Neel Kashkari | |
|---|---|
 | |
| 13th President of theFederal Reserve Bank of Minneapolis | |
| Assumed office January 1, 2016 | |
| Preceded by | Narayana Kocherlakota |
| Assistant Secretary of the Treasury for Financial Stability | |
| Acting October 6, 2008 – May 1, 2009 | |
| President | George W. Bush Barack Obama |
| Preceded by | Position established |
| Succeeded by | Herbert Allison |
| Assistant Secretary of the Treasury for International Affairs | |
| In office July 2008 – May 1, 2009 | |
| President | George W. Bush Barack Obama |
| Preceded by | Position established |
| Succeeded by | Marisa Lago |
| Personal details | |
| Born | Neel Tushar Kashkari[1] (1973-07-30)July 30, 1973 (age 52) |
| Political party | Republican |
| Spouses | |
| Children | 2 |
| Education | Western Reserve Academy |
| Alma mater | UIUC (BS,MS) UPenn Wharton (MBA) |
Neel Tushar Kashkari[1] (born July 30, 1973) is an American banker, economist and politician who is the president of theFederal Reserve Bank of Minneapolis. As interimAssistant Secretary of the Treasury for Financial Stability from October 2008 to May 2009, he oversaw theTroubled Asset Relief Program (TARP) that was a major component of the U.S. government's response to the2008 financial crisis. ARepublican, he unsuccessfully ran forGovernor of California in the2014 election.
Born and raised in Ohio, and educated at theUniversity of Illinois at Urbana–Champaign, Kashkari worked initially as an aerospace engineer. After attending business school at theWharton School of theUniversity of Pennsylvania, he became aninvestment banker, covering the information technology security sector forGoldman Sachs.
Henry Paulson, the former head of Goldman, and thenSecretary of the Treasury, hired Kashkari as an aide. Kashkari was eventually namedAssistant Secretary of the Treasury for International Economics and Development. At Treasury, he played a number of roles in the response to the2008 financial crisis and thesubprime mortgage crisis that preceded it, most notably administering the TARP.
Kashkari left government and began working forPimco in 2009, leading that company's push into theequities market. He resigned from Pimco in January 2013 to explore a run for public office. One year later, he announced his candidacy forGovernor of California. He came in second in California'snonpartisan blanket primary but lost thegeneral election to incumbent governorJerry Brown.
He was named the new president of the Minneapolis Federal Reserve November 10, 2015, succeedingNarayana Kocherlakota who announced his resignation in June.
Neel Tushar Kashkari was born on July 30, 1973,[2] inAkron, Ohio, toIndian parents. Kashkari's mother Sheila Kashkari, was apathologist atAkron City Hospital, and father Chaman Kashkari, worked as a professor ofelectrical engineering at theUniversity of Akron.[3][4]
Kashkari's parents areKashmiri Pandits, who were both born and raised inSrinagar in theKashmir Valley, within theIndian state ofJammu and Kashmir[5] andimmigrated to theUnited States in 1964. They settled inStow,[3] a suburb of Akron, where Neel Kashkari grew up.[4] His parents were well known within the local community ofHindu Americans.[6] His older sister, Meera Kashkari Kelley,[7] is aphysician specializing ininfectious diseases.[8] Growing up, Neel's parents and sister wereliberal, but hisfree-market views led him to identify more with theRepublican Party.[7]
Kashkari attendedStow–Munroe Falls High School before transferring to theWestern Reserve Academy inHudson.[9] He graduated in 1991 with honors in mathematics and was elected graduation speaker.[4] In 2009, he described his high school grades as not good enough to apply to top-tier universities.[10]
Kashkari earned bachelor's (1995) and master's (1998) degrees inmechanical engineering from theUniversity of Illinois inUrbana–Champaign.[11] He was the team leader for the mechanical engineering component of the school's entry in the 1997Sunrayce, a solar-powered vehicle race.[4]
Kashkari left his job as an engineer atTRW Inc. in 2000 to enter theWharton School of theUniversity of Pennsylvania inPhiladelphia,[4] and earned aMaster of Business Administration (MBA) degree in 2002. At Wharton, he was president of the Finance Club[12] and was part of the student organizing team for the annual Wharton Finance Conference.[13]
After completing his master's degree, Kashkari moved toRedondo Beach inCalifornia, and worked as an engineer forTRW Inc., a contractor forNASA. There he worked on a stabilizing component for theJames Webb Space Telescope.[4]
Kashkari interned at the investment bankGoldman Sachs during the summer between his two academic years at Wharton.[6] After graduation from Wharton in 2002, he joined Goldman'sSan Francisco office as an associate[14] covering software companies in the investment banking division.[6] In this role, he was part of the team that advised clients on mergers and acquisitions, as well as other financial matters, until leaving the firm in 2006.[15]
He was a regional finalist for theWhite House Fellows program.[1][7][10]
In May 2006PresidentGeorge W. Bush announced his intention to appoint Paulson asSecretary of the Treasury.[16] Kashkari contacted Paulson and asked to join him at Treasury. Despite not knowing Kashkari well,[17] Paulson agreed to meet with him, and much later offered him a job as a policy generalist. Kashkari accepted, and then Paulson remembered to confirm that Kashkari was a Republican.[18] After the U.S. Senateconfirmed Paulson, he and Kashkari started at Treasury on the same day.[17] Kashkari was one of several Goldman employees who followed Paulson to Treasury.[19]
Kashkari began as a special assistant to Paulson working onenergy policy. He andAllan B. Hubbard developed Bush's "Twenty in Ten" plan to promoteenergy conservation.[20] He also worked on issues related toIndia, particularly infrastructure development.[15] In November 2007, Bush nominated Kashkari to be Assistant Secretary of the Treasury for International Economics and Development. TheU.S. Senate confirmed the nomination in June 2008, and Kashkari was sworn in the following month.[21]
By the summer of 2007, concerns over the credit quality of private-label securitizations, underwriting standards and institutional solvency accelerated. The value ofmortgage-backed securities backed by U.S.subprime mortgages declined sharply as it became clear that many of the borrowers would continue todefault on the mortgages. This caused a housing glut and thesubprime mortgage crisis as the banks holding the mortgages rushed toforeclose the loans. This ultimately intensified into the2008 financial crisis with broad implications.
Kashkari played important roles in several episodes of the crisis. He led Treasury's participation in theHope Now Alliance, a mortgage industry initiative coordinated by the federal government that aimed to reduce foreclosures by modifying loan terms on a loan-by-loan basis.[20][22] In March 2008 he represented Treasury at negotiations that led ultimately to the federally sponsored takeover and rescue of the investment bankBear Stearns byJPMorgan Chase.[23] He was in charge of Treasury's (ultimately unsuccessful) efforts to create a market in the U.S. forcovered bonds, whose value would continue to be guaranteed by the issuing bank after the bank had sold them.[21][24][25] He also worked closely with Paulson on Treasury'stakeover of thegovernment-sponsored enterprisesFannie Mae andFreddie Mac on September 6, 2008, and the federalbailout ofAmerican International Group on September 16.[7]
In early 2008, Paulson directed Kashkari and fellow Treasury aidePhillip Swagel to write a plan to recapitalize the banking system in case the crisis worsened.[26] The plan called for Congress to authorize Treasury to spend $500 billion to buy mortgage-backed securities from troubled banks, replacing them on banks' balance sheets with safe,liquidTreasury bills. This would preventruns on the banks and encourage them to lend. The plan was conceived as an alternative to proposals from the staff of theHouse Financial Services Committee, then led byDemocratic RepresentativeBarney Frank.[27]
Following thecollapse of the investment bankLehman Brothers on September 15, 2008, theEmergency Economic Stabilization Act of 2008 (EESA) was enacted on October 3. Both Democrats and Republicans in Congress voted for the law. Kashkari was one of several Paulson aides who was heavily involved in the crafting the legislation.[28] Based in large part on Kashkari and Swagel's recapitalization plan, the EESA created theTroubled Asset Relief Program (TARP), a $700 billion bailout fund for financial institutions threatened with collapse.[29] Kashkari initially proposed a $1 trillion fund, but Paulson vetoed that number as too large. Kashkari came up with the lesser figure of $700 billion by taking 5% of the $14 trillion in then-outstanding mortgages in the United States.[30]
To administer TARP, the EESA created within the Treasury Department a new Office of Financial Stability to be headed by anAssistant Secretary of the Treasury for Financial Stability, who would be nominated by the President and confirmed by the Senate. However, it also specified that the Treasury Secretary could designate an interim Assistant Secretary to run the office. Kashkari first came to widespread public attention on October 6, 2008, when Paulson named him to this position.[31] During his time running TARP he retained his title as Assistant Secretary for International Economics and Development, but his international affairs responsibilities were delegated to another Treasury official.[15]
Noticing a lack of necessary expertise in investment within Treasury, Kashkari recruited new staff for the program, some from government and others from industry, ultimately hiring about 100 people by January 2009.[17][32][33] Kashkari also chaired the five-member investment committee within Treasury that decided which banks would receive TARP money.[34]
With Bush scheduled to leave office on January 20, 2009, following the November 2008 election, Kashkari's appointment was initially viewed as temporary. There were even plans to replace him before Bush left office.[35] However, after Obama won the election, histransition team asked Kashkari to remain at Treasury after theinauguration for a limited period.[36] He left the Treasury Department on May 1, 2009, replaced at the helm of TARP byHerbert M. Allison.[37]
During his time heading TARP, Kashkari was frequently called to testify before Congressional oversight panels. The House members would often question him hostilely over the politically unpopular program, but at least one, RepresentativeDennis Kucinich, assured Kashkari privately that he thought Kashkari was doing a great job.[17] Another public critic, RepresentativeGregory Meeks, later thanked Kashkari for his service.[29] Kashkari also won praise from Paulson andTimothy Geithner, Paulson's successor as Treasury Secretary and Kashkari's boss under the Obama administration.[17]Neil Barofsky, who oversaw TARP within Treasury as a special inspector general, commended Kashkari's commitment to the job but criticized his actions.[38]Elizabeth Warren, who headed TARP'sCongressional Oversight Panel, later criticized Kashkari for allegedly promising to focus on smaller banks shortly before Treasury announced additional measures to bail outCitigroup.[39] Kashkari later said that Bush not running for reelection allowed the government to "do things that were deeply unpopular but we knew were the right thing."[40]
One week after his resignation, he and his wife moved to a cabin in ruralNorthern California nearLake Tahoe as part of what he called a "detox" from Washington. He worked on home improvement projects and helped Paulson write a memoir.[29]
In December 2009 Kashkari was named a managing director at the investment firmPimco, in charge of new investment initiatives.[41] Pimco, which had traditionally focused onbonds, hired him to broaden its focus intoequities;[42] Pimco later named him global head of equities.[43] Kashkari had metBill Gross, Pimco's co-founder, in December 2007 as part of his work at Treasury. Kashkari's move to Pimco attracted attention because Pimco benefited from the government takeover of Fannie Mae and Freddie Mac, though it did not receive TARP funds.[37] The six equitymutual funds Pimco launched under Kashkari all underperformed benchmarks in 2012. Kashkari attributed this to the fundshedging risk, which decreases returns when stock prices increase.[44]
Kashkari resigned from Pimco in January 2013, citing a desire to return to public service. He was expected to announce a campaign for elected office.[44][45]
In 2015, the Wall StreetJournal said that "the performance of [Pimco equity] funds Mr. Kashkari launched was spotty [and] the firm has since closed some of" them.[46]
Kashkari has said he first considered running forGovernor of California after Republican nomineeMitt Romney lost the2012 presidential election to Obama.[47] He spent the year after his resignation from Pimco preparing to campaign in the 2014 gubernatorial election, touring the state, hiring a staff, and meeting with potential donors. He announced his candidacy on January 21, 2014, citing jobs and education as his top priorities. It was his first run for elected office.[48][49] He finished second to incumbent governorJerry Brown in thenonpartisan blanket primary and lost to Brown in the November general election.[50][51] After the campaign, Kashkari published "Lessons from the Trail", a firsthand account of what he learned from his gubernatorial campaign to help future candidates.[52]
Brown was widely expected to finish first in the primary, so Kashkari's principal opponent at this stage was his main rival for second place, Republicanstate assemblymanTim Donnelly. Kashkari was seen as afiscal conservative and social moderate, while Donnelly identified with the right-wingTea Party movement.[53]
Kashkari enjoyed a significant funding advantage over Donnelly. He raised $1 million within two weeks of announcing his candidacy[54] and went on to raise a total of US$4.1 million, including $2 million of his own money.[55] Republican donorsCharles Munger Jr. andRobert Addison Day also spent $400,000 supporting Kashkari through an independent expenditure committee.[56] Donnelly raised only $447,000 (~$581,721 in 2024) in 2014.[57]
For most of the race, Kashkari trailed Donnelly in public opinion polls. Kashkari's moderate views on social issues, involvement with TARP, and vote for Obama in 2008 were unpopular with many Republican voters,[58] who were more enthusiastic about Donnelly.[59] Other Republicans feared that if Donnelly advanced to the general election he would not only lose to Brown but also hurt other Republicans running for office because of his narrow appeal to white conservatives, staunch right-wing views, inflammatory rhetoric, and criminal record. The perceived threat from Donnelly attracted endorsements for Kashkari from national Republicans including Romney,Jeb Bush,Condoleezza Rice, andKarl Rove, as well as California Republicans includingPete Wilson andDarrell Issa.[50][60][61][62][63] These advantages allowed Kashkari not to campaign farther right than he wanted to.[62]
Kashkari's fundraising advantage allowed him pay for more advertising in the last weeks of the race.[58][60] The first poll showing him ahead of Donnelly came out days before the election.[53] In the June 3 primary, Kashkari came in second with 19% of the vote, and Donnelly came in third with 15%. Brown beat them both, with 55%.[50]
Brown, aDemocrat, was long considered the favorite to win the general election. His approval ratings were high, and as of the end of the primary his campaign had US$21 million.[50] Kashkari, by contrast, spent almost all his campaign money to beat Donnelly,[64] and additional financial support from the national or state Republican Parties was unlikely.[62] Kashkari cited George W. Bush's upset victory overAnn Richards in the1994 election forGovernor of Texas as a model for an upset against a popular Democratic governor.[65]
Kashkari lost the November 4, 2014 general election to Governor Jerry Brown by approximately 1.4 million votes, with Brown winning 60% of the vote.[66] Brown won the largest gubernatorial victory since1986 despite running a low-key campaign.[67]
TheSan Francisco Chronicle reported in January 2014 that, since 1998, Kashkari had been eligible to vote in 23 elections in California andPennsylvania but had only voted in 13 (i.e., 57%) of them. His campaign disputed some aspects of the reporting and said that Kashkari's Treasury Department service proves his commitment to civic life.[68] Kashkari later acknowledged his imperfect voting record.[69]
Kashkari has been aRepublican his whole life.[7][70] In a 2008 speech to theAmerican Enterprise Institute, Kashkari described himself as "afree-market Republican".[4][8] In 2013, he described himself as a "pro-growth Republican".[70] He opposes most of Obama's economic agenda[70] and supports cutting business regulations.[71] He has called for cuttingSocial Security andMedicare[72][73] and replacing thePatient Protection and Affordable Care Act.[74] In 2012, he voted against California'sProposition 30, which raised taxes in the state, and forProposition 32, which would have weakenedlabor unions' political influence.[75] In a March 2014 interview, he praisedWisconsin governorScott Walker's controversialpolicies limitingcollective bargaining.[76]
On social issues, he has described himself aslibertarian[77] and "a different kind of Republican",[71] supportingabortion rights,same-sex marriage, and a path to legal status for illegal immigrants.[71] He voted againstCalifornia's Proposition 8, which banned same-sex marriage in 2008.[70] In 2013, he was one of 131 Republicans who signed a pro-marriage equalityamicus curiae brief submitted to theU.S. Supreme Court as part ofHollingsworth v. Perry,[78] the case in which the final appeal against the previously-found unconstitutionality of Proposition 8 was rejected for lack of standing.[79] Kashkari owns four guns and considers waiting periods and background checks before purchasing a firearm to be reasonable.[80]
On environmental issues, he voted against California'sProposition 23, which would have suspended thestate law that limits greenhouse gas emissions.[75] He believes climate change is real and man-made. He has spoken positively offracking and offshore oil drilling[70] and negatively ofCalifornia's cap-and-trade program.[81]
Kashkari cites Paulson,Mitch Daniels, andJeb Bush as political mentors.[47] He voted for Obama in the 2008 presidential election and Romney in the2012 election.[70]
In March 2014, Kashkari proposed waiving state income taxes for 10 years for businesses that move to California with at least 100 jobs; waiving state income taxes for California companies that build new manufacturing plants in the state; expandinghydraulic fracturing (fracking) of oil deposits; reducing environmental regulation; and increasing water storage in response to the state'songoing drought. Economists and political experts interviewed by theLos Angeles Times were skeptical of the plan's chances in the Democratic-dominatedCalifornia Legislature and of its potential effectiveness were it to be passed.[82]
In January 2020, Kashkari andAlan Page proposed amending a portion of theMinnesota State Constitution to read, "All children have a fundamental right to a quality public education that fully prepares them."[83]
At a January 2021 Minneapolis Federal Reserve event on racism and the economy, Kashkari commented on the contrast between how therioters at the U.S. Capitol were treated compared to black Americans, saying, "If those were Black militants, armed militants, storming the U.S. Capitol, I think they'd all be dead right now [ . . .] That is the most stark example of racism and disparities in our society."[84]
In early November 2015 Kashkari was named president andCEO of the Minneapolis Fed. He was chosen by the Minneapolis bank board (excepting representatives from the financial industry), approved 5–0 by theFederal Reserve Board in Washington and assumed the Minneapolis position on January 1, 2016. With the presidents of theNew York (William C. Dudley),Dallas (Robert Steven Kaplan) andPhiladelphia (Patrick T. Harker) regional Fed banks, Kashkari will become the fourth sitting regional Fed chief to have Goldman Sachs on his resume. Kaplan and Harker both assumed their positions in 2015.[46]
On February 16, 2016 while giving a speech at the Brookings Institution, Kashkari recommended that in order to stave off another potential financial meltdown, the big banks should be broken up, saying, "I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy."[85]
Kashkari is a practicingHindu.[86] He said in 2009 that he began praying while working on TARP, having been especially affected when a colleague had aheart attack at work.[29]
Kashkari met his ex-wife Minal Jeshanker (now Kotterman) in college at the University of Illinois. They married in a traditionalHindu ceremony inChicago, and she supported him through his time at Wharton while working as an engineer atNorthrop Grumman.[6] Kashkari filed for divorce in November 2011[87] and later described the split as amicable.[88] They have no children.[86]
Kashkari married Christine Ong in California'sSugar Pine Point State Park in August 2015. In February 2019, Kashkari and Ong welcomed their first child, a girl named Ulysses Sabine Kashkari.[89]
despite running a virtually nonexistent campaign.
| Party political offices | ||
|---|---|---|
| Preceded by | Republican nominee forGovernor of California 2014 | Succeeded by |
| Other offices | ||
| Preceded by | President of theFederal Reserve Bank of Minneapolis 2016–present | Incumbent |
| International | |
|---|---|
| National | |
| Other | |
