May 10, 2022

Toomey: Fed Nominee Lisa Cook Unqualified to Fight Inflation

Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) today urged his colleagues to oppose the nomination of Lisa Cook for Federal Reserve Governor. Speaking on the Senate floor, Senator Toomey said that the American people deserve a serious nominee who understands monetary economics, has a firm grasp on how to combat inflation and restore stable prices, and will not further politicize the Fed.

Ranking Member Toomey’s remarks, as prepared for delivery:

Mr. President, I rise today to speak on the nomination of Professor Lisa Cook to serve as a governor on the Federal Reserve Board.

Two weeks ago, Senate Democrats attempted to cancel a vote on Professor Cook’s nomination. In his floor remarks, the Chairman of the Banking Committee claimed that Senate Republicans have been “AWOL in the fight against inflation for months.”

The irony, of course, is that it was the Democrats that wanted to cancel the vote. Republicans were ready to vote. Not just on Professor Cook, but also on the other remaining Fed nominees.

And so, I objected to cancelling that vote, because we were ready to vote. Professor Cook’s nomination failed by a margin of 47-51.

I then asked for consent to vote on two other Fed nominees—Jerome Powell and Philip Jefferson—who both could have been confirmed to the Fed that day. But then the Democrats objected to having that vote.

Let me be clear: Democrats hold the majority. It has been Democrats who have tied up for months the nominations of the two nominees to the Fed who have unanimous or near-unanimous support Jerome Powell, and Philip Jefferson.

If confirming Fed nominees is so important in the fight against inflation, this Democrat strategy of cancelling votes begs the question: Why wait? Why wait to confirm Powell and Jefferson?

Well, Mr. President, I have a theory. Democrats know that Professor Cook is grossly unqualified to serve on the Fed.

And they don’t want to leave her stranded as the final Fed nominee to seek confirmation. And so they are holding the nominations of Powell and Jefferson hostage in order to push through their preferred candidate.

The Chairman of the Banking Committee has not been shy about his belief that Republicans oppose Professor Cook’s nomination because she is a Black woman. These allegations are cheap, shameful, and offensive. They are also false.

This Congress alone, Banking Republicans have unanimously supported eight Black nominees, six of whom are women: Cecilia Rouse, the first Black woman to serve as Chair of the CEA; Nuria Fernandez; Alexia Latortue; Adrianne Todman; Alanna McCargo; and Ventris Gibson, the first Black woman to serve as director of the U.S. Mint.

Philip Jefferson would be the fourth Black male to serve as a Fed governor. He was voted out of committee 24 to 0.

Banking Committee Republicans did not support these nominees because of the color of their skin. We supported them because they were qualified for the roles to which they were nominated. And that is exactly how Senators should evaluate any nominee—including Professor Cook.

So allow me to rebut a few arguments you’re likely about to hear regarding Professor Cook’s qualifications. Democrats point to Professor Cook’s extensive educational attainments as evidence of her qualifications.

She was a Marshall Scholar and a Truman Scholar. She attended Spelman College, Oxford, and earned a PhD in economics from UC Berkeley.

These credentials are impressive, but they do not, by themselves, qualify her, or anyone, to serve on the Fed —especially at a time when we need a Fed that will tackle the 40 year high inflation that is hurting American families every day.

To that end, Democrats have claimed that Professor Cook is “a leading economist” with years of experience in “monetary policy, banking, and financial crises.” Now, these claims are simply untrue.

First, 75 percent of Professor Cook’s assignment at Michigan State, including her tenure, is in the international relations department—not economics. Second, her experience in monetary policy is literally nonexistent. Not a single one of her publications concerns monetary economics.

When asked to highlight for the Banking Committee her top works on monetary policy, she provided only one: A book chapter on Nigerian bank reforms, originally published 11 years ago.

According to the White House, her main qualification on monetary policy is services as a member of the Chicago Fed’s board of directors. But she only joined the Chicago Fed’s board two weeks before President Biden nominated her to serve as a Fed governor.

Third, her experience handling financial crises has largely been limited to writing a cursory overview of the Eurozone crisis during a brief stint working in the Obama White House and working in Africa over two decades ago.

You don’t need to be an economist to serve on the Fed board. But if you are on the Fed board, you should have some views on monetary policy. You’d think that would be especially true for an economist.

Given Professor Cook’s glaring lack of experience in monetary policy, it is perhaps not surprising that Professor Cook has been unable to articulate any opinion at all on how the Fed should tackle inflation.

During the nomination process, she repeatedly refused to endorse the Fed’s decision to pull back its ultra-easy money policy, and only begrudgingly said that she agreed with the “Fed's path right now as we're speaking.”

Professor Cook’s answers to very basic questions about what the Fed should do to tame inflation, to paraphrase the late Justice Scalia, amount to nothing more than logical applesauce.

Professor Cook has continued to insist that she would need to be confirmed to the Fed before she can have a view on inflation because, in her own words, “we don’t have access to all the data that the Fed has” and “we don’t have access to […] the deliberations at the time they’re being made.” These statements are bewildering for someone who has been nominated to address the most pressing inflationary threat in nearly two generations.

To be clear: The Fed has no “secret” data, as Professor Cook alleges. In fact, monetary policy—including the recent 41 percent increase in the money supply—is very transparent. Every economist in the country right now has an opinion about inflation. Every other nominee to the Federal Reserve has an opinion about inflation.

And since we know very little about her views on inflation, my grave concern is that Professor Cook will serve as an inflation dove on the Fed at a time when American families are being ravaged by price increases.

But you don’t have to take it from me. In a reaction to her nomination hearing, Bloomberg Economics expressed concern with Professor Cook’s wishy-washy answers, writing, “asked if she would endorse the current rates trajectory, she did not provide a straight answer but said she would look at the data once the decision point arrives . . . when asked how she would get inflation under control, she answered: by eliminating the risk of financial crisis.”

The American people deserve better. They deserve a serious nominee who understands monetary economics, has a firm grasp on how to combat inflation and restore stable prices, and will serve without a political agenda.

So, if Lisa Cook doesn’t have any expertise in monetary policy, then why would Democrats want her on the Fed? This brings me to my second point. Professor Cook’s history of extreme left-wing political advocacy and hostility to opposing viewpoints also make her unfit to serve on the Fed.

It is exceptionally important to keep politics out of monetary policy. But unfortunately, we’ve seen the encroachment of politics at the historically independent Federal Reserve.

There are people on the left, including in the Biden administration, advocating that the Fed use its supervisory powers to resolve complex political issues, like what to do about global warming, social justice, and even education policy. These are important issues. But they’re wholly unrelated to the Fed’s limited statutory mandates and expertise.

Professor Cook’s record indicates that she is likely to inject further political bias into the Fed’s work—at a time when we need the Fed focused on fighting inflation. In her statements, tweets, and retweets, Professor Cook has supported race-based reparations, promoted conspiracies about Georgia voter laws, and sought to cancel those who disagree with her views, such as publicly calling for the firing of an economist who dared to tweet that he opposed defunding the Chicago police.

The Fed is already suffering from a credibility problem because of its involvement in politics and departure from its statutorily proscribed role. I’m concerned that Professor Cook will further politicize an institution that must remain apolitical.

I urge my colleagues to vote against the nomination of Lisa Cook.