Biden Picks 3 for Fed Board, Including First Black Woman | Washington, D.C. News
By CHRISTOPHER RUGABER, AP Business Writer
WASHINGTON (AP) – President Joe Biden will appoint three people to the Federal Reserve Board of Governors, including Sarah Bloom Raskin, a former Fed and Treasury official, for the top regulatory post and Lisa Cook, who would be the first black woman to sit on the board of the Fed.
Biden will also name Phillip Jefferson, an economist, dean of the faculty of Davidson College in North Carolina and a former Fed researcher, according to someone familiar with the decision Thursday who was not allowed to speak officially. The three candidates, who will need to be confirmed by the Senate, would complete the Fed’s board of directors, made up of seven members.
The candidates would join the Fed at a particularly difficult time when the central bank will undertake the delicate task of raising its benchmark interest rate in an attempt to rein in high inflation, without undermining the recovery from the pandemic recession. On Wednesday, the government announced that inflation hit its highest level in four decades in December. Inflation has become the economy’s most serious problem, a burden on millions of American households and a political threat to the Biden administration.
Raskin’s appointment as the Fed’s vice chair for oversight — the nation’s top banking regulator — will be welcomed by progressive senators and advocacy groups, who see her as likely to take a tougher approach to banking regulation than Randal Quarles, a Trump appointee who stepped down from the post last month. She is also seen as someone who is committed to integrating climate change considerations into Fed oversight of banks. For this reason, however, it has already drawn opposition from some Republican senators.
A Harvard-educated lawyer, Raskin, 60, previously served on the Fed’s seven-member board of directors from 2010 to 2014. President Barack Obama then chose her to serve as assistant secretary of the Treasury, the job No. 2 in the department.
As Fed governors, Raskin, Cook and Jefferson would vote on interest rate policy decisions at the eight annual meetings of the Fed’s policy-making committee, which also includes the 12 regional chairs of the Feds. federal banks.
Raskin’s first term as Fed governor followed his work as Maryland’s commissioner of financial regulation. Prior to her government jobs, Raskin had worked as a lawyer at Arnold & Porter, a renowned law firm in Washington, and as managing director of Promontory Financial Group.
Kathleen Murphy, CEO of the Massachusetts Bankers Association, worked with Raskin when Raskin was Maryland’s banking regulator from 2007 to 2010 and Murphy led the Maryland Bankers Group. Murphy said the state’s financial sector sees her as a “strong regulator but a fair regulator.”
“She’s always had a very collaborative approach,” Murphy said. “She wanted to make sure all voices were at the table when decisions were made.”
Still, Raskin is likely to draw fire from criticism for his progressive views on climate change and the oil and gas industry. Two years ago, in a New York Times opinion column, she criticized the Fed’s willingness to support lending to oil and gas companies as part of its efforts to strengthen the financial sector deep in the pandemic recession.
“Decisions the Fed makes on our behalf should contribute to a stronger economy with more jobs in innovative industries — not support and enrich those that are dying,” Raskin wrote, referring to oil and gas suppliers. .
On Thursday, Sen. Pat Toomey, the top Republican on the Senate Banking Committee, criticized Raskin for “explicitly advocating that the Fed allocate capital by denying it to this underprivileged sector.”
Raskin is married to Rep. Jamie Raskin, a liberal Democrat from Maryland who rose to prominence as a member of the House Judiciary Committee when he brought impeachment charges against President Donald Trump.
If confirmed, Cook, along with Jefferson, would be the fourth and fifth black members of the Fed’s Board of Governors in its 108-year history. She has been a professor of economics and international relations at Michigan State since 2005. She also served as an economist on the White House Council of Economic Advisers from 2011 to 2012 and served as an adviser to the Biden transition team. -Harris on the Fed and the bank. regulatory policy.
Cook is best known for her research on the impact of racial violence on African-American invention and innovation. A 2013 paper she wrote concluded that racially motivated violence, by undermining the rule of law and threatening personal safety, caused patents granted to black Americans to fall by 15% per year between 1882 and 1940. – a loss that she said also dampened the broader US economy.
In an October interview, Cook said that despite encouragement from prominent economists such as Milton Friedman and George Akerlof, she struggled for years to get the journal published. Major economic journals, she said, generally did not cover “patents, economic history, or anything related to African Americans.”
Cook also championed black women in economics, a profession significantly less diverse than other social sciences. In 2019, she co-wrote a column in The New York Times which argued that “economics is neither a welcoming nor supportive profession for women” and “is especially hostile to black women.”
To combat these issues, Cook has spent time mentoring young black women in economics, leading a summer program run by the American Economic Association, and winning a mentorship award in 2019.
Jefferson, who grew up in a working-class family in Washington, DC, according to an interview with the American Economic Association, focused his research on poverty and monetary policy. In a 2005 paper, he concluded that the benefits of a vibrant economy through reduced unemployment among low-skilled workers outweighed the costs, including the risk that firms would adopt automation once the labor was scarce.
AP Writer Josh Boak in Washington contributed to this report.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.