Racism and the Economy - October 7, 2020
The presidents of three Federal Reserve Banks came together Wednesday to host a virtual conference on the historic roots and toll of a structural racism that, they said, continues to drag down the economy and devastate lives.
Fed presidents Raphael Bostic of Atlanta, Eric Rosengren of Boston, and Neel Kashkari of Minneapolis launched the seven-part Racism and the Economy series with a promise to take a frank look at flawed systems that have perpetuated discrimination.
Speakers at the event—which had thousands of viewers—were blunt with the Fed leaders, challenging them and their colleagues at the Federal Reserve to take a more prominent role in examining and addressing racial inequities.
Ursula Burns, former chief executive at Xerox, said the traditional notion of a so-called detached Fed removed from a direct role in ensuring positive economic outcomes for all citizens and addressing racial disparities frustrates her.
"It is important that we think about where we are as a country, and where we are as a world," she said, pointing to the grave societal inequities brought to light most recently by the COVID-19 pandemic. "We have to rethink what we're doing totally... [The Federal Reserve] has a lot of freedom in thinking about how your economic policies would drive growth, more equity and more inclusion. That's what we need."
Burns added, "There's 350 million of us that you guys have to help... It is a requirement of all the servants of the people—the Federal Reserve are the servants of the people—to actually understand the people."
Keynote speaker Angela Glover Blackwell called on policymakers to stop tinkering and use "radical imagination" to root out what she said was a deep and toxic racism in the United States.
"People are ready to do something different," she said.
Kashkari said he agreed with the calls from Burns and others.
"The reason we're having this series with Atlanta, and Boston, and Minneapolis coming together is I think we recognize we have a role to play," he said. "And it's not OK for us to say, 'Hey, it's somebody else's problem.'"
Bostic said in opening remarks that the presidents were prompted to act by recent violence against Black people—including the deaths of George Floyd in Minneapolis and Ahmaud Arbery in Georgia, among others.
"We know there is much to learn," he said. "It is my hope that through this series, we are able to build some muscle of our own to ensure that we are good partners in spotlighting problems and disrupting flawed systems, so that ultimately race is no longer a predictor of life outcomes."
The conference included a roster of nationally recognized experts, including the keynote speaker, Blackwell, founder of PolicyLink, a research institute that focuses on advancing low-income people and communities of color.
Blackwell said the United States was built on stolen land, genocide, and slave labor. "Racism is baked into every system in America," she said.
Blackwell said that historical reality is why Black people and other racial minorities bear the brunt of downturns and various crises, such as the ongoing pandemic, which has hit people of color hardest. Small steps to change entrenched systems isn't enough, she said. Bold thinking is needed.
"The fate of the nation is dependent on the very people who were left behind," Blackwell said. "If we get it right for them, we get it right for America."
Burns said people of color have long been forced to contort to fit into systems whose rules were made for and enforced by white men, and it's held them back.
But she also said she was optimistic about long-term change, even though she's worried about the deep divisions now on display nationwide.
"We are American first, and we better get back to that," Burns said.
"We are the coalition for the greatness of America, we are the coalition for the progress of the world, we're the coalition for good, and we have to actually act like that," she said. "And the Fed has to help."
In a panel discussion, the three Fed presidents reviewed ways the Fed can address racial inequalities, including better engaging communities of color, acknowledging the nation's history, and prioritizing diversity and inclusion when hiring.
Rosengren said another clear way is to continue research that exposes racial disparities, something the Federal Reserve Bank of Boston has a history of doing. He added it's critical to look at disparities in sectors such as education, criminal justice, public health, and housing, because they all feed into broader wealth disparities. Concerns in those sectors, and hopefully concrete solutions, will be discussed in detail in the series' remaining conferences, he said.
"Clearly as a country we have some distance to go, even though we've come some distance,"
Bostic said now is not a time for the Fed to "shy away."
"We need to step forward and be present in this conversation," he said, "and own that we have a role to play."
Watch a recording of the October 7 event.
By Jay Lindsay of the Boston Fed