One of Janet Yellen’s first engagements as head of the US government’s main economic department was not with Wall Street, but a Zoom call with civil rights leaders.
It was a good start as Treasury Secretary-designate for the former Federal Reserve Chairman, who has spent much of his career advocating for racial equity, often with mixed responses.
Ms Yellen and Wally Adeyemo, who will be his deputy, took notes as the group outlined its recommendations on how the Treasury could better serve black Americans – from diversifying its own staff to reviewing practices of Internal Revenue Service audit.
Attendees expressed satisfaction with Ms. Yellen’s understanding of the economic crisis facing black and brown Americans amid the Covid pandemic. But they expressed reservations about the speed and speed with which it would implement the reforms.
It’s a criticism that follows Ms. Yellen’s long interest in issues of racial justice, from researching unemployment as an academic to promoting diversity and inclusion while chairing the Fed.
“I understand that as a trained scholar she’s supposed to be cautious, but this is a time of crisis,” says Felicia Wong, president and CEO of the Roosevelt Institute think tank. “What I heard from her was a recognition that movement is important.
Civil rights leaders who have helped organize the huge turnout of African Americans on election day that propelled Mr. Biden to power now wants proof of the new administration’s commitment to their interests.
“And especially for the times when this campaign was at its lowest – the African American community stood up for me again,” President-elect Biden said upon his victory. speech November 7. “They still have my back, and I’ll have yours.”
From her early years at the Fed, Ms. Yellen has been vocal about the need to better engage people of color in the economy. She worked to hire more people of color during her tenure at the Fed and revised performance appraisal practices to help ensure those who were already there could advance their careers.
The work made the 12 federal bank boards “moderately less white and significantly less masculine,” but there was still a lot of work to be done, said Benjamin Dulchin, who heads a campaign that lobbies the Fed in names of people of color for progressive advocacy. group the Center for Popular Democracy.
After Ms. Yellen’s tenure as Fed President ended in 2018, she took over as President of the American Economic Association, where she started conversations about racism on the ground.
Rashad Robinson, chairman of the non-profit civil rights advocacy group Color of Change, cited these efforts when describing how he felt when Mr Biden announced his appointment as Ms Yellen: “Relieved.”
“Relieved is not inspired. It’s not outraged either, ”said Robinson, who added that he had been in close contact with the transition team during the appointment process and helped coordinate Monday’s meeting.
“Throughout her career Janet has innovated and as the head of Treasury, she will work alongside the entire administration to better rebuild our economy from the crises American families face with a focus on racial and gender equity. , promoting diversity and responsibility in leadership, and addressing income inequality, ”Biden spokesperson for transition Rosemary Boeglin said in a statement.
Ms Yellen’s advocacy background as well as her reputation for open-mindedness puts her at the top of Mr Biden’s shortlist for Secretary of the Treasury in the minds of civil rights leaders, a list that also included the Fed Governor Lael Brainard and Ariel Investments Co-Managing Director Mellody. Hobson.
A real test of Ms. Yellen’s attention to communities of color came in 2015, her second year as Fed chairman. She was questioned by black lawmakers during a hearing with the House Committee on Financial Services in July this year, while discussing when to raise interest rates for the first time since the financial crisis.
“So there is really nothing the Federal Reserve can do directly to influence the structure of unemployment across groups,” Ms. Yellen replied to questions from MP Joyce Beatty on whether unemployment stubbornly high among blacks would be factored into his timing. the country would be close to full employment.
“And sadly, it has long been true that African American unemployment rates tend to be higher than the average for the country as a whole.”
Ms Yellen’s remarks and final decision to raise rates have not been welcomed by progressive economists and activists such as Mr Dulchin, who believe that delaying the rate hike would have accelerated the recovery in black communities. . The memory fuels doubt that Ms. Yellen could once again slow recovery efforts before recovery takes hold in vulnerable populations.
“It is important that leaders within the Treasury, especially at this time of a huge economic, pandemic and racial justice crisis, see the power of their chair as bullies,” Ms. Wong said. “I want them to use whatever power they have to try to narrow the racial wealth gap and racialized economic outcomes.”
Ms Wong was among advocates who met with Ms Yellen on Monday and said she was impressed with the secretary-designate’s knowledge of the systemic nature of the economic challenges facing communities of color. But she noted that no promise had been made on what would happen after Ms Yellen took office.
“I really hope they see it as part of their responsibility as they remake the Treasury to develop a culture in the building to make it a central goal to help solve this problem,” Ms. Wong said.
These hopes were bolstered by the selection of Mr. Adeyemo, a Nigerian-American who heads the Obama Foundation and worked at the Consumer Financial Protection Bureau under Elizabeth Warren.
Ms. Yellen’s success in getting the Treasury Department to work for communities of color would be in part measured by whether she can get funding for disproportionately troubled state and local governments. to employ blacks, and breaking down more data in the department’s economic reports by race, Ms. Wong said.
“I think she has the knowledge to understand these issues,” Mr. Dulchin said, “but the question is, will she actually take it?”