Climate alarmists in bed with the Fed

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Climate fanaticism and its accompanying hypocrisy increasingly defines so much of our political, corporate, entertainment and media sectors. An overlapping number of these people regularly cry wolf about “democracy in peril” when the wrong persons win elections yet are openly supporting imposing climate polices without so much as a vote of the people’s representatives – i.e., by democratic means.

Two salient examples tell the story. First, many in Congress, want President Biden to declare a “climate emergency.” Why? So he can impose all matter of climate policies including, but hardly limited to, forcing higher prices on oil and gas, mandating hugely expensive “renewable” energy sources, restricting driving, increasing meat prices, and so on. The sky is the limit because, you see, there is an emergency. No vote of Congress; no matter.

We’ve seen this act with health “emergencies” that forced schools, many businesses, and houses of worship to shut down. While the worst of the lockdowns has passed, the coronavirus variants rage, workforce participation is down, and consumer price inflation is at its worst in 40 years.

Second, climate activists in and out of the Biden administration are unleashing their biggest weapon yet to force-feed impractical, unnecessary, and colossally expensive climate policies on the country by using the Federal Reserve Bank of the United States. Why the Fed? For the same reason the infamous Willie Sutton robbed banks: “it’s where the money is.” The Fed also has enormous regulatory power of the U.S. financial system and, to a lesser degree, the global financial system.

The Federal Reserve was created by the U.S. Congress in 1913 to carry out its constitutional responsibility to “coin money.” The Fed is managed by a seven-member Board of Governors led by its chairman who is considered the most powerful unelected government official in the United States. The Fed governors are appointees of the president for staggered 14-year terms of office and subject to approval by the U.S. Senate.

The structure of the Fed is designed to remove it somewhat from the vagaries of politics and act professionally independent. However, the Fed is arguably more political than ever with its printing of money to “purchase” U.S. Treasury bonds to finance yawing budget deficits and national debt, and now the climate change alarmist agenda.

The Fed’s power ultimately comes from its statutory authority over the nation’s monetary policy; specifically, it controls of the supply of money in circulation, sets the rate of interest it charges private banks to borrow and repay loans, and sets the amount banks must hold in reserves, among other responsibilities. The Fed also comprises 12 regional banks that regulate and supervise the nation’s banking sector and specifically the 750 or so large banks that comprise the Federal Reserve system. Other federal agencies oversee thousands of other banks and credit unions.

Over the years, Congress has enacted laws which have expanded the Fed’s responsibilities, but none of which entail climate policy. That’s changing, but not democratically by new congressional action but rather by executive decree.

President Biden is gradually appointing new members of the Fed to impose his climate policies over the nation’s financial system. This is not only undemocratic, but reckless considering the nation is undergoing the largest price inflation in four decades. The Fed should be dealing frontally with inflation, not the climate change fantasies of politicians and activists.

Among the president’s nominations to the Fed is Sarah Bloom Raskin, a climate fanatic who supports using the Fed’s regulatory and lending power to steer private investment from fossil fuels to “renewable” energy sources (a reminder: the latter cannot operate without the former).

This is in keeping with President Biden’s executive order directing multiple federal agencies with regulatory power over the financial sector to do just that by, for example, assigning inchoate “climate risk” assessments to bank and investment company portfolios. CFACT issued a research paper on this last August (here).

The chairman of the Federal Reserve, Jerome Powell, who was appointed by then-President Trump, also has come around to espousing “climate stress tests” on banks. President Biden just nominated him for a second term as chairman as he adopts the spurious climate narrative.

The president also nominated sitting Fed governor, Lael Brainard, an appointee of then-President Obama, for Vice Chair of the Board. Ms. Brainard also fully embraces heavy regulation with a climate change agenda.

Climate fanatics are about killing oil, natural gas and coal – something for which Americans do not support and did not vote. They are now making their bed with the Fed, a most power tool in their arsenal, to force divestment of these energy sectors. Otherwise democratic means to enact climate policies is so passe’.

Such is the war on democracy being waged.

  • Peter Murphy is Senior Fellow at CFACT. He has researched and advocated for a variety of policy issues, including education reform and fiscal policy, both in the non-profit sector and in government in the administration of former New York Governor George Pataki. He previously wrote and edited The Chalkboard weblog for the NY Charter Schools Association, and has been published in numerous media outlets, including The Hill, New York Post, Washington Times and the Wall Street Journal. Twitter: @PeterMurphy26 Website:

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