Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio. Hey,
Speaker 1: this week on the podcast, I have a special guest.
Speaker 1: Her name is Lisa Cook, and she is an economist
Speaker 1: who has done some absolutely fascinating research on all sorts
Speaker 1: of really interesting things patents, innovation, gender, race, inequality, just
Speaker 1: really really fascinating. You know, Normally, when I prep for
Speaker 1: an interview, I go in kind of knowing a lot
Speaker 1: about the person and maybe I'll find one or two
Speaker 1: little interesting tidbits to ask them. But as I'm doing
Speaker 1: the research and working off of some of the questions
Speaker 1: that bat Nick got to me, we ended up finding
Speaker 1: these really amazing research papers that she put together, some
Speaker 1: stuff that just the data is shocking, and it's amazing
Speaker 1: that nobody thought to even look at this before. She
Speaker 1: found out that the number of African American women who
Speaker 1: were earning their PhD was under one percent of the
Speaker 1: total PhDs. That's a pretty shocking statistic. And her research
Speaker 1: on patents and the impact of racism and what she
Speaker 1: called extra judicial executions or lynchings um has a huge
Speaker 1: impact on on what patents are awarded and subsequent innovation
Speaker 1: in an economy. Some of the stories she told about
Speaker 1: taking what she found two various Nobel laureate economists, expecting
Speaker 1: them to trash her research, and they're all like, this
Speaker 1: is amazing. You gotta go publish this. Milton Friedman, champion
Speaker 1: free market, said, Hey, this is interfering with the free market.
Speaker 1: You have to publish this. This is absolutely fascinating. It's
Speaker 1: a really incredible tale. She's gotten a really fascinating background.
Speaker 1: If you're at all paying attention to the news these days,
Speaker 1: and you're interested in institutional racism or sexism, or why
Speaker 1: the economy works better for some people than others, you're
Speaker 1: gonna find this to be really a fascinating discussion, data based, objective,
Speaker 1: and really really intriguing. So, with no further ado, my
Speaker 1: conversation with Michigan State Universities Lisa Cook. This is Masters
Speaker 1: in Business with Barry Ridholts on Bloomberg Radio. My special
Speaker 1: guest this week is Lisa Cook. She is the professor
Speaker 1: of economics and International Relations at Michigan State University. She
Speaker 1: is a Marshall Scholar who got her pH d in
Speaker 1: economics at Berkeley. She was a researcher for the Council
Speaker 1: of Economic Advisors under President Obama, Lisa Cook, Welcome to Bloomberg.
Speaker 1: Thank you so much so, Lisa, I have to ask
Speaker 1: what drove you towards a career in economics, Verry. That's
Speaker 1: a really good question, and I have a couple of answers.
Speaker 1: One is not as I have looked back on it
Speaker 1: over the last year or so, I think one of
Speaker 1: the important trips that we took every year was to
Speaker 1: a place called Soul City, North Carolina. My cousin, Employed McKissick,
Speaker 1: was starting the city from scratched. He was He was
Speaker 1: a protester along with Martin Luther King and marched with him.
Speaker 1: Was in the class of at Morehouse College, integrated the
Speaker 1: University of North Carolina. You know, just really active on
Speaker 1: many different fronts. But he was building a city from scratch.
Speaker 1: And this is something we saw every summer, from one
Speaker 1: trailer to two trailers, to three trailers, to a building
Speaker 1: that housed IBM, two more buildings. And what he had
Speaker 1: to do was to essentially plan an economy. And I
Speaker 1: think that that notion is something that really started turning
Speaker 1: the wheels for me. How do you how do you
Speaker 1: plan an economy and how do you try to close
Speaker 1: the racial wealth gap. This was a multi cultural effort,
Speaker 1: but the emphasis was trying to create some good jobs
Speaker 1: so that the racial wealth gap would be closed. Now
Speaker 1: this is in the sixties and seventies, so that's that's
Speaker 1: one answer. That's that's upon a lot of reflection recently.
Speaker 1: But I would say that at Oxford, when I was
Speaker 1: trying to decide on one of the three topics I
Speaker 1: was to study, when in Philosophy, Politics and Economics, I
Speaker 1: took this mathematical economics tutorial. It was so much fun.
Speaker 1: It's a grad student teaching it, and I kept telling myself,
Speaker 1: there cannot be a field. Is this much fun? Can't be?
Speaker 1: Can't be? So I kept putting it off. I climbed
Speaker 1: Killamandara with this Cambridge training the economists, and he convinced
Speaker 1: me that no, I should not go off to LSE
Speaker 1: and do a PhD and mathematical logic, which is what
Speaker 1: I was planning. I should do a PhD in economic
Speaker 1: So in five hours he convinced me that this is
Speaker 1: what I should do. So I think that's the answer
Speaker 1: to your question. Did you know you were always heading
Speaker 1: towards academia and I have to point out your doctoral
Speaker 1: advisors were Barry Iken Green and David Rohmer. That's some
Speaker 1: pretty big firepower, that's right. I am not certain that
Speaker 1: I was always headed to academia. I thought I was
Speaker 1: going to be a lawyer, certainly because so many people
Speaker 1: in my family and around me were involved in the
Speaker 1: Civil rights movement. One of the things that I thought
Speaker 1: about all the time was was making sure that voting
Speaker 1: rights were protected, and the way to do that was
Speaker 1: through the law off And it wasn't until uh much later,
Speaker 1: during this period of climbing, for example, UH and trying
Speaker 1: to figure out whether it's going to do economics or not,
Speaker 1: that I rejected the law. But I didn't think I
Speaker 1: was going into academia if I did uh the law.
Speaker 1: I think there's a lot of historiesis among economists and
Speaker 1: among academics in general. So most of my relatives were
Speaker 1: in some form of academia. So I certainly got a
Speaker 1: lot of exposure to it, but I wasn't convinced that
Speaker 1: that's what I wanted wanted to do. My advisors, whether
Speaker 1: they were hormal or informal at um at Spellman and
Speaker 1: at Berkeley, were just off the charts amazing. One of
Speaker 1: them was. It was Donald mental Store who was president
Speaker 1: of Stollman College at the time and at one point
Speaker 1: at the college board and absolute mentor and helped too,
Speaker 1: you know, encourage me to apply for the marshal and
Speaker 1: for the roads and other uh take advantage of other opportunities.
Speaker 1: Marjorite Gant, who was our Study Abroad coordinator, also a
Speaker 1: deep mentor. And then at Berkeley, Uh, it was Paul
Speaker 1: Rohmer in addition to the people on my committee George Acolos,
Speaker 1: when I talked to all the time, especially about Russian
Speaker 1: and the thing about choosing the topic that I did
Speaker 1: to study the Russian banking system. Now this was in
Speaker 1: the early nineties, right, So we were trying to figure
Speaker 1: out what are the best models to analyze the Russian
Speaker 1: economy with? Is this banking system like another? Is it
Speaker 1: forming like others? Can it form like others? How does
Speaker 1: one allocate credit on a market basis when it hasn't
Speaker 1: been before or recently? So I was looking for anybody
Speaker 1: who could elucidate this, and I was just grateful that
Speaker 1: people talk to me and we're willing to serve on
Speaker 1: my committee to help me home these questions. So yeah,
Speaker 1: very very Uh, fantastic person my committee, David Romer. Clearly,
Speaker 1: I liked macro right, I liked international topics, and I
Speaker 1: just had a wonderful time at Berkeley with with all
Speaker 1: of them. You've done some really fascinating research, and we're
Speaker 1: going to talk in a few minutes about your research
Speaker 1: into patents and innovation. But I have to ask about
Speaker 1: what led to the op ed you wrote a couple
Speaker 1: of years ago in the New York Times where you
Speaker 1: pointed out that just yearro point six of economics PhD
Speaker 1: s were awarded to black women. What was that pieces
Speaker 1: genesis and what sort of feedback did it create? There
Speaker 1: were two sources of that article that up ed. The
Speaker 1: first was that the A a American Economic Association had
Speaker 1: done a climate survey and I was on the committee
Speaker 1: to write up the results. And it was astonishing the
Speaker 1: kind of comments, especially that we got from people in
Speaker 1: the profession. Uh. You know, we learned a lot from that,
Speaker 1: as you can recall, we learned a lot about how
Speaker 1: widespread sexual harassment was. We learned that people were not
Speaker 1: feeling included in economics for various reasons. We knew that, uh,
Speaker 1: we suspected that promotion and pay were a problem with
Speaker 1: respect to UH, minority women, but we didn't know the
Speaker 1: extent to which that was the case. And certainly we
Speaker 1: didn't know that African American women were the ones who
Speaker 1: had to take more steps to avoid discrimination and that
Speaker 1: they were the ones reporting the most discrimination. So that
Speaker 1: was worrisome in and of itself. So definitely one of
Speaker 1: the motivations for writing the APT ed to talk more
Speaker 1: about that. And and again the comments were terrified. Uh.
Speaker 1: One of them let the article, if I were to
Speaker 1: advise my son, I would tell them not to go
Speaker 1: into economics, and I regret having gone into it. This
Speaker 1: person implied that she was a black woman. Uh. There
Speaker 1: was another comment that really hit home. Uh, why is
Speaker 1: it that all of these prizes are given and no
Speaker 1: African Americans ever win these prizes like Nobel nan on
Speaker 1: the day that the novel is being awarded, Uh, like
Speaker 1: the Nobel How can that be welcoming? How can that
Speaker 1: be serious? If our research isn't being taken seriously, our
Speaker 1: careers aren't being taken seriously. And the other motivation, So
Speaker 1: one motivation was the climate study. The other one was
Speaker 1: as director of the American Economic Association summer program. I
Speaker 1: noticed that there weren't too many black women, and I thought, Okay,
Speaker 1: I know that black women out number of black men
Speaker 1: and the stem fields and undergraduate so what is going
Speaker 1: on here? So I certainly put it at the top
Speaker 1: of my list to try to recruit more black women
Speaker 1: to apply to the A A Summer program and to
Speaker 1: UH to get them to think more seriously about doing
Speaker 1: a PhD in economics, and this was the way to
Speaker 1: do it. So I had those two sources that led
Speaker 1: to that op ed and would respect to the action.
Speaker 1: The reaction has has largely, I would say, been good,
Speaker 1: UH in the sense that it got a conversation started.
Speaker 1: It doesn't even feel like it's just been a year ago.
Speaker 1: So much has happened in the year. So even if
Speaker 1: people were talking about it in the last year before
Speaker 1: say the work from home period, before the pandemic, before
Speaker 1: UH George Floyd, people were embracing this notion that this
Speaker 1: wasn't just one person. And I think that that in
Speaker 1: economics many of us were often told that, well, that's
Speaker 1: anyosyncratic and you're overreacting. But when you see the results
Speaker 1: from the climate survey from you know, nine thousand respondents.
Speaker 1: We see a pattern, and we see a pattern with
Speaker 1: respect to pay promotion, UH and and the climate in economics.
Speaker 1: So I would say that in hindsight it was it
Speaker 1: was well received because of the kinds of conversation it started.
Speaker 1: The SAD collective has taken off. It was UH. It
Speaker 1: got started as they well, I wouldn't say as a
Speaker 1: result of but certainly the founders are my former students
Speaker 1: in the A A Summer program. But a lot has
Speaker 1: happened in just that short year, and I think I'm
Speaker 1: just grateful to see the movement and hope it is
Speaker 1: sustained within the economics field. There's a lot more going on,
Speaker 1: not just what I'm saying, you know, renaming UH lecturers
Speaker 1: and making the place more welcoming for all kinds of people,
Speaker 1: being more open about mental health again, about being inclusive
Speaker 1: in so many different ways. I think this is just historic.
Speaker 1: This is an historic change for the American Economic Association.
Speaker 1: Quite fascinating. Let's talk a little bit about another piece
Speaker 1: of your research that that I find absolutely fascinating. You've
Speaker 1: documented some pretty dramatic differences in patent rates based on
Speaker 1: race and gender. Tell us a little bit about that.
Speaker 1: This research came from my dissertation emerged from my dissertation
Speaker 1: being written in Moscow and on the Russian banking system.
Speaker 1: I interviewed both bankers and entrepreneurs trying to figure out
Speaker 1: if a Russian banking system could emerge in this post
Speaker 1: Soviet period. So this is the early nineties. It was
Speaker 1: a rough and tumble time when major banker on averages
Speaker 1: are being killed per month. It was a time when
Speaker 1: UH structures were being figured out as long as as
Speaker 1: well as the personalities who would engage in banking in
Speaker 1: in Russia. One thing they post, the questions they post
Speaker 1: to me UH had a couple of features. One common
Speaker 1: one was why can't innovation come to Russia? And I
Speaker 1: thought it was fascinating because it had nothing to do
Speaker 1: with the Russian banking system really, and that they wanted
Speaker 1: to know for me, You're American, You're an economist, to
Speaker 1: tell us why this is the case. And I told
Speaker 1: him I have no answer, really don't have an answer.
Speaker 1: But you know, I kind of looked around and I'm like, Okay, well,
Speaker 1: if I were an inventor, I'm not sure i'd feel
Speaker 1: secure here. I'm not sure. I thought that my ideas
Speaker 1: would be protected. But anyway, I put a put a
Speaker 1: placeholder in it, and I thought, after I finished my dissertation,
Speaker 1: maybe I'll come back to it, and it kept weighing
Speaker 1: on me. This question, I thought was a really good
Speaker 1: one because at the time, the conventional wisdom was that
Speaker 1: if you protected if a country protected intellectual property rights,
Speaker 1: that was sufficient for innovation to come from, then in
Speaker 1: innovation to come. And I thought the Russians deserve a
Speaker 1: better answer than this. So I wondered if there were
Speaker 1: an historical experiment that could inform what the Russians were
Speaker 1: going through. And I thought, well, maybe this period of
Speaker 1: the late eighteen hundreds early nineteen hundreds could be elucidating.
Speaker 1: And I just decided that maybe, you know, maybe I'll
Speaker 1: look at patents to see what's going on there. Of course,
Speaker 1: I thought it was going to be easy to find
Speaker 1: African American patents. Of course it wasn't because races it
Speaker 1: recorded on patent data. So that was a big undertaking
Speaker 1: to match names to people in the patent data set.
Speaker 1: So tell us a little bit how you were able
Speaker 1: to figure out the race of people who were applying
Speaker 1: for patent protection. Hundred and fifty years ago. How are
Speaker 1: you able to get through what was a pretty bare
Speaker 1: bones database within the government to find out who actually, um,
Speaker 1: we're applying for these patents? That was that's a good question.
Speaker 1: I tried everything. I tried everything. So the first thing
Speaker 1: that I did was to try to do what Mo
Speaker 1: Nathan and Trauma Trauma Mo Nathan did and others who
Speaker 1: study black names in the contemporary period. I tried to
Speaker 1: do what they did, and I tried to take data
Speaker 1: from the Census and UH find the most popular names UH,
Speaker 1: ones that were distinctively African American. And I did it
Speaker 1: for this period, but those those don't apply. The names
Speaker 1: they use were post Civil Rights era names, they weren't historical.
Speaker 1: So I decided that I needed to do that for
Speaker 1: the historical period, and that's how I came up with
Speaker 1: the first recording of systematic names that black names historically
Speaker 1: for African Americans. And I did that by using the
Speaker 1: Census again. UH. Luckily, later on my co authors Tuvon
Speaker 1: Logan and John Parman helped to externally validate that list.
Speaker 1: But that was the first time that such a list existed.
Speaker 1: So that was the first thing that I had to do.
Speaker 1: But after I did that only a few people that pattern.
Speaker 1: There were only a few patent taes who had these
Speaker 1: black names, so I was able to capture some, but
Speaker 1: not many. Then I resorted to a common myth about
Speaker 1: African American names related to naming people, especially men, after presidents.
Speaker 1: So started looking for presidents. Okay, so what happens is
Speaker 1: that all men in America have named that are uh,
Speaker 1: those of presidents. So this is you know, this wasn't
Speaker 1: unique to African American. So that didn't help. So I
Speaker 1: just started looking for all of the scientists potential inventors
Speaker 1: I could to try to capture the universe of inventors
Speaker 1: some way, say with directories with articles. I found this
Speaker 1: old UH survey of patent agents and patent attorneys that
Speaker 1: was carried out in UH nine hundred and in nineteen
Speaker 1: thirteen by the Patent Office trying to identify African American patentees.
Speaker 1: Now that was good for that period up to roughly
Speaker 1: nineteen thirteen, but there were some flaws. It didn't actuately
Speaker 1: identify the first African American patent he so there were
Speaker 1: there were a few holes, so I had to fill those.
Speaker 1: But I started looking for everything and I wanted it
Speaker 1: to not be biased towards famous people, because I mean,
Speaker 1: the patent data set itself is not biased towards famous people.
Speaker 1: I looked at obituaries, for example, just because people would
Speaker 1: talk about their family members as inventors and they may
Speaker 1: not have described themselves that way. And say the census,
Speaker 1: I mean Edison identified himself as a machinist, and many
Speaker 1: of these inventors described themselves as a machinists in the
Speaker 1: census data. But if you got family members to talk
Speaker 1: about them, they would describe themselves as inventors. So anyway,
Speaker 1: I tried everything I could and eventually I was able
Speaker 1: to fill this in UM, but it took a lot
Speaker 1: of work. This is pre Google patents. This is before
Speaker 1: this is all of this was digitized. This is ancient
Speaker 1: history now, but things were changing rapidly at the time.
Speaker 1: But that's how I came up with this list of
Speaker 1: African American inventors. And now let's put a little meat
Speaker 1: on the bones. The piece who wrote Violence and Economic
Speaker 1: Activity Evidence from African American Patents eighteen seventy ninety. The
Speaker 1: numbers are pretty astonishing. Patent put in the US per million,
Speaker 1: so on a per capita basis, it's six patents per
Speaker 1: million African Americans, forty patents per million women, and two
Speaker 1: hundred and thirty five patents per million for all others.
Speaker 1: That's really a stark difference, that's right, And that's that's
Speaker 1: for the modern period that includes data up to twenty
Speaker 1: so uh after the nineteen data, but certainly it's still
Speaker 1: the case. The reason why it's still failient is because
Speaker 1: eight nine is still the peak year for African American
Speaker 1: patenting per capita. That's what what are the stark things
Speaker 1: that we learn and this paper that white patenting is
Speaker 1: two orders of magnitude higher, patenting by women is one
Speaker 1: order of magnitude higher. And the size of a patent
Speaker 1: team and a teen for African Americans is the same
Speaker 1: size today if we're using data. That is astonishing because
Speaker 1: for the rest of patent tas these patent teams have exploded,
Speaker 1: especially we're talking say chemical patents, it wouldn't be unusual
Speaker 1: to find twenty or thirty people on patent for uh
Speaker 1: some chemical products. So this is this is one of
Speaker 1: the astonishing things about about this number that is is
Speaker 1: really starks. And one thing that I found in doing
Speaker 1: deep dives to biographies of some of these inventors, say
Speaker 1: Garrett Morgan, he led completely different lives from their counterparts
Speaker 1: like Edison or for for Garrett Morgan it would have
Speaker 1: been Charles Brush and Cleveland. They just had to work
Speaker 1: so many channels, many back channels. For example, to be
Speaker 1: able to sell their wares, he had to dress up
Speaker 1: like a nave of American to be able to display
Speaker 1: his gas mask. Because once it was found out that
Speaker 1: he was African American and this gas mask was being
Speaker 1: used by fire departments, uh oh, across the South, they
Speaker 1: started canceling their orders. And the fire departments all across
Speaker 1: the country, but the ones in the South started canceling
Speaker 1: their orders. He used to hire white men to pretend
Speaker 1: like they were him and go around the country to
Speaker 1: self his gas mask. So he was really adept at
Speaker 1: overcoming is increasing consumers side discrimination in America at the time.
Speaker 1: So how do we explain why patents peaked for African
Speaker 1: Americans in what was so significant about what happened right afterwards?
Speaker 1: I think that it was largely Plusy versus Ferguson. So
Speaker 1: that was in eighteen ninety six, and this was the
Speaker 1: culmination of a long period of repealing pieces of the
Speaker 1: Civil Rights Act of eighteen seventy five. And this was
Speaker 1: you know, this is the Seven States were challenging it
Speaker 1: bit by bit, tipping away at it bit by bit,
Speaker 1: and when plus they happened, it was, you know, it
Speaker 1: was a big blow. Separate but equals, So this is
Speaker 1: ruling on separate but equal um. This is this is
Speaker 1: a big blow because inventors at the time, we're doing
Speaker 1: what everybody else was doing. Right. They were they were
Speaker 1: going to libraries to find patent digests to find out
Speaker 1: what the latest inventions were. They were running into each
Speaker 1: other at their patent attorney's office or uh in the
Speaker 1: downtowns of all of these places where they were working.
Speaker 1: But all of a sudden that wasn't possible anymore. These
Speaker 1: commercial districts became all white. Uh. They weren't able to
Speaker 1: manufacture and sell their inventions. They had to often become
Speaker 1: middlemen and to become wholesalers so that they weren't facing
Speaker 1: the public. Some of them went out of business altogether
Speaker 1: and stopped inventing all together. We have a number of
Speaker 1: stories like that. So I think it was largely this
Speaker 1: growing violence and especially plusy versus instance. And with respect
Speaker 1: to the date, what my friends who are constitutional law
Speaker 1: scholars tell me is that this takes a period of time,
Speaker 1: say two or three years for rulemaking, and when it
Speaker 1: became clear that they couldn't engage in in this, I
Speaker 1: think that they rushed everything they could to the patent
Speaker 1: office and uh and hope for the best, and it
Speaker 1: just never happened. Now, it started recovering after some of
Speaker 1: the violence stopped, but it never got back to the EAK.
Speaker 1: And that's really astonishing because there's there are a lot
Speaker 1: more people, a lot more PhDs and and the natural
Speaker 1: sciences for example, a lot more PhDs and engineering, but
Speaker 1: we don't see this showing up in the patent data.
Speaker 1: So earlier this year, the Tulsa race massacre was in
Speaker 1: the news, the President was going to hold a rally
Speaker 1: on the anniversary of that. What was the impact of
Speaker 1: that events on subsequent patents and innovations in the African
Speaker 1: American community, so very that's a really interesting question. This
Speaker 1: is one of those things where you see the data
Speaker 1: and you have no idea what's going on. Like I was,
Speaker 1: I was thinking, Okay, why is this showing up in
Speaker 1: the data, what like what happened on a national scale.
Speaker 1: I'm thinking, okay, so World War one is over. Yeah.
Speaker 1: I could not put my finger on it. And then
Speaker 1: I was like, ah ha, that's not good. The This
Speaker 1: was the largest racial massacre in US history and it
Speaker 1: had an impact on everybody. John Hope Franklin wrote about it,
Speaker 1: the famous historian, wrote about it. He was actually a
Speaker 1: child UH in that massacre and his family business was
Speaker 1: torn up just like many others and destroyed. Lots of
Speaker 1: people died, and he was saying that there was this
Speaker 1: fear that permeated all African Americans because, as the commission
Speaker 1: that investigated this said, no one was safe. There was
Speaker 1: failure at every level of government, at the local level,
Speaker 1: at the state level, and the president at the time
Speaker 1: refused to UH end the violence that was happening there,
Speaker 1: and the n double a c P President UH went
Speaker 1: to see him to try to negotiate an end to this.
Speaker 1: But it was it was really serious and that it
Speaker 1: showed up in the data, and I couldn't make it,
Speaker 1: couldn't make it go away. It was just that series.
Speaker 1: There was no there was no other year like that.
Speaker 1: Besides besides quite fascinating, let's talk a little bit about
Speaker 1: what's going on in the profession of economics. You've attended
Speaker 1: fairly traditional economics program, you've taught at traditional schools. What
Speaker 1: do you think are some of the bigger changes that's
Speaker 1: taking place today versus back when you were a student.
Speaker 1: There was no conversation about why African Americans are missing
Speaker 1: in economics. When I was in college or even in
Speaker 1: graduate school, there was no conversation like that. Even though
Speaker 1: there was a longstanding program the a a summer program
Speaker 1: which I now direct him, which I did at Stanford,
Speaker 1: there was no broad conversation about that. There was no
Speaker 1: broad conversation about out what was wrong with the economics profession. Um.
Speaker 1: You know, I wish that I had heard the Planet
Speaker 1: Money series that was done about my paper, both the
Speaker 1: topic and my paper, because I think that that there
Speaker 1: would have been more realization by many people and by
Speaker 1: those who were trying to get into the field that
Speaker 1: what they were facing they weren't facing alone. So I
Speaker 1: think that that's the biggest change. There was no letter,
Speaker 1: uh that many people have read, say by Bill Spiggs,
Speaker 1: that was widely circulated. You didn't have a president of
Speaker 1: a felleral reserve Bank at all. Number one, you certainly
Speaker 1: didn't see anybody in that leadership position. Uh. There were
Speaker 1: members of the of the f O m C who
Speaker 1: were African American, certainly, uh Emmitt Rice was one of
Speaker 1: the first ones, and you know I knew about them,
Speaker 1: but it didn't seem tangible, especially for for black women.
Speaker 1: And I think that this open conversation is not something
Speaker 1: that anybody could have anticipated that has moved very far
Speaker 1: in a very short period of time that we would
Speaker 1: even try to count how many African American economists that
Speaker 1: are at the Fellow Reserves. I never heard such questions
Speaker 1: post and certainly never thought, you know that I would
Speaker 1: hear Nobel laureates telling me, you've got to publish this.
Speaker 1: This is this is groundbreaking work. You've got to publish this.
Speaker 1: Had no idea that this would be uh the case,
Speaker 1: or that they would be as interested as they were
Speaker 1: and and proved to be, and certainly grateful for it.
Speaker 1: But I didn't think of it at all when I
Speaker 1: was coming through the educational system. So over the summer,
Speaker 1: a former Federal Reserve researcher, Claudia Psam, She also was
Speaker 1: a researcher at the CEO posted a fiery blog post
Speaker 1: quote economics as a disgrace and lays out a lot
Speaker 1: of the specifics that you're discussing. What are your thoughts
Speaker 1: on her criticism of the profession and what are the
Speaker 1: role of politics in economics? That's a good question. Now
Speaker 1: I have to tell you that I didn't read the
Speaker 1: actual blog post because I I understand that I am
Speaker 1: in it and I really at that time didn't want
Speaker 1: to this, could not deal with it emotionally because I've
Speaker 1: been talking about this a lot, talking about economics the
Speaker 1: economics profession a lot. But Claudia I think is and
Speaker 1: has been a catalyst for a lot of frank discussions
Speaker 1: in economics. And because she's been in this special rarefied
Speaker 1: place of being at the subtle reserves of uh having
Speaker 1: this somb rule you know. Uh, there are very few
Speaker 1: few rules named after in macro named after women having
Speaker 1: been at c A. She has been at the top
Speaker 1: of the field in so many different ways, so she
Speaker 1: has a special place, uh from which she sits and
Speaker 1: can see the profession, the broad profession. And she's also
Speaker 1: not a phrase because she is uh interacted with the
Speaker 1: current and former presidents as the A a Uh, Janet
Speaker 1: Yellen and Ben Bernankee, so she she could address them
Speaker 1: as colleagues, as peers. And I think it has been
Speaker 1: she's fonstered this this very necessary conversation. And she's been
Speaker 1: an advocate for graduate students, for people who have felt
Speaker 1: uh sexually harassed or racially harassed in the economics profession.
Speaker 1: And you know, the ambuts person and then quite engage.
Speaker 1: We finally hired an ombuts person UH at the American
Speaker 1: Economic Association. We needed somebody if we were going to
Speaker 1: say these problems exist, we needed somebody to do something
Speaker 1: about them. It's not perfect yet, that mechanism is not
Speaker 1: perfect yet. But I appreciate people who are as engaged
Speaker 1: as Claudis. And she does a lot to mentor the
Speaker 1: next generation of economists, and not just women, and not
Speaker 1: just at or Americans, not just African American women. She
Speaker 1: spends time during this this season preparing, helping people to
Speaker 1: prepare for the job market. She reads their paper. She
Speaker 1: is providing many different public goods for the profession. And
Speaker 1: I just think that she's she's just a gym and
Speaker 1: the profession that we need more people like her who
Speaker 1: will hold our leaders accountable, point point to the issues,
Speaker 1: but also try to figure out ways to address those issues.
Speaker 1: And she's a problem solver. I mean, thesembile was created
Speaker 1: as a mechanism to solve a problems. She talks about
Speaker 1: automatic stabilizes and writes about this. So she's she's a
Speaker 1: problem solver in every dimension. To appreciate her being in
Speaker 1: the profession, quite interesting. Let's talk a little bit about
Speaker 1: what's going on today with the recession. What is this
Speaker 1: doing too? Some and wealth inequality. I'm not sure it
Speaker 1: could do more. I'm not sure this pandemic could do more.
Speaker 1: It is really driving a serious wedge between those who
Speaker 1: have income and wealth and those who doubt. Whether we're
Speaker 1: talking about those who hold stocks and those who don't.
Speaker 1: And uh, just under of Americans do not hold any stock.
Speaker 1: They are not seeing the gains the stock market has
Speaker 1: largely recovered from uh, the beginning of the pandemic. That
Speaker 1: we did see this in the Great Recession too, so
Speaker 1: that's not so unusual that that stocks would cover before
Speaker 1: employment does. But income inequality is taking a beating. How
Speaker 1: is that because let's say, if we add a racial
Speaker 1: dimension to it, African Americans are subject to occupational segregation.
Speaker 1: So they are in a lot of these front facing
Speaker 1: occupations to which they would be disproportionately exposed to COVID nineteen.
Speaker 1: So that's one way in which they're deciding between a
Speaker 1: job and eating or a job and rent a job
Speaker 1: in their health. So so this is one of the
Speaker 1: ways and which income and equality has come to for
Speaker 1: for wealth inequality, it's even more stark. So as I
Speaker 1: was mentioning, Uh, certainly the stock market is recovering, Uh,
Speaker 1: not as many people among African Americans are in the
Speaker 1: stock market. Uh. Certainly, wealth is orders of magnitude lower
Speaker 1: for African American healthhold compared to white healthhold. But there's
Speaker 1: one thing that I followed that really troubles me, and
Speaker 1: that is small businesses. There are fifty white entrepreneurs for
Speaker 1: every black entrepreneur. And as we know, this is a
Speaker 1: tried and true path to the middle class and to
Speaker 1: wealth accumulation in America. And what we know about black
Speaker 1: businesses is that a disproportionate number are reporting closing permanently
Speaker 1: as a result of the recession, the pandemic and recession,
Speaker 1: and they didn't receive PPP funds. Uh, we're not recording.
Speaker 1: SBA is not recording the applicants, and we don't have
Speaker 1: good demographic data, but from the surveys that have been done,
Speaker 1: we know that when they replied, when they applied, they
Speaker 1: were rejected. You know, this is due to the big
Speaker 1: banks being relied upon to UH to all out these moments,
Speaker 1: but also for the amount they were requesting, they got
Speaker 1: disproportionately less. So what I worry about is this fisher
Speaker 1: growing significantly, not just now but in the future, because
Speaker 1: certainly income now lays the groundwork for WELCO in the future.
Speaker 1: So given the sort of work from home pandemic economy
Speaker 1: that we're living in, some people have been calling this
Speaker 1: a quote she session unquote because so much of it
Speaker 1: is falling disproportionately on the shoulders of women. How accurate
Speaker 1: is that phrase? Is this overstanding it or is there
Speaker 1: really a deep gender fisher as well as a racial fisher.
Speaker 1: Absolutely there's a gender fisher that is that is also
Speaker 1: there with the racial fisher, and we could see this
Speaker 1: in American Time Youth Survey, in the Census. What we
Speaker 1: know about women is that regardless of occupation, regardless of income,
Speaker 1: they spend a disproportionate amount of time on care of
Speaker 1: other individuals in the household. That might be children, that
Speaker 1: might be the elderly, but they spend more time taking
Speaker 1: care of those people. And that happened before. That was
Speaker 1: happening before the pandemic. And women are the ones who
Speaker 1: are having to drop out of the workforce while these
Speaker 1: students are stuck at home. Small children especially are stuck
Speaker 1: at home trying to do their homework or trying to
Speaker 1: make sure that they have their their snacks on time
Speaker 1: and get through their school work. So this is a
Speaker 1: she session. Women are back at their participation rates from
Speaker 1: that is shocking, and were to happen in such a
Speaker 1: short period of time is absolutely shocking. And this is
Speaker 1: going to have lasting scars, leave lasting lasting scars on
Speaker 1: the labor market, because one thing we know is that
Speaker 1: when women are out of the labor force, they slow
Speaker 1: down with respect to you pay, with respect to your promotion.
Speaker 1: And I am just hoping that we will get some
Speaker 1: kind of support for child care to make sure that
Speaker 1: that some of these women can recover and recover more quickly.
Speaker 1: Quite interesting, so the Care's Act was passed at the
Speaker 1: end of the first quarter, it was about three trillion dollars.
Speaker 1: If you would have asked me over the summer, will
Speaker 1: we see a follow up another couple of trillion dollars,
Speaker 1: I would have given you ten to one odds that absolutely.
Speaker 1: The politicians in election here of course they're going to
Speaker 1: pass the second stimulus, But here we are, middle of October,
Speaker 1: no such stimulus passed yet? Did we go far enough
Speaker 1: with the first Cares Act? And are you at all
Speaker 1: surprised that there hasn't been a follow up? What do
Speaker 1: you think is going to happen? And how much stimulus
Speaker 1: has needed given the way the economy is starting to
Speaker 1: apply to and attenuate from from that big bounce back
Speaker 1: we saw over the summer. Barrett, you and I were
Speaker 1: in the same position. That's exactly what I thought too,
Speaker 1: And what I knew was that we if we had
Speaker 1: a national coordinated strategy, we could possibly be seeing our
Speaker 1: way back to normalcy by this time, if we had
Speaker 1: a national mask mandate, for example. But that didn't happen.
Speaker 1: And what I find shocking is this three trillion dollars
Speaker 1: was was a good start, but we are repeating the
Speaker 1: lessons of two thousand and eight, two thousand nine. I
Speaker 1: cannot believe this I was on the Obama transition team
Speaker 1: at the time, and what I was watching was austerity
Speaker 1: being put into place. And and I was also there
Speaker 1: in austerity being put into play when the last thing
Speaker 1: you needed was austerity. You need to throw money at
Speaker 1: people so that yes, they will stay stay afloat, whether
Speaker 1: it's businesses or households or the unemployed, they just need
Speaker 1: to stay afloat while we figure this pandemic out. And
Speaker 1: and that is what is still needed. But we're repeating
Speaker 1: the mistakes of two two nine. What we see is
Speaker 1: state and local governments laying off people and and firing people.
Speaker 1: And this is what we saw before, and that's why
Speaker 1: the recovery has stalled. I can't believe that we're doing
Speaker 1: exactly the same thing. And that's why, like Claudia, I
Speaker 1: believe in automatic stabilizes. We've got to have more so
Speaker 1: that this is not j Pel begging Congress and the
Speaker 1: administration to do something and all of the other that
Speaker 1: officials do. And and it is clear that physical policy
Speaker 1: is what is needed the mom it's ore the Federal
Speaker 1: Reserve aren't there. It's not as if they are are
Speaker 1: boundless in what they can do in the kinds of
Speaker 1: resources they can provide. They've been fast, they've been quick,
Speaker 1: but they can't do everything. So shocked that we haven't
Speaker 1: that the administration and Congress, the Senate Republicans have blocked
Speaker 1: aid to American people, households, and businesses. I think it's
Speaker 1: absolutely unconsortable. There's definitely an eviction and rental crisis that
Speaker 1: is right at our feet. It's right in front of us,
Speaker 1: and we're not doing anything about it. Let me are
Speaker 1: closing and we're not doing anything about it. I'm just
Speaker 1: in shock. So let me step back and ask you
Speaker 1: the thirty thousand foot view question, which is we saw
Speaker 1: a very miserly stimulus at the beginning of oh nine.
Speaker 1: It was I know, this sounds ridiculous to say, about
Speaker 1: eight hundred billion dollars which proved to be way too small.
Speaker 1: We saw the rise of austerity, not just here but
Speaker 1: also in the UK, and then in we saw a
Speaker 1: massive pro cyclical tax cut and stimulus. I thought the
Speaker 1: rule book was, hey, in a deep procession, you want
Speaker 1: to see countercyclical fiscal stimulus, not late cycle pro cyclical
Speaker 1: fiscal stimulus. What's the lesson to be taken away from
Speaker 1: this that somebody is not telling the truth about BUDE
Speaker 1: deficits and about gross because what we know is that
Speaker 1: the short run deviations like two thousand and eight, two
Speaker 1: thousand nine, in order for them to remain short run
Speaker 1: deviations of output, you have to go big, and you
Speaker 1: have to assure the American people that something is on
Speaker 1: the way and that they won't be out there on
Speaker 1: their own. And the same it's true for businesses. It
Speaker 1: is absolutely unconsortable that businesses that through no fall to
Speaker 1: their own are laying out tens of thousands of people.
Speaker 1: The airlines are laying off tens of thousands of people,
Speaker 1: and that's not going to affect just them. Of course,
Speaker 1: their dollar support many other jobs, and not just in
Speaker 1: the cities where there are hubbs. This is this isn't
Speaker 1: this is true in general. So I'm still in shock
Speaker 1: that we are not doing more and that the lessons
Speaker 1: of the Great Recession have not been have not been learned.
Speaker 1: It's almost as if some folks were awake for the
Speaker 1: first two days of econ one oh one and just
Speaker 1: slept through the rest of the semester. They missed the
Speaker 1: chapter on Keynes. So here's the pushback. Hey, listen, we
Speaker 1: don't have access to infinite money. Three trillion dollars is
Speaker 1: a lot, and at a certain point we have to
Speaker 1: start being concerned about the deficit. How do you respond
Speaker 1: to that sort of pushback? We do have to become
Speaker 1: concerned about the deficit, but that time is not now,
Speaker 1: absolutely not now. That would be misplaced. How do you
Speaker 1: how do you sustain growth? How do you how do
Speaker 1: you keep people afloat? How do you keep businesses afloat?
Speaker 1: That's the question we should be asking, and this is
Speaker 1: a common view of economists. Many economists, as you know,
Speaker 1: of all stripes, are saying the same thing. I'm saying
Speaker 1: that we worry about deficits in the future. Let's, you know,
Speaker 1: when the economy gets back on the feet, let's start
Speaker 1: worrying about those deficits until then. It's it's abstract, it's
Speaker 1: you know, why why do you starve a person who's
Speaker 1: already hungry? That that is ridiculous. And if you hobble
Speaker 1: the economy. Now, let's say, for example, we could be
Speaker 1: using p PP to give to our smallest newest businesses.
Speaker 1: If those smallest newest businesses don't stay a lot, we're
Speaker 1: going to permanently hit long run growth, because these are
Speaker 1: some of the businesses that give us innovation. This is
Speaker 1: where innovation comes from. Often it's from the smallest, newest businesses,
Speaker 1: and if we don't help them, what we are doing
Speaker 1: is saying we're not going to contribute innovation to long
Speaker 1: long run growth anymore. And that is really unconscionable. We
Speaker 1: shouldn't do that. We shouldn't penalize the economy that way.
Speaker 1: Quite interesting. I know I only have you for a
Speaker 1: few minutes, so let me jump to my favorite questions
Speaker 1: that I ask all of my guests. Tell us what
Speaker 1: are you streaming? What are you watching or listening to
Speaker 1: these days now that we're all working from home. The
Speaker 1: first thing that I've been streaming has been uh Nollywood
Speaker 1: movies and TV series you know from from Nigeria and
Speaker 1: uh the the TV series that just so I'm really
Speaker 1: interesting is fifty And then there's this movie called Chief Daddy.
Speaker 1: I'm also uh watching Chernobyl and I you know Chernobyl.
Speaker 1: I find fascinating. It was well done. I used to
Speaker 1: live and Russia, so I certainly know the story very
Speaker 1: well and studied the former Soviet Union quite a bit.
Speaker 1: But I can't watch it sometimes because it's so close
Speaker 1: to home, and I think it was an excellent series.
Speaker 1: I'm watching Ship's Creek. Uh so that's that that I'm
Speaker 1: not finished yet keeping it as a mini series for myself,
Speaker 1: and certainly I listened to uh Planet Money and Sereal.
Speaker 1: Those are things that I stream a lot, so to
Speaker 1: the there those of day. You mentioned some of your
Speaker 1: early mentors previously. Tell us who helped shape your career.
Speaker 1: I will uh say from a distance. I told you
Speaker 1: some who were close to home, but you know, Barbara
Speaker 1: Jordan was one I was forced to watch by my
Speaker 1: grandmother her leading the impeachment hearings against Richard Nixon. Had
Speaker 1: no idea who she was, but my grandmother was saying,
Speaker 1: this is how democracy works. You've got to watch this,
Speaker 1: this is how democracy works. So there was something that
Speaker 1: I found incredibly inspiring about Barbara Jordan's and Shirley chishol
Speaker 1: and I tried to understand how they got to know
Speaker 1: what they knew and started taking myself a lot more
Speaker 1: seriously as a person who was interested at some level
Speaker 1: in public service. Quite interesting. Tell us some of your
Speaker 1: favorite books. What what are you reading now and what
Speaker 1: have what ends up on your all time favorite lists. Well,
Speaker 1: you know, one book that is my favorite book of
Speaker 1: the summer is a book that is non fixing, but
Speaker 1: it reads like fixing. It is so good. It is
Speaker 1: the World according to Fanny Davis by Bridget Davis, and
Speaker 1: it is about the underground economy, the numbers runners in Detroit.
Speaker 1: It's going to be turned into a movie and has
Speaker 1: been the subject of a number of MPR interviews. But
Speaker 1: I'm also reading books like um uh Mercia baradns Uh,
Speaker 1: Bara Duran's uh The Color of Money. I'm reading um
Speaker 1: of course, Sandy Drity is from Here to Equality. You know,
Speaker 1: I'm just trying to learn as much as i can
Speaker 1: about the moment. I'm reading The deficit mess said that
Speaker 1: I can understand more about how we think about deficits.
Speaker 1: That's that's one way to think about, uh, deficits. But
Speaker 1: I am also rereading things like Moneyball. I used to
Speaker 1: teach the economics of baseball, and I would look forward
Speaker 1: to teaching it again. But that's just fought that, you know,
Speaker 1: That's that's that's just fun. That's just economics for fun.
Speaker 1: So what sort of advice would you give to a
Speaker 1: recent college graduate who was considering a career in economics.
Speaker 1: I would say to get as prepared as you can.
Speaker 1: And when I say prepared, I don't mean doing five
Speaker 1: or six pre doctors programs. Uh, maybe do do one
Speaker 1: or an r A ship. But get to know your
Speaker 1: professors are. Contact your professors if you've already graduated, and
Speaker 1: read as much about the economy as you can. I
Speaker 1: think being anchored in you know, podcasts like like yours,
Speaker 1: or interviews like yours, reading Bloomberg and f T and
Speaker 1: uh the New York Times Business and Economics sections. I
Speaker 1: think having a point of reference is critical because I
Speaker 1: find that many many students don't. So I think that
Speaker 1: it's critical to have some some frame of reference. And
Speaker 1: I think it would be inspiring and interesting once you do,
Speaker 1: quite interesting. And our final question, what do you know
Speaker 1: about the world of economics today that you wish you
Speaker 1: knew twenty five years ago when you were really first
Speaker 1: getting started. I wish I knew more about how policymakers
Speaker 1: think about policymakers who were not economists and who aren't
Speaker 1: at the FED or Treasure think about how to help people.
Speaker 1: So I'm thinking about Congress now, and I wish I
Speaker 1: knew more about how they thought about the economy, because
Speaker 1: if I understood that then, and frankly, if I understood
Speaker 1: that now, maybe we could affect the way they're thinking
Speaker 1: so that we don't run into this other prolonged recession.
Speaker 1: And you know the danger here, Verry, is that inflation
Speaker 1: is a real worry that can actually happen. We haven't
Speaker 1: met our inflation targets for for almost a decade, only
Speaker 1: you know a handful of times in a decade. That
Speaker 1: could be a real serious problem. So I would like
Speaker 1: to understand better how people who make a go policy think,
Speaker 1: and I wish I could influence it more because the
Speaker 1: American people, American households, businesses, need state, local governments, the
Speaker 1: art need a lot of help right now. Quite interesting.
Speaker 1: Thank you Lisa Cook for being so generous with your time.
Speaker 1: We have been speaking with Professor Lisa Cook. She teaches
Speaker 1: economics and international relations at the James Madison College at
Speaker 1: Michigan State University. If you enjoy this conversation, be sure
Speaker 1: and check out any of the other three hundred and
Speaker 1: fifty or so previous interviews we've had. You can find
Speaker 1: that at iTunes, Spotify, Stitcher, a cast wherever Finder podcasts
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Speaker 1: to us at m IB podcast at Bloomberg dot net.
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Speaker 1: I would be remiss if I did not thank the
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Speaker 1: My audio engineer is Maroufal, Michael Batnick is my head
Speaker 1: of research, Attico val Brund is our project manager, Michael
Speaker 1: Boyle is our producer, and I'm Barry rid Halts. You've
Speaker 1: been listening to Masters and Business on Bloomberg Radio.