A former Federal Reserve employee laid out a scathing critique of the lack of diversity and inclusion at the central bank and the economics profession more broadly — and drew a sympathetic reaction from Fed Chair Jerome Powell.
Claudia Sahm, who worked at the Fed for more than a decade before leaving in 2019, alleged in a 6,000-word blog post on Tuesday night that an unnamed official at the central bank, who she called her “tormentor,” demeaned her expertise and made her feel like she didn’t deserve to be an economist.
Sahm also said another official, former New York Fed President Bill Dudley, privately questioned whether she deserved to be credited for the so-called Sahm Rule, an indicator she developed to more quickly identify the start of a recession. Dudley did not immediately respond to a request for comment.
Her post, which includes anecdotes from other people’s experiences, touches on a broad range of themes, including sexism, racism and elitism. “Do you know how many Black economists work at the Fed?” she wrote. “One out of 406. Economics is a disgrace.”
Powell, asked at a monetary policy press conference on Wednesday about the post, said women at the Fed have experienced “pain and injustice." He said he had not yet read Sahm's piece.
Sahm also talks about her battles with mental illness. She said a friend at the central bank helped her keep her job after she had a breakdown from stress in 2011 but failed to tell her that she could file a complaint about her “tormentor” with the U.S. Equal Employment Opportunity Commission.
“I stopped going to people,” she said. “It was always my fault. It was always explained away.”
She refers to anecdotes from others, including a female economist at the Fed, who allegedly “was asked by male colleagues at lunch if she ‘satisfied’ her husband.”
“I mainly share my experiences here,” Sahm said. “I am NOT special. Many have similar experiences, in some cases worse. I have written documents to back these incidents up. It is awful to have these records in my email inbox, my Twitter, my text messages. Do not tell me, good men are economists too. I do not care. You did not protect the victims. You did not protect me.”
Powell emphasized that the Fed has made it a “very high priority to have as diverse and inclusive an organization as we can,” and that progress has been made.
“Without having had a chance to think about it, read it, understand it, I’ll just say a couple things,” said Powell, who has led the Fed since early 2018. “It’s fair to acknowledge that there’s been a lot of pain and injustice and unfair treatment that women have experienced in the workplace, not just among economists, but among economists and at the Fed.”
“Like every other organization, the Fed could’ve done more and should’ve done more,” he added.
Powell argued that attracting top talent means fostering a diverse workplace where people feel free to speak up and disagree respectfully.
“We’re doing a lot. I’m sure we can do more,” he said.
In a tweet following the press conference, Sahm noted that she worked with Powell since he joined the Fed board in 2012. “He cares,” she said.
Sahm has triggered some backlash by directly criticizing well-known economists, including former Treasury Secretary Larry Summers.
Summers famously suggested in 2005 that part of the reason women are under-represented in top STEM positions is because “in the special case of science and engineering, there are issues of intrinsic aptitude, and particularly of the variability of aptitude, and that those considerations are reinforced by what are in fact lesser factors involving socialization and continuing discrimination.”
“Summers continues to demean women" economists, Sahm alleged. “I had an early career woman come to me recently with an inexcusable interaction with him. Larry, it is not women’s IQ, it’s yours that is the problem.”
This renewed criticism of Summers comes as he is reportedly advising presumed Democratic presidential nominee Joe Biden on economic policy.
Asked to comment on Sahm’s post, an aide to Summers passed along a quote from one of his former PhD students that also cited other female mentees of Summers, including Facebook executive Sheryl Sandberg.
“I read Claudia’s blog with interest, as I think we can all agree there are large problems in the field that need to be addressed,” said Natasha Sarin, now at the University of Pennsylvania. “That said, the picture of Larry she paints could not be further from the truth. Larry is the reason I am an economist — like Claudia, I was told at various stages in my career that I wasn’t talented enough to make it in this field. Larry always told me, in his characteristically blunt way, that that was nonsense.”
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