The Case for the Defense

After reading the Wall Street Journal’s editorial against confirming President Biden’s nominee to head the Office of the Comptroller of the Currency (OCC):

Ms. Omarova advocates central political control of capital, credit and wages, and she has praised the Soviet-era economic system. Are her own words off-limits to scrutiny?

Ms. Omarova wants to put an “‘end to banking’ as we know it”—again, her words—and transfer private banking functions to the Federal Reserve, where accounts would “fully replace” private bank deposits. The Fed would control “systemically important prices” for fuel, food, raw materials, metals, natural resources, home prices and wages.

She says the Fed should be remade into what she calls “The People’s Ledger.” By “the people” she means progressive elites like her. She calls for “reimagining” the role of central banks “as the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy.”

A Washington Post columnist hails her as a “trenchant and informed critic of the current financial system” and praises her “innovative ideas about how to reform banking” and “tough approach to banking regulation.” Her ideas were innovative—circa Moscow, 1918.

I sought a case for the defense. Most of the defenses were either appeals to false authority or examples of the burden of proof fallacy. The best I found was this one at CoinDesk by Raúl Carrillo:

Now, Omarova has recognized the power of financial innovation to improve the quality of our lives. She acknowledges the U.S. lacks a unified strategy for fintech regulation and does not profess to have all the answers. She argues our payment and banking systems need to be more inclusive of low-income households and marginalized communities, goals the new industries say they respect. She has even emphasized the importance of data security and privacy, and deftly highlighted that opinions on these matters are not uniform among innovators.

Omarova takes a serious, long-term, big-picture attitude toward the entire financial system in favor of regulatory principles rather than any single industry’s agenda. She has long been a vocal critic of traditional finance and the largest, most entrenched players within it. And, she has argued the public interest is not served by allowing Facebook to issue its own money or Rakuten, the “Amazon of Japan,” to own a bank.

Should Dr. Omarova be confirmed? Why did President Biden nominate her?

5 comments… add one
  • Drew Link

    This seems like a classic example of lofty white paper stated goals vs cold hard reality.

    Ms Omarova states that she wants some oversite over things like crypto, or to spawn disruption of traditional financial service paradigms – in the name of the little guy of course. OK. You want to make Big Finance more accountable? Fine. How about stop bailing them out first.

    But then she proposes the Federal Reserve step in!? Perhaps the most disgraceful, harmful and arrogant institution in America? Like they are pure?!? Its ludicrous on its face.

    If you want things like automated investment, or availability of high risk credit (payday or title loans) or investment funds (can you say CRA or Solyndra) then let those people slug it out. Put the Fed in charge? Ludicrous. And her writings make clear she has ultimate faith in do gooders in the regulatory sphere. That’s scary.

    No, she shouldn’t be confirmed. There are better ways to accomplish the stated goals. But I don’t think the stated goals are the real goals.

    The left has captured the schools, controlling and filling young minds with crap. They have coopted traditional and new age media, controlling what news and opinions people hear. Now they want to control your pocketbook – so they have you by the balls. Hearts, minds and pocketbooks, with the elites excepting themselves. All run by Big Brother. Sparkling.

    That’s why they want Omarova. And it wasn’t Joe, its Obama.

  • CuriousOnlooker Link

    As to why the nomination; my speculation is due to the machinery in the White House Presidential Personnel Office, the Treasury Secretary’s office, and the Senate banking committee (in particular, Senator Warren’s staff).

    There are some critical positions to fill in the Fed — including the Fed chair, the vice chair and the supervisor for Banks. I wouldn’t be surprised if Treasury and the White House had to do some horse trading with Sen Warren in return for her support for less controversial picks to those positions, like nominating Ms. Omarova for OCC.

    Then again, on Sunday, Secretary Yellen was advocating for a measure that has serious constitutional issues (a wealth tax) and predicting inflation would be high until next fall; so who knows how involved she is in picking nominees for financial regulators.

  • Drew Link

    Yellen makes me shudder. She was wrong on QE. Wrong on inflation. And the wealth tax should go down as one of the potentially most destructive policy options ever. Taxing phantom income, as its known in the trade, causes so many distortions they are hard to enumerate.

    This is well known. Seen in other countries that tried it. Affects capital market decisions here in the US already, and is unworthy of serious consideration.

    This was your Fed Chair. Your elite. Truly chilling.

  • steve Link

    “How about stop bailing them out first.”

    The irony. BTW, this controlling hearts, minds and pocketbooks is a bit much for the party that cant even control its politicians so that was stopped a while ago. We went straight to putting 5G in the vaccines. Mind control!

    Crypto? Dave, how are we going to make ransomware payments without crypto?


  • bob sykes Link

    The modern Democrat Party is a hard-left socialist party with a dominant Communist (cap C, Marxist) wing. The US currently has the most hard-left national government in the world, substantially to the left of China and the CPC, and not even on the same chart as Russia.

    Considering the nominations the renegade Republicans in the Senate have approved, her approval is likely. It would take every Republican and at least one Democrat to defeat her. After she’s confirmed, anything goes.

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