President Biden's Federal Reserve Nominees Would Create Most Diverse Board Of Governors In History
Marc H. Morial
President and CEO
National Urban League
PRESIDENT BIDEN’S NOMINEES TO FEDERAL RESERVE WOULD CREATE THE MOST DIVERSE BOARD OF GOVERNORS IN THE INSTITUTION’S HISTORY
“The Federal Reserve is our country’s most powerful economic policy institution. Twelve Fed leaders meet every six weeks to make decisions that include how many people should be unemployed and whether wages should be going up. Most of those leaders are white men who come from Wall Street … we want the leadership of the Fed at all levels to be more diverse so it looks and thinks like the working people it is supposed to represent. – The Fed Up Campaign
The Federal Reserve Board is one of the most powerful yet least-understood institutions in the America. It sets monetary policy to promote maximum employment and stable prices, monitors the safety and soundness of financial institutions and their impact on the financial system, and helps ensure a healthy economy for U.S. households, communities, and businesses.
Given its enormous influence on every aspect of the economy, the Fed should look like the nation because the impact of its work touches every American. President Biden’s three nominees, which include two women and two people of color, represent an enormous step forward in achieving this goal.
Dr. Lisa Cook, who would be the first Black women to serve on the Board, is a tenured professor in economics and international relations at Michigan State University. She is a renowned expert in economic growth and development, innovation, financial institutions and markets, and economic history. Her groundbreaking research on economic disparities related to gender and race would bring a sorely-needed new perspective to the Fed’s efforts to curb inflation and support full employment.
Dr. Philip N. Jefferson, Vice President for Academic Affairs and Dean of Faculty and the Paul B. Freeland Professor of Economics at Davidson College, would be the fourth Black man to serve on the Board of Governors. He previously served as chair of the Economics Department at Swarthmore College, where he was the Centennial Professor of Economics. He was also an economist at the Board of Governors of the Federal Reserve System.
Sarah Bloom Raskin, a former Deputy Treasury Secretary and Governor of the Federal Reserve Board, is being invited to return to the board this type as a Vice Chair. She wasinstrumental in pursuing innovative solutions to enhance American’s shared prosperity, the resilience of our country’s critical financial infrastructure, the defense of consumer safeguards in the financial marketplace.
A diverse perspective on the Fed’s Board of Governors is critical to reducing racial gaps in wealth and income. Consider the fact that the Board’s decisions are based on maintaining a certain level of unemployment — generally around 5%.—but until recently it only ever considered the overall unemployment rate, ignoring the racial disparities that exist within that percentage and that widen during recessions.
“Through the entire financial crisis and recovery from the Great Recession, we never put a chart in front of the Board of Governors with the Black-white unemployment rate — never,” economics Claudia Sahm, who worked at the Federal Reserve from 2007 to 2019, told Next City. “You kinda know certain groups are always hit harder in a recession, but it’s different when you stare at a line. We didn’t do that, they never saw that, they only ever saw the national employment rate.”
This past week, the Senate Banking Committee held its first hearing to consider the President’s nominees. As expected, all three candidates illustrated that their impressive credentials, experience, intellect, and deep understanding of macroeconomic policy combined with their interest in the experiences of underserved communities will be an asset to our nation’s central bank. Indeed, each of these candidates has a long and proven track record of advocating for the more equitable participation of women, African Americans, and other communities of color to boost the nation’s economic potential and reduce inequality.
Unfortunately, President Biden’s efforts to elevate these highly-qualified nominees havesparked an ugly political-, and for Lisa Cook in particular, a disturbing racially- and misogynist-tinged backlash.
Like her co-nominees, Dr. Cook is extraordinarily qualified to serve on the Fed Board – more qualified than many who have served throughout the Fed’s history. Despite having a B.A. from Spelman College, a second B.A. from Oxford University in Philosophy, Politics, and Economics, and a Ph.D. in economics from the University of California, Berkeley, and having formerly served the Obama White House as Senior Economist at the Council of Economic Advisors, she has received unwarranted and ridiculous attacks from the right as someone lacking in economic experience.
Fortunately, Dr. Cook’s brilliant, professional and dynamic testimony this week before the Senate Banking Committee was able to beat back these attacks. She exhibited a deep and thoughtful approach to macroeconomics in her answers that disarmed her critics and reminded the nation of what dignity in public service looks like. But truthfully, she should have never had to endure these disingenuous attacks in first place.
The partisans who attempted and failed to derail her nomination didn’t do so because they think she is unqualified to shape the nation’s economic policies. They attacked her because they know that she is more than qualified to shape the nation’s economic policies into ones that create opportunity for all Americans.
Indeed, each of the President’s nominees will work to ensure the Fed Board is not only diverse but also creates economic opportunity for all Americans. That is a positive step not just for underserved communities, but for the nation as a whole. And it’s long-overdue.
###
5TBE 2/4/22 ▪ 80 Pine Street ▪ New York, NY 10005 ▪ (212) 558-5300
Connect with the National Urban League
Facebook: https://www.facebook.com/NatUrbanLeague
Twitter: https://twitter.com/naturbanleague
Instagram: https://www.instagram.com/naturbanleague
Website: https://www.NUL.org
Newsletter: http://bit.ly/SubscribeNUL
YouTube: http://bit.ly/YTSubNUL