Dr. Lisa Cook, one of President Joe Biden’s nominees for the Federal Reserve board of governors, has a history of canceling those critical of Black Lives Matter (BLM), supporting reparations, and advocating for policies that could politicize the Fed.
Biden nominated Cook to serve on the board of the Federal Reserve, the nation’s central bank and the key regulator of the financial industry.
Cook is a professor of economics and international relations at Michigan State University. Cook served as the deputy team lead for the Federal Reserve, Banking, and Securities Agency Review Team on the Biden-Harris Transition Team.
Cook and Sarah Bloom Raskin are both up for consideration for the Board of Governors of the Federal Reserve System. If confirmed, they will be one of seven Fed governors. That will make them voting members of the Federal Open Market Committee, which sets interest rate policy in the U.S. The Senate Banking Committee will hold a hearing this Thursday regarding their qualifications for the position.
Senate Banking Committee Ranking Member Pat Toomey (R-PA) raised serious questions this week regarding Cook and Raskin’s paperwork omissions.
Cook omitted that she gave a presentation in support of H.R. 40, a bill to create a commission to study and develop reparations proposals. Cook later filed a five-page addendum listing hundreds of pages of documents and hours of audio-video material that she initially failed to disclose.
Toomey said in a statement this week, “All of these facts constitute shoddy compliance with the Senate confirmation process, which shows a lack of respect for Congress and raises concerns about the nominees’ willingness to comply with future congressional inquiries and oversight efforts.”
Cook: Systemic Racism Is Pervasive Through American Society
Cook appeared to agree with calls to have the Federal Reserve focus on targeting its federal funds rate to improve the black unemployment rate, rather than the national unemployment rate.
The Washington Post released an article last June in which progressives shared the idea with Biden’s policy team of targeting “not the overall unemployment rate, but the black rate.” Congress created two mandates for the Fed, full unemployment and stable prices.
Michael Linden, now a senior adviser at the Office of Management and Budget (OMB), wrote in June 2020 in response to the Post article, “The Black unemployment rate is a better indicator for the health of the overall economy than a lot of more “standard” metrics that many people tend to use.”
In response to Linden, Cook wrote, “Agree.”
— Dr. Lisa D. Cook (@drlisadcook) June 10, 2020
Cook echoed this sentiment in which she retweeted a similar post that read:
This is huge –
@janellecj and @econjared are making the push for the fed to assess the economy based on the Black unemployment rate – and the idea is getting traction. As Janelle has long argued, if we can push down the Black unemployment rate, everyone is supported.
Narayana Kocherlakota, the former head of the Minneapolis Fed from 2009 to 2015, claimed that making the Federal Reserve “pay attention on a systemic basis to black unemployment” might make Fed policymakers more “cautious” about raising rates. This could put her at odds with the central bank’s plan to raise rates this year and next and make her an advocate for looser monetary policy despite inflation running at the highest level in decades.
Kocherlakota added, “It would make a difference in Fed policymaking if you had more African Americans in top roles.”
Detractors of the progressive proposal believe that it would grant the central bank too many issues to worry about, and it would also politicize the central bank in a way that Fed leaders have tried to avoid doing since its inception in 1913.
Cook claimed in a July 2020 interview with a German podcast that alleged racial disparities with the coronavirus pandemic, health, work, and the environment are “rooted in systemic racism:”
So, absolutely there’s still systemic racism. Talking about all of the disparities associated with COVID-19 for example and all of those are rooted in systemic racism. So, we talk about the health disparities. The work disparities. African Americans and Latinas concentrated in low wage work. That is rooted in systemic racism. The air that we breathe. The environmental racism that leads to asthma and other health conditions, that’s rooted in systemic racism. So, I would say certainly it is there.
Cook said that she believes blacks have to grapple with “occupational segregation” for being in “front-facing occupations,” which force them to choose “between a job and eating.”
She also professed that gross domestic product (GDP) would be much higher if it were not for “racism.”
She said during a February 2021 discussion on diversity and innovation:
All Americans suffer from the effects of racism. As I wrote in my New York Times column in November, racism just doesn’t hurt the intended target, but the economy is trillions of dollars smaller than it should be because of racism. So, we could do a lot whether it is in lending or it’s in employment, we can do a lot more to have a more inclusive economy and a larger economy.
Cook also said that systemic racism led to discriminatory lending with the Paycheck Protection Program (PPP). She said the fact the PPP did not collect demographic data is “exactly the kind of systemic racism and laxity that the folks on the street are talking about” because people are “not even paying attention to how the deck is being stacked.”
Despite Cook’s claim, the government required racial data collection to prohibit racial discrimination in lending. The Small Business Administration (SBA) and the Treasury Department sought to shorten the loan application to facilitate the rapid spread of coronavirus aid.
In a July 2021 paper titled, “Discrimination in Lending? Evidence from the Paycheck Protection Program,” Cook concluded racial biases led to discriminatory lending in PPP.
“Instead, we surmise that any observed discrimination is taste-based, stemming from either conscious or unconscious racial biases rather than being statistical in nature,” she wrote.
Cook also agreed that the “silence” in the economics profession on the Black Lives Matter riots is “violence.”
Same when I was in grad school during the Rodney King protests. Silence. @itsafronomics
— Dr. Lisa D. Cook (@drlisadcook) May 30, 2020
During a Martin Luther King Jr. speech in 2019, Cook charged that “lack of diversity was the root of the financial crisis and the Great Recession.”
She explained, also claiming that the economy would be higher if the number of minorities and women in science, technology, engineering, and math (STEM) fields increased:
Economists studying the economy at the Fed had largely attended the same universities, been trained by the same professors, posed the same questions, were primarily the same gender and race, and experienced the economy in much the same way. She argues that a more diverse pool of people would have analyzed the economy differently, detected signals that would have been missed by others and earlier, and so on. She had some standing to speak, because notes of the Federal Reserve from the period of the crisis reveal that she was the most accurate Fed official on the economy at the time the crisis was happening.
My coauthor and I have a paper that finds that GDP or the size of the economy would be 4.4% higher if the share of women and underrepresented minorities participating in STEM fields increased. We are not being good stewards of our resources and the economy if we are not helping to change the status quo.
During a February 2021 interview, Cook claimed that blacks were the “canary in the coal mine” of the 2008 financial crisis because they received “exotic mortgages when they actually deserved prime mortgages:”
She also claimed that economists could have caught the financial crisis earlier “if we had looked at mortgages that were pitched to African Americans.”
Cook Calls for Reparations
In March 2021, Cook indicated support for reparations, instituting affirmative action at California universities, corporate board diversity quotas, “baby bonds,” and job guarantees. She seemed to suggest that this may not be enough, which is why we need “blue sky thinking” to address the “systemic issues … structural racism and racial disparities.”
There are other big ideas including reparations. The work of [Ta-Nehisi] Coates or Darity and Mullen. Job guarantees, something else that [William] Sandy Darity has worked on. Baby bonds, something that Sandy Darity and Derek Hamilton have done. My basic point here is that blue sky thinking is absolutely necessary and to be relevant to address the systemic issues that big ideas must address structural racism and racial disparities.
When asked during the same webinar, The Cost of Racism, she said the “best thinking” on reparations is found in From Here to Equality: Reparations for Black Americans in the Twenty-First Century by Sandy Darity and A. Kirsten Mullen. Darity estimates that reparations will, at minimum, require “$10 to 12 trillion in federal expenditures.”
Cook admitted that this book is one of her top five favorite books.
Cook also backed H.R. 40, the House Democrat legislation to establish a commission to study and develop preparation proposal for black Americans. She said:
One thing I do support is H.R 40 which would put in place a commission to study this. And I think absolutely what needs to be done . . . That’s certainly one thing that I would pursue. No harm in having a commission to study this.
Cook also serves as the vice chair of the Board of Directors of the leftist Roosevelt Institute, which issued in June 2020 a report calling for reparations.
Cook also praised two pro-reparation advocates for bringing “clarity to the reparations debate:”
— Dr. Lisa D. Cook (@drlisadcook) February 25, 2020
Black Lives Matter Bullying and Anti-Police Rhetoric
University of Chicago economics professor Harald Uhlig in June 2020 criticized the Black Lives Matter movement for its “full fledged-support” of defunding the police.
Cook soon took to Twitter to accuse Uhlig of “racial harassment” and called on Uhlig to be fired as the editor of the Journal of Political Economy and removed from working with students.
She claimed that “free speech has its limits.”
She wrote in a lengthy Twitter thread:
…This is not a philosophical issue. When you disparage MLK, there are real people who are affected: me, Black people and any people who enjoy human rights, your students, or anyone else in ear shot of your comments (and actions). This is real pain you are inflicting.”
I, like others, support your removal as editor of JPE. Plus, I would hope the UC investigation results in removing yr access to students. Racial harassment should be treated like sexual harassment, another means of impeding the free flow of ideas in the economics profession.
I, like others, support your removal as editor of JPE. Plus, I would hope the UC investigation results in removing yr access to students. Racial harassment should be treated like sexual harassment, another means of impeding the free flow of ideas in the economics profession. 13/N
— Dr. Lisa D. Cook (@drlisadcook) June 14, 2020
During her March 2021 webinar, Cook strongly advocated for “fundamental police reforms” that are “more urgent than ever.”
Cook is also so hostile to the police that she applauded the cancellation of the television show, “Cops.”
During an August 2014 interview with the Lansing Online News Radio Show, Cook compared law enforcement in Ferguson, Missouri, to police in Russia and Africa:
And you know I’m more accustomed to seeing—it’s interesting that you should bring up Russia—I’m more accustomed to seeing these heavy-handed tactics in other parts of the world—in Africa, in Russia. But not here. Not here. I mean and you think that this is a hallmark of civilized economies, of civilized societies, that we don’t tear gas our people, that we don’t treat our people this way such that six-year-olds run out of a car saying don’t shoot me. A six-year-old. A six-year-old is a first grader. I can’t imagine it. This should not be a first graders experience. This is outrageous. Not, not in a developed civilized country.
During a September 2020 interview, Cook said that “bail funds for protestors” as one of her favorite charities.
After noting Stacey Abrams’ partisan voting organization, Fair Fight Action, Cook said she had donated money to “bail funds” for protestors “who’ve been thrown in jail for no reason:
Bail funds have come under severe criticism for helping post bail for looters and violent criminals.
Cook has also made several incendiary tweets that could raise questions about her candidacy for the Federal Reserve position.
Cook responded “Yes!” to someone suggesting a New Yorker article that argued that “American democracy has survived Donald J. Trump.”
— Dr. Lisa D. Cook (@drlisadcook) November 7, 2020
Cook retweeted in July 2020 that Gov. Brian Kemp (R) is “literally trying to murder us, especially BIPOC [black, indigenous, people of color] people in South Georgia” in reference to Kemp’s move to ban cities and counties from instituting mask mandates.
He’s literally trying to murder us, especially BIPOC people in South Georgia. Are you KIDDING me? https://t.co/JkDiqCJJa9
— 111 days til release (@jaala__) July 16, 2020
Cook also retweeted someone that claimed that Sen. Tom Cotton’s (R-AR) op-ed to send in the military to restore order in the wake of the Black Lives Matter riots of 2020 would put “my Black @nytimes colleagues in danger.”
The Federal Reserve nominee also retweeted one person that wrote, “With regard to #BlackLivesMatter and #DefundthePolice, old white guys like me should sit down and do much more listening than talking. That goes triple for old white guys in positions of authority.”
— David A. Jaeger (econ) (@DavidAJaeger) June 10, 2020
She also retweeted someone that wrote that “middle siblings have more de-escalation training than cops do.”
middle siblings have more de-escalation training than cops do
— i can be your long lost pal (@PallaviGunalan) June 9, 2020
Cook also retweeted Michael McFaul who said that the Republican National Convention exhibited autocratic behavior:
For those of us who study autocracies, including elections in autocracies, there were a lot of familiar messages, symbols, and methods on display this week at the #RNCConvention. THREAD
— Michael McFaul (@McFaul) August 28, 2020
Cook responded “Wow” in response to the Der Speigel picture depicting former President Donald Trump holding the decapitated head of the Statue of Liberty and President Joe Biden putting the head back on the Statue of Liberty.
Saule Omarova: Part II?
Cook’s nomination serves as the latest instance in which the 46th president has nominated a progressive nominee to further politicize the banking industry.
Cook’s call for reparations, Black Lives Matter bullying, and incendiary tweets may jeopardize her nomination through the Senate Banking Committee, as moderate Banking Committee Democrats have raised concerns about other controversial Biden nominees.
Saule Omarova, Biden’s now-withdrawn nominee for the Office of the Comptroller of the Currency, called to bankrupt the oil and natural gas industry and refused to pledge not to politicize lending in a manner similar to Barack Obama’s notorious Operation Choke Point.
Sens. Jon Tester (D-MT), Mark Warner (D-VA), and Kyrsten Sinema (D-AZ) sunk Omarova’s nomination, and moderate Democrats could sink this nomination as well.
Sean Moran is a congressional reporter for Breitbart News. Follow him on Twitter @SeanMoran3.