With inflation raging, it's public enemy number one in all the polls, with a heavy dose of consumer pain, when buying groceries or gasoline or home heating fuel, you would think President Biden would appoint people to the Federal Reserve that would understand the importance of curbing inflation—think Ronald Reagan and Paul Volker 40 years ago —but no. Once again, Biden has gone "big woke."
"Big woke" means Green New Deal, climate is an existential threat. "Big woke" means equity, diversification, and gender and racial disparities.
Remember last spring Harvard economist Larry Summers said that he feared a whole new generation of central bankers who are much more interested in climate risk and woke, social theories than fighting inflation? He was right.
One of Joe Biden's Fed nominations, Sarah Bloom Raskin, was on record wanting the Fed to exclude fossil fuel companies from their emergency lending programs during the height of the pandemic.
She said, "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."
Elsewhere, she has repeatedly said the Fed should allocate capital away from fossil fuel companies, but the Fed is not in the business of credit allocation, nor does its congressional mandate on stable prices and low unemployment include climate change. Ms. Raskin has her own radical agenda.
By the way, if the Federal Reserve supervised banks to stop lending to oil and gas and coal companies, energy prices would go up even more because drilling, production and investment would drop even more than they have already.
Oil is back at $90 a barrel. Gasoline at the pump is $3.47, 40% above a year ago. In other words, contrary to the Fed's mission and ignoring the current high inflation reality, Raskin's radical left woke attack on fossil fuels would raise inflation substantially more and this view should disqualify her—just saying.
Then, she's also got an ethics problem with her lobbying the Federal Reserve for a fintech company called Reserve Trust. She did this lobbying after leaving the Federal Reserve and then leaving the Obama Treasury and coveted Fed privileges that no other fintech company has every gotten. She also made a million and a half bucks on stock options from that company and failed to report it on time.
We will talk more about this with our lead guest, Sen. Pat Toomey, ranking member on the Banking Committee. There's another "awokening" from Biden for a Fed Board position.
Professor Lisa Cook from Michigan state is another radical left-winger.
I will quote economist John Cochrane, from the Hoover Institution, who scanned her publications and said, "you will find essentially nothing related to monetary policy, monetary effects on employment, interest rates, inflation, financial regulation or other traditional Fed topics."
Cochrane also points out that Ms. Cook's most cited paper is "Trade Credit and Bank Finance: Financing Small Firms in Russia." How good is that? Shades of Omarova and Moscow State University.
Here's another one. Ms. Cook has called for replacing the unemployment rate as a key Fed metric with a mandate for the Black unemployment rate. In other words, throw away 88% of the available info on the labor market. This is nowhere near the mainstream of macroeconomic thinking.
By the way, Cook hates Donald Trump, despite the fact that under Mr. Trump's policies came the lowest Black unemployment rate in the history of that statistic. Yup, but that didn't stop her from calling him a fascist and saying his administration has led America down the path to genocide, similar to the Holocaust.
She believes America is racist. She supported bailing out rioters. She's called Nascar folks uneducated rednecks and also favors slavery reparations.
Now, it's a free country and I respect Ms. Cook's freedom to say all these things, even though I find her views to be hideous and anti-American, but did the Bidens have to appoint her to the Federal Reserve Board? Our nation's central bank, which controls the money supply and inflation and is a huge influence on the U.S. and world economy? Really? This is the best they could find? Oh my goodness.
This article is adapted from Larry Kudlow's opening commentary on the February 9, 2022, edition of "Kudlow."