Republicans are apoplectic President BidenJoe BidenThe US Cyber Defense Agency warns of possible Russian cyberattacks amid tensions. RNC censorship resolution receives backlash MOREthe historical diversity offered by the Federal Reserve; of its three new nomineestwo are black, two are women.
If confirmed, Michigan State economist Lisa Cook and Philip Jefferson, economist, vice president and dean of Davidson College, would be just the fourth and fifth black governors in the Fed’s 107-year history. Cook would be the first black woman and — if confirmed along with the third nominee, former Fed Governor Sarah Bloom Raskin — would be the first-ever majority-female board of directors.
Republicans, however, attack the two nominated women as unfit. GOP Leading Senator Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell-McCarthy split in November in Klobuchar over 2 GOP lawmakers censored: ‘To me, they’ve been patriots’ Pence to deliver commencement address at University of South Carolina MORE (R-Ky.) accused Raskin of wanting “financially intimidate the private sector.” Former senior Trump adviser Peter Navarro suggested that Cook was a “purely racial rendezvous” who is “no longer qualified to coach an NFL team.”
Pennsylvania Senator Pat ToomeyPatrick (Pat) Joseph Toomey Late Night Reports Suggest the CIA is Collecting More Data on Americans Conservatives Are Outraged That Sarah Bloom Raskin Actually Believes in Capitalism Meet Washington’s Most Ineffective Senator: Joe Manchin MOREthe ranking Republican on the Banking Committee, “noted [Raskin and Cook] …would threaten the independence of the Fed.”
Alan Blinder, former Fed Vice Chairman and Princeton economist, told me that the Federal Reserve would be enriched by these qualified appointments and the diversity they would bring: views.
Based on the research he has done and his own experience, Blinder notes “there is significant evidence across a variety of disciplines that diversity is an asset. When people come in with different ways of thinking, different backgrounds, the proof is that it works better than a completely homogeneous group.
The Biden candidates are three accomplished economists. Jefferson, who so far has escaped Republican fire, was an economist at the Federal Reserve and president of the National Economic Association.
“She brings a wealth of banking regulatory experience and an impressive overall track record; she’s awesome,” Blinder says.
Raskin undoubtedly sees climate change as an existential global threat. The same goes for prominent business leaders and others, including General Mark MilleyChairman of the Joint Chiefs of Staff.
Clearly, it is advantageous for the Federal Reserve to have members who know and are passionate about a serious long-term economic threat. But the Fed’s involvement or influence on this issue is extremely limited. Raskin is named vice chairman of the Fed, not head of the Environmental Protection Agency.
From the earliest days of the Board of Governors, there was a mandate for diversity – representing financial, agricultural, industrial and business interests.
In Cook’s case, her economic research has focused on the international economy and the economic inequalities that affect minorities and women. All recent Federal Reserve chairmen have worried about the dangers of economic inequality, so it’s a good idea to have a governor with a particular interest and expertise.
Cook has advised foreign governments on banking policy and served as a senior staff member of the Council of Economic Advisers, where she achieved high marks. In an interview with the Wall Street JournalJudith Hellerstein, an economist at the University of Maryland who was a colleague of Cook’s at CEA, noted that the work can be highly pressured and involve multiple constituencies: “Lisa was wonderful at navigating it all,” which ” will translate beautifully into his work at the Fed.
It’s a quality missing from Navarro, who made race-based levy against his appointment. Read his disordered reaction when subpoenaed by the January 6 committee on What is his role – if at all – could have tried to sabotage the 2020 election results.
The most serious critic, supposedly, was Senator Toomey, who loaded that both of these women were hardliners with little experience in central monetary issues at the Federal Reserve.
Toomey’s story suggests that these criticisms should not be taken seriously.
Three years ago, Toomey supported Fed Nominee, stephen mooreStephen Moore’s Antitrust Bill in the Senate Would Raise Consumer Prices and Reduce Our Competitiveness Bob Dole: A Great ‘Greater Generation’ Leader Why the Senate Should Kill the ‘Build Back Better’ Bill MORE. (Before Toomey was a senator, he success Moore as President of the Conservative Growth Club.) Moore, after Trump nominated him, admitted he knew little about how the Fed works (and perhaps monetary policy itself); he was a right-wing fanatic plagued by personal controversies. His nomination was so discredited, the White House had to withdraw it.
I would suggest to Senator Toomey that Cook is – in every way – eminently more qualified.
Over the past 40 years, the Federal Reserve has been led by five exceptionally capable and quite different presidents. They headed a board of mostly white men; the current president, Jay Powell, has shown his appreciation that times have changed.
As the Fed faces crucial decisions, I am confident that these three candidates will work well with Chairman Powell, the other members of the seven-person board and the presidents of the regional banks. The Senate should confirm Jefferson, Raskin and Cook – quickly.
Al Hunt is the former editor of Bloomberg News. He previously served as a Washington reporter, bureau chief and editor for The Wall Street Journal. For nearly a quarter of a century, he wrote a political column for the Wall Street Journal, then the International New York Times and Bloomberg View. It hosts Political War Room with James Carville. Follow him on Twitter @AlHuntDC.