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Showing posts from May, 2023

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. 

"Empowering Women as Entrepreneurs and Leaders" Jeongmin Yoon, American University.

As a CIR intern, I had the opportunity to attend the World Bank-organized session on "Empowering Women as Entrepreneurs and Leaders" at the IMF/World Bank Spring Meetings in Washington, DC on Thursday, April 13, 2023. This engaging panel discussion featured prominent speakers such as David R. Malpass, President of the World Bank, and India's Finance Minister, Nirmala Sitharaman, who joined other panelists to explore the topic of women's development and empowerment across the globe. During the session, opinions varied on how best to promote women's economic participation and entrepreneurship. The panelists examined the conditions and strategies required in order to achieve genuine empowerment for women. Both Malpass and Sitharaman underscored the critical role of women in the global economy and development, emphasizing the significance of their empowerment and advancement. The session highlighted the ongoing economic vulnerability faced by women worldwide due to so

Artificial Intelligence (AI) Regulation: Lessons from Social Media. Charlie Gainey, Intern, Bates College.

Introduction.  As artificial intelligence (AI) advances and permeates various aspects of our lives, the question of how to regulate it becomes increasingly pertinent. To chart the best course for AI regulation, it is essential to learn from past experience with other emerging technologies. In this regard, social media platforms offer valuable lessons on what works and what does not when it comes to developing a legal framework for innovation. In this blog post, we explore four key lessons from social media regulation that can guide the path to regulating AI.  1. Congress Needs to Be More Tech-Savvy. One of the most significant challenges in regulating social media was the apparent lack of technical understanding among policymakers. During the 2018 Senate hearing with Facebook CEO Mark Zuckerberg, many senators appeared unable to ask informed questions about the company's data privacy practices (Lapowsky, 2018). This lack of tech-savvy hindered effective regulation, as many lawmake

Impact on the Black Community of the Sale of First Republic Bank to JPMorgan

The sale, by the FDIC , of  First Republic Bank to JPMorgan Chase Bank highlights the strong support system in place for financial institutions, exemplified by the various liquidity and financing programs provided to non-Black banks. Since the beginning of the 2023 bank crisis, large banks have received a staggering $147 billion in financial assistance, showcasing the dedication of regulatory authorities to ensure the stability of the financial sector. This support has been vital in maintaining confidence in the banking system and averting a potential domino effect with far-reaching economic implications. However, it is crucial to acknowledge that the same level of support is not always extended to Black-owned financial institutions, emphasizing the need for regulatory authorities and policymakers to address this obvious disparity in access to resources. First Republic primarily catered to affluent clients, and, given racially based wealth and income disparities, the acquisition may n

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