Two Black economists, Lisa D. Cook and Phillip Jefferson, have been picked by President Joe Biden to serve on the Federal Reserve’s seven-member Board of Governors amid growing calls to diversify the Fed’s overwhelmingly white ranks.
If confirmed, Cook’s and Jefferson’s addition to the world’s most powerful central bank will help make it more racially diverse than it has been in its 108-year history.
The White House sent the nominations to the Senate late Thursday, a source told Reuters.
The Federal Reserve Board oversees 12 Federal Reserve banks and their 24 branches, helping implement U.S. monetary policy. In the history of the entire Fed system, there have been three Black members of the Board of Governors and one Black Federal Reserve Bank president — Raphael Bostic, Federal Reserve Bank of Atlanta.
The Fed’s mandate is to keep inflation in check (inflation was at 7 percent in December, the highest in 39 years against a target inflation rate of 2 percent), maximize employment (currently around 39 percent and going down) and regulate long-term interest rates.
Cook is a Spelman College alumnus and economist at Michigan State University who has researched racial disparities and labor markets. She was a member of Biden’s transition team. Much of her writing has focused on the effects of racial bias and how “discrimination inflicts a staggering cost on the entire economy.”
According to Cook, racism has held back the U.S. economy for generations. She has done extensive research on how lynching and race riots affected patenting and innovation, according to an earlier report in The Moguldom Nation.
“We absolutely need some sort of reckoning with that,” Cook said during a September 2020 podcast interview on EconTalk hosted by Russ Roberts. “There are many proposals on the table to study the possibility of reparations, many economic proposals being put forward, and I think they should all be taken seriously.”
Cook has also called for a focus on closing the racial wealth gap. When asked by Yahoo Finance’s “On The Move” panel about reparations, however, she seemed to skirt the issue.
“I have seen so many proposals over the decades,” she answered. “Let me be clear, I haven’t just seen one recently, I’ve seen them over the decades. We’d have to address a specific one for me to have an opinion on it because as a macroeconomist I need more of the details, more of the moving pieces…”
In February 2021, Cook tweeted congratulations to wealth inequality expert Dr. William “Sandy” Darity and Kirsten Mullen for their book on reparations, “From Here To Equality,” which received an award from the Association for the Study of African American Life and History (ASALH ).
You can hear how Cook responded to a question about reparations at the 5:30-minute mark of this YouTube video.
Jefferson worked as a staff economist in the division of monetary affairs at the Federal Reserve Board in Washington in the 1990s before joining the faculty of Swarthmore College, where he taught courses on poverty and inequality, among others. In 2019, he became vice president for academic affairs and dean of faculty at Davidson College. He has written about the economics of poverty, and researched whether monetary policy that leads to investment with low-interest rates helps or hurts less-educated workers.
In an interview with the Minneapolis Fed in 2018, Jefferson spoke about his experience as a minority in economics.
“In graduate school at the University of Virginia, I was the only African American in the program the entire time there,” he said, adding that this continued to be the case in his career. “It has been a long, lonely road professionally.”
In 2018, Jefferson wrote “Poverty: A Very Short Introduction,” (Oxford University Press, 2018). An Amazon revoew of the book described it this way: “He shows how a person’s level of vulnerability to adverse changes in their life is very much dependent on the circumstances of their birth, including where their family lived, the schools they attended, whether it was peacetime or wartime, whether they had access to clean water, and whether they are male or female.”
In an online search, the word “reparations” did not appear in Jefferson’s book or other writing or interviews on the record by or about him.
Kevin Hassett, a former top economic adviser to former President Donald Trump, taught at Columbia University with Jefferson. Jefferson worked there as an assistant professor after completing his Ph.D.
“I don’t think there’s a partisan bone in his body,” Hassett said, according to the Wall Street Journal. “He will do exactly what his heart tells him to do, which is what we need right now at the Fed.”
Photo: Lisa Cook, http://econ.msu.edu/faculty/cook/index.php Philip Jefferson, https://www.swarthmore.edu/news-events/philip-jefferson
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