Kashkari will be the new president of the Minneapolis branch in 2016. He is the latest in a seemingly endless batch of former GS bankers appointed a major position at the central bank…
In August, the Dallas Fed named former GS Vice Chairman Robert Kaplan as its president. And before that, in March, GS trustee Patrick Harker nominated himself to head up the Philadelphia branch.
With Kashkari's appointment last month, four of the Fed's 12 regional branches are run by former Goldman executives (this includes New York Fed's William Dudley – a former GS chief economist who was appointed in 2009).
While it's hard to see how the Fed's selection of four Goldman Sachs bankers conforms to the requirement that its leaders "represent the public" with "due consideration," (requirements stated in the Federal Reserve Act), there are more urgent reasons to be alarmed by these appointments.
These financial elites hold too much sway over the Fed – and your money…
What to Expect from a Goldman Sachs-Run Federal Reserve
Fed presidents are integral in setting economic policy for the entire country. Yesterday, The Nation noted that when the Fed meets in mid-December, regional presidents will be some of the key decision-makers that determine whether to raise interest rates.
"If the Fed does raise rates – at this gathering or the ones immediately following – they will essentially declare victory on economic recovery." This victory would be claimed, The Nation continued, in spite of weak wage growth and disparities in unemployment figures.
After a Goldman Sachs-run Fed "economic victory," the self-congratulating leaders go back to the same thought processes that got us into trouble in the first place.
Consider Goldman's contribution to the 2007 subprime crisis…