Rather Than Rise to the Occasion, Jerome Powell was Cowed by Preemptive Republican Attacks on Climate Risk Mitigation, Failing to Fulfill his Obligation to Protect the Financial System From Excess Risk
FOR IMMEDIATE RELEASE
Contact: Henry Burke, Burke@therevolvingdoorproject.org
At the conclusion of the Kansas City Fed’s annual Jackson Hole Economic Symposium, Revolving Door Project Senior Researcher Kenny Stancil and Research Assistant Henry Burke released the following statement:
“The Fed’s lack of action on the massive financial risk posed by climate change is unconscionable. The failure to soberly address the issue of climate risk to financial systems at an event focused on ‘Structural Shifts in the Global Economy’ is a disappointing reminder of the misplaced priorities of central bankers. It appears that once again, dire threats to the global financial system will remain unaddressed until taxpayers are forced to bail out the poor decisions of regulators like Powell,” said Burke.
“It is clear that despite his frequent posturing about the need for central bank political independence, Fed Chair Jerome Powell is cowed by Republican threats to turn any climate risk mitigation into a scandal. While independent regulators like Gary Gensler of the SEC have been willing to endure repeated attacks from Republican lawmakers to ensure they are safeguarding the economic system from excess risk, Powell lacks the fortitude to do so himself. He has made it clear that he will jeopardize the financial system if it means avoiding Republican backlash, prioritizing the veneer of political independence over a truly independent Federal Reserve,” Stancil followed up.
Burke also condemned the treatment of climate protestors at the symposium, saying “Protestors who gathered at Jackson Hole to remind central bankers of their obligations were met with unnecessary and violent force. The videos of police throwing peaceful and cooperative protestors to the ground, forcefully pinning them down only serves to reinforce the protestors’ theme – that our government is out of touch with reality, meeting at an elite, invite-only retreat to discuss their `accomplishments’ while ignoring the real threat to our economy, and the planet.”
“Last year, Powell used the Jackson Hole symposium as a forum to announce that his push to tame inflation through interest rate hikes would be unyielding. There is no reason why this year, with inflation easing, Powell could not have announced an effort to protect systemically important financial institutions from climate threats. Insurance companies are already retreating in the face of growing climate risks in California, Louisiana, Florida, and more. It is myopic for the Fed to continue their policy of ignoring the dangers of continued fossil fuel financing,” concluded Stancil.
Ahead of the symposium, Stancil and Burke wrote an article for The American Prospect on the need for Powell to use Jackson Hole as an opportunity to address climate risk. It can be read here.