Senate panel to hear from MSU economist, Fed nominee Lisa Cook
Washington — Senators on the banking committee will question Michigan State University economist Lisa Cook on Thursday as one of President Joe Biden’s nominees for the Federal Reserve, and she’s expected to get a grilling from Republican lawmakers.
If confirmed, Cook would be the first Black woman to serve on the Fed’s seven-member board of governors, who serve terms of up to 14 years. The central bank’s mandate is to promote stable prices and maximum employment.
A Georgia native, Cook has taught at MSU since 2005, where she is a professor of economics and international relations. She was named a director of the Federal Reserve Bank of Chicago last month, and previously served as a senior Treasury Department adviser and on President Barack Obama’s White House Council of Economic Advisers 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, 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,” Cook said in testimony submitted to the panel.
Her nomination last month was lauded by bankers, former Federal Reserve governors and top-tier economists. But some conservatives are concerned that she would politicize the nonpartisan board, pointing to “left-wing” social media posts, support for reparations for slavery and tweets advocating for Democratic politicians.
“The Fed is already suffering from a credibility problem because of its involvement in politics and departure from its statutorily proscribed role,” Pennsylvania Sen. Pat Toomey, the panel’s top Republican, said in a statement released before Thursday’s hearing.
“I’m concerned that Prof. Cook will further politicize an institution that must remain apolitical.”
Toomey also said Cook had published little related to monetary policy, and he was unhappy that she refused to endorse the Fed’s pulling back its “easy money” policy when he met with her Tuesday.
MinSen. Tina Smith, a Democrat on the panel, said Republicans are ignoring the qualifications of Cook and her fellow nominees.
“They are again using the ugly GOP playbook that undermines women and people of color with partisan attacks that have little to do with their fitness for the job,” Smith said in a statement. “We need to be honest about what’s going on here.”
Cook in her written testimony 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 is among a three Federal Reserve nominees set to appear Thursday before the Senate Committee on Banking, Housing and Urban Affairs. Committee Chairman Sherrod Brown, D-Ohio, has predicted that they will all be confirmed with bipartisan support.
“I know that there’s opposition. There almost always is to some of them, but I’m confident that it will be bipartisan because of what we saw (in reaction to their nominations), with the kind of broad support that they’ve earned in their careers,” he told reporters.
Cook’s published work has focused in part on policies that boost broad 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 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, including the banking system in Russia and banking reforms in Nigeria, according to her CV.
Cook grew up in Milledgeville, Georgia, which served as the state capital during the Civil War. Family members were active in the civil rights movement, “promoting nonviolent change alongside our family friend, the Rev. Dr. Martin Luther King Jr.,” she told the committee.
She and her sisters integrated their schools and pools. Cook has spoken about how she carries physical scars from that period — on her leg and where hair won’t grow in her eyebrow — from being beaten up during desegregation.
“The sense of discipline, hope and mission instilled in me by my family has taken me from Spelman College to Oxford, the Hoover Institution and Harvard, but I have never forgotten where I came from and the dedicated teachers who supported me,” Cook said.
She said she sought a tenured position as a macroeconomist in the industrial Midwest “in this same spirit of being close to how our economic decisions affect working families.”
“Living in a manufacturing hub during the financial crisis has underscored the effect that deep recessions have on everyday lives,” she added. “And that is one reason I have dedicated much of my career to preventing the next financial crisis.”
Cook earned her doctorate at the University of California, Berkeley, and has two bachelor’s degrees, one from Oxford University where she was a Marshall Scholar and another from Spelman College in Atlanta.