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Rethinking Federal Reserve Policy in a Post-Covid Economy: From Interest Rates to Corporate Profits

The May, 2023 jobs report paints an optimistic picture of the U.S. economy, showing the addition of 339,000 jobs - a pleasant surprise for many who anticipated a slowdown. Yet, this report carries more weight than simple optimism. It plays an instrumental role in shaping the Federal Reserve's decision-making process, particularly whether to resort to an old lever: raising interest rates. Traditionally, the Federal Reserve has employed interest rate increases as a tool to manage inflation. The underlying principle is relatively straightforward: raising interest rates slows borrowing and spending, thereby tempering the labor market and reigning in price increases. However, such an approach also increases unemployment. Given increasing social volatility and our precarious cultural  position, we must question the efficacy of this strategy in our evolving economic landscape. The impact of the Covid-19 pandemic continues to transform our world, including the economy, in profound ways. A
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Projected Impact of Federal Government Default on Black Americans: Dire Consequence

The prospect of a federal government default is a daunting scenario that would have far-reaching consequences for every sector of society, but the impact of such an event would disproportionately affect marginalized communities, including Black Americans. Given the historical and systemic inequities this sector has endured, any economic disruption resulting from a federal default would exacerbate current disparities and further marginalize this already disadvantaged group. We explore the potential repercussions of a federal government default on Black people and highlight the need for proactive measures to mitigate these effects, which we estimate to be $132 billion in the case of a protracted default.  (Note that our estimate does not include direct stock market impacts since only 34 percent of Black families own any equities according to the Federal Reserve Board, compared with 61 percent of White families. Our estimate also has a shorter time frame than other studies.) Economic Inse

Why it is Reasonable to Assume the GOP wants an American Debt Default...

  To gain an honest and clear-eyed understanding of the current fiscal, monetary, and political situation, it is necessary to examine the historical context of the current debt crisis. This analysis can provide an  important perspective. One relevant historical period to consider is the Republic of Germany in the period preceding World War II. During this time, an extremist right wing party launched a successful strategy to create chaos in the political environment, leading to hyperinflation, economic instability, and social unrest. They took advantage of the economic turmoil to gain power, leading to the rise of a fascist regime that caused immense harm and destruction. Other factors, such as Germany's defeat in World War I, the Treaty of Versailles, and widespread disillusionment with the political establishment, also played a role. It is important to consider the contemporary political landscape, including the actions and policies of political leaders and parties, and the broade

Closing the Gap: Black Unemployment Reaches Lowest Rate Ever

The latest employment data released by the Labor Department on Friday, May 5, shows the U.S. job market continuing to grow at a strong pace. Employers added 253,000 jobs in April on a seasonally adjusted basis. The unemployment rate also decreased to 3.4 percent, down from 3.5 percent in March, matching the lowest since 1969.  Black unemployment hit a historic low. The unemployment rate for Black workers fell to 4.7 percent in April, the lowest on record since the Labor Department began collecting Black unemployment data in 1972. This is a significant achievement for the Black community, which has historically faced much higher levels of unemployment relative to other ethnic groups.  The unemployment data creates challenges for the Federal Reserve, complicating monetary policy and the potential pause in interest rate increases. The strong labor market could lead to an increase in wages and inflation, making it more difficult to reach current monetary policy goals. Another challenge is

Impact of Regional Bank Troubles on Black People

The impact of regional bank troubles on Black people will likely be multifaceted, since this is a group with a higher proportion of underbanked and unbanked individuals. Some potential consequences include: Reduced access to banking services: If regional banks close or consolidate, it may lead to a reduction in the number of bank branches in communities with a high proportion of Black residents. This could make it more difficult for people in these communities to access banking services, leading to a higher reliance on alternative financial services, such as check-cashing outlets and payday lenders, which often have higher fees. Credit availability: As regional banks face financial troubles, they may become more risk-averse, tightening their lending standards. This could make it harder for Black individuals and businesses to obtain credit, potentially exacerbating the existing racial wealth gap. Impact on local businesses: Many small and local businesses, including those owned by Black

Attending the Georgetown Africa Business Conference. Ntsetselelo Dlamini, Intern, Skidmore College.

On Friday, April 28, 2023, I had the enriching experience of volunteering at the annual Georgetown Africa Business Conference, which was centered around the theme "The Future is African - Harnessing Opportunities for a Prosperous Continent." One of the highlights of the event was an insightful presentation by the esteemed keynote speaker, Bobby Pittman. Mr. Pittman is the Managing Director of Kupanda Capital, a boutique investment platform with a primary focus on Africa. His impressive career includes a stint as the president of the African Development Bank, where he played a pivotal role in shaping Africa's economic landscape. During his thought-provoking talk, Pittman highlighted distinctive areas in which Africa holds a comparative advantage. As a prime example, he drew attention to Nigeria's burgeoning music industry  and explained how digital technology has been instrumental in catapulting Afrobeats to global prominence. He posited that the continent's journe

Bank Failures, 2000-2023.

  Source: proph3tsix in r/Bitcoin on Reddit.