Wednesday, December 6, 2017

"U.S. clean energy developer shares dropped this week, as the Senate tax bill threatens to erode the $12 billion tax-equity financing market for wind and solar. Renewable-energy developers sell the credits to banks and insurance companies, which then apply the credits to their own tax bills."


Monday, December 4, 2017

The New Tax Law and You

Webinar: $60
Wednesday, December 13, 2017 from 2:00 PM to 3:00 PM (EST)

This seminar will review the impact of the recently passed tax bill.
According to news reports, "The Congressional Budget Office..analysis of the Senate's tax bill..estimates, anyone making less than $30,000 a year would feel the pinch starting in 2019, with the greatest 'savings' to the government (not to you - a combination of either increases in payments or decreases in money spent on a group in services) coming from those who make less than $10,000 a year.

By 2020, everyone making $40,000 or less a year would also be contributing to lowering the deficit by paying more in taxes and/or receiving less in services, creating a net savings for the federal government. In that year, the groups making between $10,000 and $20,000 and between $20,000 and $30,000 would each be contributing double what the under-$10,000 group did in savings.
By 2027, everyone making less than $75,000 would provide a net savings to the government, whether through higher taxes, lower amounts spent on services, or both."

Others have noted that the law will "lead to cutting social programs that the majority of retired and poor Americans need and want." Finally, "most middle-class Americans will pay more in income taxes -- while facing the loss of health benefits."

We will examine how this law is likely to specifically impact you.

Sunday, October 29, 2017

IMF and World Bank Pivot Toward the Blockchain. Brendan Cody, Impact Investing Intern, George Washington University

The emergence of blockchain technology and cryptocurrency creates potential threats, but also opportunities for the world’s central banks. We noticed a pivot toward greater discussion of blockchain at the IMF and World Bank meetings we attended in early October as central bankers, financial institutions and policymakers took note of these developments.

Cryptocurrencies do not require an intermediary to verify and oversee transactions, allowing transactions to bypass the current monetary system overseen by central banks using fiat currencies.

In their official capacities as international organizations seeking coordinated and stable monetary policy, the International Monetary Fund and the World Bank recognize the potential of blockchain technology and both have taken significant steps in this fintech space.

Christine Lagarde, managing director of the IMF, suggested the creation of a digital currency based on the special drawing rights, a basket of international reserve currencies. There are details and pragmatic questions to be answered about how the currency would function, but this is certainly a positive start. Special drawing rights are seldom used, but blockchain technology could increase their utility by lowering transaction costs and decreasing settlement time. In April, The World Bank created a lab to evaluate blockchain-based currency and data storage applications.

In interviews with CNBC, both Christine Lagarde and World Bank President Jim Yong Kim were cautiously optimistic about developments in blockchain technology, acknowledging the potential but mindful of the risks embedded in this relatively unproven technology. These risks include new, unanticipated security threats and the potential for manipulation by large actors with nefarious purposes.

It will be interesting to see what the future holds for these technologies from an regulatory and institutional perspective, but blockchain's potential for disintermediation of the IMF and World Bank has put these large financial institutions on notice.

Thursday, October 19, 2017

The IMF, BASEL III and Black Banks

IMF Annual Meetings
Small Is Beautiful – Regulatory
Approaches for Non-Systemic Banks
October 14, 2017

Question about Black banks at a session on: How can a more proportionate approach to regulation of small banks be applied to align more closely with their size and business models?

William Michael Cunningham
Creative Investment Research


David Lipton, First Deputy Managing Director, IMF

Michael Gibson, Director of the Division of Banking Supervision and Regulation, Federal Reserve Board

Wednesday, October 11, 2017

The Next COINTELPRO: Black Lives Matter as a violent threat

According to an official assessment obtained by Foreign Policy Magazine, the US government has declared “black identity extremists” like the "Black Lives Matter" movement a violent threat to the country. This assessment was made by the FBI’s counter-terrorism division.

The finding, which carries with it the authority of a major counterterrorism arm of the United States, authorizes agencies of the Federal Government to use extraordinary means to protect the country from this erroneously declared threat. This might include spying on, rounding up, or forcibly detaining BLM activists and their supporters.

History has shown what this means. COINTELPRO, "a series of covert, and often illegal, projects, starting in 1956 and conducted by the United States Federal Bureau of Investigation (FBI), aimed at surveilling, infiltrating, discrediting, and disrupting American political organizations."

FBI records show that COINTELPRO resources targeted groups and individuals that the FBI deemed subversive, including..activists of the Civil Rights Movement or Black Power movement (e.g., Martin Luther King, Jr. and the Black Panther Party).."

One does not need to go back to 1956 to find a violation of Black first amendment rights by law enforcement organizations: in 2014 and 2015 "undercover officers in the New York police department infiltrated small groups of Black Lives Matter activists and gained access to their text messages.."

Given the fact that the FBI and other police departments have "downplayed the threat posed by white supremacist groups" this new declaration should be viewed with alarm.

We strongly encourage members of the Congressional Black Caucus to hold an emergency town hall conference call on this matter, using all available technologies and with all deliberate speed. 

Thursday, September 14, 2017

The SEC, ICOs and roaches

In a statement straight out of the Ministry of Public Enlightenment, a member of the U.S. Securities and Exchange Commission's (SEC) division of enforcement "compared those seeking to leverage the blockchain use case improperly to cockroaches."

To be specific, SEC Enforcement Division co-director Steven Peikin said "roaches kind of crawl out of the woodwork and try to scam money off of investors."

Of course, he should know.

According to the Anne Frank Guide, this type of language was a key feature of nazi propaganda: "Jews are described everywhere as a threat to Germany and the German way of life that had to be dealt with quickly and harshly. They were even compared to rats and cockroaches."

The issue is this: it is impossible for Mr. Peikin to know which ICOs are scams unless he can look into the hearts of ICO issuers to determine their true motivation. He knows this. We know this. He must, then, actually be referring to all ICOs. This is the same type of  discriminatory attitude used to categorize all Black men as "thugs."

This is also a prejudicial statement from a person in a position to not only influence, but to actually carry out enforcement actions against ICO issuers. My hope is that legal counsel for those so accused would point to this single statement as justification for dismissing, or at least questioning, any charges brought by the SEC.

One wonders why the SEC did not use the same language to describe the traders at Goldman Sachs, fined more that $5 Billion in connection with its sale of residential mortgage backed securities, or Wells Fargo when they set up a special sales office to steer risky subprime loans to residents in Prince George's County, Baltimore city and other predominantly black communities, or Standard and Poor's when issuing fraudulent credit ratings on residential mortgage-backed securities and collateralized debt obligations. (Talk about insects....)

We know why Mr. Peikin and the SEC Enforcement Division made no such statements. After all, employees at these large financial institutions are friends, fellow church and synagogue members, colleagues and, most importantly, potential employers.

This is exactly why ICOs are so necessary and why they are popular. 

Tuesday, September 5, 2017

What's Going On with Bitcoin Now? Brendan Cody, Impact Investing Intern, George Washington University

The meteoric rise of cryptocurrencies supported by the blockchain has regulatory agencies, financial institutions and central banks around the globe asking the same question: What in the world is going on here?

(Illustration by Jacques Barkhuizen, Chief Information Officer - Distribution & Digital at Barclays) 
Applications in finance, data storage, cybersecurity, and government merit the attention blockchain technology has received. As of last week, Bitcoin (the first and most notable cryptocurrency) approached $5,000, up +600% on the year compared to a 20% return for the Dow Jones Industrial Average over the same time. (Bitcoin has since returned to the more mundane level of $4,470 as of 9/5/17) Other cryptocurrencies ,including Litecoin and Ethereum, have seen a similar pattern of rise, retreat and rise.

Governments and financiers acted decisively in the past month in an attempt to seemingly make up for lost time. The Securities and Exchange Commission issued new regulations on the proliferation of Initial Coin Offerings (see: the American Banker Newspaper BankThink section - SEC takes jab at startups while leaving the big banks alone at Chinese regulators issued an outright ban on ICOs. Additionally, central governments in Russia, Estonia and Thailand have been studying blockchain. Russia and Thailand may create their own cryptocurrencies while Estonia is studying the potential to secure records and government data on the blockchain. New regulations foreshadow further actions as policymakers pay closer attention. (For our take on what should be done at this stage in the development of these new financial technologies, see: Why we need a Global ICO Census and Database

Furthermore, six of the world’s largest financial institutions announced the development
of a cryptocurrency to improve “record-keeping and transparency” of financial transactions. This
“utility settlement coin” is intended to speed transaction and asset transfer times while maintaining privacy and security. If executed correctly, this could lower transaction costs and time without sacrificing quality. The coin is still in development, with a projected launch date at the end of 2018. (NOTE: Picture at left not necessarily reflective of the author's opinion.)

Wall Street has also taken notice, with fifty hedge funds (including one backed by Mark
Cuban) now exclusively focusing on cryptocurrency investing. Institutional finance’s interest in
cryptocurrencies will only increase, with a Blockchain Electronically Traded Fund coming online soon and increased access for retail investors.

The myriad potential uses of blockchain and increased interest from financial institutions
might prolong the rally in asset prices for the foreseeable future. (Already, bitcoin shows signs of recovering from the Chinese Government's sudden policy shift.) Bitcoin’s volatility may keep
some investors away amid a distinct possibility of a pullback, but for buy-and-hold investors
with a long-term outlook, there is still great value in cryptocurrencies. When compared to bonds
at historically low and even negative yields and equities at high valuations, cryptocurrencies
present value for risk tolerant investors unmatched by other asset classes.

Edited by William Michael Cunningham

Saturday, September 2, 2017

HR 3441, the Save Local Business Act and Black Unemployment

Eight years after the Great Recession, many in the country still struggle economically. While we continue to look forward positively with respect to the future, we need economic policy initiatives that promote growth and fuel our entrepreneurial spirit. Technology has allowed many more people to work for themselves and build economic security. This is even truer for the African American community, which has traditionally been locked out of opportunities in corporate America, but for whom, as the chart below shows, is starting to see some modest improvement. Economic independence is one key to our future.
There are many pathways to achieving the American dream. Some of these pathways lead to entrepreneurship and to the use of empowering and flexible business models, such as franchising and the shared economy.

Recent economic policy initiatives may serve to block the door to opportunity. Specifically, federal and state efforts to expand the definition of a “joint employer” beyond the traditional legal definition of “direct and immediate” control may reduce opportunities for the Black franchisor and for Black creatives in the sharing economy. 

Let me explain.

Under the newly expanded definitions, employers who possess “indirect” or “unexercised reserved” control might be considered a “joint employer”.  The uncertainty that business owners feel over this matter might limit the ability of an employer to provide critical support for employees, like worker training and development, apprenticeship programs, corporate social responsibility programs, and guidance on compliance. For instance, if I own a franchise and the corporate entity offers tuition assistance, it could be determined that the corporate office has indirect control over my employees. Additionally, If I have a contract with Google, which requires I offer paid vacation to my employees, those employees might be considered indirect employees of Google. This designation could have any number of confusing and negative consequences, including tax and liability. In the absence of clarity, employers are considering whether to refrain from offering these critical programs altogether.
In what has become a rarity in American politics, a bipartisan effort is underway to clarify this problem.  HR 3441, the Save Local Business Act, is designed to clarify the new standard and allow business owners to have more certainty going forward.

Our economic analysis suggests this law is needed to maintain the progress as evidenced by the chart and to continue to propel the employment gains we have seen in the Black community.

Saturday, August 19, 2017

THIS is the statue that should replace Gen. Lee's

Maggie L. Walker founded St. Luke Penny Savings Bank in 1903, a time when Jim Crow laws and institutionalized prejudice conspired to prevent blacks from borrowing money or from even having bank accounts. This was done, of course, to keep blacks in a position of economic servitude, a situation blacks still suffer from to this day.
Born a year before emancipation, Ms. Walker, the daughter of a former slave, is the first American women to have successfully opened a bank. (Having attempted in 2008 to raise $50 million to create a black-owned bank holding company to make capital investments in and own parts of new and existing black-owned U.S. banks, I can tell you that this is no easy task.) She did so in the South. In Richmond, Va., the capital of the confederacy. during a time when even white women were not allowed to vote. In the South. (Oh, and she also led a boycott of Richmond’s segregated trolley car system, 50 years before the Montgomery Bus Boycott.) I'd say she's worthy of statues all over the country.
Of course, the issue of black economic empowerment via the use of black banks is still a problem. There are those, like One United Bank, in Boston, who will claim the mantle Ms. Walker left. They are, however, spectacularly unworthy: the FDIC "accused the management of OneUnited Bank, one of the largest black-owned banks in the country, of running an unsound lending operation and ordered a top-to-bottom review of executive perks that included a 2008 Porsche and a housing allowance for a beach-front home in California." One United also foreclosed on the oldest black AME Zion church in Boston, despite offers of assistance from the City's mayor. Ms. Walker, I'm sure, would not be amused. (BTW, Liberty Bank and Trust in New Orleans is a much better run black owned bank.)
The lack of ethics cited above is a key part of the black bank legacy problem and why our economic forecasts, starting in 2011, predicted an 87% decline in the number of black banks, measured from the height of the black bank era, reached around 1994 when there were 55 black-owned banks in America.
To deal effectively with this problem, we suggest the federal government use a portion of the fines levied on Goldman Sachs, Wells Fargo and other banks to create a sizable ($100 million) capital fund to create and invest in black banks. 
This would be the best tribute to Ms. Walker.

Sunday, August 13, 2017

Why we need a Global ICO Census and Database

The Securities and Exchange Commission’s (SEC) recent report defines tokens sold through ICO offerings as “securities.” This is neither appropriate nor in the public interest. This definition will restrict the ability of startups to raise much needed capital without having to go to commercial banks, investment banks and venture capitalists, institutions who long ago abdicated their role in providing capital to deserving startups and small businesses. (Commercial banks, investment banks and venture capitalists focus on providing capital to a narrow group of non-minority and non female firms. As Uber and others (Google?) have shown, many of the women who dared work for these commercial bank, investment bank and venture capitalist supported firms found themselves harassed..and we know what happened when they sought funding.)

In a press release, the SEC concluded that anyone using "..distributed ledger or blockchain enabled means for capital raising (needs) to take appropriate steps to insure compliance with US federal securities laws.” This determination is inappropriately broad, and is sure to be overturned in Court, since the SEC does not have direct authority over currencies.

As we note in our report ( investment-issues- initial-coin- offering-ico-report.html) ICOs have features that resemble crowdfunding, venture capital and IPOs. They are simply a new tool for doing what Title III of the JOBS Act should have done - sourcing capital to innovative startups in an efficient way. Title III allows all companies with less than $1 billion in sales to raise up to $1 million dollars in equity or debt. This section of the JOBS Act was designed, as I note in my book, to create eBay-like sites that allow you to post your idea for a commercial venture online and then allows investors to purchase equity shares or stakes in it. Title III has, since 2016, in aggregate generated slightly over $50 million in committed capital. The law was signed in 2012. So far in 2017, ICO issuers have raised over $1 billion.

The SEC may have legitimate questions about the classification of ICOs, but their action simply confirms that regulators are protecting entrenched social and financial interests (not the public) from a new financial technology (blockchain) with almost unlimited potential.

In attempting to bring ICOs under federal securities laws, the SEC states that "participating in unregistered offerings may subject participants to..criminal enforcement proceedings." Of course, this is only true if you are not Goldman Sachs, Wells Fargo or Standard and Poor's, institutions guilty of significant securities law violations before, during and after the financial crisis who have yet to be subject to criminal enforcement proceedings..

A key factor the SEC cites in its argument in favor of ICO regulation rests on “full and fair disclosure,” but Wells Fargo created two million fake accounts without disclosing this. If the SEC were actually concerned about the public interest, Wells would have faced charges immediately for violating disclosure regulations. Given this, one can legitimately question the public's ability, based on past performance, to trust the SEC to act in the public interest. As outlined this in our Transaction Cost Theory of the Financial Crisis, released in 2010, people are looking for financial instruments, institutions and regulators they can trust. The popularity of digital currency, decentralized structures and new ways of raising capital is, quite simply, the result of this lack of trust.

The nature of blockchain is such that this technology — not regulators — will win in the long term. It would be better for the SEC to recognize this and to simply call for ICOs to list on a globally centralized, publicly accessible database, maintained by the SEC, at no cost to ICO issuers, and with no penalties (other than fines for deliberately fraudulent registrations.)

At this point in the development of this marketplace, having a comprehensive database of all ICOs is more valuable and appropriate than subjecting these new firms to full and complete SEC registration. The agency can revisit this in, say, a year or two to determine if more comprehensive regulation is required, but for the next six to twelve months, this should be the regulatory position of the SEC with respect to the new ICO marketplace.

Friday, August 11, 2017

SEC takes jab at startups while leaving the big banks alone

The Securities and Exchange Commission’s concern about “initial coin offerings” is understandable. There are significant problems in the ICO marketplace, but new markets always have issues. Unfortunately, the SEC’s recent restrictions defining the tokens sold through such offerings as “securities” completely miss the point and once again will constrain the ability of startups to raise much-needed capital without having to go to a bank or venture capitalist first.


Thursday, July 27, 2017

Senator Bob Corker at the Post, John Ray, Impact Investing Analyst, Georgetown University, Master’s in Finance

On Wednesday, July 26th, I watched as Senator Bob Corker (R-TN) sat down with David Ignatius of The Washington Post to discuss the current foreign policy environment in the United States. Part of the Post's “Securing Tomorrow” Series, Senator Corker, as Chairman of the Senate Foreign Relations committee, answered questions on Congress’ attitude towards a variety of foreign policy concerns.

The major takeaways from the event include Corker’s firm stance on the need for congressional review of Presidential actions, his continued praise for Secretary Tillerson and President Trump’s cabinet, and his belief that sanctions on both Russia and Iran are absolutely vital pieces to American foreign policy.

Corker's bill not only enhances sanctions on Russia and Iran, but also limits the president’s ability to lift sanctions currently imposed.  Mr. Corker believes very strongly in increasing Congress’ role in foreign policy when it comes to sanctions and his bill does just that.

Interestingly, while the bill currently includes sanctions on Russia, Iran, and North Korea, it is expected that the North Korea sanctions included will need to be stripped out prior to passing the Senate, having passed overwhelmingly in the House just a few months ago. He claimed strong bipartisanship in favor of the bill and fully expects the revised sanctions measure to be pushed through prior to Congress’ August recess. ("The Senate voted 98-2 to send a bipartisan sanctions package against Russia, Iran, and North Korea to President Donald Trump's desk" on 7/27/17).

How will President Trump and the White House react you might ask? Corker anticipates some push back from the Executive Branch, but firmly believes the bipartisan support will be enough to override any Presidential veto that may come.  He acknowledged the President’s push to relax relations with Russia by lifting sanctions put in place by the Obama administration.  However, the Foreign Relations Committee believes this is certainly not the right approach to take in the current political environment.  While recognizing the United States may have its worst relationship with Russia since 1991, Corker believes the Committee will not allow Russian aggression to continually destabilize democracy worldwide.

Senator Corker thinks this bill, and subsequent sanctions, lays the groundwork for protecting our allies from future Russian aggression and addresses concerns over Russian involvement in the presidential election.  A core issue driving this bill is President Trump’s repeated “flip-flopping” on Russian involvement in the election, the lack of acknowledgement of their involvement driving the legislation.

While the Russian sanctions bill was the focus of the interview, Senator Corker did briefly address other issues, most prominently the current healthcare reform bill, President Trump’s tweeting habits, and the drama among the president’s staff and cabinet members.

On healthcare, Corker believes reform must occur, but notes that healthcare delivery costs must be addressed in order to facilitate a fully beneficial healthcare system for Americans.   Mr. Corker also believes an Obamacare repeal must occur, but not until 2020, giving Congress time to structure a reform package.

 A point continually reinforced throughout the interview was Senator Corker’s respect for Secretary Tillerson and the inner working of the President’s cabinet.   He lauded Tillerson’s work in improving foreign policy. Corker did note the apparent lack of continuity between the president and Tillerson himself.  With a string of tweets, President Trump regularly undermines Tillerson’s efforts by occasionally contradicting his own Secretary of State.

When asked more specifically about the president’s extensive use of twitter, Corker does not believe there is anything that Congress can to do to restrict the President.  In a bit of irony, President Trump sent a controversial tweet on the military during the interview, forcing Corker to, again, do his best to dodge the question of should Congress do anything about the president’s use of social media.

In concluding the interview, Corker addressed his concerns about the Iran nuclear deal put in place by the Obama administration.   He believes it was much too light on sanctions and believes his new bill will address some of Congress’ concerns. He did admit that leverage with Iran is gone since signing the initial deal.  Without tearing up the deal and destabilizing relations, Corker believes in radically enforcing the sanctions that are in place and strictly monitoring Iran's enrichment of uranium.  Backing out of the deal now could create a world crisis and adding to the list of crises right now would be very unwise.  He hopes the President understands this and waits to carry out his campaign promise of tearing up the Iran deal.

All in all, Corker did not drop any bombshells. With that said, it will be interesting to monitor the effects of the new sanctions bill.  Will President Trump veto the bill and, by doing so, create tension within the federal government? Will Russia have a strong push back against it?  While we find financial markets around the globe rallying right now, could these sanctions have a destabilizing effect on the global economy?  While no immediate impact is foreseen, it will be of the utmost importance to anticipate Russia’s response and potential escalation that would certainly affect the world economy.

Stay tuned America; our wild political ride appears to be only getting crazier.

John Ray
Impact Investing Analyst
Creative Investment Research
Georgetown University, Master’s in Finance

Tuesday, July 25, 2017

Disinformation in the Internet Age (IGF-USA) by Kari Nelson, Impact Investing Intern, University of Virginia

Picture above: the author with (l-r) John Ray, CIR Intern and Craig Newmark, Founder of Craigslist.
On Monday July 24, the Internet Governance Forum USA (IGF-USA) was held in Washington D.C. This event featured “panels, keynotes, and plenaries discussing issues vital to the continued growth of the Internet and increasing its benefits for all,” as described in the program for the day. I attended two sessions during IGF-USA, and wanted to share some highlights from each.

The first session I attended was a plenary session titled, “Nationalism, Disinformation and Free Expression in the Age of the Internet.” As it was described in the program, this panel examined:
“How the internet ecosystem allows nativist content & movements to flourish & increasingly silos people
“How content is weaponized & disinformation used in politics
“How to ensure free expression with any proposed solutions.”

Conversations exploring these issues are extremely important, especially in light of the Russian misinformation campaign during the 2016 election. We should continue to have these discussions.

While this panel didn’t offer any definite solutions, some really interesting potential solutions and areas of exploration were brought up to address America’s recent disinformation problem. Vint Cerf, the Chief Internet Evangelist for Google, suggested early training in critical thinking so children from a young age are taught to question a news story’s validity before they share it on social media. Craig Newmark, the founder of Craigslist and the Craig Newmark Foundation, brought up my favorite potential resolution to this issue, which was to develop some type of credibility score for news stories that would be calculated by networks of fact checkers who would check both the news stories and each other. These, as well as other potential solutions brought up during the panel show that some of the tech world’s best minds are thinking of innovative potential solutions to these problems which is important if Internet consumers ever hope to be able to trust online news stories posted on social media.

Any proposed solution, however, must ensure free expression. I believe Amie Stepanovich of Access Now best summed up this issue. Amie talked about how there are not only the black-and-white areas of news – news stories that are written to deliberately mislead people on one side and fact-checked, credible news on the other – but also a gray area of news between those two extremes. She brought up the example of stories on The Onion, articles that look like news stories but contain false information meant to entertain rather than to deliberately mislead the public. Stepanovich talked about how this gray area will be much more difficult to regulate due to censorship issues. A regulatory body cannot just decide what is “bad content” and take it down, that would be censorship and would violate the 1st Amendment. (Additionally, if the U.S. government was involved in setting the regulation, any censorship would set a dangerous precedent that authoritarian regimes may follow in a much more repressive way.) I agree with Stepanovich that any regulation regarding disinformation must be carefully considered before being implemented in order to ensure that the regulation does not take away the freedom of expression.

Another good point brought up by Ms. Stepanovich was that the panel could have been more inclusive of different viewpoints. The conversation seemed to keep on going back to Breitbart News and the rampant disinformation spread by the site, and often the tone the panelists used when talking about Breitbart seemed condescending. Stepanovich made the important point that in order to pop the conservative bubble – in which one’s social media feed features stories that just reinforce one’s existing biases – we need to understand both sides of the problem, people from Breitbart, for instance, should be included in these conversations so we can try to understand why their writers write stories with half-truths and total falsehoods.

Author with Vint Cerf, Google, and John Ray, CIR Intern.
The second session I attended was entitled, “Promoting a More Inclusive Internet.” This panel looked “at current barriers to an inclusive Internet and” explored “how access can be expanded to underserved areas and underrepresented communities that are still struggling to get access.” One takeaway that surprised me was the geographic diversity of communities with Internet connectivity problems: the three main examples of underserved communities discussed were in New York City, rural Vermont, and rural Rwanda. This is a global issue, affecting both rural and urban communities, and decision makers must adopt the mindset that the connectivity issues in different areas are interlinked if any significant progress is going to be made, as Maya Wiley, the Senior VP for Social Justice at the New School, pointed out.

Another key point made by the panel was that an organization must work with and listen to the leaders of the communities they help. Jane Coffin, the Director of Development Strategy at the Internet Society, summed this point up well when she pointed an organization cannot just go into communities and say “this is the solution we have for you,” but rather an organization should be willing to adapt a solution to a community based on that community’s needs and priorities.

In sum, my takeaways from the panel on nationalism, disinformation, and free expression are:
Potential solutions are being thought of and tried out
Proposed solutions cannot infringe on the freedom of expression, which will make regulating disinformation very difficult
More diverse viewpoints should be included in these conversations so all sides of the disinformation problem are considered.
My takeaways from the panel on promoting a more inclusive Internet are:
Both urban and rural areas, both domestically and abroad, suffer from connectivity issues
Models for solutions to connectivity issues must be flexible enough to take into account input from the communities they affect.

Overall, these were both important and fascinating panel discussions, and I would highly recommend that anyone who is interested in the issues that affect the Internet and its users attend next year’s IGF-USA. It is a wonderful (and free!) opportunity to learn more about Internet Governance issues from the experts.

Branchless Banking Roundtable by Zhuoxi (Austin) Wu, Impact Investing Analyst

On July 24th, I attended a Branchless Banking Roundtable discussion sponsored by the Financial Services Innovation Coalition (FSIC) at the Rayburn House Office Building in D.C. 

Panelists include the Co-Founder of BankMobile, Luvleen Sidhu, Founder of Creative Investment Research, William Michael Cunningham, and the founder of HBCU Wall Street, Torrence Reed. The moderator was the founder of FSIC, Kevin B. Kimble. During the hour-long discussion, they discussed issues related to the inefficiency of bank branches, the problem of bank transaction fees, and how newly developed technologies can change people’s way of banking.

The discussion kicked off with agreement among the panelists that bank branches are no longer a necessary part of people’s banking experience. Based on statistics, bank branches are, on average, only getting one account opened each week per branch, which equals 52 accounts opened a year at each branch. Apparently, the influence of bank branches on people’s banking habits has diminished. 

Mrs. Sidhu, the founder of BankMobile, noted she designed her company to target the underbanked, millennials, and middle-income Americans. She offers an entirely fee-free checking account for each of her clients. The fee-free guarantee includes the following: no minimum balance requirement, no direct deposit requirement, no transfer fee, etc. (There is a fee when a user withdraws money from ATMs that are not owned by BankMobile.) Considering that millennials nowadays transfer money much more frequently (that is why apps like Venmo are popular among the younger generation), the free transfer feature is viewed as a major benefit.

Mr. Cunningham echoed the idea that regulations are pushing people away from using bank services. He talked about Nigerian digital money service provider ‘Paga’, a mobile banking service provider like BankMobile. With smartphone penetration rates getting higher everywhere in the world, branches will likely suffer, generating lower revenue. This got me thinking about the Wells Fargo scandal, where the bank notoriously opened 2 million fake accounts, as a clear example of why the existence of mobile banking services like Paga threaten branch banking.

Mr. Cunningham then described the Initial Coin Offering (ICO) as a way for young entrepreneurs to fund their ideas. An ICO is a way to raise startup funding (mostly Bitcoin or Ethereum) by issuing your own currency, in our case, SRI coins. Investors who choose to invest in your ICO are either: speculating the rise of cryptocurrencies, or: investing in your idea in exchange for future service from the ICO issuer. What makes an ICO so desirable is the fact that: it is totally unregulated.

Funding ideas come and go, going from venture capitalists, to borrowing money from the bank, or even asking for money from your friends or parents. These all take time, and timing is everything in creating a new business. With an ICO, you do not need to know who is investing in your business, you do not need to worry about explaining to your friends or your parents of why your business failed, if it does fail, but the most valuable factor in an ICO is it's unregulated nature. People can invest tons of money into a business with or without knowing the risks behind their investment. Although controversial, an ICO is indeed the easiest way for young entrepreneurs to fulfill their dreams. In 2016, over $1 billion has been raised via ICOs, compared to $600 million in venture capital.

After attending the discussion, I came away impressed by the progress regular people (like me) have made over the years, seeking to make our lives easier. It is because of new technologies that we can access capital in a much better way.

Tuesday, July 18, 2017

CIR Interns at the U.S. Federal Blockchain Forum

An inter-agency forum for executives across the federal government to learn about advances in Blockchain technology, discuss use cases and set an agenda for working together to evaluate and implement it among our diverse missions.

The U.S. Federal Blockchain Forum is a program of GSA’s Emerging Citizen Technology program, organized in partnership with the Secretary of State’s Office of Global Partnerships and GSA’s Office of Information Technology Category.

Monday, July 17, 2017

Yellen at the Senate Banking Committee by Kari Nelson, Impact Investing Intern, University of Virginia

On July 13, the Senate Committee on Banking, Housing, and Urban Affairs met in open session with the Chair of the Board of Governors of the Federal Reserve System, the Honorable Janet L. Yellen, for“The Semiannual Monetary Policy Report to the Congress.” I attended this hearing and this blog post shares my reaction as well as some analysis.

Despite the fact that the hearing was supposed to be about monetary policy, the Senators mostly questioned Yellen about regulatory issues. Republicans have been pushing for widespread rollbacks of Dodd-Frank financial regulations, so this is not surprising. This regulatory theme was apparent from the beginning, with Sen. Mike Crapo (R-ID), the Chairman of the Committee, asking Yellen to affirm that she believes Congress needs to act on some areas of financial reform and that the Fed would work to make suggestions to the Committee, both of which Yellen readily agreed to. The ranking Democrat, Sen. Sherrod Brown (D-OH), quickly responded by pushing Yellen to affirm that some rollbacks proposed by the Trump administration may increase the chance of a financial crisis, to which she also readily agreed. 

This back-and-forth about Dodd-Frank banking reforms continued throughout the hearing: Republicans sought Yellen’s support for loosening regulations and Democrats wanted Yellen to state that financial regulations are important in protecting the American economy from another financial crisis.

Yellen’s responses to regulatory issues were measured and conciliatory. She expressed support for regulations put in place after the 2008 financial crisis, but also made it clear that the she’s willing to consider changes. The financial regulatory issues Yellen expressed opinions on included:
  • Requirements for how much cash major banks must hold should be maintained
  • Stress tests: The main framework used by federal regulators to test a “systemically important” financial institution’s (SIFI’s) ability to continue to operate if a financial crisis hits;
  • Thresholds: The asset level that determines which banks are considered SIFIs and are therefore subject to additional, stricter regulation (now set at $50 billion or more) should be raised, though no specific number for a new threshold was given;
  • Capital requirements for banks or the orderly liquidation authority (OLA), an account funded by SIFIs and needed to resolve a SIFI were it to fail. (For more on the OLA, click here)
  • OLA should be kept
  • The Volcker Rule, which bans banks from making certain risky investments using their own capital, should be modified
  • Regulation of community banks should be reduced
For a hearing on monetary policy, there was some (but not much) discussion of that topic. Yellen reiterated that the Fed plans to begin reducing its bond holdings in an orderly fashion sometime this year, as previously discussed. Yellen attempted to correct a statement made at the House monetary policy hearing the day before, when she indicated that the recent slowdown in inflation may go on for longer than the Fed expects. Investors took those comments to mean that the Fed might slow down the pace of the interest rate hikes, which led to the Dow Jones industrial average spiking to a record high. (Note: the Fed has raised interest rates three times since December 2016.) But at the Senate hearing, Yellen emphasized that she saw the “risk on inflation as being two-sided” and that she does not believe that the recent slowdown in inflation means that the Fed will not be able to meet its goal of 2% annual inflation.

This hearing reiterates what we’ve been seeing lately (with the CHOICE Act and the recent Treasury Report): the Trump administration and Congressional Republicans are getting serious about rolling back Dodd-Frank financial reforms. Democrats will certainly fight hard to stop drastic changes, but only time will tell if Democratic efforts are enough to stop motivated Republicans from making it even easier and more profitable to be a big bank.


Friday, July 14, 2017

Seed Spot Demo Day: A Night of Excitement, Passion, and Social Impact

On July 14th, 2017, Seed Spot hosted their first ever demo day for their Washington, D.C. location. Seed Spot is a nonprofit organization, based in Phoenix, AZ., committed to supporting social entrepreneurs through education and investment.

They did not disappoint.

At core, Seed Spot embraces entrepreneurs seeking to solve social problems, regardless of the entrepreneur's race, gender, age, or socio-economic background.  Seed Spot's dedication to the D.C. area was on full display as well, with the CEO and many board members in attendance.

Their dedication to inclusion and excellence was also on vivid display at the magnificent Warner Theater in downtown Washington on Thursday night, with nine truly remarkable DC-area startups being showcased to a packed crowd. The startups on display completed Seed Spot's 14-week accelerator program.

These businesses are more than just individuals with a dream or good idea.  Each startup had a strong team complete with a board of directors/advisors, subject matter experts, employees from various backgrounds, and even some interns!  This showcased Seed Spot’s impact in providing these companies with the resources they need to succeed and the entrepreneur’s true commitment to their passions.

Throughout the night, you could clearly see Seed Spot’s and Washington’s commitment to diversity in the startup world.  Over half of the companies were founded by women, with multiple ethnicities represented in the cohort.  This inclusionary stance embodies the principles needed in the startup culture and Seed Spot should be applauded for their commitment to their values.  Opportunity should be linked to merit, something all too lost in some circles of the startup industry.

Pitting the businesses in a friendly competition, the audience was asked to vote on their favorite, based on potential social impact.

A brief outline of each startup and their product can be found below:

IMBY (In my backyard)
Mobile app allowing a user to find information on construction projects in their area. The app also provides a mid-term outlook on how the neighborhood will change if the project is built.
Survey data from the app is accessible to real estate investors, thus increasing their knowledge of resident’s opinions on potential projects.

Empowered to Run
Digital tools to help people run for public office, providing a road map for success, campaign techniques, and help finding needed resources
Geared to state and local elections, this product will help decrease the number of uncontested elections nationwide by empowering candidates who may previously have not thrown their hat in the ring due to feeling unprepared.

Halana Foods
Makes snack foods from “imperfect” produce from local farms. The firm states that 30 to 40 percent of local produce normally cannot be sold due to minor imperfections.
In contrast to others in the alternative snack market, Halana is both healthy and affordable.

Mobile app offering career development tools from educational workshops to counseling/consulting
Aimed at providing development opportunities to all levels of the workforce: college graduates entering the workforce, mid-career professionals striving for a new challenge, and seasoned workers looking to make a change to an enjoyable position after retirement
Digital media outlet for sharing the incredible stories of those individuals striving to save and conserve our environment at the local, national, and worldwide level.
Help pair conservation projects with donors and/or local volunteers looking to join the good cause

Digital platform helping people advance their careers by showing the skills needed for certain jobs and the labor demands for that position
Shows educational options needed to obtain certain skills, with the idea of reducing university recruitment costs for partnered (and paying) universities.

Product provides mobile cybersecurity, a grossly underused and undervalued area of cybersecurity
Smartphone antivirus software helps protect against potential hacks of personal information, location services, or camera access.

Mia Learning
Interactive app helps kids choose books best suited to them, fostering greater achievement and motivation to read
Targeting elementary schoolrooms, kids can tell “Mia” what they are interested in and appropriate books will be recommended.

Mentor Method
Provides a new hiring solution to promote both diversity and inclusion in the workplace
Compared to an online dating type platform that pairs employers with minorities and women that meet their company standards, not just their diversity mandates

All of these companies showcased phenomenal products, with tremendous social impact.

As a newcomer to the Washington area, I was astounded by the level of support for local startups. With over 500 people in attendance and remarkable pitches by each team, the event gave me a clear sense of how tight knit the startup scene is in the Capital: during the awards ceremony, a member of the audience decided to give his personal favorite project  an impromptu award of three months of office space!  Other key takeaways from the event include noting how well organized these DC startups are, the obvious dedication to minority and woman inclusion, and the professional, profound involvement of BoozAllenHamilton.

In addition to being the lead community sponsor for the night, BoozAllenHamilton provided active support to many of the companies in the Seed Spot program. Booz also gave two cash prizes for social impact.  With Executive Vice President Julie McPherson and numerous employees in attendance, it was good to see their genuine interest in local startups.  This type of commitment from very established firms is vital in promoting growth for both new and well-known startups.  Hopefully we will see this trend continue, with large, respected companies helping startups in any way they can, from direct investment to expert consulting.

Seed Spot demo day provided me with an experience I frankly did not expect.  The vibrancy of the audience coupled with the true passion of the entrepreneurs made for a fun night full of promise and excitement.  Demo day opened my eyes to the exciting local startup scene I just walked into and I look forward to seeing its continued growth and expansion.

So, who won? Mentor Method took home the top cash prize.

Overall, D.C. demo day was an outstanding success for Seed Spot, the entrepreneurs, and the D.C. community.

John Ray
Impact Investing Analyst at Creative Investment Research
Georgetown University
Mcdonough School of Business
Masters of Finance, May 2019

Black Business Index & Survey

We are conducting a survey of Black Business Conditions as we prepare for our Texas Talks (see above). Note that you do not have to be either in Texas or a Black-owned Business to fill out this survey. In fact, we prefer to have a range of business owners respond. We are, however, specifically focused on the Black business sector in Texas.

To view and complete the survey, please go to:

Thank you!

Sunday, July 2, 2017

Senate Banking Committee Hearing on Fostering Economic Growth by Kari Nelson, Impact Investing Intern, University of Virginia

Soon, it may be easier to be a Wall Street Bank. We knew that one of President Trump’s central campaign promises was to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (LA Times)— passed after the 2007-2009 financial crisis to prevent similar crises from occurring—but that didn’t necessarily mean anything major was going to happen. Campaign promises go unfulfilled all the time (*cough* the Wall *cough*). Now, the Trump administration seems to be moving to follow through on dismantling Dodd-Frank. With that in mind, we take a look at developments in this area over the past few weeks to see what changes are likely in the near future.

On June 8, there was a surge of excitement (either out of fear or joy, depending on your perspective) when the House passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, which would repeal many of Dodd-Frank’s banking reforms (CNBC). Then, everyone calmed down a bit and realized that Senate Democrats could block the bill from passing so the House vote was a largely symbolic victory for the Republicans and the banking industry (CNBC).

But, on June 12, Treasury Secretary Steven Mnuchin released a report—the first of four examining Dodd-Frank ordered by Trump—proposing many of the same changes as the Financial CHOICE Act (LA Times). These proposals have been on Wall Street’s wish list since Dodd-Frank was passed, reflecting the fact that the Treasury Department consulted with 17 times more banking industry groups than consumer groups when developing the report (Fortune). Note though that the suggestions in the Treasury report present a real danger to consumers because “about 80% of the substance in the report can be accomplished by regulatory changes,” according to Mnuchin (Fortune). Therefore, a Senate Democratic filibuster would not block the majority of the changes proposed in the report.

On June 22, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled, “Fostering Economic Growth: Regulator Perspective,” the third in a series of hearings held by the Banking Committee as it prepares to draft a regulatory relief bill (Washington Post). I attended this hearing in order to get a sense of the vibe in the room and one thing quickly became clear: regulators are siding with Trump and the big banks on this one. 

Among the main targets brought up by the panel – full list here – were requirements for living wills, the asset thresholds for stress tests, strict leverage ratios, and the Volcker Rule. But the real question is: will any of these changes (which require legislation) make their way into the upcoming bill? In his opening statement, Chairman Mike Crapo (R-Idaho) expressed his commitment to bipartisan regulatory reforms in this area, so presumably Crapo and the other Republicans on the Senate Banking Committee will be looking to please the moderate Democrats first.

Currently on the Committee are three moderate Democrats from red states who have tough reelection races coming up in 2018 – Sen. Joe Donnelly (Indiana), Heidi Heitkamp (North Dakota), and Jon Tester (Montana). This may be an opportunity for Republicans because these three Dems need to demonstrate to constituents that they can work across the aisle to pass legislation (Washington Post). Tester even said that he has an “open mind” regarding Volcker Rule rollbacks (Washington Post). The buy-in from these moderates may be enough to bring a regulatory relief bill to the floor, but I find that unlikely. I tend to agree with Tory Newmyer of the Washington Post who judged that a regulatory relief bill will not make it to the floor of the Senate if the liberals on the Committee – led by Sen. Elizabeth Warren (D-Massachusetts) – maintain their current commitment to stopping the bill; Republicans likely won’t try to bring a bill to the floor unless left-wing Dems in the Senate agree to limit amendments (this would prevent poison pill amendments, or amendments intended to weaken a bill’s effect or prevent it from passing).

As long as Warren and the rest of the left remain committed to stopping this bill, they will not be agreeing to any such deal. It doesn’t seem that Warren will be backing down any time soon, pointing out during the hearing that she saw no benefits to the recommendations in Mnuchin’s Treasury Report and telling the Wall Street Journal that she views any significant changes to Dodd-Frank as dangerous to the American economy (Washington Post).

So, I’m sorry Wall Street, but unless Warren and her fellow progressives have a massive change-of-heart it seems that regulatory relief, at least relief based on legislation, may not come any time soon.

Friday, June 30, 2017

State of Black Business Report - Dallas 8/22

The State of Black Business will inform members and community leaders on the climate, condition, and trends of African American business.  The Keynote Speaker, Economist William Michael Cunningham, is the founder of Creative Investment Research and serves as Managing Partner for National Crowdfunding Services. The Forum is a critically important forum to discuss and design a plan for greater economic impact within our communities. You will want to join this discussion with black business leaders from around the city!

Invitees to this event will include elected officials, corporate sponsors, community leaders, DBCC Board of directors and select Chamber members.

August 22, 2017

2711 N. Haskell
Dallas, Texas 75204
8:30 a.m. – 6:00 p.m.

State of Black Business Registration:  (Early Bird Special) $75 Member/$100 Non-Member

Wednesday, June 28, 2017

“Scared to Death” - Scandinavia and the US by Austin Wu, Impact Investing Analyst, University of Maryland

On June 27th 2017, the House of Sweden, located on the banks of the beautiful Potomac River, hosted the Speakers of the Parliaments of Sweden and Latvia, the President of Parliament of Norway, along with Derek Cholett, the Executive Vice President at the German Marshall Fund of the United States, and Kurt Volker, the executive director of the McCain Institute for International Leadership, to discuss challenges in Northern Europe and how to face them in partnership with the United States.

The seminar focused on the possible withdrawal of the United States from NATO, and how the Scandinavian countries would be left vulnerable to potential military aggression and geographical expansion of Russia in the near future, should the close relationship between President Trump and President Putin hold true. One key point the speakers all agreed upon is this fact: a great nation needs great neighbors. As Russia sits in close proximity to the Scandinavian countries, the Scandinavians are all looking at the United States for continued support, both politically and militarily, to counter the existential threat that is Russia. Ināra Mūrniece, Speaker of the Parliament of Latvia, recounted her childhood, when she lived under the fear that Soviet troops would simply walk across the street to her home. She noted that it was the United States who helped countries like Latvia regain freedom and go onto become the prosperous and democratic countries they are today. However, confidence that the United States has her is diminished by the inauguration of Donald Trump: polls shows that only 20% of the younger generation in Scandinavia exhibits any confidence that the current U.S. government would assist the nations in Scandinavia should the Russians decide to invade.
Olemic Thommessen, President of Parliament of Norway, seconded the thought: "how are we going to fight against the Russian, when Norway only has 5 million in population, while the Russians are building fleets and airplanes every day?" He repeated the phrase “scared to death” multiple times to illustrate how terrified Scandinavian countries are about the current situation. They fear the United States would quit NATO and would no longer protect them. It was awkwardly obvious that the entire seminar was focused on the petition-like discussion that the Northern European countries are sponsoring, desperate to maintain their strategic alliance with the United States.

Mr. Chollet and Mr. Volker then tried to inject a sense of calm by noting that, while Candidate Trump seemed to move  closer to Russia, during the first 6 months of his presidency, President Trumps hasn’t make any Russia-favored movements or actions. (This of course ignores the US withdrawal from the Paris Climate Accord - ed.) On the contrary, they noted, Trump's promise to sit down and talk with President Putin to resolve any conflict has not happened yet (there will soon be a face-to-face meeting between President Trump and President Putin at the upcoming G-20 meetings). Therefore, countries like Norway shouldn’t be terrified by the Trump administration. Mr. Chollet and Mr. Volker mentioned, and I personally believe that their statement accurately reflects the key attitude of the Trump Administration towards the Northern European countries: they should be prepared to help themselves and to bring a plan or solution to discussions with the United States, rather than being panicked and asking for help before the Russian threat actually materializes.

After attending the seminar, I came away with a clear sense of the insecurity Northern European countries feel, and also with a clear sense of their desperation, their eagerness to maintain the alliance with the Untied States, even if the U.S. eventually pulls out of NATO. My personal takeaway from the seminar is this: a country doesn’t have a permanent friends or enemies, only permanent interests. Businessman like President Trump doesn’t offer assistance for free. The underlying words from the U.S. representatives, which could represent the viewpoint of the United States, is this: protection will no longer be free as these nations assumed it would be when they were comfortable that the U.S. was not going to quit NATO.

Alliance is necessary, but Trump's motto appears to be: you gotta give to get.

Austin (Zhuoxi) Wu
Impact Investing Analyst at Creative Investment Research and
Equity Analyst at Robert H. Smith School Global Equity Fund
President of the Masters of Finance Association (MFA)
University of Maryland, College Park
Robert H. Smith School of Business
Masters of Finance, May 2018

Tuesday, June 20, 2017

The Trouble with Economics by Sahil Grover, Impact Investing Intern, University of Virginia

On June 20th, 2017, the Brookings Institute invited Alan Blinder, Representative Jamie Raskin, and Former Representative Vin Weber to discuss the "Lamppost Theory" – the tentative title for Blinder’s new book that seeks to explain why economic policy often comes up short. Held in the Hutchins Center on Fiscal & Monetary Policy, the discussion began with Blinder explaining what the book title means. Blinder’s main argument is as follows: “Politicians use economics the way a drunk uses a lamppost – for support, not illumination”

Blinder believes that the reason economists and politicians have not had success working together to create effective policies is because they hail from two completely different “civilizations”. He believes both parties share blame for past policy failures and must learn from each other. Blinder argues that economists and politicians measure success differently, using a completely different set of criterion to make decisions. Economists tend to use more logical, substantive, and idea-driven approach while politicians focus on using people skills, gaining influence, and creating a message. Furthermore, economists use longer time-frames while politicians are subject to the election cycle and much shorter time-horizons.

Blinder describes policy formulation as a “four-ring circus” that gives economists little influence on public policy. The four “rings”, or phases of the process include: Substance, Politics, Message, and Process. According to Blinder, economists become too focused on the substance and fail to engage in the other phases of policy formulation. Blinder asserts that most economists either do not understand or do not care for these parts of the process, diminishing their potential level of impact on policymaking. Some of the principles that economists need to learn from politicians include:

o   Fairness beats efficiency
o   Unprincipled compromises beat pure solutions
o   Complexity sells poorly (KISS principle)
o   Need to differentiate what is good from what sounds good

Blinder identified the three impediments to generating sound policy as the 3 I’s: Ignorance, Ideology, and Interest Groups. Economic literacy is very low, making slogans such as “protectionism saves jobs” sell better than complex economic explanations. Additionally, Blinder believes that while economists focus on theories that maximize social welfare and macroeconomic conditions, politicians focus on special interests and policies that benefit a narrow set of interests.

The second part of the discussion involved a panel moderated by David  Wessel, formerly of the Wall Street Journal and now Director of The Hutchins Center. Rep. Raskin, recently elected to serve Maryland’s 8th District, believes that economists need to change their approach by using newer fields such as behavioral economics to influence public policy. Mr. Weber, one of the most prominent lobbyists and strategists in the Republican Party, added that part of the reason classical “technocrats” are not highly regarded in politics is due to past failures. Weber points out that the 2008 financial crisis and economists’ lack of ability to foresee it created an overall distrust in economic expertise. (Of course, he is wrong about this. Only nonminority, mainstream economists missed the crisis.  See: , and Trump: - Ed.)

Reverting back to the 3 I’s, Blinder emphasizes that while they may hold different values and theories, economists tend to be much less further apart than politicians. Raskin admits that the current political climate has compromise extremely difficult, making him become more of demonstrator than legislator. Although he agreed that it has become much harder to have an impact, Weber believes there is still hope. In order to fix this problem, Weber believes we must try to figure out what people actually believe in – not the slogans they sprout. Going forward, all three discussants see a tremendous opportunity for economists to positively affect economic policy. Though tax reform is the major issue area in which Blinder sees a need for technical expertise, Raskin points out the war on drugs and campaign finance as policy areas in which economic insight could play a major role.

Takeaway: At the end of the day, economics is not an issue area that many Americans understand. According to a study by FINRA Foundation, nearly two-thirds (63%) of Americans could not pass a basic financial literacy test, knowledge that has continued to decrease since the financial crisis. In order to build coalitions for more effective economic policies, we must start by making it a topic that the American electorate both cares about and can follow. As Blinder points out, this will not be easy and will take at least a generation of fundamental change. Although the long-term solution requires changes to the K-12 curriculum and more emphasis on better economic/financial press coverage, there are a number of online resources to help the transformation. For absolutely no charge, individuals can enhance their economic knowledge by taking online classes on topics such as Stock Investing and Crowdfunding

Additionally, we must figure out an create a superior communication network between politicians and economists to improve fiscal policy formulation. As Rep. Raskin points out, there is no real “neutral” economic group or organization that Congress can rely on. Although Blinder suggested a scenario in which a group of economic experts were selected to rewrite the tax code with a set of goals and oversight provided by Congress, he admitted that it was not a politically feasible solution. While I do not expect Congress to relinquish its ability to create fiscal policy anytime soon, there are incremental changes that can make economic policy more sound. In order to eliminate the time-frame problem, we must consider remove election-cycle pressures from affecting broad fiscal policy decisions. Politicians and economists must be held to the same timeline, having a standardized set of outlook and forecasting components that make analysis and comparison easier.