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Forget Inflation: Is the Federal Reserve Is Going Woke?

U.S. President Joe Biden. Image: Creative Commons.
U.S. President Joe Biden.

Is the Federal Reserve about to go woke? Inflation in America has hit a 40-year high, but don’t worry. Incoming members to help lead the nation’s monetary policy support a green agenda (not green as in dollars), sprinkled with diversity, equity and inclusion.

The regional Federal Reserve bank has been going woke for some time, and resistant to congressional oversight of its various “racial justice” symposiums.

Now President Joe Biden has nominated Sarah Bloom Raskin and Lisa Cook—who critics say are likely to take the Fed outside of its two mandates of price stability and maximum sustainable employment.

Raskin called for the Fed to use its authority over banks to curb American energy production and punish fossil fuel companies. Cook says the United States is systemically racist and calls political opponents fascists. Biden also nominated Phil Jefferson, a vice president at Davidson College who doesn’t seem to be drawing controversy.

On Tuesday, Republicans on the Senate Banking, Housing, and Urban Affairs–led by ranking member Sen. Pat Toomey of Pennsylvania–boycotted the confirmation vote to stall Raskin’s position on the board of governors.

Keep in mind that the president disappointed some on the progressive wing of his party for re-appointing Federal Reserve Chairman Jerome Powell—a Trump appointee—to a second four-year term.

Raskin is the spouse of Rep. Jamie Raskin, D-Md. While there are policy issues surrounding her nomination, there’s also a pesky ethics issue. The American Accountability Foundation, a watchdog group, filed a complaint with the Office of Congressional Ethics, alleging the congressman did not report the $1.5 million profit that his wife made in a stock sale until eight months later.

Sarah Bloom Raskin being married to a congressman is not a disqualifier. She has her own record of accomplishment, having served as the Maryland commissioner of financial regulation under then-Gov. Martin O’Malley, from 2007 to 2010 and as a former U.S. Treasury Department official. She was also a frequent commentator on financial affairs.

In a May 28, 2020, op-ed in The New York Times, she wrote: “The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment. The decision to bring oil and gas into the Fed’s investment portfolio not only misdirects limited recovery resources but also sends a false price signal to investors about where capital needs to be allocated.”

Her solution was to put the squeeze on banks that serve as a money source for banks.

“The Fed’s unique independence affords it a powerful role, and its mandate includes ensuring both the stability of the financial system and full employment. Climate change threatens financial stability; addressing it can create economic opportunity and more jobs,” the Raskin op-ed says.

This has prompted concern among conservative critics of her nomination.

“If confirmed as the primary bank supervisor and regulator on the Fed’s board, Raskin could influence decisions for the board to file cease and desist orders or shut down banking activities,” says a coalition letter from 11 conservative-leaning organizations to members of the Senate Banking Committee. “Through these types of enforcement actions, Raskin can attempt to punish banks that provide financing to energy businesses, an act that will further cripple the United States’ energy infrastructure and cede our energy independence to foreign powers. If Raskin is willing to target the oil and gas industry, it also calls into question what other industries might be targeted.”

The coalition letter states that Cook, an economist at Michigan State University, has done little writing on monetary policy but has talked and written considerably about racism and sexism. She also said that former President Donald Trump is “definitely a fascist.”

“Cook has made repeated inflammatory remarks on racial equity and fascism which exemplify her demeanor and where her focus would be at the Fed,” the letter says. “Cook would likely expand the boundaries of the Fed’s authority to focus on race and use big government to subsidize certain individuals over others.”

The groups whose leaders signed onto the coalition were from Americans for Tax Reform, the American Consumer Institute, 60 Plus Association, American Accountability Foundation, Less Government, Shareholder Advocacy Forum, Center for a Free Economy, Center for Freedom and Prosperity, Open Competition Center, Digital Liberty, and Independent Women’s Voice.

Perhaps ultimately these nominees will be approved, but not without showing what the priorities of the Biden administration and nominees are at a time when prices are soaring.

Fred Lucas is chief national affairs correspondent for The Daily Signal and the author of “Abuse of Power: Inside The Three-Year Campaign to Impeach Donald Trump.”

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Fred Lucas is chief national affairs correspondent for The Daily Signal and co-host of "The Right Side of History" podcast. Lucas is also the author of "Abuse of Power: Inside The Three-Year Campaign to Impeach Donald Trump."