Seeing Red at the Fed

Of all the members of the Federal Open Market Committee, five members of the Board of Governors (usually seven, but two sets are currently empty) and twelve district bank presidents for a total of seventeen, how many were appointed under Democratic presidents?

Answer: There is just one, William Poole of the St. Louis Fed (though St. Louis is not currently a voting member of the FOMC). Note, however, that while the president nominates Federal reserve Board members, the district bank presidents are "appointed by the board of directors of the Bank, with the approval of the Board of Governors of the Federal Reserve System, for a term of five years." Thus, we can't really hold the president accountable for the choice of district bank presidents like we can for the choice of Federal Reserve Board members, and I don't want to imply that the Fed is driven by politics or ideology, because (now that Greenspan is gone?) it isn't. Still, it's interesting how many district bank presidents came into office under Republican presidents, although part of that is simply due to turnover and the fact that Bush is serving two terms.

But when it comes to the Board of Governors, the distribution is not so easy to dismiss - it is not what was intended when the system was set up. Board members serve 14 year terms, and one member's term expires every other January. That means a two-term president should, if things go as planned, appoint four of the seven members of the Board. As it stands now, Bush has appointed the five current members and has also nominated two more, though those nominations are being held up in the Senate until after the election. [One related note: I don't think there should be, but there have been questions about whether Ben Bernanke will be reappointed as Fed chair when his term expires in 2010. If he isn't, he does not have to step down from the Board, he can continue to serve out his term - until 2020 - as an ordinary Board member. It is traditional to resign is such a circumstance, but there is nothing that requires it. So one reason to keep an open seat is to ensure that, should the new president so desire, he or she can appoint someone who is not currently a Board member, i.e. someone from outside, as the new Chair. If all seats are filled and nobody is willing to step down, the Chair would have to be chosen from among the seven current Board members. Generally, however, turnover can be expected - see the current Board - so this isn't a large consideration.]

Board of Governors

• Ben Bernanke, February 1, 2006 (first: August 5, 2002), Bush
• Donald Kohn, August 5, 2002, Bush
• Kevin Warsh, February 24, 2006, Bush
• Randall Kroszner, March 1, 2006, Bush
• Frederic Mishkin, March 1, 2006, Bush

District Bank Presidents

• Boston: Eric: Rosengren, July 23, 2007, Bush
• New York: Timothy Geithner, November 20, 2003, Bush
• Philadelphia: Charles Plosser, August 1, 2006, Bush
• Cleveland: Sandra Pianalto, February 1, 2003, Bush
• Richmond: Jeffrey Lacker, August 1, 2004, Bush
• Atlanta: Dennis Lockhart, March 1, 2007, Bush
• Chicago: Charles Evans, September 1, 2007, Bush
• St. Louis: William Poole, March 23, 1998, Clinton
• Minneapolis: Gary Stern, March 16, 1985, Reagan
• Kansas City: Thomas Hoenig, October 1, 1991, Bush I
• Dallas: Richard Fisher, April 4, 2005, Bush
• San Francisco: Janet L. Yellen, June 14, 2004, Bush