MSU's Cook makes history as first Black woman on Fed Board of Governors
Washington — Michigan State University economist Lisa Cook made history after the U.S. Senate voted along party lines Tuesday to approve her nomination to the Federal Reserve, where she will be the first Black woman to serve on the Board of Governors.
The vote was 51-50, with Vice President Kamala Harris breaking a tie. Senate Democrats lauded Cook's credentials, and Republicans cast doubt about her economic views and independence from partisan politics.
If the Senate goes on to confirm Fed nominee Philip Jefferson to the Fed, it would be the first time the board has included more than one Black governor at once, according to research by Kaleb Nygaard at the Yale Program on Financial Stability.
Democrats have been pushing for nearly four months to confirm Cook, whose pick was lauded by bankers, former Federal Reserve governors and top-tier economists but has faced united opposition from Senate Republicans. The central bank's mandate is to promote stable prices and maximum employment.
Tuesday was Democrats' second attempt after senators tried and failed to advance Cook's nomination two weeks ago by a vote of 47-51. That occurred amid the absences of two Democratic senators who had COVID-19, as well as Harris.
"Dr. Lisa Cook is the right person at the right time to serve at the Federal Reserve," said Sen. Debbie Stabenow, D-Lansing. "Today’s confirmation comes at a moment when the Federal Reserve needs the best and the brightest to help us recover from the COVID-19 pandemic. Dr. Cook’s perspective and experience is unmatched and will be instrumental in our nation’s recovery."
A Georgia native, Cook has taught since 2005 at MSU, where she is a professor of economics and international relations. She was named a director of the Federal Reserve Bank of Chicago in January and previously served as a senior Treasury Department adviser and on President Barack Obama's White House Council of Economic Advisors from 2011-12.
"The depth and breadth of my experience in both the public and private sectors qualify me to serve as a Federal Reserve governor," Cook said at her hearing in February. "And should I be confirmed, I would be honored to work with my colleagues to help navigate this critical moment for our nation’s economy and the global economy."
Pennsylvania Sen. Pat Toomey, the top Republican on the the banking panel, for months has urged his GOP colleagues to reject Cook, saying she would politicize the nonpartisan Board of Governors and that she doesn't have enough expertise in monetary policy, points he reiterated in a floor speech Tuesday. Other GOP senators have called her economic views "radical."
Senate Minority Leader Mitch McConnell on the floor Tuesday again claimed that Cook has "no proven expertise in modern economics" or fighting inflation.
"Professor Cook is a proven partisan who has promoted left-wing conspiracy theories and called for a fellow academic to be fired because that person did not support defunding the police," McConnell said. "The American people deserve an independent, nonpartisan inflation fighter for this important post."
Democratic Ohio Sen. Sherrod Brown, chair of the banking committee, said Thursday that hundreds of prominent economists have sent letters to the panel supporting Cook's nomination.
"She understands how economic policy affects all kinds of different people in different parts of the country, from the rural South where she grew up to the industrial Midwest where she built her career," Brown said.
Senate Majority Leader Chuck Schumer, a New York Democrat, has said GOP senators are working to obstruct her "purely for political purposes."
"Her qualifications are irrefutable," Schumer said last month.
"Michigan’s own Dr. Lisa Cook has the experience and leadership needed to help strengthen our economy and support families across our state," said Sen. Gary Peters, D-Bloomfield Township. "I was proud to support her historic confirmation and am confident her perspective will serve our nation well on the Federal Reserve.”
Inflation jumped 7.9% over the past year, according to a March report by the U.S. Department of Labor, the sharpest spike since 1982. Critics have argued the Federal Reserve waited too long to combat inflation as the board last week raised its benchmark interest rate by a half-percentage point — its most aggressive move since 2000.
Cook at her March hearing said she backed the direction taken by the Fed to counter the highest inflation in decades, but she didn't detail how she would vote on policy or what other tools she would support using to counter inflation.
In response to GOP questions about her expertise in monetary policy, Cook pointed to her publications related to banking reform and recognizing systemic risk, as well as her doctorate in economics from the University of California, Berkeley.
Cook described her economic specialty as managing financial crises, noting her post with the Financial Crisis Think Tank at the U.S. Department of the Treasury and that she was in charge of managing the eurozone crisis during her time on the White House Council of Economic Advisors.
Cook's published work has focused in part on policies that boost economic opportunity and innovation, including how tackling inequality can promote economic growth and the effects of gender and racial disparities on wealth inequality.
A 2014 research paper studied patents and found violence against Black Americans between 1870 to 1940 had depressed their innovation, suggesting that political conflict can affect the direction and "quality of invention of economic growth over time."
She's also written about supporting small businesses during the COVID-19 pandemic and in the area of international finance "in places of uncertainty and emerging markets and developing countries," she said at her hearing.
Cook in her hearing testimony also said she'd follow the example of economist and former Fed Chairman Paul Volcker, "whom I greatly admire for his unwavering dedication to a nonpolitical and independent Federal Reserve."
"My approach to complex problems is to be guided by facts, data and analysis and to work collaboratively," she said. "I have served in the administrations of presidents from both parties and when I make decisions, I do so based on the facts and not politics."
Cook's nomination and other Fed nominations were held up for about a month earlier this year after Republicans on the banking committee boycotted meetings over their objections to one of Biden's picks, Sarah Bloom Raskin, who has since withdrawn her nomination.
Biden this month nominated Michael Barr, the dean of the University of Michigan's Gerald R. Ford School of Public Policy, to be the Federal Reserve's vice chairman of supervision.
Before becoming dean, Barr was an assistant Treasury secretary for financial institutions during the Obama administration who helped design the 2010 Dodd-Frank regulations after the devastating 2008 financial crisis.
Barr is also a Rhodes Scholar who clerked for former Justice David Souter on the Supreme Court and served during the Clinton administration at the White House, the Treasury Department and the State Department.