Will Fed Vice-Chair Stanley Fischer Have Dual Loyalty? If We`re Lucky …
From the NYT:
President Obama plans to nominate three people to the Federal Reserve’s Board of Governors, including Stanley Fischer, former head of the Bank of Israel, as the Fed’s next vice chairman, the White House said on Friday. …
Mr. Fischer, 70, would succeed Ms. Yellen in her current role. The Senate confirmed Ms. Yellen as the Fed’s new chairwoman this week. She will take over from the current chairman, Ben S. Bernanke, in February. …
He also worked as a senior Citigroup executive from 2002 to 2005. …
Mr. Fischer, born in present-day Zambia [Northern Rhodesia, then], holds American and Israeli citizenship.
He said in a statement that he was “deeply honored” by the nomination.
Although Fischer`s many well-heeled supporters portray his jobs in Israel and now America as utterly technical, they are inherently political. An anti-Israel lobby called IRMEP has a long analysis of Fischer`s career in regard to his service to Israel. For example:
More importantly for Israel, Stanley Fischer won an appointment to the Reagan administration`s U.S.-Israel Joint Economic Discussion Group that dealt with Israel`s 1984-1985 economic crisis. … The U.S.-Israel Joint Economic Discussion Group fundamentally transformed U.S. aid to Israel forever. Before the Reagan administration, most U.S. aid to Israel took the form of loans that had to be repaid with interest. After the input of Fischer`s team, subsequent U.S. aid was delivered in the form of outright grants paid directly from the U.S. Treasury—never to be repaid or conditioned when Israel took actions the U.S. opposed.
That solution sure required some economic brilliance: “Instead of us loaning us money, we`ll give us money. Great idea! Hey, who is this `us` I`m referring to anyway? It`s confusing.”
As IMREP`s Grant F. Smith points out, the importance of Fischer`s nomination is triple:
The Fed is a major regulator, abroad and at home.
First, for example, last month the Fed and two other federal agencies fined the mostly British government-owned Royal Bank of Scotland $100 million for violations of the sanctions against doing business with Iran. Conversely, the Fed can also fight the growing movement in Europe to put sanctions on doing business with Israel.
Second, the Fed is supposed to be (but often isn`t) a major regulator of domestic financial wheeler-dealers. For example, Fischer himself was Vice-Chairman of Citigroup from 2002-2005 as the subprime bubble inflated, before he decamped for Israel.
Third, the nomination of Fischer is to establish that it`s A-OK for a dual-citizen high Israel-government official to move over to a similar job in the U.S. government. Sure, a few years from now it may still seem a little unusual for, say, the head of Israeli military intelligence to move on to running the National Security Administration in Fort Meade, but don`t you remember the Fischer Precedent?
“So, likewise, a passionate attachment of one nation for another produces a variety of evils. Sympathy for the favorite nation, facilitating the illusion of an imaginary common interest in cases where no real common interest exists, and infusing into one the enmities of the other, betrays the former into a participation in the quarrels and wars of the latter without adequate inducement or justification. It leads also to concessions to the favorite nation of privileges denied to others, which is apt doubly to injure the nation making the concessions by unnecessarily parting with what ought to have been retained, and by exciting jealousy, ill will, and a disposition to retaliate in the parties from whom equal privileges are withheld; and it gives to ambitious, corrupted, or deluded citizens (who devote themselves to the favorite nation) facility to betray or sacrifice the interests of their own country without odium, sometimes even with popularity, gilding with the appearances of a virtuous sense of obligation, a commendable deference for public opinion, or a laudable zeal for public good the base or foolish compliances of ambition, corruption, or infatuation….
“Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy, to be useful, must be impartial, else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people to surrender their interests.”
– George Washington’s Farewell Address