Chris Brunet on February 2, 2022
Three of President Joe Biden’s picks to regulate the banking industry will be grilled in front of the Senate on Thursday amid partisan tensions and looming questions over their respective qualifications.
Sarah Bloom Raskin, Lisa Cook, and Philip Jefferson were each appointed on Jan. 14. to serve on the Federal Reserve System’s Board of Governors. They will now face questioning from the Senate Banking Committee on Feb. 3, followed by a full Senate vote on Feb. 15.
Their fates are yet uncertain. Democratic Chairman of the Senate Banking Committee Sen. Sherrod Brown maintains that “we’re going to confirm all three of them,” while Sen. Kevin Cramer contends that “No, I don’t think it will be a bipartisan confirmation process. My hope is that we fight like heck as Republicans to get some moderate Democrats on board and stop one or two of these.”
The vector of attack from the Republicans varies for each nominee.
“I have on solid sourcing at least one Republican US Senator will ask [Lisa Cook] to explain her CV,” writes Claudia Sahm, director of macroeconomic research at the Jain Family Institute. “She is going to get asked by a US Senator about her CV because of [the Daily Caller News Foundation],” wrote Sahm in another tweet, once again referring to a DCNF investigation that found many economists view Cook as unqualified.
Following the DCNF investigation, Cook was criticized and praised to varying degrees by her peers, including at least two winners of the Nobel Memorial Prize in Economic Sciences, Joseph Stiglitz and Paul Romer. Sen. Elizabeth Warren says that “the attacks are racist, sexist and just plain dumb.”
Contrasting Warren’s accusation of racism is Patrice Onwuka, a senior policy analyst at Independent Women’s Voice, who said that “Lisa Cook would push the Fed to pursue a divisive, unproven racial justice agenda that prioritizes equity — not equality — at a time when society aims to root out race-based discrimination.”
Media outlets such as Fox, Washington Post, Washington Examiner, Bloomberg, Breitbart, Huffington Post, Wall Street Journal, CNBC and Financial Times have covered the unfolding battle extensively. Various reports have highlighted Cook’s purported “activist” stance, including her previous support for reparations.
“I could list at least 200 macroeconomists in the U.S. better qualified than she is for the job,” an anonymous macroeconomics professor at a top 10 ranked economics department told the DCNF. “Even conditional on being an African American female, Heather Tookes is much more accomplished, both in terms of publications and citations.
“If Tookes were the nominee, I would have said: ‘well, maybe a bit young, but let’s take a chance.’ Nominating someone like Tookes is helping to diversity the Fed respecting merit. Cook is just a political operative,” the professor added.
The professor explained to the DCNF that they are “afraid to speak up” along with their colleagues, and opted to remain anonymous.
Whereas criticisms of Cook are broad, critics of Bloom Raskin have tended to narrowly focus on her purported hostility towards the energy industry.
“My biggest concern is with Sarah Raskin and the nature of that concern is her longstanding, repeated, explicit and recent advocacy for the financial regulators generally and the Fed, in particular, to allocate credit specifically away from fossil-fuel-burning industries because she thinks the risk from climate change is so imminent that that’s necessary,” said Sen. Pat Toomey in an interview on Wednesday.
Toomey’s concerns echo those of 25 state financial officers, who wrote to Biden on Monday urging him to withdraw Raskin from consideration.
“I was searching in vain for deep knowledge of monetary economics or monetary policy expertise in these people’s backgrounds,” Geert Bekaert, a professor of finance and economics at Columbia University, told the DCNF. “I thought monetary policy was supposed to be independent of politics, but these seem 100% political nominations.”
Lost in all the partisan fighting over Cook and Bloom Raskin is Jefferson, who is widely seen as eminently qualified and apolitical. He has received little to no criticism in the week leading up to his confirmation hearing. “I don’t think there’s a partisan bone in his body,” said Kevin Hassett, former President Donald Trump’s Council of Economic Advisers chair, in reference to Jefferson. “He’s going to be an easy confirm.”
CBS News reported that Sen. Ben Luján, who suffered a stroke on Jan. 27, won’t return to work for another four to six weeks. Until then, Senate Democrats have lost their majority in the Senate and now lack the votes needed to confirm any nominees on their own.
“It’s just a reminder that in a 50-50 Senate any unexpected development could be a challenge to our moving forward on an agenda that the Democratic caucus shares,” said Sen. Chris Coons.
Facing renewed uncertainty on the eve of the confirmation hearing, the Senate Banking Committee will nonetheless convene Thursday morning.
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