Analysis & Comment

Opinion | ‘I’ve Seen the Challenges of Being in the “Other” Group’

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There’s a case to be made that the Fed is exacerbating inequality by pinning down short-term interest rates, which raises the value of stocks and bonds, most of which are owned by the wealthiest Americans. You will not, however, hear that case from Raphael Bostic, president of the Federal Reserve Bank of Atlanta.

Just the opposite, Bostic told me in a recent interview. Bostic, who is a gay Black man, has put a high priority on lessening inequality and promoting inclusion since becoming the Atlanta Fed’s president in 2017. He says his own experience has attuned him to discrimination and exclusion. In a speech in May to the Consumer Financial Protection Bureau, he said, “Economic inclusion, I firmly believe, is among the defining economic issues of our time.”

Bostic worked for the Fed’s of Governors after earning his doctorate in economics from Stanford. He became a professor at the University of Southern California in 2001 and stayed there, except for a stint at the Department of Housing and Urban Development, until joining the Atlanta Fed. His specialty is real estate economics and access to mortgage credit. According to his speeches, he and his husband also enjoy bird-watching and vacationing in recreational vehicles.

This interview has been edited for length and clarity.

Is the Fed exacerbating inequality by keeping interest rates ultralow?

I actually think that’s asking the wrong question. The goal was really to make sure the economy didn’t collapse so that there were jobs. That’s first order. If people don’t have a job then they have no hope of building wealth, so that’s the first thing we have to focus on. If you look at our policies, they are actually accomplishing that.

Have you begun to talk more about inclusion lately?

I actually think we’ve been talking about this for a while, basically pretty much the whole time I’ve been here. … A couple of years ago for our annual report the theme was “One Region. Many Economies.” About two years into my tenure we did a strategic-planning process, and coming out of that was this notion of economic mobility and resilience as something we needed to pay attention to. So the bank stepped up and leaned into that. And second, the events over the last year have given a broader focus to issues of inequity and structural barriers that are preventing people from fully participating, particularly around race.

Did the Black Lives Matter movement change your thinking or your practices?

I don’t think the movement has changed our practices or our thinking. The events have put us in a position to talk about things that we’ve been aware of and made audiences more receptive to hearing it.

Do you believe that your own experience as a gay Black man has made you more sensitive to issues of diversity and inclusion?

Absolutely. Lived experience informs how people are going to think about issues and what they’re going to be aware of and not aware of. I check multiple boxes. I’ve seen the challenges of being in the “other” group. It made me think about the voice that I have and how I use that voice to make sure that in the environments I’m in, everyone is heard.

We are told that we should not notice difference, but humans are tribal by nature. I’ve been followed in men’s stores. I’ve gotten extra monitoring out of a concern that I might actually run off with things. I’ve struggled to get taxi cabs in major cities. The first thing people are going to notice is your skin color. Sexuality plays out differently. You have to choose to reveal that. Early in my career I was not so open about this out of a fear that that might disadvantage me. The more guarded a staff person is, the less you’re going to get at their whole thinking. It has the potential to limit the ability of the organization to really come together.

What is the Atlanta Fed doing to promote inclusivity and fairness in the labor market?

One challenge is the issue of building a work force that is relevant for the economy of today and the economy of tomorrow. You have to engage with employers, and then you want to make sure you have education that’s available so that people can get those skills. Then you have to get the people there. The Rework America Alliance is a partnership where we try to do all of those things and create those networks at the local level.

Another challenge that many communities are finding is that you have a significant population that is on assistance and is not seemingly able to get off assistance. In some instances, it’s the way the support programs are structured and designed and the incentives that are embedded in them. We’ve developed some tools to help communities all over the country take a different approach and help workers make better choices. It’s called Advancing Careers for Low-Income Families.

I’ve spent a lot of my career on mortgage lending and incentives to get capital to flow to low- and moderate-income communities. Economists at the Atlanta, Philadelphia, and Boston Federal Reserve Banks have done research showing that African Americans are not building equity as fast as others, in part because they don’t refinance as aggressively. We don’t really understand why that’s the case. This gives us an opportunity to have a conversation with borrowers, bankers, churches, etc., to try to fix that.

Federal Reserve banks have always been strong on research. It seems that you’re focusing more now on what you do with that research.

For our bank, we have invested resources in that outreach piece. I have a soapbox issue: A lot of research creates great knowledge. And then it goes to a journal. Five people read it, and now six people have the knowledge. And nobody else finds out. We have a lot of knowledge that I fear is not actually known. And that doesn’t serve anybody. So, when I got to the bank, I said I’m going to make sure that every piece of knowledge we have is known in the communities that would benefit from having that knowledge.

The Readers Write

I’m grateful for all the smart correspondence I’ve gotten from readers in my first week. I hope to feature some of your messages each Friday in this space. Here’s one for starters:

Your column about Nixon abandoning the gold standard 50 years ago this month had some interesting political observations but missed the profound economic significance. Dropping gold and fixed exchange rates changed everything in government and even private finance: We fully entered the world of credit money. Stephanie Kelton and other Modern Monetary Theory (M.M.T.) economists explain how mainstream economists still fail to grasp that macroeconomics was turned upside down with the adoption of flexible exchange rates. Now both governments and commercial banks (outside the eurozone) can create money as needed for the economy without anyone having to worry about foreign central banks demanding payment in gold at $35 an ounce. Policymakers, and their advisers, need to understand and utilize that monetary flexibility.



The writer is university counsel emeritus at the University of New Mexico.

Quote of the Day

“I really don’t know one plane from the other. To me they are all marginal costs with wings.”

Alfred Kahn, chairman of the Civil Aeronautics Board, quoted in The New York Times, April 23, 1978

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