Trump Picks Federal Reserve Governor Jerome Powell To Lead The Central Bank
Trump Picks Federal Reserve Governor Jerome Powell To Lead The Central Bank
“It’s relieving that Trump chose someone that represents continuity from the current Fed,” said Jordan Haedtler, manager of the Fed Up campaign, a coalition of groups that advocates for...
“It’s relieving that Trump chose someone that represents continuity from the current Fed,” said Jordan Haedtler, manager of the Fed Up campaign, a coalition of groups that advocates for progressive Fed policies. “But it’s also unclear why if he wants continuity with the Fed’s policies of accommodating monetary policy and reasonable financial protections, he would not have reappointed Janet Yellen, who is by many metrics the most successful chair in Fed history.
Read the full article here.
Clinton Joins Crowd Calling for an Overhaul of Fed Governance
Clinton Joins Crowd Calling for an Overhaul of Fed Governance
Hillary Clinton is the latest voice calling for changes at the Federal Reserve.
A spokesman for the front-runner for the Democratic presidential nomination released...
Hillary Clinton is the latest voice calling for changes at the Federal Reserve.
A spokesman for the front-runner for the Democratic presidential nomination released a statement Thursday saying that the Fed “needs to be more representative of America as a whole” and arguing that “commonsense reforms -- like getting bankers off the boards of regional Federal Reserve banks -- are long overdue.”
The statement, sent by Clinton spokesman Jesse Ferguson and first reported by the Washington Post, comes as Democrats unleash a volley of criticism against the central bank. Earlier on Thursday, lawmakers called for more consideration of African American, Latino and female candidates for top Fed posts in a letter to Chair Janet Yellen. The missive was signed by a majority of the Democratic members of Congress.
Clinton’s position garnered praise from the union-backed Fed Up coalition, which coordinated the congressional letter.
The campaign’s comment also partly echoed a proposal that Fed Up put out last week, in which former Fed economist Andrew Levin suggested structural reforms for the central bank. Levin argued that the Fed should be made a more public institution.
Currently, regional reserve bank boards have nine directors: six are elected by member banks, with three representing commercial banks and three representing the public. The final three directors are appointed by the Board of Governors in Washington, and are also meant to represent the public.
Bank Control
That means two-thirds of the board seats at the 12 regional Fed banks are controlled by commercial banks, Levin wrote, saying that the directors should instead be affiliated with small businesses and non-profit organizations and selected through a “process overseen by the Federal Reserve Board and involving the elected officials in each Fed district.”
“The process should ensure that directors are representative of the public in terms of racial/ethnic and gender diversity and educational background and professional experience,” Levin wrote.
Esther George, president of the Kansas City Fed, said Thursday that “diversity for the Federal Reserve is critical,” and that progress has been made both at the board of directors and at the staff level in making sure the Fed reflects the communities that it serves.
Preserving Independence
Richmond Fed President Jeffrey Lacker pushed back against proposals to make the Fed more public in an article posted Thursday. He said the regional branches’ hybrid governance structure “has come to play an important role in the independence of monetary policy” and “independence allows monetary policy to place greater weight on the long-term benefits of low and stable inflation.”
“The current Fed governance structure may not be ideal,” Lacker wrote. “But until there is a proposal that preserves the monetary policy independence that is so vital to the Fed’s mandate, we should stick to what we have.”
While there have been various Congressional attempts at shaking up Fed structure in recent years, those have made little headway. For instance, Republican Senator Richard Shelby proposed a bill last year that would have tweaked the New York Fed, making its leader a presidential appointee, among other changes, but it never passed.
Donald Trump, the presumptive Republican presidential nominee, has also weighed in on the Fed in recent days. On CNBC last week, Trump said that he’s a “low-interest” person and that he would replace Yellen when her term ends.
By Jeanna Smialek
Source
Do Black Lives Matter to the Federal Reserve?
O’Neal is one of dozens of activists and policy experts traveling to Jackson Hole this week to urge the Fed against raising rates. The campaign, called Fed Up, includes some two-dozen unions,...
O’Neal is one of dozens of activists and policy experts traveling to Jackson Hole this week to urge the Fed against raising rates. The campaign, called Fed Up, includes some two-dozen unions, community groups, and think tanks, from the AFL-CIO to the Working Families Party. In Jackson Hole, organizers will deliver a petitiondemanding that the Fed rethink its plan to raise interest rates until the recovery can reach more Americans. Fed Up also plans to hold a series of teach-ins exploring questions like “How Do We Build a Fed that Works for Us?” and “Do Black Lives Matter to the Federal Reserve?”
While there’s only so much the Fed can do when spending on public investments and social programs is well below where it should be, the absence of fiscal support makes monetary policy that much more critical to promote a broadly shared recovery. At its core, the Fed Up campaign is about answering two questions, said Ady Barkan of the Center for Popular Democracy during a press call previewing the upcoming meeting: “Whose recovery is this?” and “Whose Federal Reserve is this?”
“I don’t think that those at the Fed know how life is here in south DeKalb County when they say that the economy is recovering,” O’Neal said during the call. O’Neal makes $8.50 an hour at the daycare center she works at in Atlanta. That’s not enough, she says, to cover rent, food, and utilities for her household, let alone the medication she needs to treat asthma and high blood pressure. “Our life is a constant struggle,” she says. “We have to decide whether, you know, are we going to buy meat, or are we going to buy medicine, or are we going to pinch off the electric bill this month?”
But, she emphasized, she’s hardly alone. “It’s also my neighbor. It’s also the person down the hall, my neighbor next door, around the corner. The whole community is suffering.”
The Atlanta area has been particularly hard hit by the financial crisis and weak economic recovery. In 2009, the Pew Hispanic Center named Metro Atlanta one of a handful of “distinct epicenters” of the nationwide foreclosure crisis. According to their report, less than 300 U.S. counties had foreclosure rates of more than 1.8 percent, and 19 of those counties, including DeKalb, are in Metro Atlanta. As elsewhere, the crisis had a particularly severe impact on black communities: All of the 19 counties Pew singled out as centers of the crisis are majority-black.
Since then, the weak recovery has in some ways only worsened inequities like this. In 2011, the unemployment rate for blacks in the Atlanta area stood at 14.4 percent, or twice the rate of their white neighbors. Three years later, black unemployment had dropped to 13.7 percent, but because joblessness among whites in Atlanta had fallen much faster, blacks were now nearly three times as likely to be jobless as whites. Today, DeKalb County has a poverty rate of 19 percent, well above the average for Georgia and the nation as a whole. And most of that poverty has been concentrated on the county’s majority-black south side.
But among black communities nationwide, DeKalb has actually fared relatively well. The area was hit hard by the downturn, but it remains the second-most affluent black-majority county in the country. By contrast, in Washington, D.C., a majority-minority city, black unemployment is a staggering 15.8 percent, more than five times the rate for whites, according to the Economic Policy Institute. Nationwide, after hitting its highest levels since the 1980s, black unemployment remains about double the rate for whites. The mortgage crisis and subsequent downturn destroyed a full 47 percent of black families’ wealth, and that wealth is far from recovered.
Despite that, the Federal Reserve seems perilously close to raising interest rates, possibly as soon as next month—a change that could have a disastrous effect on the already-weak recovery.
“We shouldn’t mince words,” said Barkan. “When the Federal Reserve raises interest rates, it is doing so in order to slow the economy down in order to prevent the economy from creating more jobs.” A slowdown like that would not only make it harder for the labor market to recover, but it also has a good chance of widening the gap in unemployment between blacks and whites. Historically, the joblessness gap between black and white workers tends to grow when the economy slows down.
But Fed officials remain stubbornly committed to a rate hike, even as instability grips the stock market this week. In a speech on Monday, following another day of market volatility, Atlanta Fed President Dennis Lockhart sought to allay suspicionthat the Fed’s plans to raise rates this year had changed. In June, 15 out of 17 senior Fed officials indicated that they’d like to see a rate hike this year, echoing a similar statement from March. As Lockhart put it in another speech on August 10, “The economy has made great gains and is approaching an acceptable normal.” Nowhere in his speech did Lockhart mention the poverty and racial inequality gripping communities just a few miles from the Atlanta Federal Reserve Bank he chairs.
For O’Neal, places like south DeKalb are very far from an acceptable normal. “When the Fed says that the economy is recovering and they want to raise the interest rates,” she said, “I look around and I don’t see recovery in my community.”
Unfortunately, plenty of Fed leaders don’t seem to think an unequal recovery is their responsibility to address. In testimony before Congress last month, Fed Chair Janet Yellen said that while black unemployment remains very high, “there really isn’t anything directly the Federal Reserve can do to affect the structure of unemployment across groups.”
But Barkan begs to differ. “We think that’s really a mistake,” he said. “A strong economy—more job growth and more wage growth—has a disproportionately positive effect on African Americans because of the racial disparities that exist in our labor market.” Keeping interest rates low is far from the only solution to racial inequality in the job market (and not even the only thing the Fed can do by itself), but it’s a good start.
Josh Bivens of the Economic Policy Institute, another Fed Up signatory, agrees.Because low-wage workers and workers of color tend to feel changes in unemployment much more dramatically, he said, keeping unemployment low should be the Fed’s first priority. “A policy that lets the unemployment rate get as low as it can possibly go without sparking inflation is one that’s going to have disproportionate benefits to workers of color,” he added.
Unfortunately, Barkan said, Fed officials have a long history of overlooking issues like racial gaps in unemployment and wealth. A big part of the problem is the central bank’s leadership, which is heavily skewed toward the banking sector. By law, 72 out of 108 directors of the Fed’s 12 regional banks must represent workers. But currently, just two officially do, compared with 91 who come directly from banks and financial institutions. “Of course when you have leadership like that you get policies that don’t advance the needs of American working families,” Barkan said.
Which is exactly why Fed Up plans to confront the central bank’s leadership today in Jackson Hole. In doing so, the coalition will help connect monetary policy and policymakers to the people and communities it most impacts.
And demanding that interest rates stay low is just a first step. During the conference, Fed Up will also present a report from PolicyLink on what a more equitable recovery would look like. The report explores how genuinely full employment—which has long been a core policy mandate for the Federal Reserve—would reshape our economy. The report defines full employment as no more than 4 percent unemployment for all groups and a labor-force participation rate no lower than 75 percent for men and 60 percent for women. (Currently, labor-force participation remains stuck at 69 percent for men and 56.7 percent for women, the lowest levels in decades.)
As Barkan and Bivens emphasized, a change like that would have a particularly dramatic impact on communities of color. In Atlanta, black unemployment would drop 10 percent while average household income would increase by 11 percent for black families. A full 175,000 people would be lifted out of poverty and the local economy would grow by $24 billion. Nationwide, the change would be just as dramatic. Genuine full employment would cut black unemployment by two-thirds and lift more than nine million people out of poverty.
It’s this kind of recovery that the Fed needs to begin thinking seriously about, said Barkan. The first step, he added, is to rethink how monetary policy is formulated and who gets a seat at the table.
Correction: In a previous version of this article, Dawn O'Neal's name was mispelled as O'Neil.
Source: The American Prospect
Facebook Founder Gives $20mm Donation On Hillary To Defeat Trump's "Fear And Hostility" Campaign
Facebook Founder Gives $20mm Donation On Hillary To Defeat Trump's "Fear And Hostility" Campaign
A few weeks back we noted how Bullard had questioned the intentions of ex-Facebook founder Dustin Moskovitz in funding the Center for Popular Democracy's Fed Up campaign (see "Why Is Facebook...
A few weeks back we noted how Bullard had questioned the intentions of ex-Facebook founder Dustin Moskovitz in funding the Center for Popular Democracy's Fed Up campaign (see "Why Is Facebook Funding "Anti-Fed" Activists"). The "Fed Up" group has mounted an aggressive effort to convince the Fed to keep rates ultra low noting they favor central banking policies that "are aimed at making sure lower income households and minorities share in the recovery to the same degree as the well off."
Ironically, Moskovitz, and his inflated FaceBook shares, are among the key beneficiaries of "ultra low rates" and not so much the poor and struggling people of this country. A fact that was not lost on St. Louis Fed president James Bullard. Per our previous post:
When it comes to Fed Up, "it's Facebook money," Bullard said. "I think it's kind of a funny thing for them to fund because they want low interest rates in an era where we are awash in low interest rates, so it's kind of crazy, isn't it?"
"I think that Dustin Moskovitz should be here, maybe he can helicopter in from Sun Valley or something instead of sending all these people, if he wants low interest rates. He could just come and argue about it," Mr. Bullard said.
Just a few short weeks later we now learn that the billionaire techie, and former college roommate of Mark Zuckerberg, is set to become one of the largest donors to the Democratic Party. According to CNN, Moskovitz will donate a total of $20 million to various Democratic organizations making him the 3rd most generous donor of this election cycle. But Moskovitz, at least if taken at his word, isn't really donating to elect Hillary as much as to defeat Trump saying that he wants to teach Republicans a lesson that by "supporting this kind of candidate, they compel people to act in response."
"This decision was not easy, particularly because we have reservations about anyone using large amounts of money to influence elections," Moskovitz and his wife, Cari Tuna, wrote in a post on Medium. "We hope these efforts make it a little more likely that Secretary Clinton is able to pursue the agenda she's outlined, and serve as a signal to the Republican Party that by running this kind of campaign - one built on fear and hostility?—?and supporting this kind of candidate, they compel people to act in response."
"Cari and I have dedicated our lives to figuring out how to do the most good we can with the resources we've been given. Until now, those efforts have not included making endorsements or contributions in presidential elections," Moskovitz wrote. "The Republican Party, and Donald Trump in particular, is running on a zero-sum vision, stressing a false contest between their constituency and the rest of the world."
But perhaps Moskovitz is less concerned about Trump spreading "fear and hostility" and more concerned about his recent comments suggesting that the only thing the Fed has created with "ultra low rates" is a "strong artificial stock market." Per CNN,
"They're keeping rates down because they don't want everything else to go down," the Republican presidential nominee told Reuters on Monday.
Trump said the "only thing that is strong is the artificial stock market."
"We have a very false economy," Trump told Reuters. "At some point the rates are going to have to change."
Sounds like someone is a little worried about bubbly tech markets?
By Tyler Durden
Source
America Needs a Network of Rebel Cities to Stand Up to Trump
America Needs a Network of Rebel Cities to Stand Up to Trump
“I want New Yorkers to know: we have a lot of tools at our disposal; we’re going to use them. And we’re not going to take anything lying down.” On the morning after Donald Trump was declared the...
“I want New Yorkers to know: we have a lot of tools at our disposal; we’re going to use them. And we’re not going to take anything lying down.” On the morning after Donald Trump was declared the victor in the U.S. presidential election, Mayor of New York, Bill de Blasio, wasted no time in signaling his intention to use the city government as a bulwark against the policy agenda of the President-Elect. The move made one thing very clear; with the Republican Party holding the House and Senate, and at least one Supreme Court nomination in the pipeline, it will fall to America’s cities and local leaders to act as the institutional frontline of resistance against the Trump administration.
However, cities can be more than just a last line of defense against the worst excesses of an authoritarian central government; they have huge, positive potential as spaces from which to radicalize democracy and build alternatives to the neoliberal economic model. The urgent questions that progressive activists in the States are now asking themselves are, not just how to fight back against Trump, but also how to harness the momentum of Bernie Sanders’ primary run to fight for the change he promised. As we consider potential strategies going forward, a look at the global context suggests that local politics may be the best place to start.
The election of Trump has not occurred in a vacuum. Across the West, we are witnessing a wholesale breakdown of the existing political order; the neoliberal project is broken, the center-left is vanishing, and the old left is at a loss for what to do. In many countries, it is the far right that is most successful in harnessing people’s desire to regain a sense of control over their lives. Where progressives have tried to beat the right at its own game by competing on the battleground of the nation state, they have fared extremely poorly, as recent elections and referenda across Europe have shown. Even where a progressive force has managed to win national office, as happened in Greece in 2015, the limits of this strategy have become abundantly clear, with global markets and transnational institutions quickly bullying the Syriza government into compliance.
In Spain, however, things are different. In 2014, activists in the country were wrestling with a similar conundrum to their counterparts in the U.S. today: how to harness the power of new social and political movements to transform institutional politics. For pragmatic rather than ideological reasons, they decided to start by standing in local elections; the so-called “municipalist wager.” The bet paid off; while citizen platforms led by activists from social movements won mayoralties in the largest cities across the country in May of 2015, their national allies, Unidos Podemos, stalled in third place at the general elections in December later that same year.
In Spain, this network of “rebel cities” has been putting up some of the most effective resistance to the conservative central government. While the state is bailing out the banks, refusing to take in refugees and implementing deep cuts in public services, cities like Barcelona and Madrid are investing in the cooperative economy, declaring themselves “refuge cities” and remunicipalizing public services. U.S. cities have a huge potential to play a similar role over the coming years.
Rebel cities in the USA
In fact, radical municipalism has a proud history in the U.S. One hundred years ago, the “sewer socialists” took over the city government of Milwaukee, Wis., and ran it for almost 50 years. They built parks, cleaned up waterways and, in contrast to the tolerated level of corruption in neighboring Chicago, the sewer socialists instilled into the civic culture an enduring sense that government is supposed to work for all the people, not just the wealthy and well-connected.
More recently, too, cities have been proving their ability to lead the national agenda. In the last few years alone, over 200 cities have introduced protections against employment discrimination based on gender-identity and 38 cities and counties have introduced local minimum wages after local “Fight for 15” campaigns.
Now we need a dual municipalist strategy that includes both supporting and putting pressure on existing progressive city governments from the streets, and standing new candidates with new policy platforms in upcoming local elections so that we can change institutional politics from within.
Why cities?
There are a number of reasons why city governments are particularly well-placed to lead resistance to Trumpism. Most obviously, much of the popular opposition to Trump is physically located in cities. With their younger, more ethnically diverse demographics, urban voters swung heavily against Trump and, in fact, played a large role in handing Hillary Clinton the majority of the national popular vote. Not only did Clinton win 31 of the nation’s 35 largest cities, but she beat Trump by 59% to 35% in all cities with populations of over 50,000. In most of urban America, then, there are progressive majorities that can be harnessed to challenge Trump’s toxic discourse and policy agenda.
But alternative policies will not be enough to create an effective challenge to Trump; different ways of doing politics will also be needed, and local politics has great potential in this regard. As the level of government closest to the people, municipalities are uniquely able to generate new, citizen-led and participatory models of politics that return a sense of agency and belonging to people’s lives. This new process must have feminism at its heart; it must recognize that the personal and the political are intimately connected, something that is clearer at the local level than at any other.
It’s for this reason that the municipalist movement need not be limited to the largest cities. Though large cities will inevitably be strategic targets in any “bottom-up” strategy, given their economic and cultural power, all local politics has radical democratic potential. Indeed, some of the most innovative—and successful—examples of municipalism around the world are found in small towns and villages.
Bringing the political conversation back to the local level also has a particular advantage in the current context; the city provides a frame with which to challenge the rise of xenophobic nationalism. Cities are spaces in which we can talk about reclaiming popular sovereignty for a demos other than the nation, where we can reimagine identity and belonging based on participation in civic life rather than the passport we hold.
Why a network of rebel cities?
By working as a network, cities can turn what would have been isolated acts of resistance into a national movement with a multiplier effect. Networks like Local Progress, a network of progressive local elected officials, allow local leaders to exchange policy ideas, develop joint strategies, and speak with a united voice on the national stage.
On the issue of racial equity, an essential question given the racist nature of Trump’s campaign and policy platform, cities across the U.S. have already started to mobilize to combat Islamophobia, as part of the American Leaders Against Hate and Anti-Muslim Bigotry Campaign, a joint project of Local Progress and the Young Elected Officials Action Network. The campaign pushes for local policies to tackle hate crimes against Muslims, including the monitoring of religious bullying in schools, intercultural education programmes, and council resolutions condemning Islamophobia and declaring support for Muslim communities.
Climate change will be another contentious issue over the coming years. While much has been made of the policy implications of Trump’s claim that global warming was invented by the Chinese, it has been local administrations, rather than the federal government, that have led on the environmental agenda over recent years. Sixty two cities are already committed to meet or exceed the emissions targets announced by the federal government and many of the largest cities in the country, including New York, Chicago and Atlanta have set emissions reductions goals of 80 percent or higher by 2050. U.S. mayors must continue on this path, working with international networks of cities like ICLEI and UCLG to exchange good practices and to lobby for direct access to global climate funds in the absence of support from the federal government.
Even on issues that are under the jurisdiction of the federal government, like immigration, cities have some room for maneuver. For example, although Trump has pledged to deport all undocumented immigrants from the U.S., 37 “sanctuary cities” across the U.S. are already limiting their cooperation with Immigration and Customs Enforcement detainer requests to reduce deportations. The mayors of New York and Los Angeles have already pledged to continue with this practice, and De Blasio has promised New Yorkers that the city will protect the confidentiality of users of the city ID-card scheme and continue to ensure that police officers and city employees won’t inquire about residents’ immigration status, predicting that Trump will face “a deep, deep rift with all of urban America” if he does not re-evaluate his stance on sanctuary cities.
What next?
First we must push our allies who are already in office at local level, including self-identified “Sanders Democrats,” to use all available means to act against any attempt by the federal government to roll back civil liberties, cut services or sow division among communities. Such cities must work, not only to counteract the worst excesses of the Trump administration, but also to continue to move forward on issues like gay rights and climate change, as well as forging new ground by standing up to corporate interests, increasing citizen participation in decision-making, and promoting the social and cooperative economies.
But we also need a new generation of local leaders, particularly women and people of color, who are prepared to take the leap from protest to electoral politics. The recent announcement by Black Lives Matter activist, Nekima Levy-Pounds, that she will be standing for election as mayor of Minneapolis is an inspiring example of the kind of candidate that is needed; someone with real-world experience and an insider’s understanding of social movement politics. But the search for new local leaders needs to be scaled up so that there is a pipeline of candidates to stand for school boards, zoning boards and local councils in 2017 and beyond. This is something that the Working Families Party is already doing successfully in many states, as well as supporting these candidates in primary campaigns against Establishment Democrats.
Finally, we must undertake new ways of doing politics at the local level to prove that there is an alternative to corporate lobbying, secret donors and career politics. There is no reason why candidates should wait until taking office to invite people to participate in decision-making. Local candidates should open up their policy platforms to public participation, integrating demands from social movements and local residents. There is also no reason why elected officials should use only the most generous interpretation of the law to guide their conduct; in Spain, the citizen platforms drew up their own codes of ethics for their elected representatives, including salary and term limits and strict transparency requirements. By leading by example, local movements can send a very powerful message: there is another way.
A resurgence of rebel cities in the U.S. would tap into a long-forgotten American tradition of radical municipalism and align with a new and growing international network of municipalist movements. Now is the time for us to seize this opportunity and to reclaim democracy from the bottom up.
BY KATE SHEA BAIRD AND STEVE HUGHES
Source
Hispanos afrontan barreras de idioma en NY, según informe
El Diario – August 5, 2013, by Ruth E. Hernández - Las agencias del Gobierno estatal de Nueva York tienen importantes carencias a la hora de facilitar el acceso a sus servicios a los más de $2...
El Diario – August 5, 2013, by Ruth E. Hernández - Las agencias del Gobierno estatal de Nueva York tienen importantes carencias a la hora de facilitar el acceso a sus servicios a los más de $2 millones de personas y familias que no dominan el inglés, según un estudio presentado hoy.
“Todavía queda mucho por hacer para romper las barreras del idioma y asegurar que reciban una competente y consistente asistencia”, señala el “Informe de Acceso a Lenguaje”, que destaca que esta situación dificulta a estas personas el poder obtener servicios básicos como el carné de conducir o denunciar un crimen.
El estudio, de la organización Se Hace Camino Nueva York, es el primer informe que se publica luego de que, en 2011, el gobernador de Nueva York, Andrew Cuomo, firmara una orden ejecutiva para garantizar que inmigrantes reciban, en los seis idiomas más hablados, los servicios de agencias estatales que brindan ayuda directa a la comunidad.
“Con esta orden la administración del gobernador Cuomo no sólo tomó un paso importante para garantizar el acceso a servicios del gobierno a los que aún no dominan el inglés, sino que demostró liderazgo a nivel nacional en este asunto”, indica el informe de la entidad sobre las agencias que más en contacto están con el público.
Sin embargo, reveló que, un año después de entrar en vigor esta medida, los inmigrantes afrontan dificultades para tener acceso a servicios importantes como puede ser un carné de conducir, recibir los cupones de alimentos porque los formularios no han sido traducidos en su idioma o solicitar el desempleo, entre otros trámites, dijo a Efe Theo Oshiro, codirector de la organización.
Entre los hallazgos destaca, que pese a los esfuerzos de las agencias gubernamentales, la mayoría de los inmigrantes no están recibiendo documentos importantes traducidos en su idioma, tal y como estipula la orden ejecutiva.
Cita como ejemplo que en Buffalo sólo el 11 % de los hispanos afirma recibir la documentación en su idioma, mientras que en los pueblos de la región central del estado la cifra fue del 45 %.
Igualmente el estudio mostró que a través del estado sólo el 45 % de las agencias están brindando servicios de interpretación.
En específico, señala que en el Departamento de Vehículos de Motor, una de las agencias que más público atiende, sólo se ofreció información en los idiomas establecidos en el 32 % de los casos, mientras que en el Departamento del Trabajo esta cifra aumenta al 61 %.
También indica que en aquellas agencias en las que se brindó esta posibilidad, el público estuvo complacido con la calidad del mismo.
En cuanto a la Policía estatal, Oshiro explicó que aquellas personas que acuden en busca de ayuda tienen que esperar mucho tiempo y que “no tiene ni siquiera puesto en su página que puede brindar servicios” en varios idiomas.
Durante la evaluación, los autores descubrieron que el estado contrata a agencias locales en varios de sus condados para suplir servicios, y que éstas están exentas de cumplir la orden ejecutiva.
“Eso no es aceptable. No entendemos por qué no les cubre la orden ejecutiva”, dijo Oshiro.
Indicó además que, aunque las agencias del estado con sedes en la Ciudad de Nueva York, mejoraron en un 15 % los servicios que brindan, desde que entró en vigor la orden ejecutiva, “el estudio muestra que les está tomando tiempo” cumplir con ella, lo que, según Oshiro, no es aceptable porque tuvieron tiempo para prepararse.
Entre las recomendaciones que aporta el reporte figura mejorar el acceso de interpretación y la traducción, desarrollar y distribuir una guía de cómo mejorar los servicios y establecer colaboraciones con organizaciones que estén en contacto con la comunidad que no domina el inglés.
El informe se realizó en cooperación con la oficina del gobernador y, de acuerdo con Oshiro, los autores se reunirán con sus representantes para saber qué pasos van a tomar para cumplir con la orden ejecutiva.
“El estudio es una herramienta para que la oficina del gobernador haga lo que deben hacer”, afirmó.
Source
The Great Charter School Rip-off: Finally, the Truth Catches Up to Education “Reform” Phonies
Salon - October 2, 2014, by Jeff Bryant - Last week when former President Bill Clinton meandered onto the topic of charter schools, he mentioned something about an “original bargain” that charters...
Salon - October 2, 2014, by Jeff Bryant - Last week when former President Bill Clinton meandered onto the topic of charter schools, he mentioned something about an “original bargain” that charters were, according to the reporter for The Huffington Post, “supposed to do a better job of educating students.”
A writer at Salon called the remark “stunning” because it brought to light the fact that the overwhelming majority of charter schools do no better than traditional public schools. Yet, as the Huffington reporter reminded us, charter schools are rarely shuttered for low academic performance.
But what’s most remarkable about what Clinton said is how little his statement resembles the truth about how charters have become a reality in so many American communities.
In a real “bargaining process,” those who bear the consequences of the deal have some say-so on the terms, the deal-makers have to represent themselves honestly (or the deal is off and the negotiating ends), and there are measures in place to ensure everyone involved is held accountable after the deal has been struck.
But that’s not what’s happening in the great charter industry rollout transpiring across the country. Rather than a negotiation over terms, charters are being imposed on communities – either by legislative fiat or well-engineered public policy campaigns. Many charter school operators keep their practices hidden or have been found to be blatantly corrupt. And no one seems to be doing anything to ensure real accountability for these rapidly expanding school operations.
Instead of the “bargain” political leaders may have thought they struck with seemingly well-intentioned charter entrepreneurs, what has transpired instead looks more like a raw deal for millions of students, their families, and their communities. And what political leaders ought to be doing – rather than spouting unfounded platitudes, as Clinton did, about “what works” – is putting the brakes on a deal gone bad, ensuring those most affected by charter school rollouts are brought to the bargaining table, and completely renegotiating the terms for governing these schools.
The “100 percent charter schools” education system in New Orleans that Clinton praised was never presented to the citizens of New Orleans in a negotiation. It was surreptitiously engineered.
After Katrina, as NPR recently reported, “an ad hoc coalition of elected leaders and nationally known charter advocates formed,” and in “a series of quick decisions,” all school employees were fired and the vast majority of the city’s schools were handed over to a state entity called the “Recovery School District” which is governed by unelected officials. Only a “few elite schools were … allowed to maintain their selective admissions.”
In other words, any bargaining that was done was behind closed doors and at tables where most of the people who were being affected had no seat.
Further, any evidence of the improvement of the educational attainment of students in the New Orleans all-charter system is obtainable only by “jukin the stats” or, as the NPR reporter put it, through “a distortion of the curriculum and teaching practice.” As Andrea Gabor wrote for Newsweek a year ago, “the current reality of the city’s schools should be enough to give pause to even the most passionate charter supporters.”
Yet now political leaders tout this model for the rest of the country. So school districts that have not had the “benefit,” according to Arne Duncan, of a natural disaster like Katrina, are having charter schools imposed on them in blatant power plays. An obvious example is what’s currently happening in the York, Pennsylvania.
School districts across the state of Pennsylvania are financially troubled due to chronic state underfunding – only 36 percent of K-12 revenue comes from the state, way below national averages – and massive budget cuts imposed by Republican Governor Tom Corbett (the state funds education less than it did in 2008).
The state cuts seemed to have been intentionally targeted to hit high-poverty school districts like York City the hardest. After combing through state financial records, a report from the state’s school employee union found, “State funding cuts to the most impoverished school districts averaged more than three times the size of the cuts for districts with the lowest average child poverty.” The unsurprising results of these cuts has been that in school districts serving low income kids, like York, instruction was cut and scores on state student assessments declined.
The York City district was exceptionally strapped, having been hit by $8.4 million in cuts, which prompted class size increases and teacher furloughs. Due to financial difficulties, which the state legislature and Governor Corbett had by-and-large engineered, York was targeted in 2012, along with three other districts, for state takeover by an unelected “recovery official,” eerily similar to New Orleans post-Katrina.
The “recovery” process for York schools also entailed a “transformation model” with challenging financial and academic targets the district had little chance in reaching, and charter school conversion as a consequence of failure. Now the local school board is being forced to pick a charter provider and make their district the first in the state to hand over the education of all its children to a corporation that will call all the shots and give York’s citizens very little say in how their children’s schools are run.
None of this is happening with the negotiated consent of the citizens of York. The voices of York citizens that have been absent from the bargaining tables are being heard in the streets and in school board meetings. According to a local news outlet, at a recent protest before the city’s school board, “a district teacher and father of three students … presented the board with more than 3,700 signatures of people opposed to a possible conversion of district schools to charter schools,” and “a student at the high school also presented the board with a petition signed by more than 260 students opposed to charter conversion.” Yet the state official demanding charter takeover remains completely unaltered in his view that this action is “what’s bets for our kids.”
What’s important to note is York schools are not necessarily failures academically, as New Jersey-based music teacher and education blogger going by the name Jersey Jazzman stated on his personal blog. Looking at how the districts’ students perform on state assessments, he found that academic performance levels were “pretty much where you’d expect them to be” based on the fact that “most of York’s schools have student populations where 80 percent or more of the children are in economic disadvantage,” and variations in student test score performance almost always correlate strongly with students’ financial conditions. He concluded that what was happening to York schools more represents a “long con” in which tax cuts and claims of “budgetary poverty” have prompted a rapacious state government to “declare an educational emergency, and then let edu-vultures … pick at the bones of a decimated school system.”
The attack on York City schools is not unique. As an official with the National Education Association recently pointed out on the blog Living in Dialogue, “It’s the same story that played out in Detroit, Flint, and Philadelphia where these ‘chief recovery officers’ or ‘emergency managers’ have all made the same recommendation: to hand over the cities’ public schools to the highest private bidder.”
Then, hiding behind pledges to do “what’s best for kids,” these operators too often do anything but.
Charter Schools Takeover, Corruption Ensues
York teachers and parents have good reasons to be wary of charter school takeover. As a new report discloses, charter school officials in their state have defrauded at least $30 million intended for school children since 1997.
The report, “Fraud and Financial Mismanagement in Pennsylvania’s Charter Schools,” was released by three groups, the Center for Popular Democracy, Integrity in Education, and ACTION United.
Startling examples of charter school financial malfeasance revealed by the authors –just in Pennsylvania – include an administrator who diverted $2.6 million in school funds to a church property he also operated. Another charter school chief was caught spending millions in school funds to bail out other nonprofits associated with the school. A pair of charter school operators stole more than $900,000 from the school by using fraudulent invoices, and a cyber school entrepreneur diverted $8 million of school funds for houses, a Florida condominium, and an airplane.
What’s even more alarming is that none of these crimes were detected by state agencies overseeing the schools. As the report clearly documents, every year virtually all of the state’s charter schools are found to be financially sound. The vast majority of fraud was uncovered by whistleblowers and media coverage and not by state auditors who have a history of not effectively detecting or preventing fraud.
Pennsylvania spends over a billion dollars a year on charter schools, and the $30 million lost to fraud documented in this study is likely the minimum possible amount. The report authors recommend a moratorium on new charter schools in the state and call on the Attorney General to launch an investigation.
The report is a continuation of a study earlier this year that exposed $100 million in taxpayer funds meant for children instead lost to fraud, waste, and abuse by charter schools in 15 states. Now the authors of the study are going state-by-state, beginning with Pennsylvania, to investigate how charter school fraud is spreading.
What’s happening to York City is not going to help. The two charter operators being considered for that takeover – Mosaica Education, Inc., and Charter Schools USA – have particularly troubling track records.
According to a report from Politico, after Mosaica took over the Muskegon Heights, Michigan school system in 2012, “complications soon followed.” After massive layoffs, about a quarter of the newly hired teachers quit, and when Mosaica realized they weren’t making a profit within two years, they pulled up stakes and went in search of other targets.
As for the other candidate in the running, Charter Schools USA, a report from the Florida League of Women Voters produced earlier this year found that charter operation running a real estate racket that diverts taxpayer money for education to private pockets. In Hillsborough County alone, schools owned by Charter Schools USA collaborated with a construction company in Minneapolis, M.N. and a real estate partner called Red Apple Development Company in a scheme to lock in big profits for their operations and saddle county taxpayers with millions of dollars in lease fees every year.
In one example, cited by education historian Diane Ravitch, Charter USA’s construction company bought a former Verizon call center for $3,750,000, made no discernible exterior changes except removal of the front door and adding a $7,000 canopy, and sold the building as Woodmont Charter School to Red Apple Development for $9,700,000 six months later. Lease fees for the last two years were $1,009,800 and $1,029,996.
No wonder York citizens are concerned.
What Happened To Charter School Accountability?
Charter schools that were supposedly intended to be more “accountable” to the public are turning out to be anything but.
As an article for The Nation recently observed, “Charters were supposed to be laboratories for innovation. Instead, they are stunningly opaque.”
The article, written by author and university professor Pedro Noguera, explained, “Charter schools are frequently not accountable. Indeed, they are stunningly opaque, more black boxes than transparent laboratories for education.”
Rather than having to show their books, as public schools do, Noguera contended, “Most charters lack financial transparency.” As an example, he offered a study of KIPP charter schools, which found that they receive “‘an estimated $6,500 more per pupil in revenues from public or private sources’ compared to local school districts.” But only a scant portion of that disproportionate funding – just $457 in spending per pupil – could accurately be accounted for “because KIPP does not disclose how it uses money received from private sources.
In addition to the difficulties in following the money,” Noguero continued, “there is evidence that many charters seek to accept only the least difficult (and therefore the least expensive) students. Even though charter schools are required by law to admit students through lotteries, in many cities, the charters under-enroll the most disadvantaged children.”
This tendency of charter schools operations provides a double bonus as their student test scores get pushed to higher levels and the public schools surrounding them have to take on disproportionate percentages of high needs students who push their test score results lower. Noguera cited a study showing that traditional schools serving the largest percentages of high-needs students are frequently the first to be branded with the “failure” label.
If charter schools are going to have any legitimacy at all, what’s required, Noguera concluded is “greater transparency and collaboration with public schools.”
Fortunately, yet another new report points us in the right direction.
This report, “Public Accountability for Charter Schools,” published by the Annenberg Institute for School Reform, “recommends changes to state charter legislation and charter authorizer standards that would reduce student inequities and achieve complete transparency and accountability to the communities served,” according to the organization’s press release.
According to the report, these recommendations are the product of “a working group of grassroots organizers and leaders” from Chicago, Philadelphia, Newark, New York, and other cities, who have “first-hand experience and years of working directly with impacted communities and families, rather than relying only on limited measures such as standardized test scores to assess impact.”
These new guidelines are intended to address numerous examples of charter school failure to disclose essential information about their operations, including financial information, school discipline policies, student enrollment processes, and efforts to collaborate with public schools.
For instance, the report notes that the director of the state Office of Open Records in Pennsylvania, “testified that her office had received 239 appeals in cases where charter schools either rejected or failed to answer requests from the public for information on budgets, payrolls, or student rosters.” In Ohio, a charter chain operated by for-profit White Hat Management Company, “takes in more than $60 million in public funding annually … yet has refused to comply with requests from the governing boards of its own schools for detailed financial reports.” In Philadelphia, the report authors found a charter school that made applications for enrollment available “only one day a year, and only to families who attend an open house at a golf club in the Philadelphia suburbs.” In New York City, where charter schools are co-located in public school buildings, “public school parents have complained that their students have shorter recess, fewer library hours, and earlier lunch schedules to better accommodate students enrolled at the co-located charter school.” The report quotes a lawsuit filed by the NAACP, which documented public school classrooms “with peeling paint and insufficient resources” made to co-locate with charters that have “new computers, brand-new desks, and up-to-date textbooks.”
The Annenberg report’s policy prescriptions fall into seven categories of “standards,” which include:
Traditional school districts and charter schools should collaborate to ensure a coordinated approach that serves all children.
School governance should be representative and transparent.
Charter schools should ensure equal access to interested students and prohibit practices that discourage enrollment or disproportionately push-out enrolled students.
Charter school discipline policy should be fair and transparent.
All students deserve equitable and adequate school facilities. Districts and charter schools should collaborate to ensure facility arrangements do not disadvantage students in either sector.
Online charter schools should be better regulated for quality, transparency and the protection of student data.
Monitoring and oversight of charter schools are critical to protect the public interest; they should be strong and fully state funded.
Unsurprisingly, the report got an immediate response from the National Alliance for Public Charter Schools, arguing against any regulation on charters. That organization’s response cites “remarkable results” as an excuse for why charters should continue to be allowed to skirt public accountability despite the fact they get public money. However, whenever there is close scrutiny of the remarkable results the charter industry loves to crow about, the facts are those results really aren’t there.
Charter Accountability Now
Of course, now that the truth about charter schools is starting to leak out of the corners of the “black box” the industry uses to protect itself, the charter school PR machine is doing everything it can to cover up reality.
Beginning with the new school year, the charter school industry has been on a publicity terror with a national campaign claiming to tell “The Truth About Charters” and high dollar promotional appeals in Philadelphia and New York City.
But the word is out, and resistance to charter takeovers is stiffening in more places than York. In school systems such as Philadelphia, Bridgeport, Pittsburgh, and Chicago, where charter schools are major providers, parents and local officials have increasingly opposed charter takeovers of their neighborhood schools. A recent poll in Michigan, where the majority of charter operations are for-profit, found that 73 percent of voters want a moratorium on opening any new charter schools until the state department of education and the state legislature conduct a full review of the charter school system.
There’s little doubt now that the grand bargain Bill Clinton and other leaders thought they were making with charter schools proponents was a raw deal. The deal is off.
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Fed Rate Hike Threatens Jobs and Wages
12/16/2015
Statement & Booking Opportunity : Connie Razza, Director of Strategic Research for the Center for Popular Democracy (CPD) released...
12/16/2015
Statement & Booking Opportunity : Connie Razza, Director of Strategic Research for the Center for Popular Democracy (CPD) released the following statement in advance of the likely interest rate hike this afternoon:
“The presumption underlying the Fed’s decision today is that the economic recovery is nearing completion, a determination wholly at odds with the data on which the Fed is committed to depending. Inflation is well below the Fed’s own target and wages remain stagnant, yet Fed officials voted today to intentionally slow down the economy. Today’s announcement lays the foundation for unnecessary economic obstacles in the way of the tens of millions of working people across the country who deserve higher wages and better jobs, and particularly the Black and Latino communities still mired in a Great Recession. We urge the Federal Reserve to deliberate carefully in considering future increases.” The Fed Up campaign is bringing the voices of working families and communities of color into the national debate about Federal Reserve policy. In the past year, our members have met with 9 of the 12 regional presidents and 4 of the 5 sitting Governors, sharing with them the human realities that underlie the economic numbers. We are urging the Fed to fulfill both sides of its dual mandate and build an economy with genuine full employment, where everybody who wants a good job can find one. In the event that the Federal Reserve does not raise interest rates, you will receive another statement following the Fed’s announcement on Wednesday afternoon.
To schedule interviews with Connie Razza, send an email to ajain@populardemocracy.org
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www.populardemocracy.org
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
Media Contact:
Anita Jain, press@populardemocracy.org, 347-636-9761
Sofie Tholl, stholl@populardemocracy.org, 646-509-5558
California Charter Schools Vulnerable to Fraud, Report Says
The Washington Post - March 24, 2015, by Emma Brown - Journalists, auditors and other investigators have turned up more than $80 million in charter school fraud in California to date, according to...
The Washington Post - March 24, 2015, by Emma Brown - Journalists, auditors and other investigators have turned up more than $80 million in charter school fraud in California to date, according to a new report by a coalition of left-leaning organizations, which argues that lax oversight of the state’s charter schools is leaving taxpayer dollars vulnerable to abuse.
California has more than 1,100 charter schools that serve more than a half-million students — far more than any other state in the nation. They receive more than $3 billion in public funds each year. But state and local officials don’t have a rigorous enough system to ferret out misuse of those dollars, according to the report, which says that oversight relies too heavily on audits paid for by charter schools and complaints by whistleblowers.
“Despite the tremendous investment of public dollars and the size of its charter school population, California has failed to implement a system that proactively monitors charters for fraud, waste and mismanagement,” says the report.
It was released Tuesday by the Center for Popular Democracy, an advocacy group that is allied with teachers’ unions and has published several studies of state-level charter-school fraud; the Alliance of Californians for Community Empowerment Institute, an organization that works on issues including housing and education; and Public Advocates Inc., a nonprofit law firm and advocacy organization.
The report recounts some of the charter school scandals that have come to light in California. In 2012, for example, state auditors found that the American Indian Model Charter Schools (AIMS) – an Oakland school that had won national recognition for the achievement of its low-income students — had paid its founder, his wife and their various businesses about $3.8 million. The audit was initiated after a whistleblower raised concerns.
More recently, in 2014, state auditors found that a Los Angeles charter school — the Wisdom Academy of Young Scientists Charter Schools (WAYS) — had made payments totaling $2.6 million to the school’s former executive director and her family members and close associates.
“There simply isn’t enough oversight to prevent a huge amount of fraud in the charter sector, and that’s unacceptable,” said Hilary Hammell, a lawyer for Public Advocates. “That’s unacceptable because it’s vulnerable youths and their families who suffer when money that should be spent on kids at the school level instead goes elsewhere.”
The California Charter Schools Association responded with an extensive statement that called into question the motives of the report’s authors, arguing that they had turned up no evidence of a substantial problem. Many of the examples of fraud cited in the report were old and resulted in charter revocation, overhauls in school management or changes to state law, the association said.
“We agree that inappropriate use of public dollars intended for public school students should be prevented,” the statement says. “We believe that the system that California has very carefully and thoughtfully implemented does just that.”
California school system superintendents who suspect fiscal mismanagement at charter schools can request an “extraordinary audit” from a state agency known as the Financial Crisis and Management Assistance Team. But that agency — or some other oversight body — should be auditing all charter schools on a regular basis, according to the report, which argues that absent such a systemic review, misuse of tax dollars is going undetected.
Charter schools are required to submit a number of financial documents to oversight agencies and local school superintendents, including annual audits performed by private auditors. The report’s authors argued that those audits are not designed to catch fraud, while the California Charter Schools Association questioned why charter schools should have to undergo state audits when traditional public school systems do not. “To assume that there is a greater risk at charter schools than school districts, particularly in light of all the real time oversight on financial reports, is simply unfounded,” the association said.
“The report not only provides no evidence of a systemic issue, it does not do justice to the system already in place and that is actually more rigorous for charter schools than for other LEAs in the state (e.g., school districts),” the association said.
Some critics of previous reports about charter-school fraud released by the Center for Popular Democracy have also argued that those reports did not offer equal scrutiny of fraud within traditional public school systems. Others have pointed out that the center counts teachers unions — which have been critical of the charter sector — among its allies and supporters. Randi Weingarten, the president of the American Federation of Teachers, is a member of the center’s board.
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Community Activists And Senator Warren Persuade HUD Sec. Julian Castro To Help Homeowners And Reign In Wall Street Speculators
Community Activists And Senator Warren Persuade HUD Sec. Julian Castro To Help Homeowners And Reign In Wall Street Speculators
Last September 30, community activists and local officials from around the country came to Washington, DC to protest HUD’s pro-Wall Street policies.
Two years ago, community organizing...
Last September 30, community activists and local officials from around the country came to Washington, DC to protest HUD’s pro-Wall Street policies.
Two years ago, community organizing groups around the country, with the key support of Senator Elizabeth Warren (D-MA), began pressuring HUD Secretary Julian Castro to stop selling delinquent mortgages to Wall Street investors and help nonprofit organizations to purchase the loans, help homeowners keep their homes, and expand the supply of affordable housing.
On Thursday, they won. Castro announced a set of policy changes to its Distressed Asset Stabilization Program (DASP) that activists had labeled a “Wall Street giveaway.” Last year, for example, 98% of the mortgages HUD sold went to Wall Street firms, at discounts averaging nearly 50%. Castro pledged to fix the program to triple the sales of delinquent mortgages to nonprofit community groups with experience in stabilizing neighborhoods and helping homeowners and to put more restrictions on foreclosures.
The policy fix was needed because some of the same Wall Street firms that precipitated the housing crash have been buying up distressed housing assets in bulk, including delinquent mortgages and vacant houses that are a product of the crash.
Both Sen. Elizabeth Warren and HUD Secretary Julian Castro are frequently mentioned a potential VP running mates with Hillary Clinton.
The campaign’s victory is the result of a perfect political storm. The organizers mounted a savvy grassroots organizing campaign that built on the momentum of the Occupy Wall Street movement that began in 2011. In the current political season, no politician, especially a Democrat, wants to be too closely identified with Wall Street’s financial industry, which most Americans still blame for the 2008 economic tsunami from which the country still hasn’t recovered. During this presidential season, both Hillary Clinton and Bernie Sanders vied to be the champion of Wall Street reform. HUD Secretary Castro, a former San Antonio mayor, has been auditioning for the role of Clinton’s vice presidential running mate, but many pundits view him as too conservative and cautious — and too pro-business — to help Clinton galvanize both Latino voters and Bernie Sanders’ supporters in the contest with Donald Trump. With his announcement this week, Castro can claim to be on the side of homeowners and communities against Wall Street speculators.
HUD’s DASP program, started by the Obama administration in 2012, became a part of the larger problem by auctioning off its distressed mortgages to the highest bidder, which allowed Wall Street firms to take ownership and accelerate foreclosures.
“This whole process shows just how tilted the playing field is for the big banks and hedge funds,” said Warren, who has been the Senate’s most vocal critic of Wall Street abuses, last year. “Many of these banks and funds were responsible for fueling the housing bubble in the first place — leading to the crash that hit these families like a punch to the gut. Now these same banks and funds are turning around and scooping up these loans at bargain-basement rates so they can profit from them a second time.”
The new HUD policy changes to fundamentally reform the program, resulting in more mortgage pools being sold to non-profits, more foreclosures avoided, and more vacant property turned into affordable housing. The changes include:
Help existing homeowners facing foreclosure remain in their homes by modifying their mortgages to reflect current market values — a strategy called “principal reduction.” Until now, both HUD and Fannie Mae, under pressure from the banking industry, had resisted this approach. Now, even private equity firms and hedge funds will have to use that strategy in reworking troubled mortgages.
Increasing the sale of HUD’s distressed mortgages to non-profit organizations
A commitment to work with local governments and non-profits to target sales to those who will help homeowners keep their houses and expand the supply of affordable housing.
Far greater provisions for transparency in the sale process
“These recent HUD changes move in the direction of common sense policy,” said Maurice Weeks of the Center for Popular Democracy, one of the groups that coordinated the nationwide grassroots campaign. “We shouldn’t be handing over our neighborhoods at bargain basement prices to Wall Street.”
“HUD’s bulk mortgage sale program has been fueling the speculator buy-up of our neighborhoods,” observed San Francisco Supervisor John Avalas, one of many local elected officials who supported the campaign. “Finally, HUD is making changes to this mortgage sales program that better prioritize what our communities need — saving more homes from foreclosure and creating more affordable housing. It’s about time!”
Sarah Edelman, director of housing policy for the Center for American Progress and coauthor of a new report on the problem, told the New York Times that the policy changes “significant improvements” in the loan sale program.
“The policies announced today are a promising step toward more responsible loan auctions,” she said.
Millions of homeowners are still delinquent on the mortgage payments, many through no fault of their own, but because of predatory and reckless lending practices as well as the sluggish recovery of the economy in terms of restoring the incomes of working families. As a result, federal officials and community activists expect there to be many more sales of troubled mortgages that were guaranteed by the federal government.
The policy changes are a culmination of several years of research and activism by grassroots groups on the front lines of the nation’s housing and banking crisis.
Several years ago, different community groups began noticing the growing presence of Wall Street speculators in their neighborhoods, one of the aftershocks of the epidemic of foreclosures. Several local groups examined records, interviewed tenants, and issued reports documenting that in areas where Wall Street investors own a significant number of these single-family homes — including Atlanta, Las Vegas, Phoenix, Miami, Tampa, Orlando, Charlotte, Dallas, Chicago, Detroit, Denver, and Los Angeles and nearby Riverside — their practices have harmed tenants and undermined long-term neighborhood stability.
The activists discovered that HUD, Fannie Mae, and Freddie Mac — which own or guarantee the distressed mortgages on many single-family homes — were part of the problem. Over the past few years, they’ve auctioned off about 150,000 non-performing loans that they want to get off their books. Of these loans, fewer than two percent have gone to nonprofit buyers. The rest (98 percent) have gone to Wall Street companies. As of last fall, five Wall Street firms — Lone Star, Blackstone Group, Angelo, Gordon & Co., Selene Residential Partners, and the Royal Bank of Scotland — accounted for 64 percent of all the public loan sales. Last year, Goldman Sachs popped up on the purchaser list for the first time, buying loans from Freddie Mac.
The community organizers and their researchers also exposed a double standard. Although Fannie Mae and Freddie Mac have been unwilling to offer principal reduction to struggling homeowners, and HUD has been unwilling to require principal reduction as part of its program, these agencies often offer steep discounts when they sell these mortgages to Wall Street speculators, who typically foreclose on the homeowners, adding to their inventory of homes scooped up in private foreclosure sales. In unloading these mortgages, the federal agencies often ignored the housing needs of local communities.
The grassroots groups enlisted the help of two national umbrella organizations — the Center for Popular Democracy (a network of community organizing groups) and Local Progress (a network of progressive local elected officials) — as well as Senator Elizabeth Warren, who championed the cause in Congress. These used a variety of tactics — protest actions, internet petitions, and muckraking research — to generate media attention and put pressure on the Obama administration.
These groups — many of which had been working on banking issues for over a decade — launched their national campaign in September 2014. They were relentless in pressuring HUD, Fannie Mae and Freddie Mac to prioritize non-profits over speculators in their sales of troubled mortgages. In particular, they demanded that these agencies prioritize sales to non-profit Community Development Finance Institutions (CDFIs) that have the capacity to purchase large inventories of underwater mortgages and distressed properties — including vacant houses that owners lost through foreclosure and occupied homes where underwater borrowers are on the brink of foreclosure — and stabilize them as affordable housing. The CDFIs were being crowded out by hedge funds working hand in hand with HUD, Fannie Mae, and Freddie Mac.
At the start of the campaign, the activists released a report, Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities, that explained why HUD’s policy of favoring Wall Street investors was exacerbating the nation’s housing crisis.
A week before Christmas in 2014, at rallies outside local HUD offices, community groups in Los Angeles, San Francisco and Boston presented HUD with their “Grinch of the Year” award for refusing to fix the DASP program.
“By auctioning pools of delinquent loans to the highest bidders — vulture capitalists — HUD is driving unnecessary foreclosures and contributing to the rise of ‘Wall Street Landlords,’” said Gisele Mata, an organizer with the Alliance of Californians for Community Empowerment, a statewide organizing group that played a key role in the national campaign, at the press conference.
In June 2015, the campaign released another report, Do Hedge Funds Make Good Neighbors? How Fannie Mae, Freddie Mac and HUD are Selling Off Our Neighborhoods to Wall Street, at a protest rally in front of the Santa Monica office of the Blackstone Group, the private equity giant (with over $300 billion in assets under management), which had become the largest landlord of single-family rentals in the country by gobbling up distressed mortgages - including many sold by HUD — at bargain-basement prices. Since 2012, the report found, federal agencies had sold over 120,000 delinquent mortgages to Wall Street hedge funds and private equities firms. Bayview Acquisitions, largely owned by Blackstone, has bought 24,000 of these mortgages. The report unearthed an array of disturbing business practices, including failure to make repairs and the harassment and illegal eviction of occupants. An investigation by the New York Times published last week confirmed earlier findings of abusive practices. The Times revealed, for example, that Lone Star had pushed thousands of borrowers into foreclosure and failed to negotiate with homeowners to modify their mortgages so they could remain in their homes.
Through Local Progress and 17 progressive mayors from across the county,, the campaign persuaded the U.S. Conference of Mayors to pass resolution asking HUD to change its policy.
Last September, community activists and local elected officials from around the country converged in Washington, D.C. to bring the cause directly to federal officials. After a rally at which Senator Warren and Congressman Michael Capuano (D-Mass) demanded that HUD curb its mortgage sales to Wall Street investors, the activists met with senior officials at HUD and the Federal Housing Finance Agency, which oversees the mortgage giants Fannie Mae and Freddie Mac. A few weeks later, the New York Times published an editorial, “Foreclosure Abuses, Revisited,” calling on HUD to suspend its sales of distressed mortgages until federal agencies adopt significant reforms.
By March of this year, the campaign had built enough momentum to get 45 members of Congress to send a letter to HUD and FHFA in support of the campaign’s demands.
In April, Rep. Raul Grijalva (D-Arizona) wrote to Castro - by then on many lists of potential vice presidential candidates - criticizing HUD for worsening the housing crisis with its favorable treatment of Wall Street investors and urging him to “end to the days of casino-level gambling with other peoples’ livelihoods.” That same month, the campaign sent Castro a petition with over 100,000 signatures, demanding that he change HUD’s policies on disposing troubled mortgages.
Along with the changing political climate and Castro’s ambitions, the community organizing groups’ persistence paid off.
With more homes in the hands of non-profits instead of Wall Street speculators, communities will gain further control over their neighborhoods and be less at the mercy of Wall Street. Community groups now plan to work city by city, and state by state, to make sure that HUD sells delinquent mortgage pools to mission-driven purchasers, and to continue the fight for housing justice and community control to strengthen and protect neighborhoods across the country.
By PETER DREIER
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