The U.S. Federal Reserve must do much more to address the crippling economic effects of racism, said three Fed bank presidents on 7 October in the first of a series of Fed events focusing on race and the economy.
“This is a time for us to not shy away,” said Raphael Bostic, president of the Atlanta Fed and the first African American to lead a regional Fed bank. “But we need to step forward and be present in this conversation and own that we have a role to play.” The Fed must show in its actions and policies that it represents all Americans, he said.
Neel Kashkari, President of the Minneapolis Fed, and Boston Fed President Eric Rosengren also spoke at the virtual event.
The Fed has been prodded to focus greater attention on structural racial inequities in the economy by criticism of its current bailout plan.
The Fed’s package of emergency loans and grants shored up financial markets and loaned money to corporations, buoying the stock market – 87 percent of which is owned by the wealthiest 10 percent of U.S. households, according to the Fed’s own data.
In contrast, less than 2 percent of stocks are owned by black and brown households.
Unemployment figures show the economic shutdown has had a disproportionately damaging impact on people of color, a large number of which work in face-to-face industries, such as food service and hospitality.
Fed policies and programs have not addressed that inequity.
“Why is it that business has a louder voice historically in the Federal Reserve than workers,” Kashkari asked. He said he and his staff are discussing ways to give data about workers and communities of color greater representation in the Fed’s “Beige Book,” the eight-times-a-year report on national economic conditions.
“We’ve got to think about how do we lean into a number of areas that we may not actually have the specific authorities or policies that drive it, but we have information, we have ways of thinking about it that are important,” Bostic said.
Although the Fed has limited powers to intervene directly, it can regulate and also wield influence.
For example, the central bank could redesign the Community Reinvestment Act, which outlawed so-called “redlining” of minority neighborhoods, to give lenders incentives to be more creative in their investments in those areas, Bostic pointed out.
“First, we have to listen,” Rosengren said.
TREND FORCAST: Talk is cheap, and so will be the money and effort by the Feds – who have pumped well over $30 trillion to bailout Bankster Bandits and the Wall Street mob since the Panic of ‘08 – to spread income inequality… Black or White.
