Prejudice Bad for Economy, Fed Chief Says
Discrimination isn’t just immoral, it’s economically inefficient, Federal Reserve Chairman Alan Greenspan said Friday.
Headlining the final session of Jesse Jackson’s three-day conference on spreading Wall Street’s wealth, the central bank chief said that race and gender discrimination in hiring and investment distorts the marketplace so that “in the end, costs are higher, less real output is produced and national wealth accumulation is slowed.”
Greenspan was joined at the conference atop the World Trade Center by the nation’s top securities regulator, Securities and Exchange Commission Chairman Arthur Levitt, who announced that he has chosen Los Angeles as the site for the first of a new series of SEC round-table discussions on diversity.
In the kickoff session, tentatively set for Feb. 6, Levitt will meet with corporate CEOs and heads of securities firms to discuss ways of bringing more minority-group members into the arena of finance. The place, time and list of participants all remain to be worked out, an SEC spokeswoman said.
(Levitt will be in Los Angeles then for one of his agency’s educational “town meetings” and also to deliver a keynote speech at The Times’ Investment Strategies Conference at the Los Angeles Convention Center on Feb. 8.)
The conference, climaxed by a speech Thursday by President Clinton, drew 650 professionals--at $350 per person--from Wall Street and the rest of corporate America, including many leading African American entrepreneurs.
Jackson vowed in an interview Friday that his Rainbow/Push Coalition’s Wall Street Project will follow up on the conference’s agenda by closely monitoring the securities industry’s minority employment and investment practices.
“I don’t think they’ve been under this kind of light and pressure before,” Jackson said of Wall Street executives. “Morality will drive some and fear will drive some, but eventually enlightened self-interest will lead them,” he added.
The Wall Street Project has a permanent office at 40 Wall St. now and soon will increase staffing from its current level of about 10, aides to Jackson said. The organization plans to issue regular reports on its findings.
Earlier Friday, John Sweeney, president of the AFL-CIO, told the conference audience that the union movement increasingly is using the tools of capitalism to secure working people a bigger piece of the economic pie.
“We are organizing our own corporate transactions, hiring our own investment bankers, putting together our own business plans, raising our own financing and installing our own management teams,” Sweeney said, noting that unions were largely responsible for restructuring the airline industry after it nearly foundered in the 1980s.
Jesse Brown, who mortgaged his home to help finance his Chicago-based brokerage focusing on African American small investors, said that the quickest way for Wall Street to tap into the large potential pool of black savings is by linking up with firms such as his.
“You understand, I don’t want to work for Merrill Lynch,” Brown said, in between bouts of handshaking and exchanging business cards with conference-goers. “But Merrill Lynch needs to develop joint ventures with people like myself who can relate to the ‘under-invested,’ ” he said.
Overlooking good sales prospects often is less a matter of race than class, Brown went on.
“The typical broker calls all the doctors in town, calls all the lawyers in town, calls all the dentists in town,” he said. “But he doesn’t make it to the United Methodist Church or the Baptist Church.”
