Raphael Bostic was appointed the President and CEO of the Federal Reserve Bank of Atlanta in 2017. The Harvard and Stanford educated economist was the first black and first openly gay man to be chosen as a Federal Reserve bank president. Bostic’s responsibility to lead the financial center of the South is a big one but he does carry an extra duty as someone who can speak to the issue of race – and how those issues trickle down on an economic level.
As the events of the last few weeks continue to swirl, Bostic penned an article this week with some of his thoughts on race and racism, and their moral and economic implications. The entire article is worth a read but it is particularly interesting to note his tying of the economy to improved race relations and a stronger cohesiveness as a society.
Bostic noted that his first thoughts were with those who have lost their lives and for those suffering through these events and that he stands with all those peacefully protesting for change.
He also delved into some of the sordid history of American race-related policies, including intimidation during Reconstruction, Jim Crow laws in southern states, redlining by bankers and brokers, segregation, voter suppression, and racial profiling in policing. Bostic pointed out that this legacy has had a major impact not only on those directly hurt by the policies, but on America as a whole and its economy.
“By limiting economic and educational opportunities for a large number of Americans, institutionalized racism constrains this country’s economic potential,” said Bostic. “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.”
Bostic did point out that major progress has been made. Many of the historical institutions that developed these policies have undergone legal reforms to end said policies, and more reform is under way in other areas. But Bostic said the legacies of these institutions remain and bias and prejudice passed down through history continue to play an outsized role.
He sees a role for the bank to end the cycle and to bring about a more inclusive America.
“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.”
He continued, “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. Through our monetary policy decisions, our role as a supervisor and regulator of banks, our support of the payments system, and our commitment to community and economic development, the Federal Reserve acts to create a foundation upon which businesses, families, and communities can thrive.”
To read the full letter: https://www.frbatlanta.org/about/feature/2020/06/12/bostic-a-moral-and-economic-imperative-to-end-racism
