What could go wrong with this plan?
There’s been no shortage of ideas for how to jump-start economic growth in the aftermath of the financial crisis. But a new one comes with a high-profile backer: the Rev. Jesse L. Jackson.
At a three-day conference in New York that began on Wednesday, Mr. Jackson discussed a proposal for increasing the availability of capital by using pension money to make loans in low-income communities. The idea is getting a prominent debut at the 16th annual Wall Street Project Economic Summit, hosted by Mr. Jackson’s Rainbow PUSH Coalition and the Citizenship Education Fund.
“We’ve got to think outside the present fiscal-cliff-debt-ceiling box,” Mr. Jackson said in an interview on Wednesday. “We must have some plan for reconstruction.”
The conference features some big names, with a keynote speech from former President Bill Clinton. The comptroller of New York, John C. Liu, who oversees the city’s pension funds, is speaking on Thursday.
Mr. Jackson, who regularly speaks out about banks’ abuses in minority communities, envisions the creation of a lender similar to development banks in other countries. With political gridlock in Washington, and with banks limiting access to capital, a separate solution is needed, Mr. Jackson said, comparing the idea to the Marshall Plan.
Using pension money would simultaneously achieve another of Mr. Jackson’s goals: encouraging pensions to focus on socially responsible investments.
“New York would be a great place to do this,” Mr. Jackson said. “You’ve got Harlem and Wall Street on the same island.”
There is precedent in the city for getting creative with pension funds. Mr. Jackson recalled the fiscal crisis in 1975, when the investment banker Felix G. Rohatyn engineered a rescue. That plan involved pension funds backing the city’s debt.