Fed Nominees Under Fire

Biden's nominees for the Federal Reserve are drawing smears from conservatives. These criticisms are invalid, and the appointees are extremely qualified and necessary for the Fed's future.

 

In mid-January, President Joe Biden formally announced his nominations for the remaining positions on the Federal Reserve Board. Sarah Bloom Raskin, Dr. Lisa Cook, and Dr. Philip Jefferson joined Chair Jerome Powell and Vice Chair-nominee Dr. Lael Brainard as the future of the Fed. The nominations were historic in many ways, and they immediately attracted backlash from conservative officials and media. These latest nominees must be confirmed in order to continue the historic shift in monetary policy pursued by the Biden-Harris Administration.


Raskin, Cook, and Jefferson were announced by the White House on January 14th, igniting immediate media buzz. Sarah Bloom Raskin would become the Fed’s next Vice Chair for Supervision, a position created after the Great Recession to focus on banking regulation. Meanwhile, Dr. Cook and Dr. Jefferson were nominated to the Board of Governors. As expected from the Biden-Harris White House, each nominee is comically qualified for their future roles. The Administration dutifully highlighted their long resumes in their initial press release. Bloom Raskin served as Deputy Treasury Secretary under President Obama, and was later a professor at Duke Law School. Dr. Lisa Cook served on Obama’s Council of Economic Advisors, and is now a professor at Michigan State University. Dr. Philip Jefferson worked as a research economist for the Fed, and is currently a dean and professor at Swarthmore College.


Despite the impeccable qualifications of the nominees, the conservative media ecosystem has already begun claiming the opposite. A particular interest has been paid to Dr. Lisa Cook, who would be the first Black woman to serve as a Fed Governor. Clearly mindful of this fact, Tucker Carlson’s Daily Caller published an obvious hit piece on January 20th claiming that Dr. Cook was underqualified. Her experience as an economist has never been the subject of serious debate. Back in November 2020, economist Anna Gifty Opoku-Agyeman wrote a column for Teen Vogue about Dr. Cook’s appointment to the Biden-Harris transition team. The article highlighted Lisa Cook’s numerous contributions to the field of economics. These include her work with the New York, Philadelphia, Chicago, and Minneapolis Federal Reserve Banks and her tenure as an advisor to the Treasury Department. What most certainly spooked the Daily Caller was Dr. Cook’s commitment to increasing the diversity of the economics profession. Opoku-Agyeman explained that Cook’s leadership of a program for underrepresented minorities has been credited with increasing the diversity of the Fed’s staff. It should be no surprise that the author of the Daily Caller article has long complained about the Fed being “woke” and accused it of adjusting its mandate to include “no more white males.”


Republican concerns about Dr. Cook’s qualifications are not genuine. Yet, it is only a matter of time before the Daily Caller’s nonsense is being peddled at Congressional hearings. Sen. Pat Toomey (R-PA) has proven himself ahead of the curve, releasing multiple statements questioning Dr. Cook’s expertise. Toomey, the Senate Banking Committee’s ranking Republican, will surely be the first in a long line of prominent GOP officials shedding crocodile tears over the nonissue. Toomey’s actions signal that Republican senators will run their same obstructionist playbook against yet another impeccably qualified Biden nominee. Previous targets include Neera Tanden and Saule Omarova, whose nominations failed after being subjected to ludicrous accusations. Tanden, nominated to lead the Office of Management and Budget, was charged with being too mean to Republicans on Twitter. Dr. Omarova was accused by those same senators of being a closeted communist, a smear that cost her Comptroller of the Currency. Currently, Dr. Deborah Lipstadt has seen her nomination to Special Envoy to monitor and combat antisemitism indefinitely stalled over being too outspoken on antisemitism.


It is currently unknown what level of support each nominee is enjoying behind the scenes, although past confirmation records provide some clues. Sarah Bloom Raskin and Lael Brainard have previously served on the Board. Bloom Raskin was confirmed unanimously by voice vote in 2014, while Dr. Brainard was confirmed 61-31 that same year. Thus, it follows that both should easily cruise to the simple majority needed to be confirmed. While this is likely, Governor nominations have become significantly more politicized in recent years. For decades, nominees were confirmed with over 90% of the vote. However, this has shifted to the point where Trump’s last nominee, goldbug Judy Shelton was defeated 47-50, and four others failed to gain enough support to even have a confirmation vote. Lisa Cook and Philip Jefferson have yet to be subject to Senate approval, although Dr. Jefferson may face less resistance. Even economist John Cochrane, who was quoted in the Daily Caller’s polemic against Dr. Cook, admits that Jefferson “seems straightforward and uncontroversial.” With these facts in mind, Democrats must prepare themselves to defend Dr. Lisa Cook against the impending conservative smear campaign.


As GOP senators prepare to concern-troll another nomination into the ground, it is imperative to the future of the Fed that Bloom Raskin, Cook, and Jefferson are confirmed. Their successful appointments would mark a major power shift within the Federal Reserve and allow it to more effectively handle future policymaking. On a partisan level, the three nominees (and Powell & Brainard) would shift the majority of the 7 member Board of Governors back to Democrats after it became Republican-controlled during the Trump Administration. In addition to a Democratic majority, the Board would be majority women for the first time in its history. On an individual level, Dr. Lisa Cook would be the first Black woman to be a Fed Governor, while Dr. Philip Jefferson would be just the 4th Black man.


This increased diversity has wide implications for future Fed policy. In recent years, the Fed has begun giving legitimate attention to the economic implications of race. This topic was long considered taboo at the supposedly apolitical central bank. Internal pressure, most notably from Atlanta Fed President Raphael Bostic and Philadelphia Fed Vice President Theresa Y. Singleton led to the national Fed, under Chair Powell, refocusing its strategies in 2020 to include inclusive monetary policy. Since then, the Fed has continued to produce race-focused economic research, including papers on the racial wealth gap and ensuring economic indicators consider race. Biden’s newest nominees will ensure the Fed is able to properly serve the communities most affected by its decisions. Conservative opposition to Lisa Cook stems from the fact that her research mostly focuses on issues of economic inequality and racism, and not “real” monetary policy. It’s this same focus that will make Dr. Cook an invaluable leader of the future Fed.


This leadership, from both Dr. Cook and the other nominees, will impact even supposedly “race-neutral” policies. In late 2021, the Washington Center for Equitable Growth published a report that found increased diversity within the Federal Reserve will make it more effective at messaging. Black people and women trusted the Fed’s information more when it was associated with more visible representation. They were also more likely to shape their own beliefs based on guidance from the Fed. This effect is badly needed at the present time. Despite record economic growth, Americans’ confidence in the economy has not reflected that reality. A recent Gallup poll found that 82% of adults instead think the economy is either fair or poor. Increased trust in a key government institution will help rectify that disconnect.


As the nomination process continues, Republican attacks on the nominees will only intensify. Behind this bad-faith endeavor is a desire to keep one of America’s most important institutions from serving marginalized communities. Lisa Cook, Sarah Bloom Raskin, Philip Jefferson, Jerome Powell, and Lael Brainard will be confirmed, and the entire country will be better off as a result.


Alex Moskovitz is a freshman C.L.E.G. major in the School of Public Affairs. He is a staff writer and deputy editor at American Agora.


Image courtesy "Agnostic Preacher's Kid," Creative Commons.

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