By Joy Wiltermuth
America was built on stolen land and by slave labor.
Those facts helped U.S. corporations prosper and the well-connected amass riches, but also led to a legacy of U.S. racial inequality that the coronavirus pandemic has made far worse.
Wrong lane for the Federal Reserve? Think again.
“We can’t just sit by, wait and hope” for racial equity in America to take shape, Raphael Bostic, president of Federal Reserve Bank of Atlanta, said Wednesday.
“This is a time for us to not shy away, we need to step forward.”
The call to action underpins a new series of virtual events hosted by the central bank as it seeks ways to uproot structural racism and inequality in the U.S. economy.
“We recognize that we have a role to play,” said Neel Kashkari, the Minneapolis Fed president, during the first leg of the series on Wednesday. “It’s not OK to say it’s someone else’s problem to improve outcomes for all Americans.”
Kashkari helped organize the Fed program following the death of George Floyd, an unarmed Black man, in May after a white, Minneapolis police officer pressed his knee against Floyd’s neck for at least eight minutes. The act was filmed and widely broadcast, sparking outrage and worldwide protests against police brutality, while swaths of America hunkered down at home during the pandemic.
To help find a more equitable path forward, Fed officials have been reaching out to business, community and academic leaders for ideas on what actions they might take to help reverse structural challenges to low-income and minority communities.
Ursula Burns, a Black businesswomen and former chief executive officer at Xerox Holdings Corp. /zigman2/quotes/201169674/composite XRX -6.36% , urged the Fed on Wednesday to use its regulatory, monetary and data-gathering tools to focus on building a more inclusive society.
“Everybody is passing this big load of misery on,” Burns told Kashkari, while pointing to essential workers who, eight months into the pandemic, barely are scraping by.
“We need to build a nation back,” she said, adding that the Fed should focus its monetary policy on helping “not just the rich guys, but the poor people.”
When the central bank cut interest rates to near-zero in March as the pandemic bore down on the U.S., it kept credit flowing. As a result, there’s been record U.S. corporate borrowing this year and fewer defaults than initially feared.
But slashing rates can hurt savers, the elderly and minority communities, where access to affordable credit already has been a longstanding scourge.
Geoffrey Canada, an educator and social activist and president of the Harlem Children’s Zone, said during Wednesday’s event that the Fed should examine how its policy of low rates for a longer period hurts the poorest people in the country.