“Systemic racism is around us, all the time,” Atlanta Fed president says
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In an essay published by the Federal Reserve Bank of Atlanta on Friday, President and CEO Raphael Bostic said he stands with peaceful protesters fighting for racial justice and called for an end to the “unjust and destructive practices” that contribute to inequality. As the first Black regional president in the central bank’s 107-year history, he touched on how institutionalized racism hurts the economic potential for all Americans and vowed to work toward an inclusive economy.
He spoke with “Marketplace” host Kai Ryssdal about what the Federal Reserve system can do to advance racial equality and how he’s feeling about the recovery from the COVID-19 pandemic. The following is an edited transcript of their conversation.
Kai Ryssdal: I don’t know if you remember this, but when I was at the Atlanta Fed last fall, we took a walk through the passageways and the boardroom, and we passed a row of portraits of the past presidents of the Atlanta Fed. And I said something like, “Holy cow, that’s a lot of old white guys.” And you said, “Yeah, but we’re changing that.” And clearly we are, but what I want to do is get to this essay you wrote, and I want to ask about why you felt the need to write it now.
Raphael Bostic: You know, we have been working on issues around inclusion for a long time. But the pandemic and its impacts on the economy really fell hard on lower-income folks and people who have not been as well attached to the economy. And that was weighing on us and on me. And then George Floyd’s death really changed people’s willingness to be talking about these issues, and it just felt like this was a real good time to speak to some things that needed to be spoken to, to an audience that I thought would be pretty receptive to it and be ready to have that conversation and the conversations to follow.
Ryssdal: It’s a pretty personal essay coming from a guy who helps make monetary policy in this country. And you say at the end of this, you say in the last paragraph, “I feel the weight of those affected by the hateful bias and prejudices that have no place in our society.” You’re a unique messenger, right? You’re a Black guy running monetary policy in this economy.
Bostic: Yeah, I’m different. But I think that that’s been helpful in this, in the sense that I live the same experiences that every Black man in America does. And when I go down the street, people are gonna judge me first by what I look like because they don’t know my title. And so I do carry all that stuff, and I think hearing that from me has really caused a lot of folks who have known me for a long time to think differently about what race means in America, and their place in it, and the things that they might do to help improve the situation.
Ryssdal: Well, so let’s talk about what things the Fed might do. How much of what has been happening, in this economy for hundreds of years, honestly, how much of that can the Fed fix? Because as you know, Chair [Jerome] Powell and you, even in this essay, say, look, we have this dual mandate, right? Stable prices, full employment. Tell me how the Fed can do things to change the dynamic now.
Bostic: Well, I think there are a couple things. One is that what we’ve learned in the last 10 years or so is that the economy can run a bit hotter than was previously believed without getting inflation to be spiraling out of control. And so what that means is that we can really allow the economy to run strong, and that should help all Americans. You know, just before the pandemic, unemployment rates for African Americans were at historic lows. And in part that was because our policies were not restrictive, we did not put the brakes on nearly as fast as we might have otherwise. And then the second thing I think, which is really important, is that, you know, the Fed has the ability to convene. And so we can bring people together and really get them to think hard about what things they might do in their communities to make real change and to lead to the more inclusive economy that I think we should have and that will make America better.
Ryssdal: You talk about an inclusive society meaning an inclusive economy, and that makes sense. But elsewhere in this essay, you say “systemic racism is a yoke that drags on the American economy.” Why is that so hard for people to understand?
Bostic: What I think is hard for people to see really is that systemic racism is around us all the time. There’s a book that I talk about a lot, it’s called “Citizen” by Claudia Rankine. And in that book, she tells a bunch of short stories that describe the slights that African Americans have as citizens in America that most people won’t notice. And that’s the part that I think that is really different. For many people, the systemic racism is so ingrained in everything that we do on a basic level that they don’t even see it. They don’t think about it as a structured inhibitor of African Americans’ ability to do the things that other people get to do with no questions. And I think what’s changed is that people are seeing things happen that are getting them to think, “Well, maybe things are different for African Americans. Maybe we should talk about this more and get a deeper understanding.” And once that understanding becomes clear, then that statement is an easy one for everyone to get their head around.
Ryssdal: I was reading Isabel Wilkerson’s book the other day, “The Warmth of Other Suns.” And there was a line and it hit me” “one set of people is in a cage, the other set of people doesn’t see the bars.”
Bostic: Yes, I was actually talking with another friend of mine and he said, “This is almost as if the scales have come off of people’s eyes.” So it’s not that they were blind, it’s that they were structurally unable to see things, and that disability is disappearing.
When we reached Bostic, he was on a vacation road trip. While parked on the side of the road for this interview, Ryssdal asked him about where he sees the economy heading.
Bostic: So, my sense is that, you know, the second half of this year is going to be much, much better than what we’ve seen thus far. I think we’re going to see solid growth in the third and fourth quarter. But at the end of the year, we will be behind where we would have been absent the coronavirus, and so there will still be room to improve to get us back to full recovery. I’m expecting that will happen sometime toward the middle to the end of 2021. But we’re going to continue to monitor to make sure that we understand how the economy is evolving as the virus progresses through the economy.
Ryssdal: Your colleague on the Fed and occasional guest on this program, Rob Kaplan from the Dallas Fed, said this weekend, “We’re going to need more from fiscal policy makers,” like Congress and the White House, in terms of rescue and relief money. Do you agree?
Bostic: I think that’s probably true. One thing that we’re doing right now is we are canvassing the economy broadly to see where relief has gotten and where it’s working, and then where relief has not gotten and maybe isn’t working as well. And I think that when we identify those places where it’s not working, it’s important that they get the same support that everybody else has. And I’m committed to going and talking to policymakers, making sure they’re aware of places where there does seem to be continuing distress from the pandemic. And I’m going to encourage them to think hard about doing things to help those people.
Ryssdal: Well, let’s break the fourth wall here. We have gotten you in an RV on the side of the road somewhere, I imagine just outside Atlanta or in Georgia somewhere?
Bostic: Oh, no, we’re in Utah.
Ryssdal: You’re in Utah? OK, well, great, even better. What are you expecting to find?
Bostic: Well, you know, I actually think that what we’re going to find is a large mix, and that will be interesting. I actually think relief has gotten through to many more businesses and many more families than is really reflected in the data. And some of the concerns I have are around the timing of the unemployment insurance and how quickly it’s getting to families. But the parts that I’m most worried about — and we’re going to do a lot of investigation — is the smallest of the small businesses, that connective tissue and communities that really helps them be close and cohesive. Because those are the ones that are the weakest. So I’m really hoping that they’re finding support, but I want to really understand the plight that they are going through.
Ryssdal: Well, I’ll tell you what, we’ll call you in a month or two after you’re done with the road trip, and we’ll see what you found out about that.
Bostic: That sounds like a deal. I’d be happy to talk with you.
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