The Biden administration’s Federal Reserve nominees are highly qualified and deserve a fair hearing
The Biden administration has forwarded five nominees for open slots on the Federal Reserve’s Board of Governors: Jerome Powell (nominated for another term as chair of the Board), Lael Brainard (vice chair), Sarah Bloom Raskin (vice chair for financial supervision), Philip Jefferson (governor), and Lisa Cook (governor). Notably, given the poor track record in picking Fed governors that represent the country’s diversity, Jefferson would be just the fourth Black man in the Fed’s 109-year history to serve on the Board and Cook would be the first Black woman. If this slate of candidates is confirmed, it will also be the first time that women hold the majority of seats on the Board of Governors.
This is an excellent slate of nominees, with each having better qualifications than dozens of past nominees and eventual Board governors. Despite this, political opponents of the Biden administration have started a campaign to figure out which of the nominees can be defeated by weakening their candidacy in the run-up to the confirmation process. The organized opposition has mostly settled into a focus on Cook and Raskin.
The opposition to Raskin concentrates on her policy record of regulating the powerful financial sector and seeking to make the Fed center climate change concerns in its policymaking. However, these aren’t weaknesses or flaws in her candidacy, they are strengths. The opposition to Cook is even uglier, deriding her qualifications for the nomination using barely disguised racial code words. The wellspring of much of this opposition also included attacks aimed at Jefferson, but this gross campaign against the Biden slate has clearly decided it’s more strategic to direct attacks about “qualifications” on Cook.
The attacks on Cook’s qualifications also represent a profound bias in how Federal Reserve policymaking has been captured by the financial sector for too long. The narrow criticisms being leveled against Cook center on her not having published articles in academic journals about monetary macroeconomics. But, the vast majority of Federal Reserve policymakers have not published heavily in academic journals about these topics. Historically, the easiest pass given to governors who do not have an academic publishing record in monetary macroeconomics is the claim that they “understand financial markets,” which usually means they worked for a financial institution.
Cook is a distinguished Ph.D. economist. She fully understands the theory and evidence relevant to Fed decisions. She has published academic articles about key determinants of economic growth (an obviously macroeconomics-relevant topic). She has a keen understanding of—and track record in— analyzing labor markets. How is any of this experience less useful to the Fed than that brought by, say, lawyers who once worked for private-sector banks or investment funds?
The vast majority of those seeking to block some of these nominees are doing so for a transparent reason: They want Fed governors who will play partisan politics, voting dovishly to spur growth when Republicans are in power but turning hawkish to slow growth under Democrats.
This desire is clear as day when looking at the trajectory of a recent past Fed nominee forwarded by the Trump administration—Judy Shelton—who was demonstrably unqualified to serve on the Board of Governors. But she signaled clear as day that she would be amenable to becoming a monetary dove so long as President Trump was in power and would revert back to her long history of hard-money hawkishness when a Democrat was elected.
Some of those looking to block one or more of the Biden slate of nominees will claim to be acting not due to partisanship but due to a genuine concern that the Fed has been too far behind the curve of the 2021 inflation outbreak. This argument is largely wrong, but could in theory be waged in good faith. There are many tests of this good faith, but one of the clearest is giving all the nominees a chance to answer any concerns in a confirmation hearing before preemptively deciding which one seems most politically promising to oppose.
Neither simple-minded partisanship nor performative hand-wringing about recent inflation is a decent reason to try to divide and conquer the Biden slate before they have had any chance to present their views to a confirmation committee. But these motivations are even more reprehensible given the ugly angle of political attack that this opposition has taken. These attacks are so abhorrent and wrong that it’s hard to even know where to begin to rebut them. Suffice it to say, nobody on this slate needs our validation of their qualifications because they are obvious to any fair-minded observer.
The current campaign is even more maddening given that the bar on serving as a Federal Reserve policymaker has not been set high in the past. Those who have served have made bad economic judgements on both financial supervision and macroeconomic policy, and some have even made serious ethical missteps. Many of these bad tenures, it must be said, had the enthusiastic support of those starting their cynical campaign today against the Biden slate.
In today’s political debates, there is often no shamelessness, and people will assert that up is down or left is right. When people claim that any of the Biden slate are somehow unqualified to sit on the Board of Governors, they are engaging in this kind of shameless lying.
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