Thursday, July 02, 2009

More Politicizing At The Fed

This morning's Wall Street Journal carried a fascinating piece on the selection of William Dudley as New York Fed President.

Essentially, the piece exposed the raw arm-twisting and intervention by outgoing president, now Treasury Secretary Tim Geithner, in Dudley's favor.

The article portrays Geithner and Bernanke, as well, as putting extremely heavy pressure on the NY Fed's board to choose their preferred candidate.

To the Journal's credit, the piece included some history of the Fed's design, including the regional banks and Fed boards, intended to prevent just this sort of undue influence from Washington.

The manipulation of the NY Fed's board grew so strong that Pepsico CEO Indra Nooyi resigned, using as cover her busy schedule of other duties.

I have lamented, since last fall, the continuing political flavor, content and focus of many of my business blog's posts. This article helps illustrate that it's not my choice to shift so much of my attention to political matters.

It's evident that the very fabric of American business is being heavily politicized and coerced by the federal government. This story concerning the undue influence exercised by Washington over the important regional Fed bank in New York reveals that this is a continuing theme of growing importance in our economy, and it's increasingly managed nature.

No comments: