I doubt Martin Luther King’s famous “free at last” declaration was a call for free child-care, pre-school and college. I don’t remember him marching for free health care and guaranteed incomes for people that refused work. Yet, nine Democrats at the (get this) Poor People’s Moral Action Congress were promising free everything. In stark contrast, Jerome Powell committed the Federal Reserve to support needy Americans with the “dignity” of work.
The Poor People’s Moral Action Congress was organized by Reverend William Barber, who tried to convince the nine president-wannabes that 140 million Americans are suffering in poverty. Surely, Senators Sanders, Warren and Harris knew the actual number of Americans with incomes below the federal poverty line is 40 million. Oh well, the Democratic candidates were too busy promising “free stuff” to set the record straight.
Kamala Harris proposed more subsidies for renters. Elizabeth Warren promised student debt forgiveness. Not to be outdone, Joe Biden pledged “total health care” for everyone. They painted a future vision of America in which free-loading slackers elect Santa Claus for president. Trying to avoid a booming Trump economy, the nine Democrats said nothing about how full employment is restoring dignity to low-income households and communities.
In contrast to their display of budget-busting generosity, Jerome Powell told reporters mid-week the Federal Reserve has learned how important the “dignity” of work is to low-income Americans. The chairman shared that, over the last twelve months, the Fed held conferences with the proxies of low-income Americans and learned full employment drives more than just consumer spending.
America’s central bankers stepped away from economic PHDs to hear representatives of the lowest income quartile. In doing so, they learned that high un-employment is responsible for social decay: specifically, higher opioid use, crashing home values, and deteriorating neighborhoods. In other words, rent subsidies and food stamps help only so much, because the government cannot guarantee a nice family next door or improve one’s credit score. The Fed heard that low-income communities have lacked the civic resources to nurture young citizens, and learned that only full employment and rising wages can restore the dignity of America’s low-income communities.
A real recovery is marked by the leveling of the employment rate (a sign of full employment). This never happened on Barack Obama’s watch; mostly because Obamacare triggered hiring freezes at small employers, and environmental regulations drove up energy costs. Today, tax cuts and de-regulation have created a full-employment economy marked by widespread wage stability and productivity gains that allow non-inflationary pay increases.
Obama-era central bankers thought America’s labor market had peaked when jobless rates fell below 5%, but they were dead wrong: eight million new jobs were created in the last three years. Armed with this knowledge (the effect of tax cuts and de-regulation on employment, and the effect of full employment on low-income communities), the Federal Reserve is now the true liberal at a time when Democratic leaders sound anti-dignity.
Mr. Powell made his views crystal clear: the US has finally entered a real post-recession recovery, and the Fed’s primary objective is to prevent real economic growth from falling back into recession. For the first time in ten years, low-income Americans are benefitting from the critical mass of a full employment economy – and Jerome Powell does not intend to let them down. Blue-collar workers want the dignity of jobs that fit their skills and working-class mothers want the dignity of a workplace close to home. Communities want the dignity of homes decorated for Christmas, businesses sponsoring youth soccer teams, and churches that can afford to paint their exteriors.
Kamala Harris (D-CA) proposed reparations to cheers from the Poor People’s Moral Action Congress; however, it is a political non-starter that will divide Democrats. There is simply no way that reparations can match what a full-employment economy does for low-income black communities. Kamala Harris should read Dr. King’s last sermon before his 1968 death: “If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.” And there you have it.
Dr. King fought to provide dignity to an entire race. To be sure, his cause was much ado about voting rights, but his “pursuit of happiness” was inexorably tied to the dignity of gainful employment and financial mobility. Reparations to “victims” cannot bestow dignity upon the recipients. It is a charitable gesture that cannot boost self-esteem in the way widespread pay raises and new jobs do.
It was big news when the Federal Reserve acknowledged a full-employment economy’s role in household and neighborhood dignity. Low-income black communities don’t want to merely exist – not for a New York minute. They want and need the dynamism and exceptionalism that is the American Dream. If Democrats want to re-take the White House, then they had better start talking like Kanye West: jobs…mobility…dignity!