Biden’s economic team takes shape and it is full of firsts

United States President-elect Joe Biden on Monday continued to make good on his diversity pledge, announcing a senior economic team of heavyweights that includes former Federal Reserve Chair Janet Yellen as his nominee for secretary of the US Department of the Treasury.

In a radical departure from President Donald Trump, who largely picked white men for key economic posts, Biden has selected a lineup that includes women and minorities who, if confirmed, will shape policies during a time of profound economic upheaval for the nation as the coronavirus pandemic widens inequalities.

“This team is comprised of respected and tested groundbreaking public servants who will help the communities hardest hit by COVID-19 and address the structural inequities in our economy,” Biden said in a statement.

The pandemic has been exacerbated by long-festering inequalities that have only worsened as the economy has struggled to recover.  Closing those gaps to make the economy more resilient to future disruptions is at the heart of Biden’s ‘build back better’ recovery blueprint.

In a stunning double-header for the history books, Yellen, a labour economist who became the first woman to head the US Federal Reverse, is now poised to become the first woman to lead the US Treasury.

Yellen marked the occasion by opening a Twitter account with a profile that reads: “Current nominee for Treasury Secretary. Former Fed Chair. Always an economist.”

She also composed an inaugural tweet, in which she promised to “work every day towards rebuilding” the American dream “for all” in her role as the head of the Treasury.

We face great challenges as a country right now. To recover, we must restore the American dream—a society where each person can rise to their potential and dream even bigger for their children.

As Treasury Secretary, I will work every day towards rebuilding that dream for all.

— Janet Yellen (@JanetYellen) November 30, 2020

 

Poised to join Yellen at the Treasury is Wally Adeyemo, Biden’s nominee to serve as deputy secretary. If confirmed, he would become the first African American to hold that post.

Biden’s pick for director of the Office of Management and Budget is Neera Tanden, CEO of the left-leaning think-tank Center for American Progress, placing her on track to become the first woman of colour and first South-Asian American to lead the OMB.

Labour economist Cecilia Rouse is nominated to serve as chair of the Council of Economic Advisers. If confirmed, she will become the first African American and the fourth woman to lead the council.

Jared Bernstein, who served as chief economist to Biden during the Obama administration, and Heather Boushey, the CEO, and cofounder of the Washington Center for Equitable Growth, have also been tapped to serve on the Council of Economic Advisers.

All of these nominees must be confirmed by the Senate, where Republicans still wield a majority. But that could flip pending the outcome of two Senate runoff races in Georgia on January 5.

When the team members are in place, they face a daunting challenge. The nation’s unemployment rate is still nearly double February’s pre-pandemic level. Only a little over half of the 22 million jobs lost to lockdowns in March and April have been recovered.

Initial claims for unemployment benefits filed with states – a proxy for layoffs – are on the rise again, and there are other indicators that economic recovery is slowing.

Struggling businesses and households are also bracing for key pandemic relief programmes to expire at the end of this year, including a moratorium on evictions, unemployment benefits for gig workers and others who are self-employed, and student loan debt repayment relief.