Fomc, USA, Federal Reserve discussed on The Indicator from Planet Money
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And the title is how the Federal Reserve can help black workers. Yes. For a lot of people, the Federal Reserve is a very kind of esoteric, you know, it's like the raising lower interest rates that get very boring speeches. It's like how can they possibly help black workers in the U.S.? So lay out the strategy that Carl presents. So essentially, you talked about the FOMC, which is the federal open market committee's statement on the longer run goals and monetary policy strategy. The FMC right now is being used to ensure that not only is the recovery broad based, but it's also as inclusive as possible. And he cites it as a way to think about, okay, if we're going to ensure that we have inclusive economic recovery moving forward, black workers are really, really good proxy for that. So we can't say that the unemployment rate is dropping for everyone if black workers are still very much out of work and they're unemployment rate is rising. So for example, I think there was some chatter some time ago where people were saying, oh, things are improving, but then if you actually disaggregated the data, black women's unemployment rate actually jumped. So that's kind of what he's getting at, where it's, you know, we don't want to say that economic recovery for some is economic recovery for all. So in a let's talk about another essay from economist Kyle Moore. It's about stratification economics. And traditionally, I think people think of economics as how to best allocate scarce resources. That's sort of the initial puzzle. But from what I understand stratification economics is a way to explain economic inequality that looks at how different groups of people are separated or stratified in a society. And the essay starts out talking about how we need to actually look at all of economics a little bit differently in order to address and solve these issues. Absolutely. Yes, I think that his essay is really shocking. Yes. And I mean, the entire book is pretty shocking. It's just facts to be Frank. The facts are pretty bad, so we need like way better solutions. And his assay, I really love it because he lays out the facts in a very clear way. Like this idea, for example, that the racial gap in earnings or in employment is due to some sort of education and skills gap, is something that we should actually question, right? And this is very much where stratification economics comes from. There are structural factors that essentially limit opportunity from the very get go. And so how do you then factor that into someone's quote unquote individual decision to maximize their utility? And so the way that he thinks about stratification economics is that he says, look, it should be used to evaluate the structural influences that impact the U.S. economy at the intersection of race class and gender. And the economists that I've really pioneered this, who have sort of said, look, racial injustice is in the DNA of America, we can't just ignore it when we're talking about the economy. I also feel like it kind of looks at the economy more of as like a living thing rather than like a machine and you put X in one side and why should come out the other side. But of course, it's messy. It's like a living organism, all the good and bad that come with that. That's exactly it. That's I love the way you describe that. The economy is living, right? And one thing that I loved from my microeconomic theory class was that, you know, my professor said, you know, not every efficient market equilibrium is a fair equilibrium, or welfare maximizing equilibrium. And I think that that's a really poignant point, right? This idea of like, yeah, you might have the market workout an efficient outcome, but that efficient outcome might be completely unfair to different groups. And I think that that's what Kyle's es ultimately gets at that. The way that the market is constructed currently, you know, the economy is constructed currently is unfair to black people. So we need to think about ways to mitigate that. And one really interesting solution comes up in the book and the essay of William darity junior who yeah, it's very well known economists often called sandy darity. Doctor Derrick, he talks about reparations and an economic Bill of rights. Talk a little bit about those two concepts. Yeah, so reparations from the perspective of doctor dairy's essay says, if you are African American, meaning that your descendants are formally enslaved, African Americans, then America definitely owes you something and they owe you money, right? This idea of the entire economy was built off of the slavery system that existed, then segregation, then Jim Crow, and arguably the prison system, the prison industrial complex. And so all of these things compounded upon each other have made folks who are not black, lots and lots of money. And that's why it's incredibly important that folks who are looking to mitigate the economic realities that black Americans are facing disproportionately, think to reparations as a possible way to do that. Yes. And he brings up the statistic, which is very stark, which is he says, one fourth of white households have a net worth of more than a $1 million. So a quarter. And 4% of black households have wealth of more than a $1 million. Yep. And he like directly ties this back to slavery to the systemic racism in the U.S. and how that's played out in markets and housing and everything. And he also talks about, you know, the economic Bill of rights, which he sees as a program of universal benefits guaranteed to all Americans, and so the way that he breaks that down is that everybody gets Internet. Internet is something that connects us all, but it also connects us to opportunities, specifically economic opportunities. And so we need to think about bold solutions that address those disparities and get at the root cause of them. Anna, you put this book together, you gathered experts from all these different fields and collected these essays. I'm wondering what your takeaway was from this project. Yeah, so my takeaway really boils down to three words. Oh, actually four. Listen to black people. Seriously. Like, listen to black people. And when I say that, I mean, black folks have been saying a lot of these ideas for a very, very long time. You know? And the truth of the matter is the best outcome for black people is a better outcome for everyone else. And that is the biggest takeaway from this book. Whatever is happening with the black American community in the United States is indicative of what is happening to those who are most marginalized and in my opinion those who might become marginalized in the future. And so it's incredibly important that we use our policy solutions to gear them towards the black American community to ensure that they have the resources that they need to thrive and live in incredible life in the American context. And a gifty apocalypse edited the new book, the black agenda, bold solutions for a broken system..