Progressives say Michael Barr, the architect of the Dodd-Frank Act and President Biden’s pick for the Federal Reserve Board vice chair for supervision, wasn’t hard enough on big banks. Conservatives, like Sen. Pat Toomey, say he “enshrined into law taxpayer bailouts of banks,” not to mention the “unconstitutional and unaccountable” Consumer Financial Protection Bureau.
I say all that criticism is a good thing. In a rapidly changing financial services landscape, it is essential to have a Fed vice chair who takes a thoughtful, nonpartisan and evenhanded approach to regulating the country’s financial institutions — one that both meets the Fed’s objectives and considers the risks and rewards of modern-day financial services and products.
Barr, whose early academic research focused on “banking the unbanked,” recognizes that innovation in financial services can expand access for businesses and consumers. But, having served as assistant Treasury secretary during the financial crisis of 2008, he also understands firsthand the consequences of leaving the institutions involved unchecked. As, for instance, cryptocurrencies continue to take off, Barr will be able to strike the right balance between crafting policies that center on oversight and supervision while enabling growth and embracing innovation.
In the wake of economic disruption wrought by the pandemic, Barr is likely to focus on advancing policies that strengthen protections for consumers and small businesses. Amid heated debates around personal privacy, he will empower consumers with control over their own financial data. And as the global financial system is tested once again — by inflation, by supply chain disruption, by war — he will aim to instill resiliency by ensuring capital and liquidity regulations are designed to meet these challenges.
Barr respects Congress, he will work well with both Republicans and Democrats, and he has held numerous high-profile government positions. But these are not the only reasons why he is a fantastic choice for vice chair. As dean of the Ford School of Public Policy and as a law professor at the University of Michigan, he is a respected academic and mentor — one who always advocates for a thoughtful, measured and fact-based approach to the law, policy and to life.
I would know. As a student of his in the spring of 2003 at the University of Michigan Law School, he inspired my own legal career and demonstrated his approach to critical thinking. If anyone in class wanted to convince him of a policy argument, they had to exhibit original thought supported by strong arguments.
He also taught us to value and respect the oversight function of Congress, an attitude vital for serving in the executive branch. Republicans should be heartened by the prospect of having someone with that humble posture at a powerful agency. What’s more, he continually stressed the importance of original thought and open-mindedness — two attributes that are invaluable for successfully serving in government.
He is more than a great legal and financial mind. He’s a good and earnest person. Professor Barr’s positive influence on students extends well past graduation ceremonies, and his desire to effectuate a well-functioning government crosses the political spectrum.
After law school, I went to Wall Street and then to Capitol Hill, where I worked for Republican Majority Leader Eric Cantor. Professor Barr kept in touch regularly, offering genuine encouragement, smart career guidance and erudite policy advice regardless of my personal political leanings or those of my bosses in public office. He was responsive because I was his student and he cared about my success and the impact policy has for the good of our country.
A few years ago, Professor Barr invited me to talk to his undergraduate students, which I graciously accepted. (It didn't hurt that the speaking engagement was on a Friday of a pre-COVID football weekend.) In the spirit of Professor Barr’s bipartisan approach to governance, I also invited a good friend from House Majority Leader Steny Hoyer's office, so we could show the undergrads that people of different political parties can work together and enjoy each other’s company.
Bipartisanship and open mindedness are not just theories. They are the principles by which people like Professor Barr operate. Despite the fact that it generates attacks from both sides, I find it refreshing. The American people would be lucky to have Michael Barr return to public service.
