Raphael Bostic says racism has economic impacts

Raphael Bostic, Atlanta Fed President in a June essay said that racism has economic impacts, emphasizing that “systemic racism is a yoke that drags on the American economy.”

The events that occurred within the past few months with regard to the killings of unarmed Black civilians by members of the police force have stirred up the waters systemic racism that has been ongoing for decades in the United States. Many individuals and organizations have come out to publicly condemn the act of social injustice and systemic racism. Quite a number of corporations have also taken the personal effort to contribute to social justice and close up the wealth gap between the majority and minority in the United States.

The Atlanta Fed president, Bostic also wrote an essay, comprehensively showing how racism impacts the economy and proffers multiple ways the organization can help the Black community contend for equality.

“I believe the Federal Reserve Bank of Atlanta, and the Federal Reserve more generally, can play an important role in helping to reduce racial inequities and bring about a more inclusive economy,” Bostic wrote. “We can do this, first, by fulfilling the mission given to us, which is to promote the health of the U.S. economy and the stability of the U.S. financial system.”

Bostic, as an economist has based most of his works on racial disparities in accessing capital, and has also helped lead public discussions as one of the presidents of the 12 reserve banks.

In his essay he wrote, Bostic highlighted major points in light of the recent killings and systemic oppression of Blacks, referencing the death of George Floyd who died in police custody, as well as Breonna Taymor, Ahmaud Arbery, Dana Martin, and many others who have been victims of apparent or alleged bias.

“By limiting economic and educational opportunities for a large number of Americans, institutionalized racism constrains the country’s economic potential,” he wrote. “The economic contributions of these Americans, in the form of work product and innovation, will be less than they otherwise could have been. Systemic racism is a yoke that drags on the American economy.”

In a recent interview with regard to racial disparity and social injustice, Mr. Bostic said many of the rising themes in discussion now, have long been the subject of private discussion within the Fed. “What changed is that a lot of the issues underlying those conversations have been laid starkly before us in a way that really makes it difficult to not talk about them,” Bostic said. “We are a different Fed in a lot of ways.”

According to Bostic, the Fed has come under criticism over the years due to its lack of diversity in leadership. Prior to when Bostic came on board the Fed leadership in 2017, there had been no Blacks that ever occupied the position of Fed chair nor regional president. Bostic has also taken the initiative to suggest possible steps that can be taken to promote equality of opportunity in the Fed and society at large. His proffered solutions include the Fed pursuing its dual mandate of full employment and price controls, ensuring that the economy is running at its full potential, and by setting a standard for economic inclusion that starts with the Fed.

“What we are witnessing in the protests is inspiring all of us to step up, and the Atlanta Fed stands by those fighting for equality in every form.”