Biden’s Brilliant Start
Sounding long overdue and welcome words at his inauguration, President Biden has gotten off to a brilliant start.
The new President signed thirty (30) executive orders in three days. One third directly reverse the policies of the prior Administration. As the first real first attempt by any Administration to address the COVID-19 crisis, we applaud the effort.
What’s brilliant about these policies is the honest way they address the touchstone of American politics: race. One of the first Executive Orders issued by the Biden Administration mandated a “comprehensive approach to advancing equity for all.” The executive order requires the US Government to “identify the best methods, consistent with applicable law, to assist agencies in assessing equity with respect to race, ethnicity, religion, income, geography, gender identity, sexual orientation, and disability.” Finally, the order requires that “each agency...assess whether underserved communities and their members face systemic barriers in accessing benefits and opportunities available” from agency policies and programs.
We also are positive about the Biden Administration’s effort to increase the minimum wage from $7.50 to $15. As we stated in 2019 at a session on Black Wealth held at the Congressional Black Caucus, (see: https://youtu.be/x4ukwLKqEzs?t=1242) this is the one economic policy that would have the most immediate and positive impact on the Black community.
Our optimism is, however, leavened by memory: the Obama Administration also got off to a very fast and hopeful start. To make the effort as effective as possible, the current Administration will need to recognize some hard truths. These executive order-based initiatives suffer from the faults of their makers: they are first steps one would expect from a group of wealthy white people: minimum wage policies from people who have never worked a minimum wage job and food stamp policies from wealthy white people who have never had to depend on them. In a sense, these flaws are similar to the stereotypical racial attitudes that were the hallmark of the prior Administration.
This may be due to the fact that the Administration has chosen to fill its economic team with persons beholden to Wall Street, not strategic economic thinkers operating in the public interest. This increases the risk that the social and economic performance of the Administration will not be as positive as it could be.
The President named former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Ms. Yellen’s tenure at the Fed is particularly concerning. She never pushed the Fed policy envelope to increase economic fairness. In fact, her ties to Wall Street are so close that she needs to obtain “clearance” from an internal Treasury ethics official if she is required to participate in any matters involving Citi, Goldman Sachs, or any other bank that paid her.
This concern is particularly relevant in light of testimony Ms. Yellen made to the House Financial Services Committee in 2015, where she stated that “there really isn’t anything directly the Federal Reserve can do to affect the structure of unemployment across groups, and unfortunately, it’s long been the case that African-American unemployment rates tend to be higher than those on average in the nation as a whole.” See: https://www.linkedin.com/pulse/why-janet-yellen-wrong-black-unemployment-cunningham-am-mba/
In addition, the President named Brian Deese, a BlackRock executive, to head the National Economic Council. BlackRock is the largest money management firm in the US, but the thought processes and skills needed to fully protect the public interest in a crisis differ greatly from Wall Street profit maximizing money management skills. A cursory look at BlackRock’s track record reveals a trail of economic damage. In addition, the firm has a history of discrimination. (See: New Jersey, BlackRock Sued for Alleged Discrimination and Theft. Bloomberg News. Bob Van Voris and Kelsey Butler, June 23, 2020. https://www.bloomberg.com/news/articles/2020-06-23/new-jersey-blackrock-sued-for-alleged-discrimination-theft May 1, 2014. BlackRock is a "Toxic environment for women and minorities." See: https://www.glassdoor.com/Reviews/Employee-Review-BlackRock-RVW4156964.htm )
We also observe that Secretary of State nominee Antony J. Blinken, made seven figures advising companies like “private equity giant Blackstone and the asset management company Lazard.” The nominee for Director of National Intelligence, Avril Haines, consulted for Palantir, a firm which has provided “data and surveillance services to law enforcement, including the United States Immigration and Customs Enforcement.” (See: https://www.nytimes.com/2021/01/01/us/politics/yellen-speaking-fees-disclosure.html )
The popular definition of insanity is doing the same thing over and over with the same people and expecting different results. Rather, we suggest they immediately hire the three Black women who created "Black Lives Matter", a protest movement that generated activity on all seven continents.
We need a team that understands most rich people rarely have the ability to operate in the public interest, as the Trump administration has proven conclusively. In 2020, they created 56 new billionaires while from 8 to 14 million people, many of them Black and Hispanic, fell into poverty. (See: https://www.washingtonpost.com/business/2020/12/16/poverty-rising/ and https://www.cbpp.org/research/poverty-and-inequality/research-note-number-of-people-in-families-with-below-poverty ). This is especially obvious now: most of the 140,000 jobs lost in the last quarter of 2020 were formerly held by women (particularly black and Hispanic women).
We applaud this Administration’s fast start and look forward to supporting their efforts, but we can no longer afford uneven, unfair and wealth concentrating economic policies. While the first week of the Administration gives us reason to be optimistic, the performance bar is very low, and four years is a long time.