Forget the ‘veepstakes’ — Biden should make history with finance picks

As COVID-19 takes its toll across a divided nation, bad economic news is pouring in from every corner of the country. Vice President Biden has been here before. He campaigned with President Obama in 2008 as the U.S. economy and Wall Street collapsed. This time, however, it’s Biden’s turn to pick a running mate. 

Should he claim victory in November, Biden has pledged to build a top-notch Cabinet that “will look like the country.” That’s important, as diverse voices produce better policy outcomes for everyone.

After promising last month to pick a woman to be his running mate, the former VP has recently gone further, saying he ”would consider announcing some Cabinet members before the election.” While naming actual nominees now would be politically fraught, he should instead pledge to fill some of the high-ranking economic and financial posts – for the first time – with minorities. 

The list of high-ranking administration jobs that have yet to see an African American, Latino, Asian or Native American includes secretary of the Treasury, as well as the chairs of the National Economic Council (NEC) or the Council of Economic Advisors (CEA). Most influential of all is chair of the Federal Reserve System, which has been occupied by a woman, Janet Yellen, but never a person of color. Nearly every demographic has been confirmed in some or all of the above-mentioned jobs — men, women, old, young, rich, poor, rural, urban and white. That leaves one glaring exception.

Why is this important, beyond making history and breaking barriers? 

First is to acknowledge the reality of demographics. With families of color soon to constitute the majority of the U.S. population, having a Cabinet that better reflects society is a no-brainer. Additionally, while global chronic wealth and income inequality have become a defining issue of our times, and the current crisis is sure to exacerbate it, the truth is, race defines inequality in the United States. 

According to the Urban Institute, “In 1963, the average wealth of white families was $121,000 higher than the average wealth of nonwhite families. By 2016, the average wealth of white families ($919,000) was over $700,000 higher than the average wealth of black families ($140,000) and of Hispanic families ($192,000).”

Next is policy. While the agenda will ultimately be the president’s to set, the economic and political actualities of 2021 will most likely entail stimulus schemes and a re-boot of Trump’s tax bill that favored the wealthy and big business. This reality would heighten the importance of having minority representation in the executive posts whose most important function is counseling and devising new policies.

From homeownership and access to capital to retirement, history is rife with well-meaning policy efforts that had unintended consequences because policymakers failed to fully consider how people of all backgrounds would ultimately be impacted. 

Prosperity Now (formerly CFED) finds that “more than half of the $400 billion provided annually in federal asset-building subsidies…flow to the wealthiest 5 percent of taxpaying households. Meanwhile, the bottom 60 percent of taxpayers receive only 4 percent of these benefits and the bottom 20 percent of taxpayers receive almost nothing. Black and Latino households are disproportionately among those receiving little or no benefit. Unless key policies are restructured, the racial wealth gap—and wealth inequality in general—will continue to grow.” 

As the old saying goes, “personnel is policy.”

Finally, in this day and age, despite any semblance of parity, there are simply too many experienced, successful and knowledgeable women and men of color spread across banking, finance and academia for this streak to continue. To think otherwise is to be ill informed. We simply need the will to make change a priority.

Amid the coronavirus outbreak, the Biden campaign can’t lose focus of the bigger picture. A commitment to an inclusive Cabinet would reflect the spirit of Biden’s campaign. Pledging to start addressing economic justice with the top decision makers at one or two of the top economic and financial policy setting institutions makes sense. The fact that these top tier (and most influential) posts have never been led by a minority is a shame. Pledging to nominate minorities to these positions is an idea whose time has come.

Jason Gold is the managing director at the Progressive Policy Institute, where he works financial markets and economic policy. Follow him on Twitter at @jasongoldDC.