Biden Fed Pick Will Plug Fossil Fuel Finance Pipeline

Last month President Joe Biden nominated Duke law professor Sarah Raskin, a former Obama financial regulator and candid anti-fossil energy nemesis, to serve as the Federal Reserve's powerful vice chairwoman for supervision with primary say in the central bank's lending decisions.

The hallmark of Dr. Raskin's career has been a vendetta against U.S. hydrocarbon energy producers — one she can be counted on to take with her to the Fed.

Whereas the Fed's mission, as outlined by Congress, is explicitly nonpolitical, don't imagine for a moment that she won't weaponize every opportunity to press banks to cut off lending for fossil energy investments in favor of growing greener subsidy pastures.

During her Feb. 3 Senate confirmation hearing, Ruskin tried to walk back her former public statements supporting a Fed role in climate-related financial regulation. She told the Banking Committee, "It is inappropriate for the Fed to make credit decisions and allocations based on choosing winners and losers."

Despite pledging to abide by objective monetary banking policy interests, fully expect instead that Sarah Ruskin will use the Fed to push Environmental, Social, and Governance (ESG) lending qualification scores which include assessments of impacts on climate change.

Former Treasury Department deputy secretary Raskin has previously argued that it's time for U.S. regulators to do their part to turn ESG conviction on issues like climate change into actual conduct.

Raskin wrote in a May 2020 New York Times article: "The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment.

"The decision to bring oil and gas into the Fed's investment portfolio," Raskin said, "not only misdirects limited recovery resources, but also sends a false price signal to investors about where capital needs to be allocated."

In March 2020 testimony before the House Select Committee on the Climate Crisis, she said, "Informed decisions allow us to mitigate the financial impact of climate risks and fashion timely remedies ahead of a crisis," noting the need for financial regulators to "foster the development of climate-related financial risk management technology," including climate-related financial disclosures and stress tests.

Raskin urged in a June 2020 Ceres article that the Fed use its risk-based standards to drive capital away from oil and natural-gas firms toward "sustainable investments," and went so far as to suggest that the Fed should de-bank energy companies by establishing portfolio or concentration limits for banks on "high-emission assets."

In a more recent September 2021 article for Project Syndicate, Raskin said, "They [the Fed] need to ask themselves how their existing instruments can be used to incentivize a rapid, orderly, and just transition away from high-emission and biodiversity-destroying investments."

Elaborating on her views regarding how "regulatory changes relating to disclosure, access to credit, and pricing of risk support a rapid and just green transition," Ruskin added that regulators must steer this transition, because "market discipline and private-sector initiative" won't do this on their own.

And why should the Fed force private banks to deny credit to hydrocarbon businesses?

Because, in Raskin's opinion, oil and natural gas represent a "dying" industry that poses "climate-change-related risks to the economy."

If dying, it's only because the Biden administration and its radical far left handlers are determined to kill it along with the more than 70% of American energy it provides to air condition our homes, fuel our cars and power our industries that supply products, employment, and public revenues we urgently depend upon.

Bear in mind that U.S. oil and gas companies contribute nearly 8% of the U.S. GDP and employ more than 10 million Americans, including many blue-collar wage earners.

At a time when the country is experiencing self-inflicted energy-driven inflation with Americans paying 40% more at the pump today than they were a year ago, President Biden has nominated a financial regulator keen on making things worse.

There's little wonder then why 41 industry trade associations joined in a Jan. 28 letter opposing her approval, pointing out that "her multiple public statements indicate an agenda at odds with the President's goal of providing Americans with reliable, affordable energy."

The determining Raskin vote will come at a time when the Senate is officially split 50/50 between the two political parties, yet with Sen. Ben Ray Luján, D-N.M., expected to miss four to six weeks because of a stroke, it potentially leaves Democrats one vote short of a crucial majority including a Vice President Kamala Harris tiebreaker.

And whereas we should all wish Sen. Luján a strong recovery, let's also hope that Senate Democrat spending and inflation hawks, West Virginia Sen. Joe Manchin and Arizona Sen. Kyrsten Sinema, will help Republicans withhold levers of Fed monetary policy from the hands of an activist ideologue who will use them to drive a far-left anti-fossil agenda.

Larry Bell is an endowed professor of space architecture at the University of Houston where he founded Sasakawa International Center for Space Architecture and the graduate space architecture program. His latest of 11 books, "Beyond Flagpoles and Footprints: Pioneering the Space Frontier" co-authored with Buzz Aldrin (2021), is available on Amazon along with all others. Read Larry Bell's Reports — More Here.