On Saturday, President Obama stated that he wants the next chairman of the Federal Reserve to not just be an economic wonk but to actively promote policies that will advance the welfare of ordinary citizens. This was right on the heels of the president's speech about his economic agenda, which is focused heavily on shoring up the middle class, promoting equality, and improving the lives of the millions of Americans who have been left behind by the system.
He may as well have described the resume of Robert Reich.
Reich, a former Labor Secretary under Bill Clinton and a member of President-Elect Obama's transition advisory board, is a Rhodes Scholar, has won awards for his economic and social thought leadership, and was named by Time magazine as one of the ten most successful cabinet secretaries of the century. And those are just his credentials.
What makes Reich so suitable is not just his policy work but his frequent and insightful political commentary in print and on television and radio, his frank analyses of our nation's problems, and his ability to come up with smart solutions for the same. In addition, Reich's interests and ideas seem to fit perfectly with the president's economic goals, and could help the administration promote its agenda effectively. The former cabinet secretary and current professor of public policy at UC Berkeley is a staunch champion of workers' rights, a crusader for economic equality, and a proponent of responsible fiscal policy that would move our nation towards greater prosperity without compromising the welfare of lower and middle income Americans.
That is exactly the kind of person we need in the Fed today.
Ben Bernanke has done a great job as Chairman but his stewardship, by force of circumstance, became a status quo one. Bernanke's mandate for the past five years has been to adjust monetary policy to battle recessionary forces and to keep our economic ship of state steady; he really has had little room to do anything else. The next Fed Chair, by contrast and because of a recovering economy, will have a different mandate, and the luxury to influence broader economic policy which touches on the areas outlined by Obama in his speech.
Another strong argument in favor of Reich is that he is the anti-Greenspan. Unlike the former Fed Chairman who made a career out of doing nothing but hindering the efforts of others who tried to regulate the financial markets and prevent the type of disasters we have witnessed in the past two decades, Reich understands the dangers inherent in blanket deregulation, which not only allows major financial institutions to take trillions of dollars of extreme risk but to hide that risk through clever accounting, offshore banking, and outright fraud, and to transfer that risk to unsuspecting parties.
Republicans and free-market theorists love to criticize Too-Big-to-Fail, but the very reason that Too-Big-to-Fail became necessary was the systematic deregulation of Wall Street under two administrations; especially the dismantling of the long-standing Glass-Steagall Act and the refusal to monitor the derivatives markets. And both of these things were facilitated by Alan Greenspan, Robert Rubin and Larry Summers, and so it is extremely ironic (not to mention myopic) that Summers is one of the leading contenders for the Fed Chair position while Reich's name has not come up at all!
Reich is also deeply critical of exploitative Darwinian capitalism, practiced by major retailers, fast food companies, technology giants and many others, who dodge billions in taxes every year through loopholes while refusing to pay their workers even a living wage, make legal end-runs around providing benefits, and basically run sweat-shops - both literally in other parts of the world and in a more sanitized way right here at home.
Such exploitation goes against the grain of fairness and equality and will be extremely damaging to our nation and economy in the long run. The US is not only one of the most unequal nations in the world - with a Gini coefficient (which measures income inequality) that is almost double that of other developed nations and with 72% of the nation's wealth concentrated in the hands of the top 5% of Americans, but also one where the income and wealth gap just keeps growing. This situation is a ticking time bomb which requires active government intervention to be fixed, and Reich could well be the perfect person for the job.
Finally, Reich has demonstrated his commitment to serving his country; not just during his tenure in Washington but also through his consistent commentaries and ideas after. Many politicians simply vanish into the private sector after government and focus on building their personal wealth rather than contributing publicly. Reich, on the other hand, seems to be on a mission to improve America, and that is the hallmark of a patriot.
For all these reasons, I believe that Robert Reich is the best choice for the next Fed Chair, and President Obama would be smart to give him serious consideration.
SANJAY SANGHOEE is an active political and business commentator. He has worked at leading investment banks and hedge funds, has appeared on CNBC's 'Closing Bell' and HuffPost Live on business topics, and is the author of two thriller novels, including "Killing Wall Street". For more information, please visit www.sanghoee.com
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