Mishkin, who has been a member of the Board since September 5, 2006, submitted his letter of resignation to President Bush. He will return to the Graduate School of Business at Columbia University as a professor of economics and resume teaching in the fall.
Mishkin, 57, was appointed to the Board by President Bush to fill an unexpired term ending January 31, 2014.
When Mr. Mishkin leaves, the Fed’s will have just four governors, making it harder to conduct its business. Board meetings usually need a quorum of four governors, so the absence of just one could interfere with policy decisions and increase the work load on Chairman Ben Bernanke, Vice Chairman Donald Kohn, governor Kevin Warsh and Mr. Randall Kroszner.
The Fed normally has seven governors but currently has only five because Senate Banking Committee Chairman Chris Dodd (D., Conn.) in a typical partisan infantile action has refused to move on White House nominations to those seats. Wonder why we cannot get things done? Mr. Dodd has also refused to even schedule a vote on the nomination of a sitting governor, Randall Kroszner, to a new term. Mr. Kroszner’s term has expired under rules is permitted to continue serving until a replacement is sworn in. Terms to the Fed board are 14 years, and members can be appointed to serve unexpired terms.
Essentially, Dodd would rather add to an already strenuous and understaffed situation at the Fed than let the President’s nominees even come to a vote. Does Dodd actually wonder why no one thought he might a decent Democratic nominee?
Anyone sitting there complaining why the Fed “isn’t getting more done” ought to send their inquiries to Mr. Dodd.
All governors have votes on the interest-rate setting Federal Open Market Committee, along with five of the 12 regional reserve bank presidents. Mr. Mishkin’s departure is unlikely to affect voting dynamics on the committee as he has always voted with Mr. Bernanke.
What is does mean is that either Bush or the next President will have a host of vacancies to fill on the Fed
