Today, as the Federal Reserve meets to set monetary policy, it will also be bracing for another round of attacks from Donald Trump. In one of the many twists of this strange election season, Trump...
Today, as the Federal Reserve meets to set monetary policy, it will also be bracing for another round of attacks from Donald Trump. In one of the many twists of this strange election season, Trump has gone straight after Fed chairwoman Janet Yellen, saying she should be “ashamed” of keeping interest rates low, and accusing the Fed of creating a “false economy” and doing “political things.” If the Fed declines to raise rates today, as is expected, he will likely attack the central bank yet again.
The implication of Trump’s attacks is that the Fed is just another institution rigged against Trump: that Yellen is keeping rates artificially low to help the economy, which helps the Democrats look better and thus helps his opponent, Hillary Clinton.
Economists, and a lot of political observers, have been horrified by Trump’s direct attacks: What seems normal for the pugnacious outsider candidate is a major violation of American political norms. Politicians aren’t supposed to push the Fed one way or the other; it's a point of pride for the Fed, and for the nation overall, that the central bank sets policy independent of political pressure. Economists credit central bank independence as one of the great economic success stories of the 20th century, paving the way for lower inflation and stronger growth.
But how far off is he, really? It's true that the Republican nominee is violating tradition: critiquing individual policy decisions shows that he doesn't respect the line between politics and monetary policy. And there’s an implicit threat that could genuinely damage the Fed’s autonomy: He’s signaling that Fed leaders would be on notice in a Trump administration, and could pay a price for making decisions he didn't like.
But the line between politics and the Fed is far blurrier than the conventional wisdom would have it—and politicians before Trump have crossed it in much more serious ways. Moreover, buried within Trump’s comments is a kernel of truth: The Federal Reserve is, by definition, not independent. Unlike the Supreme Court, the central bank is a creation of Congress and is accountable to lawmakers on Capitol Hill. It can be changed—or abolished—by Congress as well. And to pretend it's not—to treat the Fed as an entity totally removed from American politics—also leaves us powerless to talk about the ways it might be improved.
It's important to point out that Trump's immediate accusations are almost certainly wrong: Economists across the political spectrum reject Trump’s claims that Yellen is declining to raise interest rates to improve Clinton’s election odds. Yellen, who has also firmly rejected Trump’s claims, does not set monetary policy alone; it’s set by the 12 members of the Federal Open Markets Committee. (Currently, it has just ten members.) That means no individual member, or even small group of members, can tip the scales to benefit a certain candidate. And any collusion would also be difficult to hide: Transcripts of FOMC meetings are released publicly (though on a five-year delay), and Yellen testifies before Congress four times a year.
“The fact that I don’t happen to agree with the conduct of policy doesn’t mean that they are being political,” said Glenn Hubbard, the dean of Columbia Business School and former top economist to President George W. Bush, who believes rates should rise faster. “I think that’s very unfortunate.”
A real example of political interference with monetary policy occurred in the early 1970s. Taped recordings of Richard Nixon provide clear evidence that Nixon pressured then-Fed Chair Arthur Burns to adopt expansionary monetary policies to improve his reelection chances. For instance, before Burns was confirmed by Congress, Nixon told him: “I know there’s the myth of the autonomous Fed ... and when you go up for confirmation some senator may ask you about your friendship with the president. Appearances are going to be important, so you can call [Nixon economic advisor John] Ehrlichman to get messages to me, and he’ll call you.” Nixon met with Burns frequently and tacitly pressured the chairman to keep policy loose. The FOMC transcripts indicate that many Fed members had doubts about the policy decisions but voted for them anyways.
Trump’s criticism of the Fed on the campaign trail doesn’t approach Nixon’s actual interference in monetary policy from the White house. But it does raise the broader question of what constitutes "political interference" in the Fed, and what constitutes legitimate criticism. One key distinction: Nixon used his presidential powers to influence Burns, while Trump currently has no such power over Yellen. But Trump, if elected, will also nominate the next Fed chair. That inherently means his criticisms of the central bank veer closer to political interference than critiques from academics like Hubbard.
“The line is blurry,” said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics who has worked at the Fed intermittently for the past 30 years.
On substance, what constitutes a "political" attack versus a policy criticism isn't immediately clear: Trump’s comments on the Fed often are substantive, such as when he said the Fed’s policy has created “a big, fat, ugly bubble.” But given his penchant for changing positions on the institution—he first said he’d retain Yellen before saying he’d replace her, for instance—many economists have concluded that Trump’s motives are concerned more with his own advantage than any serious policy beliefs.
To some experts, the threat posed by "political" attacks on the Fed has always been overblown. “I don’t get as worked up as some people to do about what politicians say,” Gagnon said. “They are allowed to have their opinions. If they think the Fed should do something differently, they can say it.”
The long tradition of deference to the Fed’s policy independence can even pose a risk: It creates an environment in which any critique of the Fed is seen as out of line, including the idea of reforming how it works. "The Federal Reserve is a crucial public agency, so there are lots of important questions—including the selection of its leaders, the determination of their priorities, and the specific strategy that they're following—that should all be open to public discourse," said Andrew Levin, an economist at Dartmouth who spent two decades working at the Fed, including as a top advisor to Yellen and her predecessor, Ben Bernanke.
Levin has been part of a movement that has put a few cracks in the protective shield around the Fed this year. Earlier this year, he published a set of recommendations for reforming the Fed in conjunction with the Center for Popular Democracy’s Fed Up campaign; the goal is to make the Fed's board members—currently 83 percent white, nearly three-quarters male and nearly 40 percent from financial institutions —more representative of the American public. Although it hasn’t received as much attention as Trump’s attacks on the Fed, Hillary Clinton also quietly criticized the central bank when her campaign said she supported such reforms.
To Ady Barkan, the head of the Fed Up campaign, these efforts do not constitute an unacceptable interference with the Fed’s independence, and neither do Trump’s comments. The Fed’s independence, he said, comes from its structure; its leaders are appointed, not elected, for long terms, which inherently insulates the central bank from political pressure. The Fed must still be accountable to the public though, and one way policymakers fulfill that responsibility is through public comments. For that reason, Barkan added, monetary policy decisions “are appropriate topics for political debate.”
“The main thing about Trump’s comments is that they show real ignorance about how the Fed works,” he said. “I don’t object to the idea that Trump or Hillary would object to what the Fed is doing.”
By Danny Vinik
As attacks on immigrants grow more vocal and more galling this election season, it can be easy to feel sickened and lose hope. Across the country, millions of hard-working immigrants are trapped...
As attacks on immigrants grow more vocal and more galling this election season, it can be easy to feel sickened and lose hope. Across the country, millions of hard-working immigrants are trapped in a painful limbo, confined to the shadows, vulnerable to abuse and exploitation, and unable to fully participate in society.
Federal efforts to support immigrants are stalled, with repeated failures to pass an immigration bill. The most promising pro-immigrant policy in years — President Obama’s executive order shielding immigrant parents and children from deportation — was turned back with a deadlock at the Supreme Court.
But if you zoom in to states and cities, the picture couldn’t be more different. When it comes to promoting immigrant inclusion and equality, they are buzzing hives of innovation, generating a variety of policies that benefit everyone by promoting dignity, inclusion and access to justice for the immigrants who drive their economies and enrich their communities.
As of this year, more than a dozen cities provide a form of municipal identification to all residents regardless of their immigration status. Without such a proof of identity, immigrants are unable to access vital services needed for daily life, such as opening a bank account, seeing a doctor at a hospital, or even collecting a package from the post office. New Haven became the first city to introduce municipal IDs in 2007, and many of the country’s largest cities, including New York, Los Angeles and San Francisco, have followed. New York City has issued close to a million municipal ID cards, clearly demonstrating their value to a broad swath of New Yorkers.
Sixteen states also have laws — known as DREAM Acts — that offer undocumented residents access to the same tuition rates as U.S. citizens at state colleges and universities. In Texas, nearly 25,000 students annually take advantage of the state’s DREAM Act, a law passed with the backing of Republican Governor Rick Perry.
States and cities have also helped curb the worst excesses of harsh and ineffective federal deportation policies. Since 2011, more than a dozen jurisdictions have passed laws limiting collaboration between local police and Immigration and Customs Enforcement. Knowing that detained immigrants often lack access to legal help, a number of cities such as Los Angeles and Chicago are exploring programs to provide meaningful representation to immigrants. In New York City, the country’s first access to counsel initiative has helped its clients be an astounding 1,000 percent more likely to win their immigration cases than those who lack representation.
With fears that the divisive rhetoric unleashed during this campaign cycle could persist well into the future, even more localities need to take action to welcome immigrants and to value their tremendous contributions. Sadly, there is no guarantee that a long-overdue immigration reform package will be passed by the next president, whoever wins November 8. Cities and states must lead the way.
In recent years, cities and states have led the way in defending and expanding the rights of workers, with the passage of paid sick days, higher minimum wages and fair scheduling laws in municipalities like Seattle, Los Angeles, Minneapolis and New York City, as well as states like California, Connecticut and Oregon.
They have a similar role — and responsibility — to play in protecting immigrants. Immigrants to this country have made the United States more vibrant and prosperous. Rather than turning a blind eye to the millions in this country denied fundamental benefits and services, we must work hard to realize the highest ideals of our country and to promote a better future for our immigrants and for all.
By Andrew Friedman
More than $3 million in contributions aided the slate of statewide initiatives in the final campaign finance reporting period before next Tuesday’s election, with more than $1 million in last-...
More than $3 million in contributions aided the slate of statewide initiatives in the final campaign finance reporting period before next Tuesday’s election, with more than $1 million in last-minute money bolstering the effort to increase Colorado’s minimum wage.
The two proposals to create a presidential primary and allow unaffiliated voters to participate in primaries also got a healthy infusion of cash, as did the measure that would make it harder to amend the state constitution.
The late flow of contributions pushed the total raised for Colorado’s ballot initiatives to nearly $48 million.
The effort concerning primary elections, spearheaded by Let Colorado Vote, the issue committee funding the campaigns for both Proposition 107 and 108, brought in more than $600,000.
Most of that came from Kent Thiry, who personally gave $300,000, and DaVita Health Care Partners, the company he heads, which pitched in $100,000. Thiry has given nearly $1.4 million of about $4 million that has gone toward those initiatives. Noble Energy joined the effort with a $200,000 contribution.
2016 COLORADO BALLOT MEASURES
Amendment 69: ColoradoCare
Amendment 70: Minimum Wage
Amendment 71: Constitutional changes
Amendment 72: Cigarette taxes
Proposition 106: Aid-in-dying
Proposition 107: Presidential primaries
Proposition 108: Unaffiliated voters
Amendment T: Slavery reference
Amendment U: Property taxes
Ballot Issue 4B: Arts funding
Organized opposition to the propositions has been sparse, with Citizens for Integrity reporting only a total of about $51,000 in non-monetary contributions for the campaign.
More than a half-million dollars rolled into the Raise the Bar campaign supporting Amendment 71, which would make it tougher to get citizen initiatives onto the statewide ballot and require more than a simple majority to pass them.
All but a small slice of that came from energy interests, who put in just shy of $500,000 in this reporting period through Protecting Colorado’s Environment, Economy and Energy Independence, which has given more than $2.8 million over the course of the campaign. After initially anticipating a fight against anti-fracking initiatives that ultimately didn’t make the ballot, Protecting Colorado shifted its resources to Amendment 71, which could make it even more difficult for anti-fracking forces to put measures before voters.
Opposition from the Colorado League of Responsible Voters has pumped nearly $840,000 into a campaign against the measure, including $500,000 from the National Education Association and a $100,000 contribution from the River Habitat Preservation Coalition.
A surge in cash donations supported Amendment 70, which would establish a new minimum wage in Colorado. It received much of the more than $1 million in contributions from unions and other organizations that have been supporting minimum wage increases on ballots around the country.
The Colorado campaign now totals nearly $5 million.
The Center for Popular Democracy Action Fund, based in New York, pitched in $400,000 to push its total for the campaign over $1 million; the National Education Association and Washington-based Service Employees International Union political action committee gave a series of six-figure contributions.
Opponents, who have raised about $1.7 million, brought in $154,920 on the strength of a handful of five-figure donations, including $50,000 from Greenwood Village-based Colorado Citizens Protecting Our Constitution.
Opposition to Amendment 72, the increased tax on tobacco products, has been funded by more than $16 million from Virginia-based tobacco giant Altria, but reported no additional cash contributions — though that campaign remains by far the most well-funded effort among all statewide ballot measures.
The Campaign for a Healthy Colorado, which has backed the tax that would fund a variety of health-related programs and seek to reduce smoking among young people, added nearly $150,000 — most from health-related entities. It also benefited from a $10,000 donation from Colorado Rockies owner Charlie Monfort.
Contributions to the medical aid-in-dying measure, Proposition 106, appeared to be winding down, though it remained a distant second in fundraising to the tobacco tax with about $8 million raised from both sides.
Supporters of the initiative added a little more than $73,000 to their $5.4 million total, with $50,000 of that coming from Aspen’s Adam Lewis, son of the late Progressive insurance chairman Peter Lewis. Opponents, whose $2.6 million in total contributions has been fueled largely by faith-based organizations led by the Catholic church, added about $255,000. The largest contribution came from Washington, D.C.-based The Catholic Association.
The battle over ColoradoCare, the proposed state-run health care option, also calmed on the campaign finance front, with both sides adding relatively modest five-figure contributions. Opponents of the system have raised more than $4 million while those advancing the initiative have raised less than a half-million dollars.
By The Denver Post
This is the third post in a series about ballot measures to raise the minimum wage in Colorado and three other states. The first post introduced a restaurateur in Denver who supports the increase...
This is the third post in a series about ballot measures to raise the minimum wage in Colorado and three other states. The first post introduced a restaurateur in Denver who supports the increase and the national organization that persuaded him to go public with that support, is here. The second looked at how the provision could widen inequality among servers and kitchen workers.
There are 32 mostly state and local business associations that have signed on to Keep Colorado Working, the coalition formed to fight Amendment 70, which would raise the state’s minimum wage through a constitutional amendment. Only one of them, however, has actually contributed money to fight the ballot measure: The Colorado Restaurant Association and its political action committee have spent $359,000, which makes it the single largest Colorado contributor to campaign, which has raised $1.7 million to date.
Indeed, while dozens of local food services businesses have chipped at least $105,000 to the effort, which has raised $1.7 million to date, more than $1 million has come into the coalition’s coffers from out of state, including $850,000 from a shadowy business group called the Workforce Fairness Institute. Other large national contributors include Darden, the Olive Garden’s parent corporation, and the National Restaurant Association.
But all this is far less than the $2 to $3 million that opponents had anticipated spending to try and defeat the amendment. And it is dwarfed by the $5.2 million that advocates for the vote, working under the name Colorado Families for a Fair Minimum Wage, have raised. Most of their money has come from national unions and union-backed organizations like The Fairness Project and progressive philanthropies like the Center for Popular Democracy and the Civic Participation Action Fund.
In a campaign awash with money, the efforts of Business for a Fair Minimum Wage, which has been organizing Colorado businesses to support the amendment, are fairly modest. Business for a Fair Minimum Wage founder and C.E.O. Holly Sklar won’t say how much her group is spending in Colorado, but the effort is being funded by Dr. Bronner’s, the organic soap-maker with a long history of activism. (She declines to further identify its funders, except to say that they comprise businesses and foundations.) Dr. Bronner’s has made raising the minimum wage a top company priority, even relabeling some of its soap bottles with “Fair Pay Today!” “People should be able to make ends meet on the wages they get,” says David Bronner, C.E.O. of his family’s company, which is registered as a benefit corporation. “They should not have to rely on inefficient government programs like food stamps and housing assistance. Taxpayers should not have to subsidize companies using the welfare system to keep wages low.”
Bronner says his company has given about $75,000 to Business for a Fair Minimum Wage. “We really like what they’re doing,” he says. “I think it’s really important that policy makers hear from business owners, that business owners too see value in raising the minimum wage, and it isn’t just about labor groups and worker rights.”
Outside of Colorado, business groups have mounted little more than token opposition. In each of Arizona, Maine, and Washington, where advocates have raised over $1 million to promote their respective ballot measures, opponents have raised $100,000 or less, according to state campaign finance records. The Arizona Restaurant Association sued to try and prevent the minimum wage from making the November ballot, but hasn’t spent any money combating it since then. (The group’s president and C.E.O., Steve Chucri, didn’t respond to requests for comment.) The state chamber of commerce has agreed to kick in $20,000.
In Maine, the state restaurant association has spent nearly $78,000 to fight the ballot amendment through its political action committee, but apart from small contributions from Darden ($7,500) and the National Restaurant Association ($2,500), the opposition has recorded no contributions from out of state.
It’s not clear — even to some of the principals — why Colorado became the battlefield of choice in the fight over minimum wage at the expense of media outlets in Arizona, Maine, and Washington. “Why they’re not putting money to fight it here is a mystery to me,” says Maine Restaurant Association president and C.E.O. Steve Hewins of the national organizations, though he allows that “Maine to a degree is off a lot of radar screens.”
The National Restaurant Association declined to respond directly to Hewins’s charge of neglect. But in an emailed statement, the organization’s spokesman, Steve Danon, wrote, “While we work in partnership, our state restaurant associations take the lead on these issues, as they know what works best for restaurateurs in their state. We’ve been vocal on opposing drastic increases to the minimum wage overall.” The Workforce Fairness Institute and Darden didn’t respond to a request for comment.
But Tyler Sandberg, who is managing the Keep Colorado Working campaign, suggests that perhaps national groups are drawn to the Colorado initiative because, as a constitutional amendment, it “is the worst-written of all of them.” But he also says he’s made a point of soliciting those contributions. “When we saw all the national money coming in on the other side, we realized we would have to fight fire with fire and seek national contributions as well.”
Sklar says her pro-wage-hike business group is focusing on Colorado because the Arizona and Washington measures also include paid sick leave, which is beyond her group’s scope, and in Maine a local small-business coalition is pressing the case.
In any event, the vast sums spent in Colorado appear to have made little difference. Polls in all four states show the wage increase winning by similar margins, with 55 percent to 60 percent of voters backing it.
By Robb Mandelbaum
Scandal-plagued Wells Fargo’s recent selection of long-time bank insider Tim Sloan to replace John Stumpf as its CEO has done little to mollify critics, given Sloan’s central management role...
Scandal-plagued Wells Fargo’s recent selection of long-time bank insider Tim Sloan to replace John Stumpf as its CEO has done little to mollify critics, given Sloan’s central management role during more than a decade of consumer and community complaints.
Sloan has largely escaped scrutiny during the thumping Wells Fargo has taken from Congress, the media, and bank reform activists for boosting its own stock price by secretly creating more than two million unauthorized checking and credit-card accounts. As lawmakers and state and federal regulators line up to investigate the bank following Stumpf’s resignation, Sloan now replaces him on the hot seat. Sloan’s role as a member of the bank’s inner circle at a time when Wells Fargo stood accused of reckless and discriminatory practices is sure to interest investigators.
“I remain concerned that incoming CEO Tim Sloan is also culpable in the recent scandal, serving in a central role in the chain of command that ought to have stopped this misconduct from happening,” said House Democrat Maxine Waters, of California, in a statement. Waters is the ranking Democratic on the House Financial Service Committee, which is investigating Wells Fargo, as are the Senate Banking Committee, the Justice Department, the Labor Department, and the attorneys general of several states.
Paulina Gonzalez, executive director of the California Reinvestment Coalition, a consumer watchdog group, also has singled Sloan out for special criticism. There are “a lot of unanswered questions as to when and what Tim Sloan knew about these fraudulent consumer accounts,” says Gonzalez, who has called on the new CEO to help mend public trust by ending Wells Fargo’s practice of forcing former employees and fraud victims into arbitration to get their grievances resolved.
Sloan recently acknowledged that Wells Fargo had made serious mistakes regarding the phony accounts scandal, including placing too much of the blame on branch employees. “We failed to acknowledge the role leadership played and, as a result, many felt we blamed our team members,” Sloan told an audience of 1,200 Wells Fargo employees at the Knight Theater in Charlotte on October 26. "That one still hurts, and I am committed to rectifying it.” He said that the bank has ended the aggressive sales goals that led its employees to create the phony accounts, and pledged to rehire some rank-and-file employees who were fired for creating those accounts, though it’s unclear how many.
“Getting an apology when the company is backed into a corner doesn’t fix how Wells Fargo’s predatory, high-pressure sales goals hurt millions of working people and their customers,” says Erin Mahoney, a spokesperson for the Committee for Better Banks, a nationwide coalition of bank employees and community groups. “If Sloan really wants to rebuild trust within the company, he should start paying frontline workers a fair wage and working with them to collaboratively to improve working conditions and serve the best interests of employees and customers.”
The nation’s leading home mortgage lender, Wells Fargo has already agreed to pay $185 million in settlements with the federal Consumer Financial Protection Bureau, the federal Office of the Comptroller of the Currency (a federal bank regulator), and the City of Los Angeles, which sued Wells Fargo on behalf of its victimized customers. Those fines are a drop in the bucket compared with Wells Fargo’s 2015 profits of $20 billion, note consumer watchdogs spearheading their own investigations and lawsuits.
Sloan, 56, was a key member of Wells Fargo’s upper echelon throughout the period leading up to the falsified-accounts scandal.
Sloan, 56, was a key member of Wells Fargo’s upper echelon throughout the period leading up to the falsified-accounts scandal. Having started his climb up Wells Fargo in 1987, Sloan headed the bank’s corporate real estate and social responsibility divisions before being named senior executive vice president and Chief Financial Officer in 2011. That’s the year Wells Fargo started firing some 5,300 low-level employees for opening the fraudulent accounts and quietly refunding millions of dollars to customers.
Last year, Sloan was promoted to Chief Operating Officer, a post that made him the executive responsible for Wells Fargo’s Community Bank and Consumer Lending divisions—ground zero in the current scandal. Among other duties, Sloan was in charge of supervising Carrie Tolstedt, who ran the Well Fargo’s community-banking division at the center of the current firestorm. Tolstedt was forced to resign last month. Under pressure from Congress and shareholders, Wells Fargo’s board withdrew Tolstedt’s severance and bonus pay as well as all of her $19 million worth of unvested stock awards. She also agreed not to exercise about $34 million in stock options. Even so, she left owning more than $43 million worth of stock that she had accumulated during her career with the bank.
Although Sloan is relatively unknown nationally, this is not the first time he has faced public scrutiny. In 2012, California bank reform activists picketed his home to protest Wells Fargo’s efforts to evict a wheelchair-bound homeowner who had missed a few mortgage payments due to a health crisis.
The owner of the residence in question, a tiny, 949-square-foot house in the gritty, working class Los Angeles suburb of South Gate, was Ana Casas Wilson, a court interpreter who had lived there since she was 12 years old. Wilson lived in the house with her husband James (a school janitor), her mother Becky (a retired factory worker who worked as a home health aide), and her teenage son Anthony.
In 2009, Wilson was diagnosed with breast cancer and underwent a double mastectomy. She also suffered from cerebral palsy and was confined to a wheelchair. Her husband quit his night job as a security guard to care for her, reducing the family’s income. During her hospitalization and chemotherapy, the family fell behind on its mortgage payments, and Wells Fargo started to foreclose on Wilson’s property.
Wilson sought to resume payments once the family’s financial situation stabilized, but Wells Fargo refused to accept the Wilsons’ checks and pursued foreclosure and eviction. A feisty disability rights activist, Wilson fought back, contacting the Alliance of Californians for Community Empowerment (ACCE), a community organizing group on the front lines of the foreclosure crisis that is known for confronting banks through negotiations, protests and civil disobedience to draw attention to their abuses of consumers and communities.
In October of 2011—a month after the Occupy Wall Street movement had started in New York City and started spreading to cities across the country—ACCE members lodged their first protest outside Sloan’s house, a $5 million, eight-bedroom Spanish-style mansion on a cul-de-sac in San Marino, one of California’s wealthiest suburbs. It’s only 10 miles from Wilson’s South Gate home, but it might as well be a world away.
After Wilson and her supporters picketed outside Sloan’s house, the five-member San Marino City Council adopted a new law that requires protesters to remain 150 feet away from a target residence, or 75 feet from the curb adjacent to the home, whichever is further.
“The purpose of the ordinance is not to reduce picketing, but to protect the people who are the victims of picketing,” San Marino city manager John Schaefer said at the time. “We’re a prime target. We have a lot of people who fit the profile to be the victim of this type of crime.”
The following April, after Wells Fargo continued to refuse to help the Wilsons stay in their house, Wilson and about 100 supporters from ACCE and the Service Employees International Union showed up carrying signs and chanted “Wells Fargo, shame on you!” in the street in front of Sloan’s house. Wilson even brought a check for her mortgage payment, and crossed a police cordon in her wheelchair to deliver it to Sloan. She knocked several times, but nobody answered the door.
“He's embarrassed,” Wilson told The Los Angeles Times. “That's why he won't come out. ... He knows that what they are doing is wrong.” About 90 minutes into the demonstration, police formed a line around the home, declared the assembly illegal and ordered the group to move 75 feet up the street.
Wilson refused to go and, under San Marino’s anti-protest ordinance, was arrested and taken to San Marino police headquarters.
In September 2012, as Wells Fargo was trying to evict Wilson from her home, Sloan chaired a fundraising ball for the Huntington Library, Art Collections and Botanical Gardens, an elite San Marino institution housed in the former estate of one of America’s best-known robber barons, railroad titan and real estate speculator Henry Huntington. A local newspaper published a photo of Sloan in his tuxedo, smiling for the camera. It reported that the menu by celebrity chef Wolfgang Puck included “filet of beef topped with shrimp scampi, sauteed spinach, pommes puree and baby heirloom tomatoes,” and a dessert of chocolate soufflé “with spun sugar, whipped cream and berries and panna cotta with tangerine sorbet.”
The event drew 380 supporters and raised $300,00—almost twice the value of Ana Wilson’s house.
WILSON’S CASE IS ONLY ONE of many customer abuse controversies that must undoubtedly have been known to Sloan as a member of Wells Fargo’s executive inner circle. Long before the phony accounts scandal erupted, bank reform activists had raised the alarm about the San Francisco-based bank’s racially discriminatory lending practices and aggressive foreclosures.
Wells Fargo has been repeatedly sued by consumer watchdog groups around the country, as well as by Baltimore and other cities, for allegedly violating laws against racist mortgage lending. Activists have testified before Congress, state legislatures and City Councils demanding that they investigate the bank’s practices. Like Wilson and her supporters, they’ve occasionally picketed at the homes of the bank’s top executives, and at its offices and shareholder meetings. Wells Fargo has been so concerned about these demonstrations that it has taken to playing cat and mouse by moving its annual shareholder meeting to a new location every year in a bid to evade protestors.
In 2006, before the subprime bubble started to burst, Wells Fargo originated or co-issued $74.2 billion worth of subprime loans, making it one of the top subprime lenders in the country.
In 2006, before the subprime bubble started to burst, Wells Fargo originated or co-issued $74.2 billion worth of subprime loans, making it one of the top subprime lenders in the country. By June, 2010, Wells Fargo had $17.5 billion worth of foreclosed homes on its books, making it one of the nation’s three top banks in foreclosure activity. Despite getting a $37 billion taxpayer bail out, Wells Fargo resisted kicking and screaming before reluctantly agreeing to participate in the federal government’s Home Affordable Modification Program. Even so, it helped few of its borrowers who were eligible for loan modifications designed to keep families in their homes.
Wells Fargo has also been forced to make huge settlement agreements with government agencies for engaging in a variety of predatory practices. In 2010, the Federal Reserve Board levied an $85 million fine on Wells Fargo for steering borrowers inappropriately into subprime loans and falsifying income information on loan applications. This was the largest civil consumer enforcement fine ever imposed by the Fed.
In 2012, in a settlement with the U.S. Department of Justice, Wells Fargo agreed to pay at least $175 million to redress blatant discrimination against African American and Hispanic borrowers. In cities across the country, brokers working with Wells Fargo steered minority borrowers into costlier subprime mortgages with higher fees when white borrowers with similar credit risk profiles received regular loans. Furthermore, while its mortgage lending to white borrowers increased, the bank’s lending dropped dramatically for African American and Hispanic borrowers. Wells Fargo has been sued many times for charging abusive mortgage default fees, submitting false and misleading court documents, processing unlawful foreclosures, mortgage appraisal and origination fraud, charging military veterans with hidden and illegal fees, robo-signing of mortgage documents, and other illegal acts.
In April, in another settlement with the Justice Department, Wells Fargo agreed to pay $1.2 billion and admitted responsibility for engaging in mortgage fraud. Between 2001 and 2008, the bank falsely claimed that many home mortgage loans were eligible for Federal Housing Authority (FHA) insurance, forcing the federal government to pay FHA insurance claims when some of those loans defaulted.
Last month, a few weeks after the fake accounts settlement was announced, the Office of the Comptroller of the Currency (OCC) assessed a $20 million civil money penalty against Wells Fargo for violating the Servicemembers Civil Relief Act. According to the OCC, between 2006 and 2016, the bank illegally made loans over the law’s 6 percent interest rate limit, and sought to evict service members from their homes without disclosing to courts that they were on active duty.
Wells Fargo has also been deeply involved in the payday lending business that preys on cash-strapped families by providing short term loans with exorbitant fees and annual interest rates (typically around 400 percent) that trap people in a cycle of debt, particularly borrowers in poor and minority neighborhoods. Wells Fargo provided financing for nine payday companies that operate one-third (32 percent) of the entire industry, whose storefronts are concentrated in African American and Latino neighborhoods.
Sloan is only one of two new leaders taking over for Stumpf as Wells Fargo enters a new phase of damage control. Stumpf had been both the bank’s chairman and its CEO. Now, those two jobs will be divvied up between Sloan as CEO and Stephen Sanger, a former CEO of General Mills, as chairman of the Wells Fargo board. The bank’s purpose with these and other moves may be to signal a clean slate.
But Sloan is the ultimate insider, not only at Wells Fargo, but as part of the nation’s corporate ruling class, which also exercises influence through its overlapping ties with business, foundation, and charitable organizations. Sloan not only serves on the Board of Overseers of the Huntington Library, he’s also a member of the University of Michigan’s Ross School of Business Advisory Board and a trustee of Ohio Wesleyan University, the California Institute of Technology, and (ironically, in light of Wilson’s condition) City of Hope, a well-known hospital dedicated to researching and treating cancer.
A major political donor, Sloan has made more than $235,000 in political contributions in the past five years, most of its to Republican candidates and committees.
Since the Occupy Wall Street movement emerged in 2011, Wells Fargo has donated over $10 million in campaign contributions to presidential and congressional candidates and paid $21.3 million to lobbyists, according to the Center for Responsive Politics.
Sloan and the bank he now runs will need all the political clout they can muster to repair the serious damage done to Wells Fargo’s reputation and stockholder confidence. California’s state treasurer, John Chiang, suspended the state’s ties with Wells Fargo, including the lucrative business of underwriting California municipal bonds, citing the bank’s “venal abuse of its customers.” Illinois and Ohio quickly followed suit. Ohio’s Republican Governor, John Kasich, has barred Wells Fargo for one year from “participating in future state debt offerings and financial services contracts initiated by state agencies” under his authority.
San Francisco city treasurer Jose Cisernos kicked Wells Fargo out of its Bank On program, which helps low-income people or those with credit problems open checking and savings accounts. Chicago has banned Wells Fargo from participating in bidding for bond underwriting and other types of business. Local Progress (a network of municipal officials), the Center for Popular Democracy (a federation of local community organizing groups), and the Committee for Better Banks (a coalition of unions and consumer groups) are pushing other cities to follow suit and stop doing business with Wells Fargo until it cleans up its act. Even the Better Business Bureau pulled its accreditation from Wells Fargo, citing the more than 4,000 complaints it has received about the bank over the last three years.
One silver lining of the scandal is that it has strengthened support for the Consumer Financial Protection Bureau
One silver lining of the scandal is that it has strengthened support for the Consumer Financial Protection Bureau, the federal agency that helped uncover the bank’s abuses. The brainchild of Massachusetts senator and anti-Wall Street Democrat Elizabeth Warren, the CFPB was created as part of the 2010 Dodd-Frank financial reform bill over heavy banking industry opposition. Since then, banking lobbyists and their GOP allies on Capitol Hill have sought to undermine the agency by reducing its budget and authority. But the recent Well Fargo settlement may make it more difficult for bank lobbyists and Republicans in Congress to attack the CFPB, according to a recent article in American Banker. Hillary Clinton recently touted the CFPB’s “forceful response” to the Wells Fargo scandal, adding that it was “a stark reminder of why we need a strong consumer watchdog to safeguard against unfair and deceptive practices,” a sentiment echoed by Wall Street watchdog groups like Americans for Financial Reform.
Unfortunately, the CFPB could do little for Ana Wilson, so she found a different way to make her voice heard. In addition to her family’s protest on the front lawn of Sloan’s mansion in 2012, she and her supporters also set up an encampment outside Wilsons’ home. Family members said they would refuse to leave if the bank tried to arrest Wilson. The publicity generated by these protests—including TV and newspaper stories, and support from a popular morning pop radio disc jockey—brought Wells Fargo to the negotiating table.
The bank ultimately offered to sell Wilson’s house to a nonprofit group, HomeStrong USA, that promised to rent it back and give the family an option to repurchase it after the Wilsons had reestablished their credit. Tired from fighting the bank and fighting her stage four breast cancer, Wilson reluctantly agreed to the arrangement. A few weeks later, in December 2012, Wilson died at the age of 50. HomeStrong has kept up its end of the bargain. The group made major improvements to the house. Wilson’s husband James, son Anthony, and mom Becky still live there and pay an affordable rent.
Meanwhile, as he takes over as Well Fargo’s CEO, Sloan may have to sell his San Marino mansion and move to the Bay Area to be closer to the bank’s San Francisco headquarters. Now that he is in the CEO, Sloan can be certain that activists will find out where he lives and visit his new home if he doesn’t change Wells Fargo’s corporate culture and deal with its abuse of employees and consumers alike.
By PETER DREIER
In July, Andrew Bird began a new series called “Live From the Great Room,” where he performed an acoustic set in his living room with a guest. Today, he’s released an updated version of Soldier On...
In July, Andrew Bird began a new series called “Live From the Great Room,” where he performed an acoustic set in his living room with a guest. Today, he’s released an updated version of Soldier On’s “Sic of Elephants,” he originally played with My Morning Jacket’s Jim James for the series. The updated song is being released as part of the anti-Trump 30 Days, 30 Songs series, and it is Jim James’ second release for the program. Below, watch them perform “Sic of Elephants.” Read Bird’s statement on why he updated the song here, and revisit Bird and James’ full living room performance here.
30 Days, 30 Songs will continue to release at least one new song or video daily until Election Day (Tuesday, November 8). The entirety of 30 Days’ proceeds will go to the Center for Popular Democracy and their efforts toward Universal Voter Registration for all Americans. Previous 30 Days releases include songs from Sun Kil Moon and Jesu, EL VY, Filthy Friends, Death Cab for Cutie, Franz Ferdinand, and others.
By Kevin Lozano
Patrick T. Harker, president of the Federal Reserve Bank of Philadelphia, sat down for an interview with The Wall Street Journal’s Michael S. Derby on Thursday, Oct. 13, 2016. Here is a transcript...
Patrick T. Harker, president of the Federal Reserve Bank of Philadelphia, sat down for an interview with The Wall Street Journal’s Michael S. Derby on Thursday, Oct. 13, 2016. Here is a transcript of the exchange, lightly edited for length and clarity.
MICHAEL S. DERBY: So we already talked about a lot of the economic and monetary policy stuff. And we just met, so I’m not going to keep getting you to say the same things over and over again. And since I knew this – we were going to be talking after, you know, the speech – I thought we might sort of take a step back and think about, you know, you’ve been in the job a year and a – I mean, a little over a year now.
And, you know, you come to the position from a different background than some other central bankers do. I mean, there’s a lot of economists and research directors who’ve come up, or people from the financial sector. And so I figure I’d start off by asking you just your sense of, you know, like how it’s been, you know, coming in, and what kind of things you’ve learned about the job, and the challenges you’ve faced so far as you, you know, come to lead this institution.
You know, a little bit about my background. While I have degrees in engineering, I also have a degree in economics. I’m published a lot in spatial economics, so micro/spatial economics, what are called Takayama-Judge models or all-trade models. So – (laughs) – yeah. And then – and in addition to that, I’m a quant. So it’s not as though I came to the job with no understanding of the economics that underlie what we do. So let me start with that.
It’s been a really great first – little over first year for a couple of reasons. One, this role is not only important at the national level with respect to monetary policy, which is always the headline event for the Fed and the (Federal Open Market Committee), but I really enjoy the work we’re doing at the regional level, and really trying to create a better environment for job creation and economic mobility and inclusiveness for the economy here. You know, and Philadelphia, the Third District, is uniquely challenged given that we are the poorest top 10 city in America. We have communities throughout our district that are struggling. And so I think the Fed, through our research capability, our ability to convene people, we can have meaningful conversations about that and really start to create more and more opportunity. That’s why we launched this Agenda for Poverty and Prosperity, right?
So we’ve got a challenge here. I think that challenge is also national, but we have it uniquely here in Philadelphia, in the region. And even despite the fact that Philadelphia as a city itself is doing quite well, we need to start bringing more people into the economy productively, first and foremost for those people, but also for the economy. I mean, as I discussed in the speech just prior to this, we need more people in the workforce. And so immigration may be part of that solution, but a substantial component of that, just you look at the numbers, are bringing more people – unskilled people into job-training programs and workforce-development programs to get the jobs they need, and then have those jobs for them, and that they’re able to live somewhere near those jobs, right? It’s no good to have the jobs and have the skills and not be able to get to the job, right? So I think it’s a three-legged stool that we’re trying to develop here.
You know, and that’s – this is a – the other thing, to answer your specific question, is this is an incredible team of people. I mean, I’ve been really – I got to know them a little bit when I was director here, but you only get to meet certain people, right? Now I’ve been out and about in the Bank and in the community and see what we do, and, boy, it’s really impressive what the Philly Fed does. And I think you multiply that across the system.
MR. DERBY: What have you been doing to – I mean, if you come – like, as you say, you do have the M.A. in economics and you’ve done – you’ve done work in that area. But, like, as you’ve been – and you were director, obviously.
MR. HARKER: Yes.
MR. DERBY: So you weren’t unattached to what the institution was doing. But your predecessors – say Charles Plosser, I mean, he had some very strong views on monetary policy and the economy.
MR. HARKER: Yeah. Yeah, yeah.
MR. DERBY: And what have you been doing to come into your own on that front?
MR. HARKER: So I tend to be more of a pragmatist. And first you start with a little bit of humility on what we really know and the state of theory and practice when it comes to macroeconomics. Despite a lot of advances – and we’ve made a lot of advances in the field – there’s still a lot of things we don’t know, I mean, at a fairly fundamental level, right? I mean, we still debate questions on measuring inflation and inflation dynamics, measuring GDP and GDP – what’s happening with productivity. So you come into this understanding that while we have a deep bench of theorists and empiricists that need to inform policy, at the end of the day you need to base your judgment not on an ideology, but on the facts on the ground, right, as best we know them. And I think that’s what I bring to the table.
And then part of that is, you know, engineers are inherently pragmatic by nature. You know, the old engineering joke, the optimist says the glass is half-full, the pessimist says it’s half-empty, the engineer says you’ve got twice as much glass as you need there. (Laughter.)
MR. DERBY: I haven’t heard that joke, but yeah, that’s a good one.
MR. HARKER: So I think – and it’s part of, I think, the portfolio of talent that the Fed has attracted. You don’t want everybody to have the same background. You don’t want everybody to have the same life experiences. So you need some people in the room who have come from different experiences. You need some people in the room, I believe, who have actually worked on the other side of the financial markets – actually participating in the financial markets, not just regulating them, right, and theorizing about them. So I think you need – it’s the mix that makes for the richness of the conversation that happens in the room.
MR. DERBY: Has the Fed been too dominated by academics, and especially academic economists? Because that’s been one of the criticisms the Fed has faced at various points over the years.
MR. HARKER: So that’s an interesting question because I think that the Fed has – over time it cycles. You need some base knowledge of economic theory to be able to meaningfully participate in the conversation, but you can get that in different ways, right? You also, I think, need some understanding of markets and market functioning, right? And you can learn that, but it’s better if you’ve had some of that experience. And lastly, I think you need in the room – not everybody brings – you know, not everybody has all three of these things I’m saying at once, right, but it’s the mix of people. You need people with practical industry experience. And again, you can either get that by having run large institutions, for-profit, nonprofit; being on corporate boards, so they get some sense of how that decision process – that all has to be in the mix. But at the base we still need those economists, right, because ultimately we are dominated by, you could say – but really for a good reason – that base of economic talent because that’s the business we’re in.
MR. DERBY: And does the Fed have a good balance on that front right now, or could it –
MR. HARKER: I think so.
MR. DERBY: I mean, there’s obviously an opening in Atlanta coming, although he – I mean, Dennis was a markets guy.
MR. HARKER: Yeah. So I don’t know. I mean, that’s up to the board in Atlanta, obviously, to decide the choice they’re going to make, in conjunction with the governors. But I think right now we have a good balance. I mean, the conversation around the table is diverse in terms of people’s perspectives, and that’s healthy.
MR. DERBY: Is your – is the pragmatism that you bring to this, is it leading you to have any firming thoughts about how you think the economy works and how monetary policy should be conducted?
MR. HARKER: Right, so our best theory of the economy, right, is embodied in something like a DSGE model, right? And in that model, the two key words in there, it’s “dynamic” and “stochastic,” right? So there’s a lot of uncertainty in those models.
So what you know, having been an engineer and done control theory and optimization theory, right, you know the limits of those models as well, right? In any kind of dynamic control environment, which is embedded in that model and the way we think the economy works over time, a key component of any kind of complex system like that is that you need to learn by doing. That is, you can’t step back and say the model is a perfect or near-perfect representative of the system you’re trying to control or manage. You have to tweak it, move, learn; tweak it, move, learn, right? And so that’s what we know not even in economics, but in large dynamic stochastic systems.
I don’t think that’s any different with respect to macroeconomic policy. I think, as we move toward normalization, and if we believe the risks are balanced, which I do, then – and there are some risks that I’m worried about, such as some distortive effects of a low interest rate environment – then it’s time to move, and then see what happens, and then move. And so that’s what I mean by pragmatism. It’s understanding that theory, which I understand well. And as that applies to macroeconomics, it brings a more experimental flavor, I think, to the way you think, as opposed to an ideological point of view.
For me, I think that’s healthy because I know those kind of systems are inherently complex. The nonlinearity alone is complex, and then you add the stochastic nature, and there you should have a lot of humility to say we really don’t know exactly what’ll happen. That’s why we move cautiously, but move, to see what happens.
MR. DERBY: Well, in that way of thinking about things, I mean, there’s always been that axiom, you know, monetary policy works with long and variable lags.
And if you’re confronted with lots of uncertainty and you’re, you know, move, see what happens, but those see what happens are dynamics that play out over a long period of time –
MR. HARKER: They are, but then you see some of that future in things like expectations, whether they’re inflation expectations, market expectations. So you’re right, you’ll never perfectly know what’s going to happen, say, 18 months from now after you make that move, but you can get some glimpse of it with how markets respond and expectations become anchored or unanchored relative to such a move.
MR. DERBY: It seems as if there’s been – we see in the markets a lot of grumbling about the Fed communications or the guidance that the Fed has given, in that the Fed has not done with rates what the dot plot suggested it was going to do in December. Some market participants are, like, we were right, you know, we won, the Fed was wrong.
MR. HARKER: (Laughs.)
MR. DERBY: What do you think the dynamic is between financial markets and the Fed right now? Is it – is it a healthy dynamic? Or is there – is there a problem?
MR. HARKER: I don’t think there’s a problem. I do think the market is possibly underestimating the rate of normalization, but we’ll see, right?
And part of the challenge is, when it comes to communication, the dot plots are all forecasts, but people take the path of the Fed funds rate as a policy statement, not as a forecast. And we have not made that clear, right? We’re asked to forecast what we think the Fed funds rate will be. That’s a different question than saying, you know, what will the Fed funds rate be? And so that one dot plot I think causes us some problems when it comes to communication.
MR. DERBY: The December?
MR. HARKER: No, I’m just saying the path of the Fed funds rate. I think that causes us some communications challenges, because nobody says our dots for inflation or (gross domestic product) are anything other than a forecast. They take this one – and really, you think about what we’re asked: Given the path of the economy as we best know it, forecast it today, what do we think the Fed funds rate will be? But that’s not a promise that it will be that, right? And I think that’s been a challenge for us, because as things happen – as shocks, large or small, hit the economy – we have to react accordingly. We can’t stay on that predetermined path because it’s not a predetermined path.
MR. DERBY: So how do you fix it? I know (Cleveland Fed President) Loretta Mester’s talked about confidence bands. I know it’s a matter that the Communications Committee is considering. I don’t know if you’re on it. What would you like to see done differently?
MR. HARKER: So there are a lot of options. One is to add even more information with confidence bands. That’s one alternative.
The other – but it would be very difficult to do, that other central banks have done – is just get a consensus view. But we’re a large, diverse Committee. So that may work, but you know, we’d have to think about that carefully.
I mean, there are various options on how to do that.
MR. DERBY: So, but yeah, I mean, there’s nothing you particularly favor –
MR. HARKER: No, not at this point. I think we really – I need to weigh the pros and cons of that. We’re not far enough along, at least in my mind, to be able to make that decision.
MR. DERBY: And just the overall state of communications. I know there’s also been, you know, I mean, days when you’ll have four and five Fed officials speaking. The Dallas Fed had a paper that talked about maybe collectively people need to speak a little bit less and pick their – pick their spots a bit more.
MR. HARKER: Well, what do you think about that? (Laughs.)
MR. DERBY: Ah, you know, I mean, we take it as it comes. So, I mean, that’s not our place to rule in on that.
MR. HARKER: I don’t know, right? I mean, you have to be careful because the way the way the system is set up is to have – especially with the regional banks – is to have a diverse, independent view. And I think it’s – is it incumbent upon us to distill that view and to – or limit that view, or is it incumbent upon the public to distill that view, right? I mean, that’s the question, right? Should we limit what we communicate in terms of our diversity of views, or should we let the public and the media work with those diverse views? I’m more in the camp of the latter, because I think the more information we put out there it’s – the better, even if it’s not all – we’re not all saying the same thing in the same way.
MR. DERBY: OK. Well, back to the pragmatism question again. I mean, do you feel that that leaves you – and I’ll just ask this because this is often how central bankers get, you know, graded – but it does lead you to be so far more hawkish or dovish? I suppose in that you favored a rate rise in September that didn’t happen, that –
MR. HARKER: Yeah, I would tend to be because, again, I – as we discussed earlier, with the lags that we know are in such a dynamic stochastic system, I think it’s important that we take some move now and have a gradual path of normalization, as opposed to wait, wait, wait, and then have to have a steeper rise. I just think that’s prudent. And being a Philly guy, I’m more an Eagle.
MR. DERBY: Oh, yeah. (Laughter.) OK. I got to remember that one.
But on the other side of it, I mean, the Fed has undershot its inflation target for years. And the New York Fed just had a report yesterday that showed some – another little trailing off in inflation expectations. And I know they’ve – that report has shown at various points softening. And I know energy’s a big part of all of this, but you talk about the dual mandate, and one side of that mandate is still – still seems rather elusive.
MR. HARKER: But I’m seeing signs with some increase in health care inflation and others that that 2 percent target is – remember, there’s a long lag to that too, right? So I think we’re within the zone, with 1.7 percent core (personal consumption expenditures), where it is prudent to make a move sooner rather than later.
MR. DERBY: So you’re not a whites of their eyes type of –
MR. HARKER: No, because I think the lags are pretty long. And we know that, historically. So we could get behind the curve. And again, we’re talking about a 25-basis-point increase, which would leave policy still quite accommodative.
MR. DERBY: One of the things the Fed forecast changed was lowering the long-run – long-run growth rate. And I wanted to know where you – what you thought about it, because that was a – struck us as a fairly meaningful shift.
MR. HARKER: Yeah, and I lowered mine too primarily because of the neutral funds rate, right, R-star. Until we see that start to move up, and with that productivity, it’s hard to forecast that we’re going to see a robust growth. So we’ll – again, that is – we have to take that as it comes, because we don’t move R-star. Other policies do that. So we just have to accept that fact and do the best we can, given that we – in my view, as I said in the speech earlier, we don’t have a set of policies that are necessarily conductive to economic growth at this point. There are some challenges there.
MR. DERBY: Does the change in that view tell us anything about the Fed’s assessment of secular – I’m sorry – the secular stagnation argument?
MR. HARKER: The secular stagnation assumes there’s nothing that can be done to move R-star, right, by definition. I don’t believe that. I just don’t think monetary policy can move it. But I think there are things we can do to increase the potential of the economy.
MR. DERBY: So I’ve noticed that – I mean, you – that has been an emergent theme in a number of comments from Fed officials recently, about the limits of monetary policy and what could be done on the fiscal front or the other side of the equation. And why are we hearing more about that? Because you’ve spoken about it several times as well. So why –
MR. HARKER: Well, it is true, right? (Laughs.) And so I think, first, it’s true. And also it’s important that we communicate what we can’t do, right, because often people look at the Fed for solving problems that are really outside of not just our mandate, but, with the tools we have of monetary policy, our ability to effect that change.
MR. DERBY: Can you point to some examples of that?
MR. HARKER: Well, go back to the speech I made earlier, right? If we want long-term growth, it comes from population increase and productivity increase in the long run, right? If we don’t have population increase – and we know that’s been a pretty large part of what we’ve seen – we should expect slower growth. Just look at Japan as an example. There is nothing, in my view, monetary policy can really do if your economy is shrinking because the number of people you have is shrinking. You may be able to affect per capita GDP, but you can’t affect headline GDP if you – if you have a smaller population, unless you have some extraordinary productivity growth that, at least in the foreseeable future, in the planning horizon, is hard to see.
MR. DERBY: Do you think people are asking the Fed to do some of these things in part because the political process is so gummed up or paralyzed?
MR. HARKER: Yes.
MR. DERBY: So that’s part of it? And also, the extraordinary actions taken during the financial crisis, I’ve gotten the sense from some quarters, have given people the belief the Fed can do more, or is the magic thing that can fix everything, and so why not ask them to target this and target that now.
MR. HARKER: Right, right. And that is not – we can’t do that in theory nor in practice.
MR. DERBY: Well, what would you say to, say – I’m sure you’ve met with the Fed Up people, and then they’re pressing you not to raise rates because they want the –
MR. HARKER: Right.
MR. DERBY: – in their view, the recovery to spread out to everybody, and they think if you raise rates that’s not going to – that’s not going to happen.
MR. HARKER: No, I understand their frustration. I think the frustration is very real. I’ve been out and about in the community, not just meeting with Fed Up but meeting lots of people throughout the district. But the long-term solution there is back to this Agenda for Poverty and Prosperity that we have. It’s that three-legged stool. It’s jobs, skills that can – individuals can have, and the housing and the environment that they can live in to be productive. That’s going to – that’s going to move the needle. I think if – whether we change the Fed funds rate or not will have a – not anywhere near the effect that that set of changes in policy around workforce development, job creation and housing would have. And that’s why we’re really focused on that here.
MR. DERBY: Does that mean you have to interact with the political system more than otherwise would have been the case, say, in the past?
MR. HARKER: Well, I don’t know. I wasn’t here in the past, OK? (Laughs.)
MR. DERBY: Oh, well, but I mean just as – I mean, as a student of the institution.
MR. HARKER: Yeah. I think what – I think what we need to do is provide the intellectual research capability that the Fed has a lot of and train it – you know, put our lenses firmly on these issues, for two reasons. One is I think it’s the right thing to do. We’re not going to write the policy. We’re not going to decide the policy. But we can do the research that lays out the parameters of what most likely will and won’t work, right, and the costs and benefits of those.
But also, we’re not going to have the long-term growth if we don’t reach full potential. And a big part of reaching full potential in the economy is we can’t leave a lot of people behind, all right? It’s just – it’s not just going to hurt those individuals; it’s going to hurt the economy overall. That’s why I think it’s so important. If our job is maximum employment, we got to bring those people into the workforce. And I think just moving the Fed funds rate or holding it steady is not going to be very effective in doing that. It’s going to be these other issues.
MR. DERBY: Have you spoken with elected leaders –
MR. HARKER: Oh yeah.
MR. DERBY: – and got any sense that this is getting through?
MR. HARKER: Oh, they get it. Yeah, yeah.
MR. DERBY: OK.
MR. HARKER: But, you know, it’s a complicated time in our country. And again, this is not what – this is particularly one of these issues that’s not just a national issue. We tend to think of it as a national issue, but it’s community by community, city by city. You know, dealing with state leaders, city leaders, it’s really important.
You go across the river to Camden, and I spent some time over there and my mother was born in Camden. There’s a place that has a plan that they’ve put together with the administration in a bipartisan way – with the Christie administration to really bring Camden back, and do it in an inclusive way so you’re not just saying, oh, well, they’re gentrifying, but where do the gentrified go? We’re not solving the problem if the gentrified just get pushed to the edges. And so they’ve got a plan, and they’re executing that plan. And we’re doing some research there to sort of see how it plays out over time, what we can learn. That’s the kind of thing the Fed can do. We can step in and say, let’s bring our analytical capability to these issues and see what we can learn from these changes.
MR. DERBY: Well, at the national level, I got the sense from your remarks earlier today that political paralysis, or just an unwillingness of the two sides to engage, or the unwillingness of one side to engage with the other side, is a major problem for the economy right now. Did I hear that accurately?
MR. HARKER: Yeah. I mean, if – I think – you know, I think – I’ll put my citizen hat on, right, and not my Fed hat. (Laughs.)
MR. DERBY: OK.
MR. HARKER: Of course. That’s frustrating to everyone. And again, we see this in this partisan conflict index. We measure this. We know that this is elevated and it’s stayed elevated. And we know the implications of that, the results of that on economic growth: it’s not good. And so it – that’s where I think we are the Fed, with our research capability, can at least be a voice of nonpartisan, here are the facts as we know them, and you have to make use of these facts or not. It’s up to you. But this is what we know will or won’t work.
MR. DERBY: Well, in desiring to be nonpartisan, I mean, the Fed has been drug into the – or has been pulled into this election campaign in a way that I haven’t really seen before. I mean, does that – does that alarm you?
MR. HARKER: Yes. I can honestly say, in my (Federal Open Market Committee) meetings to date and my daily interactions around here, politics never enters the equation. I’ve just not seen that, right? Now, I don’t know what’s inside people’s heads, but I’ve never, ever seen it articulated in any way. People are just trying to do what they believe is the right thing with the right policy. So I think it’s unfair that we’ve been brought into this political situation because I think the strength of the Fed is that we stay independent and we stay nonpartisan. And I think the leadership of the Fed, myself included, are deeply committed to making sure that happens.
MR. DERBY: Do you think the Fed is well-suited that if it were to come under – I mean, if it were to come under strong political pressure to follow a certain policy line, would it be able to withstand that pressure?
MR. HARKER: I can’t speak for everybody else, but I could.
MR. DERBY: OK. I just figured I’d ask.
I wanted to ask you about the inflation target. There’s been some talk about raising it recently as one possible way to help address the R-star argument, among other things. So I’m curious where you stood on that matter.
MR. HARKER: Well, first, it would be good to get to 2 percent and then have that. (Laughs.) But I’m not sure increasing the inflation target will move R-star as much as just economic growth will move R-star. In which case, it would be nice if growth was that robust where we started to have the inflation target exceeded on a routine basis, and we’d have to rethink what that is. But we’re not there right now.
MR. DERBY: Right. But I thought part of the idea was that you communicate – in that you say this, that it exerts an influence.
MR. HARKER: Yeah, there are all – look, expectations are clearly a critical part of macroeconomics. That may have an effect. I’m more – and I won’t dismiss that effect. But I think the other policies will have a larger effect over time.
MR. DERBY: So you’re not looking for any changes in how the Fed approaches its inflation target right now? I know there’s another idea of, like, ending the bygones policy.
MR. HARKER: I don’t think right now. Until we get past where we are now towards something that one may consider more normal, I think it’s – then it’s time to revisit that.
MR. DERBY: OK. And I know we’ve talked a lot about – or just you’ve confronted these questions before – but just the Fed being ready or having tools in case it confronts another economic downturn.
MR. HARKER: Yeah. I mean, I – that’s another reason I am supportive of a slow but consistent path toward normalization, so we can get further and further away from zero. I think there are risks of hanging around zero too long. And if the economy can withstand it, I think it’s appropriate to move.
MR. DERBY: What would you say to people that say the entire reason why the stock market is at the levels that it’s at is because of near-zero rates and Fed actions, and –
MR. HARKER: Yeah, I’m always skeptical of somebody who says that the sole reason – the only reason is this. I think it is a contributing factor. Is it the only factor? No. But I do believe it’s a contributing factor. And I say that going back to my previous life as a corporate director. Again, you are looking at shareholder value, and you’re looking at shareholder value and how to enhance it. Well, in the long run, it is investing in new businesses, investing in new plant and equipment.
But you also can return value to the shareholder through dividends or stock buybacks. And if the debt is that cheap, it’s one of the things that your – one of the arrows in your quiver that you’re going to use. When debt is that cheap, you’re going to make that switch from equity to debt. And I think there is some truth in the fact that the equities markets reflect those individual decisions by companies that are perfectly rational for those companies to do in this low-rate environment.
MR. DERBY: Do you worry, though, that raising rates, as it starts to affect that calculus, starts to deflate or cause the stock market to sell off, and then that’s a negative input for confidence and it just causes things to come from that?
MR. HARKER: Not if we do it – not if we do it cautiously and pace the rate of normalization. If we have to do it quickly, I’d worry about that. But that’s why I don’t want to have a wait and then rapid rise later policy.
MR. DERBY: And do you believe – I mean, it sounds like from the meeting minutes people are coming around to there’s going to be an action relatively soon.
MR. HARKER: Yeah, again, I can’t speak for the Committee. But for me, I would like to see that sooner rather than later.
MR. DERBY: Take another step back and talk about some of the reform proposals that have been directed towards the Fed.
MR. HARKER: Sure.
MR. DERBY: One of the ideas – we’ll just go down them by the list – this will actually be (Dartmouth College economics professor) Andy Levin’s list in a way, but just because it kind of pulled together a lot of different things. But the quasi-private status of the regional Federal Reserve banks, I mean, that has been long something that has – outside critics have criticized the Fed for. You know, you hear arguments the Fed is just doing the work of the bankers that own it. If the Fed were to be made – regional Fed banks were to be made fully part of government, would it help address that criticism?
MR. HARKER: I don’t think so, because I – we’ll start with the fact that I don’t think the bankers – I can only speak for myself – influence my policy decisions, other than the information they give me on what’s happening in their communities.
And so one of the reform proposals is to remove bankers from the board, right? That would be part of this proposal. And I think that’s a mistake, because if I think about my board, we meet every 14 days, they vote on the discount rate, and I get information from them about what is going on in their communities. And that information, to me, is very important because data, by definition, is backward looking, right? You can only have data about what happened. They give me information about, for example, one banker was involved with a health care institution in his community. Nurses were getting a 9 percent raise and they were getting – teeing up for a possible other increase in their wages because they couldn’t find nurses. That’s actually helpful information. As we start to tease out the picture of where we’re seeing wage pressure, OK, that’s only one anecdote and you have to be careful of solo – you know, caution about anecdotes, but it still – it gives you some sense of the right questions to ask, right?
Similarly, asking the bankers and others on the board what they see with respect to business investment. We have a lot of data on that, but what are they seeing on the ground? What are people doing and not doing? And again, in our case, all the bankers are community bankers. They’re not (Large Institution Supervision Coordinating Committee) institutions. They’re institutions that are serving their local communities, and they’re part of the fabric of those local communities. Those voices are really important to me, and I’d hate to lose those.
MR. DERBY: You can’t have them on an advisory council and meet with them –
MR. HARKER: You could, but not every 14 days.
MR. DERBY: OK.
MR. HARKER: You’re not going to have any advisory council – (laughs) – I mean, we have a great advisory council, our Economic Community Advisory Council, chaired by Madeline Bell, who’s the head of Children’s Hospital here, one of the leading if not the leading children’s hospital in the world. But again, we meet on a regular basis, but not that frequently. And so I worry about losing information in that process.
MR. DERBY: OK. But on the matter of Fed ownership, I mean, you don’t see that – any conflicts coming from that structure?
MR. HARKER: It’s never affected – again, I can only – it’s never affected anything with respect to our policy stance – my policy stance.
MR. DERBY: And how do you ensure that, say, board members don’t get information about the policy outlook that other people – like, if it’s not being distributed, you know, broadly?
MR. HARKER: Yeah, I mean, they get the same economic update that we would give to any group as we run around the district and talk about – you know, our economists talking about issues. They don’t get any proprietary information. Everything we present to them, at least here in Philly, is publicly disclosed information.
MR. DERBY: There was a change that the New York Fed had made on its – how it handled the –
MR. DERBY: There we go. The New York Fed had made a change in how it briefed, or made – the president no longer gives a recommendation on what the discount rate should be, so that whatever the board votes from is entirely self – it comes from them now. And that way they don’t have any – they can’t draw an inference from what the president – say, President Dudley – tells them. Do you have that same policy here?
MR. HARKER: No. And I don’t get the sense, though – my board is quite independent. And as a director, I was quite independent. So I’m not sure that it has that kind of influence, at least in Philadelphia. I can’t speak for any other bank.
MR. DERBY: So you – just to be clear, I mean, you do it the traditional – you make a recommendation to them based on –
MR. HARKER: And the board is quite independent in their perspective on that.
MR. DERBY: OK. Actually, that is a question. I mean, from your – what’s different from – what’s changed in your perspectives from being on the board to being a president? What do you know now about how this all works that you didn’t know then?
MR. HARKER: I know a lot. (Laughter.)
So I think the biggest issue is outside of monetary policy. It’s just the complexity of the Federal Reserve system and everything that we do, right? When you sit in a board room, you have some sense of that, but you don’t get a deep dive in everything we’re doing in the community. And by definition, the board members have no access into supervisory information, right? Because we do – there is a real strict wall of separation there, other than anything that’s public information. So obviously, on this side, as the supervisors, as the regulators, I have a lot more information now than I ever had as a board member.
MR. DERBY: So it’s mostly an informational difference?
MR. HARKER: Yeah.
MR. DERBY: I think what people might find interesting: How much of your time do you spend on actual economic and monetary policy thinking and working, compared to the other demands of the job?
MR. HARKER: So, of course, it goes in cycles, right. There’s, I think, for me, eight times a year (inaudible) the FOMC. Then we have a conversation with the team here after the FOMC, just a sort of after-action report of, you know, what’s happening. I would say in any given cycle of eight times a year. So think of that roughly as six weeks; so a little more than a third. We may even be bumping up to half of that is spent on monetary-policy issues. Another big chunk of that is spent on regional development issues and community development issues, which I think feed into that view. And then there’s the day-to-day running a bank.
MR. DERBY: Yeah. I mean, it’s a large organization with a lot of stuff to do in services and –
MR. HARKER: Right. Right, right.
MR. DERBY: Yeah, interesting.
Back on the reform front, one thing we didn’t talk about was diversity. And that is now coming even more into the fore with what’s happening down in Atlanta with the congressman writing about, you know, their hopes for the pick down there. Can the Fed – can and should the Fed do better in terms of diversity, especially at its top leadership levels, again, when it comes to governors and bank presidents?
MR. HARKER: Yes.
MR. DERBY: OK.
MR. HARKER: So I think about Philadelphia. We’ve had a 20 percent increase in the diversity of our top leadership team here, and we’ve – and if I think about the board, we’ve tried to increase diversity there both in terms of ethnicity and gender. Our Economic Community Advisory Council, which gives us an insight into what’s happening in communities, but also an opportunity to engage people possibly being board members, that is quite diverse. Sixty percent of those members are either women, minorities, or both, because there’s overlap.
So I think we’re making progress, and I think with the staff as a whole. But there is an issue at the top, and as you mentioned, at the senior leadership within at least – I can only speak for this bank. And there’s a matter of working hard to bring people – bring them into the Fed system, get them the experiences they need to grow in leadership in the Fed, and to be prepared for those next steps. I think that’s an area I’m very committed to, because it starts with recruiting a diverse workforce here, or, in the case of directors, diverse directors, and having sort of feeder systems for that, whether it’s inside the bank and the system or outside that you could then draw from.
MR. DERBY: Well, I’ve heard the case made one of the problems is because the academic profession is tilted in the way that it is that academic economists have been historically tilted towards white men, and that’s just – that is the reality of who is in the profession. And so, therefore, as you’re looking for people to move up through it, it’s – that creates a –
MR. HARKER: I mean, as a former university president, it’s not just economics; (science, technology, engineering and mathematics) disciplines generally. That’s a problem. I think, in terms of gender, that’s starting to change in those disciplines. But it’s still a challenge for underrepresented groups. So I think that is a challenge.
But we need to then therefore look for leadership not necessarily out of that channel, right, and look for others, whether it’s coming from experience in the financial-services industry or other parts of academia or other industries altogether. I think we need to start broadening our thinking about that if we’re going to really change the nature of the leadership of the Federal Reserve. And I do think it’s important to do. I mean, we’re very committed – I’m very committed to that here. We’re making some progress, but we need to keep pushing.
MR. DERBY: Has the lack of diversity had any policy implications so far?
MR. HARKER: Well, in addition to diversity of ethnicity, gender, et cetera, it’s also important to have diversity of thought. And so I am concerned about avoiding group-think. So that, I think, has more policy implications than other forms of diversity, although I do think we need to have appropriate and important understanding of low-, moderate-income communities and what they’re facing. I think that is important. And that’s why we have really enhanced our efforts here in our community development, in this agenda, to really get a deeper, deeper understanding of what’s going on there, because that has to inform our policy as well. And so the leadership has to be informed by that. They don’t necessarily have to come from that. But they could, right? They potentially could.
MR. DERBY: Do you think the Philadelphia Fed is fixed to be a leader on, say, understanding the plight of low and –
MR. HARKER: I hope so. Yeah, I hope so, for two reasons. One, I think we have the talent here to do that. And second, it’s important to this district. If we’re going to serve the district, which is part of our charge, we have challenges in this district. We have a lot of opportunity, too, in Philadelphia, but we’ve got some challenges.
MR. DERBY: OK. Well, I often do this towards the end of interviews sometimes, but to ask if, I mean, if there is any issue or thing that you would like to see people talk about or point that you feel that you’ve been trying to make that might not be getting through. Kind of an open-ended question there, but I mean, is there something you think people need to understand about the Fed that they’re – it’s just not getting through? Is there anything like that?
MR. HARKER: I’d go back to our earlier conversation. I do think that people don’t quite understand the limits of what monetary policy can do, and therefore what the Fed can do. And we’re – we create the environment, the platform for the economy to grow, but we’re not going to drive that growth. As I said earlier in the Q&A after the speech, I think people – we don’t have the secret sauce all by ourselves that’s going to make the economy grow. It’s just not the way it works. And I think people don’t necessarily understand that. And I’m worried about that because I think we’re being asked to do more than we’re capable of.
If there are two American figures one would least expect to be connected, they may well be Woody Guthrie and Donald Trump. Guthrie, one of the most revered political songwriters ever to put pen to...
If there are two American figures one would least expect to be connected, they may well be Woody Guthrie and Donald Trump. Guthrie, one of the most revered political songwriters ever to put pen to paper, has next to nothing in common with Republican presidential nominee Trump, a man who represents everything against which Guthrie fought as a folk singer and activist. But the two do have one connection: Trump's father, the late New York real estate mogul Fred C. Trump.
In the early 1950s, Guthrie was briefly a tenant of Trump's Beach Haven apartment complex, a Brooklyn property the elder Trump developed using an FHA subsidy specifically designated for affordable public housing. Years after Guthrie moved out of Beach Haven, in 1964, Trump would be investigated for profiteering, having, as Will Kaufman wrote in a story on Guthrie and Trump for The Conversation earlier this year, "overestimat[ed] his Beach Haven building charges to the tune of $3.7 million." And in 1973, six years after Guthrie's death from Huntington's disease at the age of 55, Trump was sued by the Justice Department for discriminating against Black people, eventually settling outside of court.
"In 1950, Woody and his family rented an apartment in the complex called Beach Haven that was owned by Fred Trump," Deana McCloud, Executive Director of Tulsa's Woody Guthrie Center, says. "After they moved in, it came to [Guthrie’s] attention that the elder Mr. Trump would not lease apartments to African-Americans, which did not sit very well with Woody, as an advocate for civil rights."
It was the racism of "Old Man Trump" that stoked the most intense anger in Guthrie, inspiring him to write two sets of writing -- the first being the better known "Beach Haven Ain't My Home," a re-working of an existing Guthrie song called "Ain't Got No Home" and one that is often referred to as "Old Man Trump," and the second, "Racial Hate at Beach Haven." Both writings are available on view at the Guthrie Center and, since Kaufman's piece was published, have been fodder for outlets as large as NPR and the New York Times, once again relevant in light of the 2016 election. As seen in the images provided by Kaufman, Guthrie punctuated his lyrics with exclamation points, a seemingly small detail that McCloud finds very telling.
"What’s really interesting for me is, I looked at the lyrics for ‘Beach Haven Ain’t My Home’ and -- of course, we have thousands of examples of Woody’s handwriting and very seldom does he use exclamation points -- in this particular lyric, every line is followed by an exclamation point," she says with a slight laugh. "His emotions are very apparent in the lyrics. It was just an issue with him, the idea that people should be separated and kept apart in anything, but especially when it comes to allowing them to live together and learn together and cooperate with each other."
A reimagined "Old Man Trump," recorded by Santa Barbara band U.S. Elevator, made its way into current headlines just a few days ago as part of the "30 Days, 30 Songs" project, an initiative spearheaded by acclaimed author Dave Eggers (famous for works like 2000's A Heartbreaking Work of Staggering Genius and the more recent novel A Hologram for the King; he also documented his time at a Sacramento Trump rally for the Guardian) and Zeitgeist Artist Management's Jordan Kurland, who is known for his integral role in the careers of artists like Death Cab for Cutie and Bob Mould. The project, which kicked off October 10, is a playlist of anti-Trump songs, proceeds from which will benefit the Center for Popular Democracy, written and/or performed by a diverse roster of artists that includes Aimee Mann, Jim James, R.E.M., and Adia Victoria. At press time, the initiative has grown to become "30 Days, 40 Songs," and could continue to grow larger as Election Day draws nearer. "30 Days" follows the pair's 2012 effort "90 Days, 90 Reasons," a series of essays by figures like Roxane Gay and George Saunders that argued for the re-election of President Barack Obama.
"One of the things that really struck [Eggers] about the rally was the music that was being played," Kurland says. "It was so off-base from Trump’s message, you know? It was Elton John’s 'Tiny Dancer' or Bruce Springsteen or the Who -- clearly just songs that didn’t make sense contextually, but also songs that there’s no way the artists would have approved. So Dave came back with the idea to get artists to write songs that should be played at Trump rallies, with that meaning they could be songs either directly about Donald Trump or songs that celebrate all the things that Donald Trump is against, like diversity and freedom of speech, etcetera, etcetera."
Nashville artist Adia Victoria -- who speaks powerfully on race, class, and Southern culture in both her music and in interviews -- contributed the sparse, sobering "Backwards Blues" to the playlist. When sharing the song on Facebook, she wrote, "Perhaps the greatest irony is how a campaign fueled by outright lies reveals a deep-seated kernel of truth of what far too many Americans hold up as sacred: massive wealth, the sway of celebrity, branding, power, and greed. I don't want to say that he's the president we deserve, yet here we are."
Many other musicians outside of the "30 Days" project have found themselves getting political in recent months, too. Ani DiFranco recently released the song "Play God" which, while not overtly anti-Trump, champions women's reproductive rights, a message that flies in the face of Trump's endlessly mysognistic rhetoric and behavior. "As we prepare for our first woman president, isn't this the perfect time for all of us to put women's civil rights into law?" DiFranco asks. "Make reproductive freedom a Constitutional amendment. With the Supreme Court in flux, we cannot afford to leave our rights in the balance."
Revered Nashville/Austin songwriter Radney Foster contributed to the conversation with "All That I Require" -- what he describes as an "anti-fascism history lesson" that, to name only one example, feels especially chilling in light of Trump's third debate comments about his reluctance to concede the election were Clinton to win the presidency.
"The voices of extremism and fascism are ringing more loudly in our national debate than ever before in my lifetime," Foster says. "Questioning the free press and the peaceful transition of power never ends well. All of the sloganeering in the song are taken from Stalin, Mussolini, Hitler, and Franco -- demagogues from the right and the left. I hope the song is something that will make us all, Democrat or Republican, do some soul-searching about what kind of country we want to be.”
One of the most powerful, acclaimed albums of 2016, the Drive-By Truckers' latest release American Band, was described by Slate's Carl Wilson as "the perfect album for the year of Trump." DBT songwriters Patterson Hood and Mike Cooley address a number of difficult topics, including racism, immigration, and police brutality, on the LP, with songs like "Ramon Casiano" and "What It Means" two standouts (among a consistently stellar batch of songs) whose narratives have chilling parallels: The first describes the death of Mexican teenager Ramon Casiano at the hands of Harlon B. Carter; the second refers to the murder of Trayvon Martin by George Zimmerman, as well as cases like the police killing of Michael Brown. The album grapples with many of the very issues for which Trump stands, providing alternative viewpoints from, as Wilson describes, a group of men "embodying the stereotypical demographics of a Trump voter (white, male, middle-age, non–college-educated)."
Akron, Ohio, songwriter Joseph Arthur released his anti-Trump number, "The Campaign Song," which juxtaposes audio and video of clips of Trump shouting catchphrases like "Build That Wall" with lyrics like "Trump is a chump," earlier this month and invoked Guthrie's legacy as a political songwriter, as well as his unfortunate connection to the Trump family. "Woody Guthrie wrote a protest song about Donald Trump’s grandfather," Arthur wrote on his website. "So this is like carrying the torch for Woody. I used the lingo of a by-gone era to accentuate that aspect like ‘America really should boot bums like this out’ and ‘Old scratch’. I wanted to use the lingo of Trump’s elders as subtle form of linguistic manipulation designed to send him under his bed shivering like the whimpering maggot that he is.”
A particularly biting critique of Trump, his policies and his deeply flawed Trump University comes from folk singer/songwriter Anthony D'Amato, who released the song "If You're Gonna Build a Wall" and its accompanying video via MoveOn's Facebook page last week. D'Amato was inspired to write the song, which references Trump's desire to build a wall between Mexico and the United States and includes lines like "Oh if you're gonna build a wall / You better be ready the day it falls," after covertly attending a Trump Rally in Long Island.
"I wrote this song last Summer during the primaries," D'Amato says. "I was home from tour with a broken finger and bombarded by election news every day. The rhetoric was dark and divisive and ran counter to a lot of the ideals I always felt like this country was built on. Trump's campaign was the initial spark, but the song touches on race and class and privilege, too. History doesn't look kindly on those who build themselves up by excluding and demonizing the less powerful. If you're going to do that, you'd better be prepared for the consequences."
Pioneer Valley band Parsonsfield also felt compelled to write about Trump's hypothetical wall, expressing their frustration in the song "Barbed Wire," a stirring track off their recently released album Blooming through the Black. "It's funny how the loudest voices championing freedom are the ones who want to erect the clearest symbol of restrictiveness," the band's Chris Freeman says. "It will never happen, but the rhetoric is frightening enough. The song references the wall in the sense that they are often built as a mechanism to keep others out. The builder usually fails to see that they are also the ones being kept in.”
Like his father's before him, Donald Trump's policies seek to exclude rather than unite. And like Guthrie before them, today's musicians are using their platforms to voice progressive platforms, the latest entrants into the long, continually evolving songbook of American protest music. Protest music is most commonly attributed to the 1960s -- just look at this year's somewhat unusual, certainly polarizing winner of the Nobel Prize for Literature -- but it's a tradition that's been around in America for centuries. To name just two, non-'60s American milestones that birthed political music, the Civil War inspired a number of tunes, including "When Johnny Comes Marching Home" and "Song of the Abolitionist"; and the gay rights movement of the '80s and '90s brought us "Rebel Girl" by Bikini Kill and "True Colors" by Cyndi Lauper.
Trump is, of course, not the first politician to inspire musicians' ire (and he certainly won't be the last), although he has accomplished the not-so-desirable feat of doing so before the election results have even been tabulated. Bright Eyes, Radiohead, and, perhaps most famously, the Dixie Chicks were among the many artists who called out 43rd President George W. Bush through song. Ronald Reagan had the Ramones and Prince as detractors. And, in case you thought musicians only targeted Republicans, Democratic President Bill Clinton's indiscretions have been documented by artists as high-profile as Beyoncé -- though it's important to note that Monica Lewinsky is often, problematically, the target, instead of Clinton himself.
"The way that music makes a difference in society is still apparent today," McCloud says. "You still have those people who are raging against injustice and we know that Woody’s work is as relevant today as it was whenever he was writing it. The specific names might have changed a little, some specific details may have changed. But when you look at the lyrics that Woody wrote, and that Pete Seeger wrote, and Phil Ochs wrote, we’re still struggling with this huge divide between the people who have so much and those who struggle just to get by every day."
And while many artists choose to express political views through song, others take stances by withholding their music from candidates with whom they disagree. Just this year, the Trump campaign has received cease and desist letters (or, some cases, some very angry rhetoric) from the Rolling Stones, Adele, R.E.M. (who, along with Sleater-Kinney, just released their own "30 Days" tune), and several other artists regarding the usage of their songs at Trump rallies and events.
"Music and protest, for a very long time, have gone hand in hand," Kurland says. "For this particular project, it’s to get people inspired about the election or voting that have maybe been somewhat apathetic to it. Certainly Bernie Sanders captured a lot of people’s attention and imagination amongst younger voters and it just felt like, in May or June, there were people who were disappointed and people who weren’t really seeming like they were very engaged. So the idea of doing this is a way of getting people motivated by hearing a well-written song about an important topic. The goal with this project, and the other projects we've worked on in the past, is to appeal to younger voters who maybe don't fully grasp the importance of this election or understand how different the two candidates really are. I get so sick of hearing, 'Hillary is the lesser of two evils.' That couldn't be further from the truth."
While Guthrie isn't alive to sing us through these last few weeks leading up to election day, many of the issues for which he fought are, unfortunately, still issues today. McCloud believes he would have been just as disappointed by Donald's political rhetoric as he was by Fred's housing practices. "I certainly don’t want to put my thoughts into Woody’s voice by any means, but based on my knowledge of what he wrote and his perspective of things, I think, like many of us, it would be deeply troubling to him to see the lack of civility and the divisive nature of today’s political climate," she says. "This idea of getting together, walking together, talking together, solving problems is almost nonexistent in what we see today, and I think that would be deeply troubling to him."
Though it appears as though Hillary Clinton has all but clinched the election, the work to heal from and evolve past the divisive, racist, bigoted rhetoric in which the United States became ensnarled throughout this election is only just beginning. It's another chapter in a long, bloody story that is centuries long -- one that Guthrie, like his modern counterparts, immortalized in song, offering small glimpses of hope, wisdom, and catharsis for all of us hoping for a better world.
McCloud sums up Guthrie's feelings -- which were messy, uncomfortable, unresolved, but ultimately hopeful -- when she recounts his writing "Racial Hate at Beach Haven." "What I really love is the way he ends it," she says. "The last paragraph -- it’s so lyrical. It’s, ‘Let’s you and me shake hands together and get together and walk together and talk together and sing together and dance together and work together and play together and hold together and let’s get together and fight together and march together until we lick this goddamned racist hate together, what do you say?’ That’s Woody. He was upset. He was angry. But he still understood that this is a problem, and let’s sit down and talk about it and solve the problem instead of just being separate and having our own opinions. Let’s solve the problem."
By BRITTNEY MCKENNA
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An earlier review...
The commentary you find at BuzzFlash and Truthout can only be published because of readers like you. Click here to join the thousands of people who have donated so far.
An earlier review identified the "Three Big Sins of Charter Schools": fraud, a lack of transparency, and the exclusion of unwanted students. The evidence against charters continues to grow. Yet except for its reporting on a few egregious examples of charter malfeasance and failure, the mainstream media continues to echo the sentiments of privatization-loving billionaires who believe their wealth somehow equates to educational wisdom.
The Wall Street Journal, in its misinformed way, says that the turnaround of public schools requires "increasing options for parents, from magnet to charter schools." Wrong. As the NAACP affirms, our nation needs "free, high-quality, fully and equitably-funded public education for all children." For all children, not just a select few.
The NAACP has called for a moratorium on charter schools. And Diane Ravitch makes a crucial point: "Would [corporate reformers] still be able to call themselves leaders of the civil rights issue of our time if the NAACP disagreed with their aggressive efforts to privatize public schools?"
Here are the four big sins of charter schools, updated by a surge of new evidence:
1. Starve the Beast
Corporate-controlled spokesgroups ALEC, US Chamber of Commerce, and Americans for Prosperity are drooling over school privatization and automated classrooms, with a formula described by The Nation: "Use standardized tests to declare dozens of poor schools 'persistently failing'; put these under the control of a special unelected authority; and then have that authority replace the public schools with charters." But as aptly expressed by Jeff Bryant, "As a public school loses a percentage of its students to charters, the school can’t simply cut fixed costs for things like transportation and physical plant proportionally...So instead, the school cuts a program or support service."
It's an insidious and ongoing process, aided and abetted by business-friendly mainstream media outlets, to convince Americans that "every family for itself" is better than the mutual support and cooperation of a public school system.
2. Cream and Segregate and Discard
Urban charter schools primarily enroll low-income minority students. That seems admirable upon first reflection, but selective admissions of the best students from ANY community will make an individual school look good, leading to the belief that the concept will work on a larger scale. Success is much harder to achieve if a school accommodates special needs and English-learner students.
Numerous sources reveal the high degree of segregation in charter schools -- white or black, and by income and special need.
As expressed in the report "Failing the Test," "School choice is just that — except that charter schools are doing the choosing instead of communities."
It gets worse. Prominent New York charter network Success Academy has been accused of "counseling out" students who are low-performing or disruptive or otherwise difficult to teach. Even worse are charters that shut down, stranding hundreds of students, while their business operators can just move on to their next project. Nearly 2,500 charter schools closed their doors from 2001 to 2013, leaving over a quarter of a million kids temporarily without a school.
3. Scream 'Public' to Get Tax Money, Plead 'Private' to Hide Salary Data
Charter schools are increasingly run by private companies, or by private trusts. The National Labor Relations Board affirms that charters are private, not public.
As private entities, they are unregulated and lacking in transparency, and, as concluded by the Center for Media and Democracy, they have become a "black hole" into which the federal government has dumped an outrageous $3.7 billion over two decades with little accountability to the public.
4. Engage in "Fraud, Waste, Abuse, and Mismanagement"
That's how the Center for Popular Democracy describes charter performance in 2015, during which the schools wasted an estimated $1.4 billion of taxpayer money. The fraud is far-reaching, with examples from around the country:
The Department of Education audited 33 charter schools and concluded: "We determined that charter school relationships with CMOs (charter management organizations) posed a significant risk to Department program objectives."
In California, charter performance is so poor that even the National Association of Charter Authorizers is calling on the state to better control the authorization of such schools. At present, there are almost no restrictions on opening a charter school, and existing schools are restrictive in their enrollment policies.
Because of charters, Michigan cities have lost nearly half (46.5%) of their revenue over the past 10 years. Detroit, which is surpassed only by New Orleans in the number of charter students, half of the charter schools perform only as well as, or worse than, traditional public schools. A federal study found an "unreasonably high" number of charters among the lowest-rated public schools in the state.
In Louisiana, according to the Center for Popular Democracy, "charter schools have experienced millions in known losses from fraud and financial mismanagement so far, which is likely just the tip of the iceberg."
According to PR Watch, Florida "has one of the worst records in the nation when it comes to fraud and lack of charter school oversight." Texas has an unknown number of charters housed in churches. Nine charters in Washington remain open despite being declared unconstitutional by the state's Supreme Court.
Ohio might be worst of all. Since the 2006-07 school year, 37 percent of the state's charter schools receiving federal grants have either closed or never opened. An Ohio newspaper reported, "No sector – not local governments, school districts, court systems, public universities or hospitals – misspends tax dollars like charter schools in Ohio."
The Big Picture
Despite student selection advantages, charter schools generally perform no better than public schools, according to the most recent CREDO study and as summarized by the nonpartisan Spencer Foundation and Public Agenda: "There is very little evidence that charter and traditional public schools differ meaningfully in their average impact on students' standardized test performance." As for technology-based schools, the National Alliance for Public Charter Schools admits that "The well-documented, disturbingly low performance by too many full-time virtual charter public schools should serve as a call to action to state leaders and authorizers across the country."
Charter schools have turned our children into the products of businesspeople. Americans need to know how important it is to get the profit motive out of education, and to provide ALL our children the same educational opportunities.
By Paul Buchheit
Minnesota consistently ranks at the top in terms of voter turnout. It earns accolades for the quality and competence of its election administration. Recently Secretary of State Steve Simon...
Minnesota consistently ranks at the top in terms of voter turnout. It earns accolades for the quality and competence of its election administration. Recently Secretary of State Steve Simon challenged Minnesotans to register and vote so that the state can continue to be the leader when it comes to election turnout. Yet that high turnout comes with a racial gap that is among the worst in the country.
Minnesota is a land of racial disparities, such as in education. Minnesota Department of Education data point to blacks and other students of color scoring 30 points or more lower on achievement tests compared to whites. U.S. Department of Education data show Minnesota near the bottom of the list in on-time high school graduation rates for blacks, with an overall 67 percent graduation for black males (compared to 90 percent for white males), according to the 2015 Schott Foundation for Public Education report. The black/white male graduation gap is one of the highest in the country. A 2014 study found black students 10 times more likely to be suspended or expelled from Minneapolis schools than white students.
Income and employment
Second, look at income and unemployment. A 2013 Minnesota Advisory Committee to the U.S. Commission on Civil Rights report found the unemployment gap for blacks to be three times that of whites. A 2015 report by the Center for Popular Democracy found the gap to be second worst among states in the nation, only behind Wisconsin. And 2015 U.S. Census data point to Minnesota as having one of the highest black/white gaps in medium family income in the nation. WalletHub, a personal finance site, documented the financial gap between whites and minorities in Minnesota as the biggest in the nation, with median income (4th highest), home ownership (3rd), poverty rate (3rd) and education level (14th).
In criminal justice, groups such as the Sentencing Project note Minnesota among the worst when it comes to racial disparities in terms of incarceration. And the Institute for Metropolitan Opportunity 2015 report “Why Are the Twin Cities So Segregated?” confirmed what john powell and I had documented a generation ago at the Institute on Race and Poverty: that the seven-county metro region has one of the worst residential and educational segregation patterns in the country.
Now consider the racial disparities in voting. WalletHub earlier this year released a study examining political engagement among blacks, using six criteria. It found Minnesota ranked 16th. Among notable failures, Minnesota was 45th in the nation for black voter turnout in the 2014 elections. According to the U.S. Census Bureau in the 2012 elections, 80.2 percent of white non-Hispanic citizens registered to vote, compared to 66.9 percent and 56.1 prcent for blacks and Hispanics. In terms of actually voting, white non-Hispanic turnout was 74 percent, compared to 49.2 percent and 32.5 percent for blacks and Hispanics. For Asian-Americans, their registration was greater overall than for white non-Hispanics at 87.6 percent, but actual turnout was only 56.2 percent.
Why the disparity in registration and voting? It is no coincidence that the poverty, education and incarceration disparities along with the residential segregation are related to the lower voter turnout. Political scientists have long documented the correlations between income, education, and geography. High incarceration rates bring felon disenfranchisement, contributing to decreased eligibility to register and vote.
Low voter turnout compounds other disparities
Low voter turnout among people of color feeds upon itself, compounding other racial disparities and problems. People of color are unable to electorally challenge employment or housing policies. They are unable to challenge policing policies, and they are unable to challenge the voting laws and procedures that may hinder their political engagement.
Minnesota must address the racial voting disparity, especially in light of the growing diversity of the state population. It will require not just addressing problems in the voting laws including felon disenfranchisement, but also tackling the other racial disparities that contribute to the voting problems. If it does not, Minnesota risks perpetuation of a second-class citizenship for many of its people.
By David Schultz