Flashback: Biden's Fed Reserve Nom Won't Say If She's a Capitalist or Socialist

January 13, 2022

The Biden administration's nominee for the number two slot at the Federal Reserve refused to tell lawmakers if she is a capitalist or a socialist.

Lael Brainard, a Federal Reserve governor and former Obama administration appointee whom President Joe Biden nominated to serve as the central bank's new vice chair, is facing pushback from conservative advocacy groups for her controversial statements about China, including a claim that China is "formerly communist," and her refusal in 2019 to come clean about her political views when testifying before Congress. Brainard also has a history of tax evasion.

Brainard, who was grilled at a Senate confirmation hearing early Thursday, generated waves in 2019 when she declined on three separate occasions to tell lawmakers if she is a capitalist or a socialist.

"Are you a capitalist or a socialist?" Brainard was asked by Rep. Roger Williams (R., Texas) during a September 2019 hearing by the House Committee on Financial Services.

"Thank you for your question," Brainard replied. "I view markets that are well regulated, that are competitive, as providing really important benefits in terms of innovation and dynamism."

"Well, are you a capitalist or socialist?" Williams replied.

Brainard again deflected the question, saying, "Markets that are well regulated, where we've seen strong competition, I certainly have seen important benefits."

"Are you a capitalist or socialist?" Williams pressed again.

"I don't really think about it in those terms," Brainard said.

Williams posed the same question to Dino Falaschetti, director of the Office of Financial Research at the time who was testifying alongside Brainard. Falaschetti quickly answered: "I am a capitalist."

Brainard also has a spotty track record when it comes to paying her taxes: She was late with her property taxes four years in a row, late paying her taxes on 11 different occasions, and was forced to revise one of her tax filings after Senate investigators found she was "taking on an overly generous deduction," according to information published by, a watchdog site focused on the White House's candidates for top positions. Her track record is likely to raise concerns with Republicans as she tries to win confirmation in the narrowly Democratic-controlled Senate.

In addition to her past tax issues and troubles before Congress, Brainard claimed in a 2007 research paper on China's global rise issued by the Aspen Institute that the CCP is "formerly communist" and has a "communist past."

"Heavy state control of this formerly communist economy has been withdrawn unevenly, so that much of the state-controlled banking sector continues to direct credit primarily to SOEs," wrote Brainard, who was working at the Brookings Institution, a liberal think tank. "However, China's primary point of uniqueness long predates its communist past."

Brainard, during her time at Brookings, also proposed raising taxes on airline tickets to help fund United Nations climate change programs.

Matt Buckham, founder of the American Accountability Foundation, a conservative advocacy group, told the Free Beacon that Brainard is a bad fit for the Federal Reserve post and should be closely examined by senators in charge of confirming her.

"Lael Brainard spends her time carrying water for the Chinese Communist Party, who run slave labor camps and hold the United States in contempt for our way of life. She's even going so far as trying to erase the fact that they are communists," Buckham said. "By any metric, Brainard is a bizarre pick for the Biden administration for a post at the Federal Reserve since her first nomination under Obama was marred because she couldn't even pay her taxes on time."

Published under: Biden