Georgia’s congressional Democratic representatives tout the political not economic narrative on inflation.

Congress has been passing the buck on the value of money since it created the Federal Reserve System in 1913.  Article I, Section 8 of the U.S. Constitution not only provides the Congress the authority to borrow money on the credit of the United States, but to coin money and regulate both its domestic and foreign value.  Today, the two agencies to whom primary responsibility for regulating the value of money has been passed down to are the U.S. Treasury and the Board of Governors of the Federal Reserve.  President Joe Biden appeared to emphasize the “buck passing” by meeting recently with Jerome Powell, chairman of the Board of Governors.  Reportedly, Mr Biden reiterated the Federal Reserve’s political independence and that the White House would not only do its part in combating inflation, but “get the Fed to do whatever it takes.”

Between U.S. Treasury Secretary Janet Yellen taking the hit for making the wrong call last year on the transitory nature of inflation, thinking that inflation would abate a lot sooner, and what some analysts deem as poor decision making on the part of Chairman Powell for not raising rates faster, Americans are seeing the political nature of the inflation narrative. 

Mr Biden is distancing himself from the inflation narrative, a politically prudent move, since Congress long abdicated its role on the matter.  But it is a move that is both too late and tentative.  Forget that Mr Biden selected as Treasury secretary a former chairman of the Board of Governors and that Mr Biden nominated Chairman Powell to another four-year term.  Mr Biden decided to keep the inflation arrows in his quiver probably unaware of the restraints his Executive Branch is under in terms of policymaking.

By coming out swinging on the one hand that he will be laser focused on inflation, but on the other hand is ready to throw his Treasury secretary under the bus for a bad inflation call while telling the world that inflation management is really all on the Fed makes Mr Biden look weak. 

Closer to home, the Georgia representatives to Congress seemingly prefer tout Mr Biden’s increasingly waning line on supply chain constraints.  For example, U.S. Representative Nikema Williams, a Democrat representing Georgia’s 5th district, and U.S. Representative David Scott, another Democrat representing Georgia’s 13th district, have emphasized Mr Biden’s infrastructure and Build Back Better plan as a way to expand economic capacity, relieve congestion, increase jobs, and stimulate the economy.

Sitting on the other side of the inflation argument is U.S. Representative Barry Loudermilk, Republican of Georgia’s 11th district.  Inflation, according to Mr Loudermilk, is a monetary phenomenon.  One need only look at increasing asset prices, according to Mr Loudermilk, to see that inflation is a monetary issue.

Sitting somewhat in the middle is U.S. Senator Jon Ossoff. While he agrees with the President that unraveling the supply chain is one way to combat inflation, he took issue with the Federal Reserve’s pursuit of massive quantitative easing when it was clear that inflation was not transitory.

The narrative has been disingenuous on the part of Mr Biden and on the part of Georgia Democrats.  Their lane is a political lane and over 100 years ago, Congress decided that the money vehicle would not be driven in the political lane. Saying that they can do something about inflation while acknowledging the money supply is the responsibility of the Federal Reserve only confuses voters.      

Alton Drew

6 June 2022

Disclaimer: This blog post should not be construed as legal advice or an agreement to provide legal or political analysis.  To set up a consultation, contact us at altondrew@altondrew.com.

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Stacey Abrams is not a black candidate and that’s great for Georgia’s progressive Democrats.

Stacey Abrams recent comments regarding the Democratic Party’s seeming avoidance of the term “black” versus the use of other ethnic or demographic references such as “woman of color”, “people of color” or LGBTQ+ has raised a bit of a row among the members of the “New Black Media.”  A recent YouTube video depicts the 2022 Georgia Democratic gubernatorial candidate explaining why the term is not used by herself or by other Democratic surrogates.

Ms Abrams explains in the video that proposing policies that would benefit black people in particular would not be wise given that, on a national level, blacks make up approximately 12% of the population.  Discussing distinct policies aimed solely at helping blacks given their proportion of the population would get black candidates in trouble with non-black donors.  Using terms such as “minorities”, “poor people”, “woman of color” or “people of color” keeps references to ethnicity vague and palpable for non-black donors.

Observers of political media can’t help but notice that non-black surrogates, political media strategists, and non-black candidates rarely if ever use “black” when describing that portion of the electorate that could benefit from intentionally designed income transfer programs.  Progressives rather push the “We’re all in this boat together” diatribe than focus on, for example, serious programs for closing the household wealth gap between blacks and whites. 

Such policy action plans would require specific recognition of the black racial group and discussion of the economic, financial, and legal components underlying discrimination against this group.  Fortunately for Georgia and national Democrats, Ms Abrams appears willing to tow the “We’re all in the same boat together” line to ensure non-ruffling of feathers while bringing a heaping spoonful of black votes to the polls this November.

Georgia’s black voters should bear in mind the inconvenient truth of Ms Abrams’ observation; that the proportion of black voters in Georgia does not provide blacks with the leverage necessary to produce policy outcomes of their liking.  What good is a “black slate” of voters if each voting cycle produces an empty plate? 

Ms Abrams and any other member of the black political class that uses vague ethnic and class references to describe blacks should reconsider whether running for office is an effective mechanism for channeling benefits to black people.  If you cannot even mention them by name, then you are less likely to properly denote and channel benefits to the recipients you claim to want to help.

Do blacks really need electoral candidates whose mission is to run for office so that they can represent everyone else?  Ms Abrams and other members of the black political class may want to design and deploy another political power mechanism that allows them to focus on the electorate that shares their heritage, lineage, and ethnicity while not worrying about offending people who don’t share their history.

Alton Drew

27 May 2022

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Georgia has to decide who can guide its state political economy through a rough patch of inflation

Raphael Bostic, president and chief executive officer of the Federal Reserve Bank of Atlanta, recently released a video reiterating the Board of Governors of the Federal Reserve System’s policy of achieving an inflation rate of two percent. President Bostic defined inflation as an imbalance between aggregate demand for goods and services and aggregate supply of the same.  Achieving the two percent inflation rate during a “soft landing” is achievable but will be rough, according to the Atlanta Fed president.  A soft landing is defined by Investopedia as a moderate economic slowdown following a period of growth.  Central banks line up on their economies’ runways hoping for a soft landing while raising interest rates for the purpose of curbing inflation.

The Board of Governors uses a number of monetary policy tools to curb inflation including changing its target range for the federal funds rate; buying and selling securities; changing the reserve requirements for its member banks; changing the amount of interest it charges at its discount window for loans to its member banks; and changing the amount of interest it pays on commercial bank excess reserves held at the system’s twelve federal reserve banks.

Mr Bostic also noted an apparent imbalance in the United States’ labor markets where only 60% of available and open jobs have been filled.  There is where I think about the state of Georgia’s management of the political economy.

The role of government is to act as a transfer agent between taxpayers and bondholders.  Government taxes the spread between a taxpayer’s work efforts and what the taxpayer yields from those efforts.  Government takes its cut and passes on the rest to its bondholders.  As a people manager, government creates narratives to encourage more yield and implements policies to encourage or support actions that create that yield.

State governments are less incubators of democracy and more incubators of tax-generating activities.

In the case of Georgia, bond holders and bond traders should not only keep their ears open to narrative spun by Georgia’s gubernatorial candidates, but keep their eyes open when reading the policies proposed by the candidates.  How well do their proposals lend to the need for yield creation?  Are their proposals designed solely to tug at heart strings or can proposals be tied to activities that ultimately increase yield from taxpayers that can ultimately be transferred to bond holders?

Followers of state elections rarely if ever tie state government policies to national dollar and monetary policies.  I think bond holders and bond traders should start looking at state and federal governance of the American political economy to best understand how well the United States is doing on generating yield.          

 Alton Drew

25 May 2022

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Candidates for Georgia governor should be mindful of price appreciation for yuan vs dollar.

I was curious about demand for the U.S. dollar versus the Chinese yuan in terms of the British pound, the euro, and the Indian rupee. Given the state of Georgia’s export efforts, I wanted to determine what Georgia should be keeping its eyes open for when it comes to competition between the dollar and the yuan.

Georgia’s gubernatorial campaign is heating up. It has been my experience that candidates nary make mention of export efforts. If you are going to talk about exports, you have to talk about currencies. From what I have gathered so far, only Libertarian Party candidate Shane Hazel has provided serious discussion about currencies. Democratic Party candidate Stacey Abrams and the Republican incumbent governor Brian Kemp have been pretty much mum on the topic.

Now, using data from OANDA, a look at the numbers. During the period 11 February 2021 to 11 February 2022, the price of the US dollar in terms of the British pound has appreciated two percent in price from GBP0.72283 to GBP0.73733. In terms of the euro, the dollar has appreciated six percent over the same period from EUR0.82467 to EUR0.87449. In terms of the Indian rupee, we see price appreciation of three percent from INR72.8104 to INR74.9521.

Compare the above with appreciation of the dollar price in terms of the yuan. Between 11 February 2021 and 11 February 2022, the price of the Chinese yuan in terms of the British pound rose just over three percent from GBP0.11207 to GBP0.11593. In terms of the euro, the yuan appreciated over seven percent from EUR0.12786 to EUR0.1375. Lastly, in terms of the Indian rupee, the yuan appreciated over four percent from INR11.2885 to INR11.7846.

There is a currency war brewing between China and the United States. This war tends to get mentioned in passing during broader political discussions in Washington, DC about the economic and competitive threat China poses to the United States. What gets overlooked is Europe’s political and geographic middle position. Europe has been buying less expensive technology from China; thus has a demand for Chinese currency. In addition, with the Federal Reserve preparing to hike overnight interbank lending rates as early as next month, Georgia’s exporters may be seeing an increase in the cost of doing business and may seek assistance from the state to help keep their prices competitive globally.

The candidates should be contributing to the conversation on trade, preferably encouraging policies that facilitate infrastructure investment. The conversation should begin with an appreciation for what’s happening in the currency markets.

Alton Drew

02.11.2022

3815 Media, Inc., is expanding in metro Atlanta …

Source: Georgia Department of Economic Development

ATLANTA, October 30, 2020 —The Georgia Department of Economic Development (GDEcD) today announced that content development, production, marketing and distribution company 3815 Media, Inc. is expanding with a new headquarters in Peachtree Corners. Founded by two-time Emmy Award-winning executive producer and Georgia Minority Supplier Development Council member Rushion McDonald, 3815 Media’s focus is identifying and promoting positive values for the Black community through diverse content creation.

“Investments from innovative companies like 3815 Media, Inc. are a testament to Georgia’s support for the film and production industries and to the investments Georgia has made in developing creative talent in the state,” said Georgia Department of Economic Development Commissioner Pat Wilson. “I thank Rushion McDonald for his continued investment in Georgia, and look forward to seeing the incredible opportunities he creates in Peachtree Corners with his commitment to producing quality content with an eye to diversity.”

Originally started in 2014, 3815 Media, Inc.’s expansion to 3201 Peachtree Corners Circle is expected to create 23 jobs in Gwinnett County. 3815 Media’s mission is to produce and market diverse content to consumers. Company Founder Rushion McDonald is also a multiple Emmy and NAACP Image Award-winner for television production and has produced national campaigns for State Farm, Ford, MGM, iHeartRadio, HBCU Week, ESPN, NBC, BET and ABC. He has written and produced for Steve Harvey, Kevin Hart, Taraji P. Henson, Mo’Nique, Gabrielle Union, Tia and Tamera Mowry, Stephen A. Smith, Jamie Foxx and many other household names.

“It was a no brainer for me to open 3815 Media in a city recognized as one of the best places to live in the entire State of Georgia thanks to its education quality, low crime rate, cost of living, employment and access to amenities,” said 3815 Media CEO Rushion McDonald. 

3815 Media, Inc.’s additional staff will include graphic designers, legal experts, talent managers, producers, creative strategists, virtual exhibit designers, marketing experts and more. Individuals interested in working for 3815 Media, Inc. who have experience in graphic design, social media, digital marketing and SEOs are encouraged to email their resumes to Rushion@3815Media.com. 3815 Media, Inc. will also offer internship opportunities.

“It is indeed a pleasure to welcome Mr. McDonald and his talented team to Peachtree Corners,” said Peachtree Corners Mayor Mike Mason. “One of our city’s top priorities is to ensure that all businesses have the opportunity to succeed. Our zero-millage rate and business-friendly city continues to draw remarkable businesses like 3815 Media. We wish them great success.”

“Gwinnett County is a great home for 3815 Media due to the strong diversity within the community,” said Andrew Carnes, vice president of economic development at Partnership Gwinnett. “We are always excited to continue to expand the creative talent workforce and provide opportunities for our region.”

Project Manager Asante Bradford represented GDEcD’s Global Commerce division on this project. 

About 3815 Media, Inc. 
3815 Media is built on the vision and career success of Rushion McDonald. Whether it’s print, radio, TV, film, live touring productions, industry exhibits, in person or across social networks, 3815 Media can help its clients create the exact message to build their brand, as well as produce content on the right platform medium. 3815 Media covers content development, production, marketing, distribution and multi-platform initiatives including digital video.

Contact

Marie Hodge Gordon
Director of Communications
404-962-4075
MGordon@Georgia.org

Alison Wentley
Communications Specialist
404-962-4086
AWentley@Georgia.org