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From his years of work at the Federal Reserve to nearly 13 years as the CEO of giant money manager TIAA, economist Roger Ferguson knows a thing or two about money. In March, when he steps down as chief executive, he could be headed to Capitol Hill to use that know-how in the Biden administration to address the economic crisis caused and compounded by the coronavirus pandemic, the subsequent health care crisis, and the racial justice crisis that COVID-19 has shone a light on.
“We had the shortest and also one of the deepest recessions in American history, one quarter or less, and a dramatic bounce back,” Ferguson explains on the most recent episode of Leadership Next. And that may not be the end of it.
He says that odds of a double-dip recession are rising, and he encourages Congress to consider another stimulus that gives direct payments to individuals, much like the CARES Act did this spring. This stimulus, though, should include more support for state and local governments, he says. That would help recovery for a host of reasons, one being that it enables communities to choose the best way to spend that money, which could allow the funding to better serve the Black and brown people who are often overlooked in broader plans.
Solutions to the hardship much of America is facing will not just come from the federal government, Ferguson says. This should be addressed by the private sector and higher education as well, using tools like reskilling to support the unemployed.
As the capitalist system in America and abroad is rebuilt in many ways after the pandemic, Ferguson thinks there is ample opportunity to diversify the ranks at all levels and increase the societal value of the work that corporations do. For too long, companies have prioritized short-term profit over long-term sustainability and stakeholder value, he says.
“No long-term strategy is viable if it is not consistent with the best kinds of environmental and social governance behaviors,” Ferguson says.
