Economic Policy Has Become a Partisan Game. That Could Do Long-Term Harm.

It created the appearance that she was a partisan actor who, rather than apply a consistent philosophy to try to make the American economy as healthy as it can be, would pivot on a dime to try to strengthen the economy during a Republican administration and slow it in a Democratic one.On Tuesday, in a dramatic moment, with Senator Kamala Harris (now also the vice president-elect) racing to Washington and two Republican senators rendered unavailable for coronavirus-related reasons, Ms. Shelton fell just short of the votes to put her on track to join the Fed’s board of governors.There is no modern precedent for a president to try to fill Fed governor seats while a lame duck, and if confirmed Ms. Shelton would be the first Fed governor to take office without confirmation votes from the opposite party. (The Senate still has time to confirm her, but the math is tenuous.)To Democrats, the last-ditch effort to confirm Ms. Shelton implied not only that Mr. Biden would have one less important economic policy appointment to make, but also that he might have to deal with a policymaker seeking to undermine his administration from within the central bank. (Mr. Trump has also nominated a second Fed governor, Christopher Waller, who may well be confirmed before Mr. Biden takes office — though he falls more squarely in the tradition of Fed governors with technocratic independence, and has attracted some Democratic support.)Only a dozen years ago, consider what happened during the transition from George W. Bush to President Obama. The economy was in the worst phase of the global financial crisis, and President Bush had secured a $700 billion financial rescue package from Congress just before the election.That bank rescue, known as the Troubled Asset Relief Program, was divided into two $350 billion tranches, with the president required to ask Congress for the second tranche to obtain it. Not only did President Bush not try to block the Obama team from having access to the bailout money upon taking office, but at Mr. Obama’s request he also took the politically unpopular step of requesting the second tranche in January 2009, days before Mr. Obama was inaugurated.That step helped keep a bipartisan gloss on the financial rescue, gave the Obama administration access to the funds sooner rather than later, and enabled Mr. Obama to take office without making one of his first actions the politically toxic act of asking for more bank bailout money.


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