Elon Musk balked at remarks from the Biden administration that diversity would play an important role in the appointment of the next vice chair of the Federal Reserve.
White House Press Secretary Karine Jean-Pierre remarked during a Thursday press briefing that “diversity and representation is really important” to President Joe Biden and confirmed that he will “look at a highly diverse group of world-class economists” as he did for past nominations at the central bank, which is currently seeking to handle record inflationary pressures. Lael Brainard recently departed as vice chair of the Federal Reserve to replace senior adviser Brian Deese as director of the National Economic Council.
“The Cabinet is a majority of people of color for the first time in history. The Cabinet is … majority female for the first time in history. A majority of White House senior staff identify as female,” Jean-Pierre told reporters. “Forty percent of White House senior staff identify as part of racially diverse communities. And a record seven assistants to the Presidents are openly LGBTQ+. So, again, this is something that the President prides himself on, that he actually has taken action to show the diversity of this administration.”
Musk, the chief executive of Tesla, SpaceX, and Twitter, commented on social media that the nomination decision for the next Federal Reserve vice chair “affects the lives of everyone.” He added that “maximum skill with monetary policy is extremely important in this role.”
Maximum skill with monetary policy is extremely important in this role!
A bad Fed decision affects the lives of everyone.
— Elon Musk (@elonmusk) February 23, 2023
The world’s second-richest man and other skeptics of diversity considerations in hiring processes contend that weighing external factors such as racial or sexual identity causes a decline in overall competence as efforts to merely hire the most qualified candidates are deprioritized. The diversity, equity, and inclusion movement, also known as DEI, acquired a larger foothold in the public and private sectors after the social justice movement which followed the death of George Floyd in the late spring of 2020.
Controversy over the possible replacement for Brainard comes as the Federal Reserve increases target federal funds rates, a course of action which could induce a recession as borrowing costs for businesses and consumers increase, in an effort to combat rising price levels. Inflation was charted at 1.4% when Biden entered office in January 2021 and reached 6.4% in January 2023. Real wages have meanwhile fallen 1.5% between January 2022 and January 2023, according to data from the Bureau of Labor Statistics.
There are now more female, black, and homosexual officials at the Federal Reserve than at any other time in the central bank’s history, according to a report from the Associated Press. The Biden administration operates under a “whole-of-government approach to racial equity and support for underserved communities” and mandated last week that members of the Cabinet must create “agency equity teams” to ensure federal workforces are sufficiently diverse.
Biden has announced on several other occasions that he would make critical nomination decisions based on the race and sex of the appointees.