Jeff Fuller knows that’s a big number. “Yeah, it’s big,” when he said wealth Ask him about his prediction that the federal government should spend an additional $2.7 trillion per year to correct economic inequalities stemming from systemic racism. That’s a huge number, but here’s the thing: Fuhrer believes $2 trillion of that should go toward reparations for blacks and Hispanics and other historically marginalized groups. That may sound like an unrealistic goal, but he believes it’s exactly what’s needed based on data.
“For people who understand the world of statistics, this is not surprising,” Non-resident fellow at the Brookings Institutionwho is the author the myths that make us, recently published by MIT Press.take Consumer Finance SurveyHe said he believed it was the best wealth survey ever conducted by economists nationwide (the most recent was in 2019). “You can see what the average family gap is between black families and white families.” In fact, he points out in the book that $2 trillion a year may even be a conservative estimate.
“But will I be hindered in terms of compensation?” the Führer said with a sigh. wealth Asking him about this big number buried hundreds of pages into his book. “Absolutely.”
As for how long those investments will last, he changed the timeline. For example, his housing plan will take 10 years, but his early childhood education plan will be “at least one generation,” or until target outcomes are achieved. As for compensation, the issue was so huge for the Führer that it meant another long timescale, so he wondered aloud: 30 years?
To put into perspective what a radical proposal he made, consider: The Proposed Federation Budget The budget for fiscal year 2024 is only US$6.9 trillion, and the head of state hopes to increase it by 39%, and reparations alone will increase by 28%.
How will he pay for this? He acknowledged that there may be “resource shortages” within a generation, which he wrote could come from deficit spending or higher taxes on the wealthiest and highest-income households and businesses. There is a huge opportunity to do so, he writes, but “the political will to seize it is another matter” — an understatement, to say the least.
In his book, he points out that the United States is far out of step with other democratic, free-market capitalist countries, noting that U.S. taxes are quite low by international standards. Just look at the data, he said: For both individuals and businesses, data from the Organization for Economic Co-operation and Development and research from the Institute on Taxation and Economic Policy show that “Americans have made an unusual decision on how to build our economy.” choice.” Just taxing individuals and businesses like all of our international counterparts will pay the price for his audacious plans.
But do we really want to? This is where the myth comes from.
‘myth’
The Führer’s proposal for reparations may have been the climax of his argument, but that is not what this book is about. As the title suggests, this is “The Myth,” and he believes its roots are inseparable from the American republic itself: “Success belongs to those who work hard. Failure belongs to those who don’t.” This, he told me, runs through American culture. The long-term narrative is easier for most people to believe than to admit structural faults.
The Führer insists that he does not want to “paint the entire economics profession with too broad a brush,” but its proponents – including, he admits, an early version of his own. Three degrees from Princeton University and Harvard University— “There is an overemphasis on the extent to which markets can solve almost everything.” Otherwise, he said, he had never heard of the economic consequences of racial and ethnic discrimination in his education and work.
But in the late 2000s, he started working on community development projects for the Federal Reserve, leaving behind his macroeconomic models and really talking to people in trouble. “The more I talked to people about (the economy) and the more I saw what was happening in low-income communities,” he explained, the more he realized there were gaps in his understanding. “I think someone was hurt. There were just too many.”
Imagine a community of hard-working people who look at their lives and say, “Why have I been working for 35 years and I have very little money in my savings account…and I’m not really following my Way to achieve success.” Did you think about it when I was 25 years old?
He recalled “The Fed is listeningThe series began in 2019, when the economy was growing, unemployment was low, and the Fed was hosting events across the country “to understand how monetary policy affects people’s daily lives and livelihoods.” As the president put it, central banks are essentially responsible for the ten The work began years ago to “listen to the views of ordinary people in communities that have long been suffering from poor living conditions.”
He recalled one interviewee at a meeting who, when asked about the impact of the recession, said: “Our community is always in a recession. That’s what it is.” The Führer said he might be naive wealth, but he thinks it resonates. “I think they did hear it.”
What does “full employment” really mean?
For a while, at least before the pandemic and the war in Ukraine upended the global economy, the Fed had begun to focus more on the first part of its so-called dual mission — which includes ensuring full employment and stable prices. Inflation has not been a serious problem in the United States since 2008, allowing the central bank to focus on the labor market. But rising inflation during the pandemic changed everything, forcing Fed Chairman Powell to follow the lead of Paul Walker, the hawkish central bank chairman who fought (and defeated) inflation in the 1980s. Fuller argued that monetary policy was only one aspect of the full employment agenda and that bold fiscal policy was needed to structurally correct an economy “designed to produce inequality.”
But Fuller’s book argued for more than full employment. When I pressed him on what he was really proposing—to accept what former Treasury official Peter Fisher once described as “ Insurance companies that own the military And replacing it with a massive investment vehicle — something he doesn’t object to. He said it could be called a “public equity investment firm,” in contrast to a private equity firm. “All of these are investments in a productive future for the economy and just give everyone a chance to really succeed.”
There was something charming about the Führer’s outlandish vision, but even he admitted it was unrealistic. But he again pointed to the implications of the hard data and how economic inequality along racial and ethnic lines persists for generations. If we don’t take as drastic action as he suggests, “I think in 25 or 50 years you’re going to see essentially the same wealth gap and say, ‘Well, why didn’t we do anything? ?’ ”
The only answer, he adds, is that it’s (perceived to be) too expensive, and he partly blames that on his own generation. He sees hope in the millennial generation of his children (his oldest is about 40). Given their economic experience, he said, having lived through the upheavals of the financial crisis and the pandemic, “they’re probably going to be supportive of more of the things that I have in mind.”
But frankly, even that’s a bummer for him. “We who have the money and power now, we don’t take any responsibility, we just… hope that other people can handle this. It seems strange and sad.” As a data nerd, he hopes to show His book urges people to take action. “I don’t want to wait for the next generation to start bearing these bombs. We can do it now.”
The Führer tends to use a lot of “D-words” in his books, such as “disturbing,” “disheartening,” “depressing,” and “distressing.” He insisted that he was actually a born optimist and that everyone knew the economy was broken and all it took was the will to act. “It’s a series of decisions that we make together.” So that’s the final “D word,” democracy? He agreed, adding: “Is this feasible? Yes.”
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