Monday, January 24, 2022

Biden nominations for Fed board include first black woman

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President Joe Biden on Friday announced three candidates for the Federal Reserve Board, including Fed and former Treasury official Sarah Blum Raskin, for the top regulator and Lisa Cook, who will be the first black woman. Fed board.

Biden also nominated Phillip Jefferson, an economist, dean of Davidson College in North Carolina and a former Fed researcher. The three candidates, which must be approved by the Senate, will fill the Fed’s seven-member board.

They join the Fed, especially at a difficult time, as the central bank takes on the delicate task of raising its key interest rate without curbing recovery after the pandemic to curb high inflation. On Wednesday, the government announced that inflation had reached its highest level in four decades in December.

If confirmed, Biden’s choices would significantly increase the Fed’s diversity. Cook and Jefferson were the fourth and fifth black governors in the Fed’s 108-year history. And for the first time, the majority of the board will consist of female appointees.

In late November, Biden also nominated Jerome Powell for a second four-year term as Fed chairman and elected Fed board member Lael Brynard as his deputy.

“This group will bring much-needed experience, feedback and leadership to the Federal Reserve System, while at the same time bringing a variety of ideas and perspectives that have never been seen before on the board,” Biden said in a statement on Friday.

President Biden’s election, if approved, would significantly increase the Fed’s diversity.

Ruskin’s candidacy for the Fed chairman’s vice president of supervision – the country’s best banking regulator – is endorsed by advanced senators and advocacy groups who believe he may be tougher on bank regulation than Trump-appointed Randal Quarles. decreased last month. He is also seen as a man loyal to the Fed’s oversight of banks on climate change considerations. Because of this, he has already faced opposition from some Republican senators.

Raskin, a 60-year-old lawyer trained at Harvard University, served on the Fed’s seven-member board from 2010 to 2014. President Barack Obama then elected him Deputy Secretary of the Treasury, the No. 2 position in the department.

As Fed governors, Raskin, Cook, and Jefferson vote on interest rate decisions at eight annual meetings of the Fed Policy Development Committee, including 12 regional Fed bank presidents.

Ruskin’s first term as Fed governor was after he served as Maryland’s chief financial regulator, overseeing state banks during the 2008 financial crisis.

Sarah Blum Raskin
Sarah Blum Raskin, a former employee of the Fed and the Treasury, has been elected Deputy Chairman of the Fed for Supervision – the best banking regulator in the country.

From 2007 to 2010, she worked with Kathleen Murphy Raskin, CEO of the Massachusetts Bankers Association, as Maryland’s bank regulator. Murphy said the state’s financial industry sees him as a “strong regulator, but a fair regulator.”

“He’s always been very collaborative,” Murphy said. “He wanted to make sure all the votes were on the table when the decision was made.”

Still, Raskin could fire on critics for his progressive views on climate change and the oil and gas industry. Two years ago, in a column in The New York Times, he criticized the Fed’s willingness to support lending to oil and gas companies as part of its efforts to strengthen the financial sector in the depths of the pandemic crisis.

“Decisions made by the Fed on our behalf should build a stronger economy with more jobs in innovative areas – not supporting and enriching the dying,” Raskin writes, referring to oil and gas providers.

Exterior of the upper part of the Federal Reserve building
Biden also nominated Phillip Jefferson, an economist, dean of Davidson College in North Carolina and a former Fed researcher. Jefferson and Cook were the fourth and fifth black governors in the Fed’s 108-year history.

On Thursday, the Senate criticized the Banking Committee’s top Republican senator, Pat Toomey Raskin, for “openly promoting the Fed’s allocation of capital by denying it an unsustainable sector”.

Ruskin was married to Jamie Ruskin, a Liberal Democrat from Maryland, who gained widespread attention as a member of the House Judiciary Committee when he impeached President Donald Trump.

Cook has been a professor of economics and international relations in Michigan since 2005. He served as an economist on the White House Economic Advisory Board from 2011 to 2012 and was an adviser to the Fed and the Biden-Harris Transition Group at the bank. regulatory policy.

Cook is best known for his research on the impact of racial violence on African-American inventions and innovations. In a 2013 article, he wrote that racially motivated violence reduced the patent fees of black Americans by 15% annually between 1882 and 1940 by violating the rule of law and threatening personal safety – a loss that also halted the wider U.S. economy. .

Jerome Powell
Biden candidates join the Fed, led by President Jerome Powell, as the central bank takes on a delicate task of raising its key interest rate to curb high inflation without compromising the country’s recovery from the pandemic.

In an interview in October, Cook said he had struggled for years to publish the newspaper, despite the encouragement of prominent economists such as Milton Friedman and George Akerlof. He said major economic journals typically don’t deal with “patents, economic history or anything related to African Americans”.

Cook was also an advocate for black women in the economy, a profession that is far more diverse than other social sciences. In 2019, she wrote a column in The New York Times stating that “economics is not a pleasant or auxiliary profession for women” and “especially against black women”.

To combat these challenges, Cook took the time to mentor young black women in economics, lead a summer program run by the American Economic Association, and win an coaching award in 2019.

Growing up in a working-class family in Washington, Jefferson focused his research on poverty and monetary policy, according to an interview with the American Economic Association. In an article published in 2005, he concluded that the benefits of a hot economy from reducing unemployment among low-skilled workers outweigh the costs, including the risk that companies will use automation after a reduction in the workforce.

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