“We’ve got to fix all of the problems that were created over the last four years,” said Rep. Gregory Meeks (D-N.Y.), a senior lawmaker on the House Financial Services Committee and a member of the Congressional Black Caucus. “We’re going to need every hand on deck.”
Black business leaders that Democrats have floated for potential Biden Cabinet positions include Roger Ferguson, the CEO of financial services giant TIAA and a onetime vice chair of the Federal Reserve, as well as John Rogers and Mellody Hobson, the co-CEOs of Ariel Investments. The emerging debate over whether corporate insiders should be in the mix is shaping up to be a major point of tension within the party as it tries to unify around Biden’s campaign.
“We have seen the effects of corporate control over the American government for our entire lives; it has blocked universal access to health care, real action on the climate crisis and started endless wars that waste taxpayer dollars we need to invest in schools and jobs,” said Emily Mayer, political director of IfNotNow, one of the groups trying to discourage Biden from appointing executives and lobbyists. “We reject the false choice between having the people leading our country represent the diversity of our nation and removing corporate control from our politics.”
The long-running lack of diversity in top economic jobs has come into stark relief as the U.S undergoes a wrenching national debate over excessive police violence against Black Americans and the deep economic disparities that minority communities suffer.
A new study by Georgetown Law Professor Chris Brummer found that there have been only 10 Black political appointees in the history of the federal government’s independent financial regulatory agencies, including the Federal Reserve Board of Governors, the Securities and Exchange Commission and the Federal Deposit Insurance Corp.
President Donald Trump’s Cabinet-level appointments have been mostly white, with HUD Secretary Ben Carson, Transportation Secretary Elaine Chao and SBA Administrator Jovita Carranza among the few exceptions.
As for Biden, the former vice president’s economic platform includes a pledge to improve racial equity in part by promoting “diverse leadership for all federal agencies.”
At the same time, progressives are waging a fight that has been under way in earnest since the Obama administration to keep Wall Street titans out of powerful government posts.
The case made by Sen. Elizabeth Warren (D-Mass.) and her allies is that big business has long held too much influence over Washington policymaking and the way to stop it is by appointing more industry watchdogs to pivotal economic positions. Warren took on President Barack Obama in 2014 when she derailed his appointment of investment banker Antonio Weiss to the Treasury Department.
Since then “personnel is policy” has become a major rallying cry for progressives, who also pressed former Secretary of State Hillary Clinton to swear off appointments of corporate insiders during her unsuccessful run for the presidency in 2016. When Biden became the presumptive Democratic nominee earlier this year, progressive groups asked him to pledge to appoint “zero current or former Wall Street executives or corporate lobbyists, or people affiliated with the fossil fuel, health insurance or private prison corporations, to your transition team, advisor roles, or cabinet.”
Now, some Democrats are beginning to warn Biden that his priority should be helping overlooked communities break new ground in government rather than adopting an anti-Wall Street purity test.
“Had Hillary Clinton won back in ’16, there were several names of African Americans that we wanted to put up for secretary of Treasury, for deputy secretary of Treasury, for the Fed,” Meeks said. “Many of those individuals — not all but many of them — having utilized this rule would have been automatically eliminated.”
Paul Thornell, a lobbyist who served as an aide to former Vice President Al Gore and former Senate Democratic leader Tom Daschle of South Dakota, said “there are voices on the far left that are pushing it, and what I don’t know is who is pushing back.”
“If there’s a recognition you need more diversity in the economic policy roles of a Biden administration, then you’re going to have to be really intentional about going out and finding those people,” said Thornell, who advises Democratic leaders on the Hill about improving diversity in their own staffing. “They typically are not in leadership roles in regulatory bodies. They have not been previously in senior roles in other Democratic administrations. You’re not going to pick them off the Hill.”
A key point made by critics of the anti-Wall Street approach is that minority candidates may be among the first with the opportunity to build wealth for their families, creating pressure for them to enter the corporate world before joining government.
“Our path to becoming a lobbyist often looks different than our colleagues,” said Nicole Venable, who founded a group of women lobbyists of color known as the Black Girl Magic Network. “There is more toggling between the Hill, the administration and ‘downtown.’ For many of us, we have to come out at certain points and work in the private sector to either advance or to make money in order to stay working in politics and policy.”
Aaron Klein, a Brookings Institution fellow who served as the Senate Banking Committee’s chief economist under Democrats, pointed to financial disparities as the reason why the approaches may conflict.
“I do not believe the goals are in tension,” Klein said. “Fighting the revolving door and promoting diversity among regulators are means, not ends. Both fighting the revolving door and promoting diversity share the same goals of a more just economic system. However, as means they do conflict with each other. The root cause of the tension between fighting the revolving door and promoting diversity is the lack of wealth of Black and minority households.”
The net worth of a typical white family was almost 10 times greater than that of a Black family in 2016, according to the Brookings Institution.
Progressives don’t dispute the financial burdens faced by potential minority appointees but they say it should not be an excuse to allow corporate influence to go unchecked.
“To say that we would have to have people who are currently working in private equity or Wall Street or the banking industry to take up senior economic jobs is absurd,” said Jeff Hauser, who scrutinizes executive branch appointments as director of the Revolving Door Project. “You can come up with a very rich set of potential appointees of color without taking on people who are currently and very recently closely identified with high finance.”
The Biden campaign did not respond to requests for comment on the issue.
Sen. Sherrod Brown (D-Ohio), who would become chair of the Senate Banking Committee and play a key role in confirming presidential nominees if the Senate flips to Democratic control, says diversity would be one of his top priorities. Brown is a Wall Street watchdog in his own right who has fought presidential appointees — including Obama’s — because of their ties to the finance industry.
“Senator Brown believes we all need to work to increase the diversity of financial regulators and agency appointees,” Brown spokesperson Alysa James said when asked about concerns around excluding potential appointees. “He stands by that commitment and urges this administration, and future administrations, to nominate diverse candidates and consider diverse perspectives.”
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