Close by the editorial staff
The editorial office
April 23, 2021, 6:41 p.m. ET
The Federal Reserve Board building in Washington, DC
Leah Millis / Reuters
The racist politicization of everything continues and now extends to monetary policy. White male dominance at the Federal Reserve is a pressing issue, according to a new report from the Brookings Institution.
“A growing chorus has urged the Fed to diversify its ranks at all levels to better reflect the heterogeneity of the United States,” the report said Remarksadding, “In all of system history, there have been only three black members of the Fed’s Board of Governors, only one President of the Black Federal Reserve Bank, and only three non-white Presidents of the Federal Reserve Bank.”
The authors suggest this because the directors of the 12 regional Fed banks that elect the presidents are mostly white businessmen. Bank directors are predominantly white, predominantly male, and predominantly from the business community in their districts, with little minority, female, or economic involvement – labor, nonprofits, academia – with important contributions to Fed governance, ”the report said . The promotion of presidents of the reserve bank from within creates “a risk for groupthink and intellectual homogeneity”.
The authors exaggerate the homogeneity. In 2018 around 40% of directors were women and 30% were minorities. Ah, but organized employee representatives and PhD students in economics each make up only 5% of directors. Liberals want to add more non-business people who believe in putting social justice and climate at the heart of monetary policy.
There is no doubt that diverse experiences and perspectives can be valuable. But if the Fed is suffering from groupthink, it is not because of gender or race. It is the lack of different views on monetary policy.
The current line-up of Fed governors and regional presidents seems to have the most consistent position of all time that we can recall. The first speeches by the Fed’s newest governor, Christopher Waller, were particularly noteworthy for cheerleading the politics of his new home team. In Ben Bernanke’s years, however, the regional banks no longer had presidents who questioned the orthodoxy of Fed staff. That includes Atlanta Fed President Raphael Bostic, an economist who happens to be black.
Disagreement for its own sake doesn’t help, but if the Fed were to conduct one of the most radical monetary policy experiments in history, you’d think there would at least be more debate. The race and gender focus obscures the fact that the Fed is really about the value (not the color) of money.
Wunderland: More than 100 corporate executives conducted a Davos on laptop to denigrate the Republicans and validate their progressive references. Image: Getty Images / iStock Photo
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Published in the print edition on April 24, 2021.