President Biden’s nominee for governor of the Federal Reserve has said she supports reparations for black Americans to compensate for years of economic discrimination and slavery.
“Everybody benefited from slavery. Everybody,” nominee Lisa Cook said on a September 2020 EconTalk podcast, Fox Business reported.
“So, I think that we absolutely need some sort of reckoning with that,” the Michigan State University economics professor added. “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 a long history of supporting “race-specific” financial compensation “because the injury was race-specific.”
Biden announced Cook’s nomination on January 14. She would become the first woman to be on the seven-person Board of Governors, if elected.
The president himself supported the study of paying reparations during the 2020 campaign. He has also backed a House bill that would form a panel to study the issue.
Last March, Cook said she supported the House bill while speaking at the University of California’s Haas School of Business.
“One thing I do support is H.R. 40, which would put in place a commission to study this. I think that’s absolutely what needs to be done,” she said. “It’s difficult not to comment on a particular plan because there could be many different plans to achieve the kinds of reparations that [two authors] are suggesting.”
However, opponents of reparations argue there is no mechanism for fairly distributing payments and that compensation is unnecessary given the improved state of racial equality in the country over the last several decades.
William Darity Jr., an economist at Duke University who has advocated for reparations, estimates such a policy would cost the U.S. government some $12 trillion.
“I can’t imagine a more divisive, polarizing or unjust measure than one that would, by government force, require people who never owned slaves to pay reparations to those who never were slaves based not on anything they’d done, but because of what race they were born,” said Representative Tom McClintock (R.,Calif.).
Meanwhile, Cook also supports bail funds that pool money to post bail for people who have been arrested.
Senator Pat Toomey (R., Pa.) has sounded alarms about Cook’s nomination. Cook has worked on the Opportunity & Inclusive Growth Institute at the Minneapolis Fed, an advisory board that Toomey says has created work “heavily laden with political and value judgments” and has engaged in improper “political advocacy.”
“The Minneapolis Fed increasingly has focused on politically charged causes, like racial justice activism, that are wholly unrelated to the Federal Reserve’s statutory mandate,” Toomey wrote in a letter last year.
More recently, Toomey cautioned that “many on the Left want to misuse financial regulation to politicize capital allocation and advance a far-left agenda.” The senator expressed “concerns with the significant lack of diversity in geography and professional experience in your [Biden’s] slate of nominees to serve on the Board of Governors of the Federal Reserve System.”
The Senate Banking Committee is set to meet Thursday to decide whether Cook’s nomination and two other Fed nominees will advance to a full Senate vote.
Biden has lauded Cook as a “talented economist with decades of experience working on a broad range of economic issues.”
The president said in a statement announcing the nomination that Cook and her fellow nominees “will bring much needed expertise, judgement, and leadership to the Federal Reserve while at the same time bringing a diversity of thought and perspective never seen before on the Board of Governors.”