @econjared, @DeanBaker13 and many more say there's room to grow.

The @NewYorkFed president will be decisive, and Williams is on the wrong side.

bloomberg.com/news/features/…

3. Williams may not be as extremist as the worst hawks at the Fed like George and Lacker, but he's been wrong about maximum employment for years. In 2012 he said the natural rate of unemployment was 6.5%. We're at 4% now and there's still no inflation.

wsj.com/articles/SB100…

While deferring to Yellen early in the recession, Williams has prioritized price stability over full employment. Recently he's pushed, and is now voting for, rate hikes.

The @NewYorkFed doesn't need a hawk who wants to limit our jobs, wages, and power.

nber.org/papers/w17080.…

Williams has consistently underestimated maximum employment.

If Williams had the permanent FOMC vote and influence of the @NewYorkFed Presidency over the past several years, millions of people who have jobs today would be unemployed.

From 2 years ago:

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4. Williams is a failed regulator. Williams didn't stop @WellsFargo, how can he supervise and regulate the most complex, and powerful financial institutions on Wall St?

#10YearsAfter the @NewYorkFed's last failure, we can't afford another crash.

cc: @ACREcampaigns

In 2013 @scottreckard broke the story that @wellsfargo was creating millions of fake accounts.

In 2015 Williams appointed Wells CEO Stumpf to represent the @sffed on the Federal Advisory Council. Then reappointed him in 2016

It happened under his nose.

latimes.com/business/la-fi…

It took a letter from @SenAngusKing, @SenWarren, @JeffMerkley, @RonWyden, and @SenatorCantwell to get Williams to finally remove Stumpf from representing the @sffed.

This was 3 years after the story of @WellsFargo fake accounts broke.

king.senate.gov/newsroom/press…

Of all the most dangerous, predatory banks, @WellsFargo is easily one of the worst. And their crimes happened on Williams's watch.

As President of the @NewYorkFed Williams will supervise the largest banks in the world.

Will all of them now get away with just as much or more?

5. What do we do about the @NewYorkFed presidency?

First of all, this isn't over. We can still make our voices heard. Tell the @NewYorkFed we need a zealous advocate for full employment and a tenacious regulator, not Williams at 10YearsAfter.org

More to come. Stay tuned.

We need to start over with a fresh slate of candidates. As disappointing as Williams is, the other two "finalists" are an insult.

I mean an executive from @Citi? Just #10YearsAfter their predatory subprime lending led to the largest bailout? Really?

populardemocracy.org/10yearsafter

And the other option is an asset manager whose main "public service" was blocking more meaningful bank reform when we had the chance and protecting derivatives firms from oversight.

Really?

No. We need to start over.

newrepublic.com/article/147423…

According to @bencasselman's reporting, the @NewYorkFed's presidential selection is not yet final. @Sara_Horowitz can restart the process and take a stand for tens of millions of workers. With Cote gone, the balance of power on the board has shifted.

nytimes.com/2018/03/24/bus…

If the @NewYorkFed decides to go through with this, they will be known as the ones who unwittingly ushered in comprehensive @federalreserve reform.

We put forward this idea in 2016, and given how this process has gone, we'll make it an issue in 2020.

drive.google.com/file/d/0Bx9Ept…

In 2016, both @HillaryClinton and @SenSanders endorsed our plan for comprehensive @federalreserve reform -- it was even included in the Democratic Party Platform.

drive.google.com/file/d/0Bx9Ept…

The @NewYorkFed Presidential selection is not over yet.

Go to 10YearsAfter.org and let them know #10YearsAfter the crash you need a zealous advocate for full employment and a tenacious regulator. Not Williams or the runners up.

That's all for now. Stay tuned for more.