White House Council of Economic Advisers Member Heather Boushey discusses President Biden’s top Fed nominees, their qualifications, and climate change.
ALEXIS CHRISTOFOROUS: President Biden announced three additional nominees for the Federal Reserve Board. Today, a former Fed governor Sarah Bloom Raskin and economists Lisa Cook and Phillip Jefferson, if confirmed, they would round out the central bank's governing body as it prepares to tackle the highest inflation in nearly four decades. Joining us is Heather Boushey, a member of the White House Council of Economic Advisors. And, Heather, welcome back to the show. It's good to see you again. Outline for us briefly why the president believes these three individuals are right for the Fed board at this pivotal time.
HEATHER BOUSHEY: Well, these three individuals are extremely well-qualified, and they're ready to go. And they will be a valuable asset to the Federal Reserve Board. So each of them brings skills and qualifications, years of experience as economists. They've all, in some way, been at various-- played a role at the Fed before, either as a visitor at one of the regional banks or, as Sarah Bloom Raskin, having actually served as a governor before herself.
You know, one of the other things about this slate of candidates is that, when you put it together with the other two nominees Jerome Powell and Lael Brainard that the president announced last year, if they are all confirmed, this will be the most diverse Federal Reserve Board of Governors ever. And that's important because the president is committed to making sure that those who are making economic policy represent the diversity of the American experience. And so that's an important facet of this, as well.
These are extremely well-qualified people. They're ready to go. They have the experience and the skills that they need. And they're going to bring a different set of voices into this really important conversation about getting us to full employment while maintaining price stability.
KARINA MITCHELL: Heather Boushey, thank you for joining us today. A quick question about Miss Raskin. Obviously, she is no stranger to the Fed board. She's been on the Fed before. She-- obviously, the primary concern is monetary policy and taming inflation. But she's been very outspoken on climate, as well. Do you see that becoming more of a focus in the Fed's world as we move forward? Does it become important to the economy?
HEATHER BOUSHEY: Well, one of the things we know is that climate has become important to the economy. In a world with an unstable environment, where we are seeing years where there's over $100 billion in damage due to climate-related disasters, climate is not something that fiscal or monetary policy makers can avoid. The climate is changing. And with it, we need to make sure that our policy toolbox, in all ways around economic policy, is taking into account the risks that climate change is bringing, both the physical risks and the transition risks.
So it is really important that, as we think about economic policy, those risks are not seen as a nice to have. But they really are now a must have in terms of their importance for our-- getting our economy to full employment and ensuring price stability over the long run.
ALEXIS CHRISTOFOROUS: And that's actually one of the Fed's mandates, right? Creating stable prices, but also trying to maximize employment. I know, at least on the part of the White House, President Biden has tapped into the Strategic Petroleum Reserve to try to ease some of these high energy prices that we've been seeing. He's met with the meat industry to talk about possible gouging there. What else can the White House do realistically to put a stop to these high consumer prices?
HEATHER BOUSHEY: Well, we have to remember that the real reason that we have high consumer prices today-- a lot of it does stem from this pandemic and the challenges that that's created for our nation's supply chains and global supply chains. Let's remember that inflation is not a US phenomena. It is actually global. And other countries are seeing high inflation just like we are here in the United States because the pandemic has really challenged the way that we've been doing business. Global supply chains bring a lot of efficiency, but they aren't resilient as we can see in the face of shocks. Like, you know, workers getting sick and not being able to produce necessary pieces across the chain.
And I start there because that has been a core focus of President Biden since the campaign, that we need to make sure that our supply chains are resilient, that Americans can get the goods that they need. And so that's been a focus of this administration all along. And that is one of the ways that we will help to keep prices down.
We've already seen the effectiveness of those policies. You know, we've been doing that work, making sure to keep the ports open on the West Coast, you know, helping truckers be able to do their jobs. And as a result, we were able to see the shelves stocked for Christmas and the holiday season. And that's a really important piece of the puzzle, having government do its part to make sure that the private sector can do its part to get goods on the shelves for consumers.
But at the end of the day, inflation really is the job of the Federal Reserve. And they have their tools to deal with inflation. But the federal government can really deal with the supply-side issues in terms of supply chains but also, as you mentioned, in terms of making sure that markets are fair and competitive, people are paying a fair price, and making sure that we're dealing with the productive capacity issues on the side of families, making sure that families have access to health care or home health aides that they need in order to get to work. All of these things are going to keep prices down for families.
KARINA MITCHELL: And then want to turn your attention-- the president is talking today on infrastructure and building bridges. I understand the long-term benefits of this project. But is this the right time to push it forward because we're dealing with a hot economy? We have a red hot labor force. Does this sort of exacerbate things at a time when we need to take a step back?
HEATHER BOUSHEY: Well, here's the thing. We just talked about the lack of resilience of America's supply chains. This investment that's going to go out from the bipartisan legislation that was passed back in December, it's going to be a $27 billion investment in bridges all across the country. This is the kind of thing that makes sure that our supply chains function, right?
You've got to get goods across American waterways. You've got to have people getting back and forth to work all the things. It is so important to invest in American resiliency in our economy. And that's what these investments and infrastructure and specifically these investments and bridges will do.
I'll also note that it remains the case that employment in the kinds of heavy engineering and construction that goes into making these bridges, that employment remains below its prepandemic peak. We are not seeing wage pressures in that sector of the economy. So there is room there to get out there, hire those workers, put them to work, making sure that Americans can get to work and goods can get to the store shelves because bridges don't fall down. So this is an important piece of building our long-term productivity while, you know, getting workers to work in the here and now.
ALEXIS CHRISTOFOROUS: Want to pivot for a moment to [INAUDIBLE] The Supreme Court yesterday struck down the Biden administration's vaccine mandate for large private employers. What do you think that ruling means for worker productivity in this country, especially at a time when so many industries are grappling with labor shortages?
HEATHER BOUSHEY: Well, we know that this economic crisis that we've been in has been due to the pandemic. That's where it started. Getting the pandemic under control has been job one for this president because it is important to people and families. And as an economist, I think about how important it is to the economy.
So the vaccine mandate was a way of making sure that when people went into work and when people went into American places of business to engage in economic activity, to go shopping, go to-- you know, all the things, that for those large businesses, they knew that people would be vaccinated. They knew that they would be safe. So I think this is a real challenge for the economy.
Now individual employers are going to have to make that decision one by one. But the important thing is that we've seen that, when employers have made that decision, they say that it's been effective. So, you know, the United Airlines CEO wrote a letter, I believe last week, noting how effective that vaccine mandate was for their own business in making sure that they had fewer workers that were out of work sick so that they could do their job.
So the point is is that we need to contain the pandemic so that people can go back to work, so that we can get those goods on shelves, so that people can go back to services. So it remains the case that that is core to our economic recovery.
ALEXIS CHRISTOFOROUS: All right. Heather Boushey of the White House Council of Economic Advisors, thanks for your time today.