Wow!
I do not know to what party Dr. Thomas Hoenig belongs, but he has been great on the FOMC (the Federal Open Market Committee that determines monetary policy.) President Obama has nominated him to be the number two official at the Federal Deposit Insurance Corporation (FDIC) which guarantees bank deposits. The FDIC also is one of the agencies that examines banks for soundness.
Tom Hoenig has been a staunch critic of the "Too Big to Fail" syndrome in American bank supervision. He has been seemingly a Cassandra warning of the bubble in farmland prices. Hopefully his arms will not be chained when he raises them to prays for policies to address the problem.
On the FOMC, Hoenig has voted for raising rates. Knowing that we are creating new bubbles rather than stimulating new investment in real projects creating real jobs, he has dissented from the prevailing majority. What business owner in its right mind would invest in a risky business project when there is free money to lever up holdings of financial assets made risk free by the Bernanke put? Why subsidize investment banking bonuses? And he has not kept quiet. As Michelle Lucci pointed out over a year ago, "Kansas City Federal Reserve Bank President Thomas Hoenig has been recently speaking publicly about his desire for an increase in the federal funds rate, sooner rather than later, and also about his concern for community banks and the drag on earnings from commercial real estate loans."
Scott Canon at the Kansas City Star warns "Hoenig is ... a provocative selection to join [the FDIC's] board of directors." Three cheers for President Obama on this one. Even Ron Paul should be cheering. He would be available should a President Cain need a Fed Chairman.
