The New York Federal Reserve Bank believes that David M. Cotes, the gazillionaire Chairman and CEO of Honeywell Inc. is best qualified to "to represent the public 'with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor and consumers.'"  These directors are chosen and elected by the commercial bank members of the regional Federal Reserve.  They do not make policy but the advice they give influences decisions at the regional Fed level and, ultimately, at the level of the United States Federal Reserve System.

The Class B Directors really represent the needs of non-financial industries which is why they cannot be executives or officers at banks.  Cote used to be a board member of JPMorgan Chase where he served on the Risk Committee that failed to foresee or prevent the $6.2 billion in trading losses inflicted upon the bank by "The London Whale" in 2012.  Despite that failure, Cote put himself up for re-election to the board which he won narrowly (a narrow win is as bad as a loss as shareholders rarely reject the slate of candidates recommended on the proxy).

In the NY Fed's defense, Honeywell is a major industrial company and Cote has insights to share about raw materials costs, labor costs and global trade.  Also, I was pleased to find, that Cote has made serious efforts, since the financial crisis, to address the impending shortfall in Honeywell's pension fund.

Now for the bad news.  Cote is one of those "Fix the Budget"guys who believes that Social Security should be cut.  He also believes that the government should cut spending even if it hurts the economy because the debt is, to him, the most important issue.

As a Class B Director at the New York Fed, Cote doesn't have any special authority over government spending.  But he has proven himself to be a self-interested sort.  He has a $135 million saved for retirement and will get $800,000 a year payments for life when he steps down at Honeywell.  So, he has no problem advocating for Social Security cuts for everyone else.

I think we can assume a similar blind spot when Cote gives advice and counsel at the the bank.  He will represent not the public but the interests of Honeywell.  That means he will want to keep costs low -- he needs cheap raw materials and cheap labor.  Just as he advises the government to cut spending even when that spending is needed to support job growth, he will encourage the Fed to withdraw stimulus even if it is needed to keep the economy growing.

In the end it's kind of a backstage appointment, probably one with more power and influence than most people know and it's so insidery that it won't be much discussed.  I think there are issues, to be sure.  I think it also reveals the type of person that these bankers respect and want to work with.  This is not a stunning surprise but, there you go.