Joe Biden’s nominee to the Board of Governors of the Federal Reserve, Michigan State economist Lisa D. Cook, is currently a director of the Federal Reserve Bank of Chicago, one of the many impressive sounding posts she has held in her peripatetic career.
Macroeconomist Harald Uhlig has an endowed chair at the U. of Chicago and is a former chair of that world famous economics department. Like Cook, he was also affiliated with the Federal Reserve Bank of Chicago…until the crazed month of June 2020, when the Chicago Fed Bank cancelled him for daring to criticize Black Lives Matter supporters as “flat-earthers and creationists” for their lack of scientific evidence for the suddenly sacred Defund the Police movement in the weeks when they were running amok in an orgy of riot and murder in the streets of Chicago.
In response to his heresy, Cook lashed out at Uhlig’s right to free speech:
Uhlig is still sore about this and has unloaded, at length, on Cook’s scanty qualifications to be a Federal Reserve Governor. He then raises the bigger question of appointing an anti-free speech ideologue:
What do her backers expect from her appointment? Do they believe that her beginner thoughts on monetary policy should be given much weight in the deliberations in the Board? Do they want her to reminisce there about her childhood and the difficulties she faced while growing up, bringing up some lived experience as often as she can? Are they just content with scoring some “historic first”, but otherwise hope to have her remain on the sidelines during her term? That would be a pyrrhic victory.
Clearly, the key reason for her appointment to the Federal Reserve is her keen interest in matters of Racial Equity and Social Justice. As Governor, she will have access to the research powers of the 400 Ph.D. economists working there. Will she send them to work on these matters, then creatively cherry-pick findings and sweep serious caveats under the rug, as she may have done in her 2014 paper and as described above? Would she instruct the research staff to keep updating their findings, until it fits the narrative she desires, as may have been the case in her own research? Will she use these “insights” to tilt monetary policy and to disseminate them, given the powerful public voice granted to a Governor?
Couldn’t one simply avoid these risks and concerns by appointing an academic expert on monetary policy instead, who also happens to know a thing or two about how to combat inflation? I surely think so.
Her activism pro reparations, defunding the police, and against free speech
Her stance pro reparations has been well documented: even her supporters confirm that she has stated as much. But there is more. On June 14th, 2020, Lisa Cook tweeted that "free speech has its limits" in that it "should not be used to spread hatred". She directly accused me: "This is how you, Dr. Uhlig, used your words and your power - to spread hate". Here is a screen shot:[Above↑]
Most likely, she meant my tweet on June 8th, 2020, in which I argued that defunding the police is absurd, followed by my tweet on June 9th, 2020 providing an apology for the strong language and providing more nuance. Obviously, no one has to agree with what I said. Anyone is entitled to feel irritated by them. Indeed, these tweets did irritate quite a number of people. A group of colleagues (some very prominent, one a co-author, some were friends) went so far as to collect signatures on a petition to get me fired as editor of the Journal of Political Economy [ Note: I was not fired, and my term ended as scheduled in June 2021 ]. John Cochrane provided an excellent account of the episode. This is all perfectly fine, of course. In the U.S., you are free to sign silly manifestos to your heart's content. Freedom of speech is wonderful and it is important. Needless to say, I disagreed with that petition.
And thus, obviously, Lisa Cook is free to argue that my speech should be restricted. I have no objection to her stating what she stated and sending that tweet: I just politely disagree. Yet, tweets reveal, how a person thinks or believes: this holds as much for her as it holds for me or others. Where did I “spread hate” in my tweets, as she argues? And even if you cringe at my tweets, shouldn’t the limits to the first amendment be set very wide in a free society, and far wider than she demands?
I can’t help but think, that her tweet was sent because she disagrees with my point of view. I am against defunding the police and she rakes me over the coals for stating as much. Quite likely, then, Lisa Cook is in favor of defunding the police. There is no doubt that she will reject defunding the police when asked now, and with the nomination at stake. But then, how does one explain her strong stance then? Moreover, she appears rather quick at invoking limiting free speech and raising the charge of “hate” in a matter of disagreement.
Should these activist stances be a cause of concern, before appointing someone to one of the highest offices in the country? I do think so. Might she use her then considerable power to shut down speech and disagreement in the Federal Reserve and elsewhere? Is it reasonable to appoint a person as Fed Governor, who so forcefully spoke up against someone critical of defunding the police, when some police protection might occasionally be welcome to, say, help guard the gold reserves and cash delivery trucks, protect bank employees and assure the safety of buildings?
I was fired as consultant from the Federal Reserve Bank of Chicago, following my tweets. Lisa Cook is on the Board of the Chicago Fed. She has the power to see to it that my firing is reversed. Has she taken steps to rectify that decision? I have not heard anything, if so. Does she perhaps endorse that firing as an entirely appropriate procedure to deal with dissenting voices? What, then, will happen, when she is appointed Governor? Will Fed researchers continue to speak freely about their findings concerning racial disparities or the importance of policing, or will speech by sullied, for fear of taking a wrong step and seeing a career come to an end? To the degree that these issues matter for monetary policy at all, will the Board be provided with a balanced and reasoned assessment by its researchers, or will only an activist voice be welcome?
This may all lead to considerable damage to the Federal Reserve, its focus on the limited mission in form of its dual mandate, and its wide respect as a neutral voice of reason on economic matters. The credibility and neutrality of the Fed is its perhaps biggest asset. Loose that and it may not be possible to get the genie back into the bottle.
Myself, I know far less about macroeconomics than Uhlig or Cook, so I won’t comment on that.
But I do have a track record of debunking much-admired forays into history by historically illiterate economists, such as Steven D. Levitt’s abortion-cut-crime theory and Nobel laureate David Card’s claim that the 1980 Mariel boatlift to Miami proves that immigration doesn’t tend to push down wages. Levitt forgot the Crack Wars and Card forgot Miami Vice and Scarface.
Cook is most famous for a 2014 paper claiming that there was a massive and permanent decline in the number of patents earned by black inventors from 1899 to 1900 due to increasing racism. Cook is convinced that she discovered the heretofore unknown Turning Point of Black History between 1899, when blacks earned the most patents in their history, according to her research, and 1900, when the number of verified patents proven to have been earned by blacks suddenly and permanently dropped.
For example, during the racial reckoning on July 9, 2020, she told the electrical engineering journal IEEE Spectrum:
IEEE Spectrum: What key events impacted African American innovation?
Lisa D. Cook: Plessy v. Ferguson in 1896 was a big one. 1899 was the peak for African American invention, and even using 2010 data [PDF} it was still the peak per capita for African American invention.
Scholars of constitutional law explain that the Plessy v. Ferguson Supreme Court rulings took two or three years to produce effects, for rulemaking to happen, and for laws to be passed. What we did see was a proliferation of laws after Plessy v. Ferguson in states, especially outside of the south, and that’s where patenting was happening. So I think it was largely Plessy v. Ferguson that led to this huge drop in patenting by African Americans that hasn’t yet recovered.
Blatant violence also had an effect. Before I did anything, I had looked at the time series of patents and I’d noticed several dips. One was 1899, and another one was in 1921. The first thing I did, being an economist of innovation, was try to see if the patent laws changed or if patents became more expensive. But the only thing I came up with was the Tulsa massacre. [In May and June 1921, a White mob attacked and destroyed a relatively wealthy African-American neighborhood in Tulsa, Oklahoma. Many in the mob had been deputized and armed by government officials, and the attack included aerial bombardment.] The local, state, and federal government failed African Americans so much in Tulsa that it had a sizeable effect on all African Americans. They felt terrorized at the time, and there was nobody who had their backs. So I think that that’s why 1921 stood out in the data, and I think there’s evidence to support that.
In reality, while her database of 726 patents indubitably earned by blacks does at least show a big drop in 1900, in her data 1921 is a ho-hum year:
And, as I pointed out over the weekend, her celebrated finding about 1899 vs. 1900, which nobody had ever noticed before, was in reality instead due to the U.S. Patent Office having sent out a mass mailing on January 26, 1900 asking experts for information about African-American inventors so that the United States could boast about them at the upcoming 1900 Paris World’s Fair.
In her defense, Lisa Cook did a cautious, conservative job of only coming up with 726 specific patents that were definitely issued to blacks from 1870-1940. That has to be considered the absolute minimum number, while the real number of patents earned by African-Americans was likely considerably higher (but also likely an order of magnitude or so less than Andrews and Rothwell’s implausible extrapolation for the Brooking’s Institution of 49,821 black patents over the same 71-year period).
But then Dr. Cook confused her admirable scholarly cautiousness with what had really happened and announced that the sudden drop in verified patents in her database from 1899 to 1900 was real rather than an artifact of her methodology.
The huge drop in Lisa Baker’s list of patents earned by black inventors from 1899 to 1900 is due to the U.S. Patent Office sending out a mass mailing to patent attorneys and other experts on January 26, 1900 asking if they knew of any blacks who had earned patents in order to celebrate black inventors in the U.S. pavilion at the 1900 World’s Fair in Paris. A book was displayed that summer in Paris of 350 patents earned by black U.S. inventors. In other words, Cook has an excellent published contemporary survey of patents awarded to black inventors in the 19th century.
As I will explain below, Cook’s database also includes a limited fraction of the patents earned by black inventors according a second survey in 1913, from which, unfortunately, we only possess published highlights rather than the bulk of the items. And we don’t have any contemporary surveys of black inventions from 1914-1940.
The Patent Office official who followed up on the responses to verify them in the patent files, Henry E. Baker, published in 1902 a detailed list of about 400 patents earned by African-Americans. (I need to count them.)
The Patent Office apparently did another mass mailing in 1913 but, as far as I can tell, Baker only published several dozen highlights from it rather than a detailed list of all the additional patents found in the 1913 survey. He wrote in 1913 he was now up to “nearly 800” patents, which would be almost 400 over the 1900 survey. He said he was working on a book that would include each one, but I don’t see that this book was ever published.
If most of those were new patents from post-1900, rather than old pre-1900 patents missed by the first survey, that would suggest the early 1900s were similar in black inventiveness to the late 1800s.
Dr. Cook says 65% of her 726 patents, or about 472, are from Baker’s research. That implies she’s using Baker’s complete 1900 list of about 400 along with about six dozen of his published highlights from 1913, but that she’s missing a few hundred more obscure patents Baker came up with in 1913 but never published that are not readily available and may be lost to history.
Personally, I would be inclined to take Henry E. Baker’s 1913 statement that he was now up to nearly 800 patents at face value. His 1902 list based on the work he participated in for the World’s Fair appears unimpeachable. And he was well known in Washington D.C. black circles as a careful and honest man, who was always elected treasurer of the various civic organizations he joined. So I don’t find much reason to doubt that by 1913 he had a list of patents earned by blacks that was approaching twice as long as the list he’d published in 1902.
On the other hand, I can also see Cook’s caution in not accepting Baker’s 1913 statement without documentation. But I can’t see justification for Cook’s next step of assuming that the fact that Baker published complete documentation in 1902 but only published highlights in 1913 is therefore proof of a sudden drop after 1899 of black patenting.
Inventing a narrative of a cataclysmic and permanent drop in black patenting from 1899 to 1900 has certainly been good for Cook’s career. It’s possible that she suddenly discovered an implausible-sounding radical historic change between 1899 and 1900 that nobody, including, for all we can tell, Henry E. Baker, ever noticed before. But it seems an awful lot more likely that it was caused in her database instead by the fact that we have all of the 1900 survey, only a fraction of the 1913 survey, and that there were no more surveys after 1913.
Here’s a challenge to Lisa D. Cook to assess her assertion: publish a trend graph showing the sources of her data. Create layers showing the contribution per year from Baker vs. all her other sources. My expectation is that Baker’s contribution will nosedive after 1899, and especially after 1901, when he shut off data collection to write up his 1902 chapter, and then vanish after 1917 when he published his last paper on the subject, while her other sources will be fairly steady over time.
But if her theory is correct, her graph should show patents from her other sources nosediving after 1899.
I’m guessing the big problem for her was that she didn’t really discover anything all that noteworthy compared to what Henry Baker had done over a century before. By immense labors, she added 54% more patents to the approximately 472 patents Baker published. But what new, more general knowledge had her labors, which were considerable, produced?
In contrast, I probably would have put forward a guesstimate of something like several thousand patents earned by blacks from 1870-1940 based on:
—We have Baker’s detailed list of about 400 (I haven’t gotten around to counting the exact number) published in 1902 and
—we have his verbal report in 1913 that he was now up to “nearly 800” after another big mail survey in 1913. So he was likely adding 25-30 per year, although some added in 1913 might have been overlooked ones from before 1900.
– And at that rate by 1940, the list would likely be up to close to 1,500.
– And Baker guesstimated in 1913 that he had found only half.
So, 1500 times two is 3,000 patents earned by black Americans over 71 years. That may well be an overstatement, but it’s a defensible SWAG. That African-Americans in the 75 difficult years after Emancipation earned up to 3,000 patents is something to be proud of.
What I can’t wrap my head around justifying is the Brookings estimate of “nearly 50,000” or, to be precise, 49,821. If Cook found 726 black patents, and Andrews and Rothwell found 49,821 at least one set of them is wrong, if not both.
From reading their methodology, I think the Brookings guys of Andrews and Rothwell (2020) matched names on patents with Census records, which include addresses and race. The patents include the inventor’s name, the town in which he’s filing for the patent, but not his race or his street address.
So, if a patent was awarded in 1900 to Zebediah Q. Grimsby of Smallville, Maine and the 1900 Census says there was one Zebediah Q. Grimsby living in Smallville, well, you’ve found your man and you can rely on the Census’s demographic data for him. (To summarize, he’s white.)
But what if the patent was awarded in 1900 to J. Smith in Philadelphia? I think what they are doing then is looking in the 1900 Census and counting all the possible J. Smiths in Philadelphia and then allocating fractions of the patent by race. If there were 850 white J. Smiths and 150 black J. Smiths in Philadelphia in 1900, then whites get credited with 0.85 patents and blacks with 0.15 patents.
But you can see the problem: you are assuming that black J. Smiths are as likely to earn patents as white J. Smiths and then using your assumption to “discover” that Northern blacks earn a surprising fraction of patents per capita relative to whites.
But the Brookings guys don’t provide many illuminating examples, so it’s hard to tell what they are doing.
