Tarullo Sworn in as Member of the Fed Board of Governors

Daniel K. Tarullo took the oath of office, today, as a member of the Board of Governors of the Federal Reserve System. The oath was administered by Chairman Bernanke in the Board Room.

The Senate earlier this week confirmed Tarullo, a former Clinton administration official.

Before joining the Clinton administration, he served as Chief Counsel for Employment Policy on the staff of Senator Edward M. Kennedy, and practiced law in Washington, D.C. He also worked in the Antitrust Division of the Department of Justice and as Special Assistant to the Undersecretary of Commerce. From 1981 to 1987, Tarullo taught at Harvard Law School.

The vote to confirm Tarullo was 96-1. Only Sen. Jim Bunning, R-Ky., voted against Tarullo.

Senator Bunning's office tells me that when the Senator met with Tarullo, he was unimpressed and that the Senator felt Tarullo was unlikely to break the logjam of group think at the Fed.

This is a very curious nomination by Obama. Tarullo has a stronger background in law than in finance. Word has it that he may be tight with White House advisor Larry Summers, who may be angling for Bernanke's spot. Thus, Tarullo may have been placed to watch Bernanke, rather than the economy. Consider, Tarullo a Summers chess piece.

Bunning Statement On The Hypocrisy Of Treasury Secretary Timothy Geithner

Well, somebody is awake in the Senate.

Senator Jim Bunning (R-KY) today issued a statement in regards to the hiring of a former Goldman Sachs lobbyist to serve as Chief of Staff to Treasury Secretary Timothy Geithner.

As the Bunning statement notes, this appointment came after Treasury Secretary Geithner imposed new rules restricting contacts with lobbyists at the Treasury Department.

"The hiring of a former Goldman Sachs lobbyist to be Chief of Staff to Treasury Secretary Timothy Geithner sure sends the ‘message of change’ to the American people in the middle of a financial crisis," said Bunning . "On day one, Secretary Geithner confirmed to me why I opposed his nomination to be Treasury Secretary. The appointment of this former Goldman Sachs lobbyist to be Chief of Staff flies in the face of President Obama’s guidelines on ethics. I hope for the sake of the American worker this hypocritical appointment is the only mistake Secretary Geithner makes during his tenure at the Treasury Department."

Geithner Confirmation Likely Thursday

A Senate friend, who is closely observing the confirmation hearing of Timothy Geithner, tells me that Geithner is likely to be confirmed Thursday.

The Senate Finance Committee,for the most part, outside of Sen. Jim Bunning, has been treating Geithner as though he was the Dali Lama instead a key player in the bizarre near-criminal disbursement of the first $350 billion of TARP funds.

But, Bunning let him have it. Live blogging the hearing, WSJ reported:

Sen. Jim Bunning, the longtime Fed foe, steps onto the pitcher’s mound and starts firing. He says he had “serious reservations” even before the tax issues arose. Bunning says Geithner was “involved in just about every flawed bailout action of the previous administration.”

On the tax issues, “Mr. Geithner does not provide a satisfactory explanation for the problem, certainly not one significant for a high-ranking public official, who the American people demand and deserve to hold to a higher standard.” He says the committee has known about the tax issue since December 5 but didn’t tell members until a week ago. He also says the hearing has been rushed, and that the committee never interviewed the IRS personnel involved in the tax case. Geithner’s failure to pay all the taxes until being nominated “is hard to explain to my constituents who pay these taxes on a regular basis.”

There was no indication of a question for Geithner. But Bunning’s time was up anyway.

Bunning Rips Bailout Of Fannie And Freddie

"This takeover of Fannie and Freddie is a calamity for our free market system. This arrangement just props them up when they should be dismantled. Fannie and Freddie have been operating under a failed business model and it should not be allowed to continue" said U.S. Senator Jim Bunning in a prepared statement.

"By directly investing in the mortgage market, the Treasury Department is acting like it is a hedge fund. Building up a portfolio of mortgage-backed securities is part of what got Fannie and Freddie in trouble, and now Secretary Paulson is doing the same thing by using taxpayer dollars to prop up housing prices. This is not a free market system. Secretary Paulson is turning America into France of twenty years ago. Simply put, it is socialism.

"Over a month ago Secretary Paulson came before the Senate Banking Committee and told us that just because Congress gave the Treasury Department the authority to bail out Fannie and Freddie it didn’t necessarily mean it would be used. I knew better at the time, though, and pressed Secretary Paulson on the matter asking him why he would request such sweeping powers if he didn’t plan to use them. Not surprisingly the Treasury Secretary couldn’t answer my question. And now we know why.

"As I suspected back in July, Secretary Paulson knew more than he was telling us during his appearance before the Banking Committee. He knew that Fannie and Freddie were in an irreversible state of damage. He knew all along he was going to have to use this authority despite what he was telling Congress and the American people at the time. And yet Congress was foolish enough to give him a blank check for this irresponsible bailout. I hate to say it, but I told you so."