Biden appoints 3 to Fed board, including first black woman

FILE - U.S. Undersecretary of the Treasury Sarah Bloom Raskin is introduced ahead of the opening ceremony of the Asia-Pacific Economic Cooperation (APEC) Finance Ministers' Meeting at the Diaoyutai State Guest House in Beijing, in China, October 22, 2014. President Joe Biden has forwarded three Senate nominations for the Federal Reserve Board of Governors, including former Fed official Sarah Bloom Raskin for the top regulatory post, and Lisa Cook, who would be the first black woman to serve as governor.  Biden also names Phillip Jefferson, an economist, dean of faculty at Davidson College in North Carolina and a former Fed researcher.  (AP Photo/Andy Wong, File)

FILE – U.S. Undersecretary of the Treasury Sarah Bloom Raskin is introduced ahead of the opening ceremony of the Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting at the Diaoyutai State Guest House in Beijing, in China, October 22, 2014. President Joe Biden has forwarded three Senate nominations for the Federal Reserve Board of Governors, including former Fed official Sarah Bloom Raskin for the top regulatory post, and Lisa Cook, who would be the first black woman to serve as governor. Biden also names Phillip Jefferson, an economist, dean of faculty at Davidson College in North Carolina and a former Fed researcher. (AP Photo/Andy Wong, File)

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President Joe Biden announced the appointments of three people to the Federal Reserve Board of Governors on Friday, including Sarah Bloom Raskin, a former Fed and Treasury official, for the first regulatory post and Lisa Cook, who would be the first woman. black to sit. the Fed board.

Biden also named Philip Jefferson, an economist, dean of faculty at Davidson College in North Carolina and a former Fed researcher. The three nominees, who will need to be confirmed by the Senate, would fill the Fed’s seven-member board.

They 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.

If approved, Biden’s picks would significantly increase Fed diversity. Cook and Jefferson would be just the fourth and fifth black governors in the Fed’s 108-year history. And for the first time, a majority of the board of directors would be made up of women.

In late November, Biden also nominated Jerome Powell for a second four-year term as Fed chairman and selected Fed board member Lael Brainard as vice chairman.

“This group will bring much-needed expertise, judgment and leadership to the Federal Reserve while bringing a diversity of thought and perspective never seen before to the Board of Governors,” Biden said in a statement Friday.

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 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 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 her work as Maryland’s commissioner of financial regulation, when she oversaw the state’s banks during the 2008 financial crisis.

Kathleen Murphy, CEO of the Massachusetts Bankers Association, worked with Raskin during Raskin’s tenure as Maryland Banking Regulator from 2007 to 2010. Murphy led the Maryland Bankers Group during that time. 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.

Cook 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, running 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.

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AP Writer Josh Boak in Washington contributed to this report.

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This story has been updated to correct contestant Jefferson’s first name. It’s Philippe, not Philippe.

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