Elizabeth Warren and more than 100 House Democrats blast lack of diversity at the Fed
Elizabeth Warren and more than 100 House Democrats blast lack of diversity at the Fed
The Federal Reserve System is one of the most important institutions in the entire American government. Its composition is also almost shockingly non-diverse, with zero African Americans or...
The Federal Reserve System is one of the most important institutions in the entire American government. Its composition is also almost shockingly non-diverse, with zero African Americans or Latinos serving on the key panel whose decisions impact job creation and the pace of economic growth, despite fairly overwhelming evidence that Fed decisions impact racial groups differently.
What's more, the bodies that choose which people sit on that non-diverse committee are themselves extremely non-diverse — locking into place a system in which the interests of African Americans, Latinos, and lower-income people more generally may be underconsidered in making decisions about unemployment, inflation, and interest rates.
All this is the subject of a letter released at noon today by a group of 111 members of the House of Representatives plus 11 senators, headlined by Elizabeth Warren, Cory Booker, Bernie Sanders, Jeff Merkley, Kirsten Gillibrand, and Al Franken, demanding that the Fed pay more attention to diversity in its ranks.
The key graf:
According to a study by the Center for Popular Democracy released in early February, 2016, 83 percent of Federal Reserve head office board members are white, and men occupy nearly three-fourths of all regional bank directorships. The lack of public representation on regional Banks’ boards is even more distressing in light of the lack of diversity among regional Bank presidents and the resulting lack of diversity on the Federal Open Market Committee (FOMC). Currently, 92 percent of regional Bank presidents are white, and not a single president is either African-American or Latino. Moreover, at present 100 percent of voting FOMC participants are white, while 83 percent of regional Bank presidents and 60 percent of voting FOMC members are men.
Progressives interested in monetary policy issues have long struggled to engage the public, activist groups, or elected officials in the topic. The focus on diversity from the left-wing Center for Popular Democracy's "Fed Up" campaign that inspired this letter represents a new tactical effort to change that.
Diversity among decision-makers is not, of course, directly a monetary policy issue. But as the letter points out, monetary policy does have significant consequences for racial disparities in employment. They cite research from the Economic Policy Institute "demonstrating that for every .91 percent reduction in unemployment for whites, black unemployment drops 1.7 percent" meaning that African Americans have more to gain from monetary policy that is more pro-growth and less inflation-averse.
Michigan Representative John Conyers who was one of the main driving forces behind the letter issued a statement observing that "Detroit and cities across the country with high minority populations have some of the highest unemployment rates and will be harmed if the Federal Reserve does not consider our needs when they make key policy decisions."
How the Federal Reserve is organized
The specifics of the letter hinge on the structure of the Federal Reserve system, which is, in a word, confusing.
The main hub of the Fed is the Board of Governors in Washington, DC, which consists of a chair, a vice chair, and five other board members. Currently there are two vacancies on the board, and all five board members are white.
In addition to the Board of Governors, there are 12 regional Federal Reserve banks, each of which has its own president and its own board of directors. Each bank's president is selected by its board, with the choice subject to confirmation by the main board. Each regional bank board itself is composed in part of members selected by the private banks of the region and in part of members selected by the central board.
Monetary policy decisions are made by what's known as the Open Market Committee. The committee is composed of the seven members of the Board of Governors (at present, again, there are two vacancies) plus the president of the New York Fed, plus four other regional bank presidents serving on a rotating basis.
The point of the letter is that all these various groups underrepresent women and massively underrepresent African Americans and Latinos.
Today's Fed neglects race
Diversity of membership is neither necessary nor sufficient to ensure that a broad range of interests is represented. But there is considerable evidence that the current not-so-diverse group of monetary policymakers is not considering the full range of interests in American society.
Narayana Kocherlakota, the former president of the Federal Reserve Bank of Minneapolis, was the only nonwhite FOMC member during his term and offered this observation back in January:
However, there is one key source of economic difference in American life that is likely underemphasized in FOMC deliberations: race. Let’s look, for example, at the most recently released transcripts for FOMC meetings, which cover the year 2010 (my first full year on the Committee). It was a challenging year for the US economy as a whole, as the unemployment rate was above 9 1/4% in every month. But it was especially challenging for African-Americans: In every month of 2010, the unemployment rate among African-Americans was at least 15 1/2%. I did a search of the hundreds of pages of the meeting transcripts. Based on that search, my conclusion is that there was no reference in the meetings to labor market conditions among African-Americans (or Black Americans).
Monetary policymakers, with their needed independence, always risk being (or at least being seen as) insufficiently empathetic to the lives of their nations’ citizens. The Federal Reserve Act has mitigated this risk in the US by ensuring that an appreciation for economic diversity is at the heart of the FOMC’s deliberations.
The details of monetary policy get pretty complicated, and there's rarely been much sign of normal people being interested in them. But issues about who is represented and whose interests get discussed are easier to understand, so you can see why this particular angle is gaining momentum in Congress.
After the release of the letter, Hillary Clinton also weighed-in on the issue via spokesman Jesse Ferguson who offered a statement:
The Federal Reserve is a vital institution for our economy and the wellbeing of our middle class, and the American people should have no doubt that the Fed is serving the public interest. That's why Secretary Clinton believes that the Fed needs to be more representative of America as a whole as well as that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue. Secretary Clinton will also defend the Fed's so-called dual mandate — the legal requirement that it focus on full employment as well as inflation — and will appoint Fed governors who share this commitment and who will carry out unwavering oversight of the financial industry
By Matthew Yglesias
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“We matter”: Dozens with pre-existing conditions stage D.C. sit-in over GOP health care bill
“We matter”: Dozens with pre-existing conditions stage D.C. sit-in over GOP health care bill
Marthella Johnson was born with one kidney. At a young age, the 42-year-old resident of Little Rock, Arkansas, developed kidney stones.
Before the Affordable Care Act, many insurers...
Marthella Johnson was born with one kidney. At a young age, the 42-year-old resident of Little Rock, Arkansas, developed kidney stones.
Before the Affordable Care Act, many insurers considered kidney stones a pre-existing condition and wouldn’t insure people like Johnson. After it went into effect, Johnson said she was able to buy insurance through her state’s marketplace.
Read the full article here.
Want To Change The Face Of Politics? Help Teens Register To Vote.
Want To Change The Face Of Politics? Help Teens Register To Vote.
In a recent Center for Popular Democracy report, we detailed examples of youth-focused campaigns for high school registration around the country. In Phoenix, organizers at Living United for Change...
In a recent Center for Popular Democracy report, we detailed examples of youth-focused campaigns for high school registration around the country. In Phoenix, organizers at Living United for Change in Arizona regularly go door-to-door registering eligible students in the 27,000-student Phoenix Union High School district. They also work with school district officials to integrate voter registration in high schools.
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US lawmaker welcomes plan to aid Caribbean immigrants
Guardian - July 22, 2013 - Caribbean American Congresswoman Yvette D Clarke has welcomed a plan by New York City (NYC) to aid undocumented Caribbean immigrants. NYC officials say the city will...
Guardian - July 22, 2013 - Caribbean American Congresswoman Yvette D Clarke has welcomed a plan by New York City (NYC) to aid undocumented Caribbean immigrants. NYC officials say the city will spend US$18 million to help undocumented Caribbean and other immigrants find jobs. City council speaker Christine Quinn, a mayoral candidate, said the money will fund adult education classes and legal services that the US federal government requires immigrants to take to qualify for the Deferred Action for Childhood Arrivals programme.
The New York Immigrant Family Unity Project will provide free legal services to immigrants threatened with deportation who are unable to represent themselves in proceedings. “New York has always been a city of immigrants within a nation of immigrants,” said Clarke, the daughter of Jamaican immigrants, who represents the 9th Congressional District in Brooklyn.
“Under this programme, thousands of immigrants in Brooklyn and other parts of the city will finally have an opportunity to challenge the deportation proceedings that separate families and weaken communities,” she said.
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Activists from around the country to march, hold workshops in Pittsburgh
Activists from around the country to march, hold workshops in Pittsburgh
An estimated 1,500 demonstrators will hit the streets of Downtown Pittsburgh this afternoon — and both geographically and politically, they expect to cover a lot of ground.
The “Still We...
An estimated 1,500 demonstrators will hit the streets of Downtown Pittsburgh this afternoon — and both geographically and politically, they expect to cover a lot of ground.
The “Still We Rise” March, which kicks off a two-day gathering of activists from around the country, begins at 2:30 and will feature stops including the Pittsburgh branch of the Federal Reserve, the headquarters of UPMC and the Station Square office of Pennsylvania Sen. Pat Toomey.
Ana Maria Archila, co-director of the Center for Popular Democracy, which is organizing the gathering, said the activists are turning out to put the spotlight on issues communities face such as economic inequality, racism and xenophobia.
“… We will win our rights,” she said, adding that the event “is really the launch of a national grassroots community.”
In fact, the “People’s Convention” at the David L. Lawrence Convention Center expects to attract over 40 progressive groups from 30 states, focusing on issues ranging from immigrant rights and racial equity to environmental concerns and public schools advocacy. A parallel program will involve policy discussions among progressive elected officials: Pittsburgh Mayor Bill Peduto and City Councilor Daniel Lavelle are among those participating.
The event “reflects what we’re trying to do in Pittsburgh, on a national level,” said Erin Kramer, executive director of activist group One Pittsburgh.
Here as elsewhere, organizers have pressed fast-food employers to raise minimum wages to at least $15 an hour, and fought for a city ordinance requiring employers to grant paid sick leave to workers. Other cities are weighing “fair scheduling” ordinances that require giving workers earlier notice about, and input on, their work schedules.
Immigration issues, which have become a critical issue in this year’s presidential race, also will be a key topic. While Ms. Kramer said the convention is about more than electoral politics, Republican presidential candidate Donald Trump “is really a threat for a lot of participants. He’s literally talking about building walls and sending people home. You may see a Trump puppet in the parade, more as a rodeo clown than anything else.”
The agenda may seem sprawling. “It is hard to weave these things together,” Ms. Archila admitted. One goal of the convention is for participants to craft a “statement of unity” outlining a vision to guide future activism.
But “all of our issues are interconnected,” said Pittsburgh education activist Pam Harbin, who will attend the convention to discuss tactics and lessons with organizers from elsewhere. “A $15 minimum wage is deeply connected to the fight for quality schools, because if you have parents working three jobs, you really can’t ask, ‘Why aren’t these parents more involved in their kids’ education?’”
Campaigns for higher wages or better worker protections often concentrate on the federal level. But with Washington in a partisan deadlock, activists are increasingly pressing for change locally.
“In some ways, people became more reliant on the federal government, and that took some of the wind out of the sails of local activism,” said Lisa Graves, executive director of the left-leaning Center for Media and Democracy. “But seeing the federal government crippled is an opportunity to reinvigorate local democracy.”
There are perils to the approach, as Pittsburgh has learned. Here as elsewhere, while progressives may control city hall, conservatives often rule state capitals.
State law has barred enforcing a Pittsburgh law to require the reporting of lost-and-stolen firearms, for example. And last December, an Allegheny County judge struck down ordinances requiring paid sick leave for employers, and special training for building security guards. A 2009 Supreme Court ruling barred municipalities for setting such rules for employers, Judge Joseph James ruled.
“It’s a growing trend to see these special interests using their access at the state level to preempt local democracy,” Ms. Graves said. This weekend will feature discussions of the challenge, but because states can limit local authority, “It’s extremely difficult to overcome.”
And a local ordinance may not help struggling families across the city line — at least not immediately.
Still, said Ms. Kramer, “If you lift the minimum wage in one place, people say, ‘Why not me?’ You have to start by painting an alternative picture.”
By Chris Potter
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Skinny Girl's CEO Bethenny Frankel charters multiple planes to bring supplies to Hurricane Maria survivors
Skinny Girl's CEO Bethenny Frankel charters multiple planes to bring supplies to Hurricane Maria survivors
Bethenny Frankel is turning the full force of her efforts on the disaster in Puerto Rico post Hurricane Maria. As reported by People, the Skinny Girl CEO, B Strong charity spearhead, mother, and...
Bethenny Frankel is turning the full force of her efforts on the disaster in Puerto Rico post Hurricane Maria. As reported by People, the Skinny Girl CEO, B Strong charity spearhead, mother, and Bravo reality star combined a Twitter crowdfunding campaign with her own resources to raise the money necessary to charter four planes full of water, canned goods, diapers, baby food, medical supplies, and more.
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Group Blasts Fed for Lack of Diversity in Leadership
Source: Wall Street Journal
Federal Reserve leadership is overly...
Source: Wall Street Journal
Federal Reserve leadership is overly male, almost entirely white and drawn too frequently from the banking community, according to a group critical of the central bank.
A new report from the Center for Popular Democracy’s Fed Up campaign analyzes the types of people populating the Fed’s Washington-based board of governors, the regional bank presidencies and the regional bank boards of directors.
The report notes that all voting members of the central bank’s rate-setting Federal Open Market Committee and nearly all the regional bank presidents are white. Just two of the 12 presidents and two of the five governors are women.
“These key decision-making bodies remain dramatically unbalanced and unrepresentative of the vast majority of people who participate in the economy,” said the group, which has called for more public input into the selection of regional bank presidents and their performance evaluations.
The center said the composition of the Fed’s leadership bodies violates the spirit of the law that created the central bank, which calls for membership drawn from many different industries and interests.
A Fed spokesman responded to the criticism about the regional bank boards by saying the central bank has “focused considerable attention” to finding directors “with diverse backgrounds and experiences” that represent agriculture, commerce, industry, services, labor and consumers, as the law requires.
“We also are striving to increase ethnic and gender diversity,” the spokesman said, noting a rise in minority representation on the boards from 16% in 2010 to 24% today. Female representation has risen from 23% to 30% over the same period, and all told, 46% of regional directors now are either a woman or a member of a racial minority, the spokesman added.
Fed Chairwoman Janet Yellen is the central bank’s first female leader.
The Fed Up group, with a membership drawing heavily from labor unions and community organizations, is a regular critic of the central bank. It has argued in recent months that the Fed shouldn’t raise short-term interest rates and has pressed its case in private meetings with Fed officials. Several of its members appeared outside the central bank’s research conference in Jackson Hole, Wyo., last year to call attention to their views.
The group’s concern about a dearth of diversity at the Fed has been echoed by former Minneapolis Fed chief Narayana Kocherlakota. He argued in a blog post last month the central bank has appeared to give short shrift to racial concerns in part because there have been almost no African-Americans in its policy-making ranks. He wrote that the concerns of racial minorities have been “underemphasized” at the Fed.
The last African-American to serve on the Fed board was Roger W. Ferguson Jr., who served as a governor between 1997 and 2006 and as vice chairman from 1999 to 2006. The first African-American to serve as a Fed governor was Andrew Brimmer, from 1966 to 1974.
The report showed particular concern about the directors on the regional Fed bank boards, which are drawn from the private sector. It said 83% are white, compared with around two-thirds of the total U.S. population.
“The diversity of regional board members is meant to inform the bank presidents, who in turn, participate in discussions and vote at the FOMC,” the report said. “However, the boards, the presidents, and the FOMC fail to represent their region’s racial diversity.”
The report also said its analysis found that representatives of banking and what it calls commercial interests have increased their share of regional Fed board seats in recent years. Representatives of community groups and labor unions account for fewer than 5% of the available board seats, according to the center.
Among the regional Fed bank boards’ most high-profile roles is selecting their bank presidents. Recent regulatory changes now bar directors from participating in that process if their firms are regulated by the bank.
The directors also provide information to bank officials about local economic conditions and give advice on running the banks.
Protesters Press Diversity Case as New York Fed Seeks New Chief
Protesters Press Diversity Case as New York Fed Seeks New Chief
“Fed up, we can’t take it no more!” chanted a group of about 50 green shirt-clad members of Fed Up, a grass-roots advocacy campaign that has received backing from Facebook billionaire Dustin...
“Fed up, we can’t take it no more!” chanted a group of about 50 green shirt-clad members of Fed Up, a grass-roots advocacy campaign that has received backing from Facebook billionaire Dustin Moskovitz. Fed Up is pushing central bankers to keep focused on creating more jobs. America’s unemployment rate is at its lowest since late 2000. But when Fed Up’s members look at the labor market, they see the people that they say the central bank has overlooked. That’s why they and other progressives, including Democratic lawmakers, are pressing the New York Fed to consider a diverse slate of candidates as it weighs replacements for its president, William Dudley, who plans to step down this year.”
Read the full article here.
America’s Biggest Corporations Are Quietly Boosting Trump's Hate Agenda
America’s Biggest Corporations Are Quietly Boosting Trump's Hate Agenda
Corporate Backers of Hate campaign calls on companies to end practices that benefit from Trump's agenda...
...
Corporate Backers of Hate campaign calls on companies to end practices that benefit from Trump's agenda...
Read full article here.
The Housing Recovery Has Skipped Poor and Minority Neighborhoods
On October 11, 2009, when Isaac Dieudonne was two years old, his family moved into a new home in Miramar, Florida. As they began to unpack, young Isaac bounded out the...
On October 11, 2009, when Isaac Dieudonne was two years old, his family moved into a new home in Miramar, Florida. As they began to unpack, young Isaac bounded out the front door in search of fun. The parents found him several minutes later, floating dead in the fetid pool of a foreclosed house.
Since the financial crisis began in 2008, approximately 5.7 million properties have completed the foreclosure process, and stories like this begin to answer the critical question of what happens to all those homes. While many are resold, too often they fall into disrepair, creating blight that drags down property values and turns communities into potential deathtraps, attracting not just mosquitoes and mold, but crime and tragedy.
According to expert reports, this neglect occurs disproportionately in communities of color, part of a disturbing pattern. While the Supreme Court has reaffirmed the ability to use the Fair Housing Act to challenge discriminatory effects in neighborhoods, the nation’s neighborhood layout looks more segregated than ever, exacerbating the racial wealth gap. There’s no point in having an anti-housing discrimination law if it isn't vigorously employed to prevent a real societal division that drags down minority families. The Justice Department, free of uncertainty about the Fair Housing Act’s future, needs to work to realize the law's intended purpose.
The housing recovery has skipped more low-income neighborhoods.Fifteen percent of homes worth less than $200,000 are still underwater, where the borrower owes more on the house than it’s worth. This is compared to only six percent of homes over $200,000. Property values in low-income neighborhoods have not bounced back to the degree of their wealthier counterparts.
An important study from Stanford University shows how this housing divide doesn’t align with socioeconomic status, but with race. Middle-class black households are more likely to live in neighborhoods with lower incomes than the average low-income white household. This creates fewer opportunities for minorities, as neighborhood poverty can predict the quality of schooling and the availability of jobs for the next generation. Areport from the American Civil Liberties Union shows that median household wealth for African-Americans continued to drop after the housing collapse, long after median wealth for whites stabilized. They project this to continue well into the next generation, with a drop in the average black family’s wealth by $98,000 more than it would have been without the Great Recession.
Foreclosures are largely responsible for this widening disparity. Predatory lending was directed at minority homeowners. Subprime mortgages weregiven disproportionately to minority borrowers, and after the housing bubble collapsed, these loans failed at higher rates. Racial segregation prior to the crisis turned these neighborhoods into targets, with subprime lending specialists going door-to-door and luring even those who owned their homes outright into refinances with dodgy terms. Banks like Wells Fargo and Bank of America paid fines for pushing minority borrowers into subprime loans, even when they qualified for better interest rates. But these fines—$175 million and $335 million, respectively—were substantially lower than they paid for other bubble-era abuses.
More black and Latino borrowers had their wealth exclusively tied up in their homes, and when they lost them, more of their wealth dissipated. Even after the collapse, the Federal Reserve found that from 2010-2013, net worth of nonwhite or Hispanic families fell 17 percent, compared to an increase of 2 percent for white families.
This wealth transferred in part to Wall Street. Private equity and hedge funds scooped up hundreds of thousands foreclosed properties in low-income communities, and converted them into rentals. This prevented minority homeowners from benefiting from any return in property values, and displaced many from their neighborhoods. And a recent survey of community organizations finds that this has created higher rents and more transient neighborhoods.
The Department of Housing and Urban Development, along with quasi-public mortgage giants Fannie Mae and Freddie Mac, auction off these homes to investors at a discount, according to a study from the Center for Popular Democracy. The U.S. Conference of Mayors recently passed a resolution urging these government lenders to sell instead to non-profits that would work to protect homes from foreclosure.
And then there is the disparate treatment of foreclosed properties repossessed by banks, known as real estate owned (REO). The National Fair Housing Alliance’s findings in 29 metropolitan areas indicate that REO in communities of color are twice more likely to have damaged doors and windows, overgrown weeds and trash on the premises and holes in the roof or structure. This violates the Fair Housing Act: Banks are responsible for maintenance and upkeep on all properties, and if they neglect that in black and Latino neighborhoods, the Justice Department can sanction them.
The failure to maintain foreclosed properties has multiple negative effects for communities. Blight creates health and safety concerns, acts asmagnets for crime, and lowers property values for neighboring homes. It also reduces the tax base for municipalities, as nobody pays property taxes on an empty house. The city of Detroit has already lost $500 million from foreclosures in the past few years; 78 percent of homes with subprime loans are know foreclosed or abandoned.
Last week, fifteen Senate Democrats, including leaders Chuck Schumerand Dick Durbin and ranking member of the Banking Committee Sherrod Brown, asked regulators to open an investigation into the treatment of foreclosed properties. “The same communities of color that were victimized by predatory lending may now be facing the double whammy of racial bias when it comes to the upkeep of foreclosed homes,” said Brown. But policing foreclosed properties would only begin to close the gap between white and non-white neighborhoods.
The entire point of the Fair Housing Act, passed shortly after Martin Luther King’s death in 1968, was to reverse the findings of the Kerner Commission, that the country “is moving toward two societies, one black, one white — separate and unequal.” But reading through these statistics, you wouldn’t know the Fair Housing Act existed. We are further than ever from what Justice Anthony Kennedy described as the act’s “role in moving the Nation toward a more integrated society.” It has been impotent in the face of multiple discriminatory shots at people of color, which has opened up a historically large wealth gap and crippled their opportunity.
Until we figure out another way for the middle class to build wealth other than purchasing a mortgage, the discriminatory effects of our housing system will further a permanent underclass among people of color in America. The Justice Department has an enormous amount of work to do.
Source: The New Republic
7 days ago
7 days ago