Neel Kashkari to Become New Minneapolis Fed Chief

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  • November 10, 2015, 11:29 A.M. ET
By Amey Stone
Neel Kashkari was something of a Wall Street wunderkind when he was tapped at age 35 to head up the government’s Troubled Asset Relief Program in 2008. He formerly worked as an investment banker at Goldman Sachs and was hired by former Goldman CEO Henry Paulson, then Treasury Secretary.

Now at just 42, Kashkari has a new post — running the Minneapolis branch of the Federal Reserve system, according to the Wall Street Journal. It’s not known what his views on monetary policy are, says the Journal.

Kashkari will replace Narayana Kocherlakota, the most dovish Fed member, on January 1. Kocherlakota, who has recently advocated that the Fed should provide more stimulus for the economy, said late last year he would step down at the end of this year.

After his time in government, Kashkari worked for Pimco and also made a run for governor of California in 2014.

“I think it’s a very welcome turn of events when a non-economist who has had private sector experience becomes a member of public policy vehicle like the Fed,” commented Ethan Penner, founder of Mosaic Real Estate Investors, when reached by Barron’s. Penner is known for building the market for commercial mortgage-backed securities in the 1990s.

TARP, considered at the time a bailout for big banks, ultimately recovered all the assets — and more — that it lent to institutions.

Here’s the official announcement from the Minneapolis Fed.
 
Incompetent Bailout Chief and Unrepentant All-Purpose Failure Ascends to Minneapolis Fed Presidency
http://gawker.com/incompetent-bailout-chief-and-unrepentant-all-purpose-f-1741726761

Neel Kashkari, the at-the-time little-known Goldman Sachs banker who was put in charge (by Treasury Secretary and former Goldman Sachs CEO Hank Paulson) of the Troubled Asset Relief Program (that is, the bank bailouts) in 2008, has been named the new president of the Minneapolis Federal Reserve Bank.

As head of TARP, Kashkari was responsible for distributing $700 billion worth of bailout funds to financial institutions struggling to remain solvent in the face of a crisis created by financial institutions. He was famously and repeatedly drubbed by lawmakers for failing to exercise oversight over how the recipients of TARP funds used the cash, especially after the catastrophically inept executives of AIG awarded themselves $503 million in bonuses. Kashkari (and Paulson) refused to put conditions on the money, had no coherent or transparent criteria for determining who got cash, and insisted that funds only went to “healthy” institutions while they desperately spent billions saving Citigroup from collapse (which they lied about to Elizabeth Warren).

After TARP, Kashkari, who was very depressed about a Hamilton Nolan post, decided to move to the woods and build a shed. That is, effectively, the ideal response to reading a Hamilton Nolan item about yourself, and the world would be a better place if all of his targets moved to the woods.

Alas, Kashkari returned from the woods to accept a position at the investment firm Pimco, where he launched six mutual funds that all underperformed benchmarks.

Naturally, his next move, having never actually achieved anything worthwhile in his entire professional career, was to run for office. He launched a campaign for governor of California, running on a platform of being the guy who was briefly in charge of the most widely and broadly hated government response to the financial crisis. Unsurprisingly, he did not win.

Thankfully, there’s another sort of political influence one can grab, without having to go through the arduous trial of earning the support of a majority of a large and diverse population of people. As a longstanding defender of the class interests of the high finance elite, and as an unreconstructed adherent of the ideology that created our new gilded age, Kashkari is the perfect person to be given an unelected position with authority over the nation’s monetary policy.
 
He's a Goldman Sachs alumni. What, you thought Uncle Sam would chain him and whip his ass for having cooked up the grand scheme to bail out his old buddies on Wall Street while ignoring too-small-to-bail Jack and Jane on Main Street?
 
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