The Roosevelt Rundown is an email series featuring the Roosevelt
Institute’s top 5 stories of the week.
1. The Origins of the
Racial Wealth Gap
As part of its 1619 Project analyzing the legacy of American
slavery, the New
York Times Magazine examines the 400
years of policy choices that have driven the racial
wealth gap—from segregation to redlining to
evictions. Quoted in the piece, Roosevelt Senior Fellow William A.
Darity Jr. traces the origins of the gap to the government’s failure
to provide land grants to the formerly enslaved. “To the extent that
Blacks have the capacity to accumulate wealth, we have not had the
ability to transfer the same kinds of resources across generations.”
To confront this systemic and historical injustice, we
must rewrite
the racial rules.
2. This Land Was
Our Land
Further exploring the effects of land loss on the
racial wealth gap, an Atlantic piece details the dispossession of 98
percent of Black agricultural landowners and 12 million acres over the
last century—most of which occurred after 1950. The article also
spotlights analysis by a research team including Roosevelt Fellow
Darrick Hamilton and Dania Francis of the University of Massachusetts:
“The dispossession of Black agricultural land resulted
in the loss of hundreds of billions of dollars of Black
wealth. We must emphasize
this estimate is conservative . . . Depending on multiplier effects,
rates of returns, and other factors, it could reach into the
trillions.”
3. Racial Justice as Economic
Stimulus
A new McKinsey
report quantifies the economic benefits of
closing the widening racial wealth gap: as much as $1.5 trillion in
GDP growth by 2028. In its
discussion of the income gap, the report also warns of the racially
disproportionate impacts that automation may have on Black workers in the coming
years: “Broadly, we calculate that Black Americans are at risk of
losing 459,000 more jobs than white Americans are because of these
jobs’ higher automation risk." In a recent Roosevelt issue brief,
Insight Center Vice President of Programs and Strategy Jhumpa
Bhattacharya analyzes how a guaranteed
income could
redress these divides.
4. Low Interest in Investment
A Bloomberg
Businessweek
article on stock
buybacks draws on
the work of Roosevelt Fellow JW Mason in explaining the fractured
relationship between corporate debt and capital expenditures.
Because of an increasingly shareholder-first
mentality, corporations are now likelier to funnel borrowed
billions to stock buybacks, rather than capital investment.
The result:
Federal
Reserve interest
rate cuts don’t pack the same punch they used to. “If you can borrow
on more favorable terms, you don’t necessarily invest more,” Mason
says. “You might think this is an opportunity to give bigger payouts
to shareholders. This is a big reason why monetary policy isn’t as
effective as it used to be.”
5.
Reaching Our Economic
Potential
In an op-ed for
Project
Syndicate,
Roosevelt Chief Economist Joseph Stiglitz argues that Trump’s deficit
economy has harmed our economic potential. “Redistribution from the
bottom to the top—the hallmark not only of Trump’s presidency, but
also of preceding Republican administrations—reduces aggregate demand,
because those at the top spend a smaller fraction of their income than
those below.” In an issue
brief published
this year, Roosevelt’s JW Mason makes the case that public spending
and investment should fill the vacuum—and that we can afford it. For
the blog, Roosevelt Forward’s Vice President of
Strategy and Policy Nell Abernathy urges 2020 Democratic candidates to
defend the efficacy of public spending. “If we truly
learned the lessons of the past, the question should no longer be “How
will you pay for it?” but “How will you ensure that our economy is
reaching its full potential?”
What We’re
Watching
Last
Sunday’s episode
of Patriot Act with Hasan
Minhaj examines how Big
Pharma has profited from the fentanyl overdose epidemic. On Friday,
August 20, Roosevelt will participate in a day of action
(#PeopleOverPharma) to fight back against the greed taking lives and
sapping wallets. Click here for more information and to find an event
near you.
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