The day after President Obama’s speech calling on Congress to take further steps to overhaul the regulatory financial system may be the right time to ponder the implications of an important measure already taken. On August 24, Denis M. Hughes, the president of the New York AFL-CIO, was named chair of the Federal Reserve Bank of New York. He is a former electrician and a carpenter.
At first glance the symbolism of this appointment is striking, even if Denis Hughes had already been appointed to the board in 2004 and even if he is not the only able labour leader recently put in charge of important segments of the economy. This is so because it is one thing to climb up to the pinnacle, as Obama has done, and quite another to jump from one pinnacle to another, across an abyss that until recently was considered unbridgeable.
But apparently no longer. Labour has lost a great deal of influence in the last generation and is an important constituent of the Democratic Party. Rival ideologies have lost their sting. If a man is a superb strategist in the labour movement, he is likely to be similarly effective on Wall Street.
But so far there has been no indication that a banker has been appointed to succeed Denis Hughes as president of the New York AFL-CIO.