Neel Kashkari named CEO of Minneapolis Fed

Neel Kashkari, the Republican who ran unsuccessfully against Gov. Jerry Brown in 2014, won’t be running for public office in California again any time soon – he’s trading the warm sun of Laguna Beach for the cold snows of Minneapolis to become president and CEO of that city’s Federal Reserve Bank, effective Jan. 1.

NEEL KASHKARIKashkari, 42, will replace Narayana Kocherlakota, who has served in the post since 2009 and announced last December that he wouldn’t seek reappointment at the end of his term, according to the Minneapolis Fed’s news release.

Kashkari will be part of the Federal Open Market Committee that helps formulate U.S. monetary policy, and will oversee 1,100 employees in Minneapolis and in Helena, Mont., who do economic research, supervise financial institutions and provide payments services to commercial banks and the U.S. government.

Kashkari said in the release that he’s “truly honored” to get the job. “I look forward to working with the Bank’s dedicated staff and continuing the Bank’s long-standing tradition of excellent service to the Ninth Federal Reserve District and to the nation. The Minneapolis Fed has built a strong reputation for economic research and thought leadership as well as excellence in Bank operations. I am delighted that I will be working with the Federal Reserve Bank of Minneapolis team to build on the Bank’s many achievements.”

Kashkari beat a more conservative Republican, then-Assemblyman Tim Donnelly, by about five percentage points to finish second behind Brown in June 2014’s top-two gubernatorial primary. He lost to Brown by 20 percentage points in November’s general election.

Before running against Brown, Kashkari had been a managing director and head of global equities at PIMCO from 2009 to 2013; before that, he served in the Treasury Department from 2006 to 2009, culminating with his oversight of the Troubled Asset Relief Program (TARP) to bail out reeling Wall Street firms under presidents George W. Bush and Barack Obama.

“Mr. Kashkari is an influential leader whose combined experience in the public and private sectors makes him the ideal candidate to head the Minneapolis Fed,” said MayKao Hang, incoming chair of the Minneapolis Fed’s board of directors and co-chair of the search committee. “We were fortunate to have outstanding candidates during our national search. Mr. Kashkari stood out because of his inspiring leadership skills, solutions-oriented nature, collaborative style and deep commitment to public service,” she added.


Lunch with Pete Stark

Every year or two, Rep. Pete Stark, D-Fremont, sits down to lunch with reporters in his district for a chat; we broke bread today at Paradiso in San Leandro.

Stark held one of his monthly town-hall meetings Monday night in Fremont, and he has another tonight in San Leandro. Constituents aren’t happy that we still have troops in Iraq, he said, or about all the money that’s getting funneled to Wall Street to bail out the banking system. Stark, an outspoken opponent both of the war and of the bailout, said he’s telling them “I didn’t vote for it … Talk to the other guys.”

I told him I’m working on a story about bipartisanship (probably coming in this Sunday’s editions), and Stark, 77, promptly whipped out an iPhone to read some words of praise he received from the Alameda County Republican Party for having opposed the banking bailout; the local GOP also urged him to sign onto Rep. Ron Paul’s HR 1207, the Federal Reserve Transparency Act of 2009, which he did. “How about that for bipartisanship?,” he laughed, adding he feels as if he should put the GOP’s rare praise for him on a billboard somewhere in the district.

More after the jump…
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Spreading a TARP over San Mateo County

Reps. Anna Eshoo, D–Palo Alto, and Jackie Speier, D-Hillsborough, met this week with San Mateo County officials and House Financial Services Chairman Barney Frank, D-Mass., to discuss the use of Troubled Asset Relief Program (TARP) funds to buy up troubled assets held by local governments.

“I’m grateful that Chairman Barney Frank committed to a public hearing on the issue of public funds lost due to the collapse of Lehman Brothers,” Eshoo said in a news reelase. “This is progress and I’m hopeful that San Mateo County and other public entities will be able to recover some of the dollars invested in conservative instruments. Our schools, public safety, and social services will suffer if we cannot return a portion of these dollars back to our local governments.”

Speier noted Lehman Brothers was the only large financial institution allowed to fail, and its failure cost state and local governments more than $2 billion. “I’m grateful that Chairman Frank has agreed to hold hearings on this important matter and I look forward to finding a solution that returns some of these taxpayer funds back to the public entities where they belong.”

San Mateo County officials in the meeting included Supervisor Rich Gordon, Supervisor Rose Jacobs Gibson and Deputy County Manager Mary McMillan. County officials also met with the White House Office of Intergovernmental Affairs, Senators Barbara Boxer and Dianne Feinstein, and House and Senate finance committee members.


Ellen Tauscher introduces anti-foreclosure bill

Rep. Ellen Tauscher, D-Alamo, introduced a bill Wednesday that would let the California Housing Finance Agency issue an estimated $10 billion in new bonds to help refinance “underwater” mortgages and jump-start growth in neighborhoods devastated by home foreclosures.

The bill also would grant CalHFA the power to use Troubled Assets Relief Program (TARP) money to help families refinance their homes at a price they can afford in order to avoid foreclosure.

“Foreclosures are decimating neighborhoods from Fairfield to Antioch and Oakley,” Tauscher said in her news release. “This legislation will help families in the hardest hit areas get the additional resources they need to stay in their homes and keep these vibrant communities from disappearing.”

Tauscher’s co-authors on the bill are Zoe Lofgren, D-San Jose; Dennis Cardoza, D-Atwater; Shelley Berkley, D-Nev.; and Maurice Hinchey, D-N.Y.

Cardoza’s Central Valley district includes more than half of the city of Stockton, which has been rocked by one of the nation’s highest foreclosure rates. “As I have continued to say, the foreclosure crisis remains at the heart of our nation’s economic crisis. It is imperative that we pursue all means to address this problem and ensure that taxpayer funds are being used in the most responsible way,” he said.

UPDATE @ 8:36 A.M. THURSDAY: Click here for a copy of the bill.


Oh, so NOW they want an exit strategy?

House Republican leaders sent a letter to Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke yesterday outlining their concerns about the lack of transparency in the Troubled Assets Relief Program (TARP) — the $700 billion financial-markets bailout — even as Treasury officials decide whether to ask Congress to release more of the money.

Such opaqueness is unacceptable, particularly if it is your intention to ask Congress to release the remaining $350 billion in taxpayer funds that were conditionally authorized by Congress this fall. It is our strongly held view that before any such request is made, the American people need satisfactory answers to a number of important questions. While the Treasury and Federal Reserve play different roles within the government, many of your recent activities have been coordinated efforts. As a result, we request answers to the following questions:

    1. What is your exit strategy for the government’s sweeping involvement in private business?

Whoa. I’m all for more transparency and accountability, but I spend much of my day writing so I’m a little sensitive to use of the language, and I think House Republicans should be banned from using the phrase “exit strategy” for the time being, don’t you? I mean, by some estimates we’ve spent well over $600 billion — some say it’s way into the trillions — on the war in Iraq (not to mention the steep human costs), but I didn’t see these same Republicans pushing the Bush Administration for an exit strategy there. I guess big government is in the eye of the beholder.


East Bay clergy at D.C. prayer service for homes

Minister Marvin Webb of Richmond’s Bethlehem Missionary Baptist Church and the Rev. Lucy Kolin of Oakland’s Resurrection Lutheran Church took center stage Tuesday at a PICO National Network-organized prayer rally outside the U.S. Treasury in Washington, D.C.. About 40 clergy members and 100 congregants asked God to help keep Americans from losing their homes, and prayed that Congress and Treasury Secretary Henry Paulson would provide help to all those facing foreclosure.

Paulson wasn’t there, however; he was at the Capitol, briefing Congress on how he doesn’t think it prudent to use some of the $700 billion lawmakers made available to him to deal with toxic mortgage assets, as he’d originally said he intended to do.