Romney right to pick Hoenig to lead Fed
The Kansas City Star
If the published reports are true, Republican presidential nominee Mitt Romney would do himself a big favor to tap Tom Hoenig as chairman of the Federal Reserve when Ben Bernanke’s term expires.
Washington Post writer Neil Irwin brought that issue up, saying big banks “would scream bloody murder.” And he’s right.
Credit junkies have stayed high for years with the Fed keeping interest rates so low that borrowing money has cost next to nothing compared with 10, 20 and 30 years ago. Low interest rates might help corporations, big banks and home buyers, but they hurt retirees and people trying to save.
Hoenig has advocated raising interest rates over concerns that keeping them too low for too long will trigger runaway inflation. He also has been critical of the big combo of investment banks and commercial banks, calling for the breakup of big banks.
If Romney were to pick Hoenig, The Kansas City Star reports today, it would show that the former governor of Massachusetts is serious about a tight-money policy and “combatting the too-big-to-fail problem in the banking system.”
Hoenig had been the former Kansas City Fed president until he retired last year after 20 years. President Barack Obama appointed Hoenig to the board of the Federal Deposit Insurance Corp.