Economic Sector Bias at the Federal Reserve
Economic Sector Bias at the Federal Reserve
In part one of this two-part posting, I looked at the gender bias at the Federal Reserve, showing how men vastly outnumber women in key posts at Federal Reserve Banks throughout the United States...
In part one of this two-part posting, I looked at the gender bias at the Federal Reserve, showing how men vastly outnumber women in key posts at Federal Reserve Banks throughout the United States despite the Fed's Congressional mandate. In part two of this posting, I want to take an additional look at the Fed's bias; its failure to represent the economic diversity of America.
For those of you that either didn't read part one or who are unaware of the Federal Reserve's organizational setup, here is a graphic from a report by the Center for Popular Democracy showing the link between the Federal Reserve and its Federal Open Market Committee (FOMC) and its district banks known as Federal Reserve Banks:
Here is a map showing the regions covered by each of the 12 district banks (Federal Reserve Banks) and the 24 branches within each district:
Note that Alaska and Hawaii are covered by the San Francisco district.
If we start at the top of the organizational chart, the seven members of the Federal Reserve Board of Governors are appointed by the President and confirmed by the Senate for a 14-year term of office. The President (and Senate) also confirm two members of the Board to be Chair (currently Janet Yellen) and Vice Chair for four year terms. The FOMC consists of 12 members; the seven aforementioned Board members, the president of the Federal Reserve Bank of New York and four other regional Federal Reserve Bank presidents on a rotating, one-year term basis. The Federal Reserve Banks form an important link between the Federal Reserve and their local economy and help to dictate the Federal Reserve's monetary policies. Each of the twelve district banks has their own president and boards of directors (nine directors in total for each bank); in addition, each of the 24 district branches has its own directors (seven directors in total for each branch). The Board of Directors for each Reserve Bank are appointed in two ways; the majority are appointed by the Reserve Bank and the remainder are appointed by the Federal Reserve's Board of Governors. The directors for each district bank then appoint their own president and vice president. It all sounds rather nepotistic, doesn't it?
By law, under the Federal Reserve Reform Act of 1977, the Boards of Directors of the Federal Reserve are to be
"...elected with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor and consumers.".
That is, each of the leaders/directors of the world's most influential central bank and its district banking system are to represent a wide variety of each of the economic sectors that make up the American economy.
The report by the Center for Popular Democracy compares the economic sector representation during the period from 2006 to 2010 when the Government Accountability Office examined the composition of the Federal Reserve Bank Boards and the present. Here is a graphic showing the past and present composition:
In both 2006 to 2010 and 2016, directors from the banking sector filled over one-third of the board seats, growing by 3 percentage points over the timeframe of the study. In combination, in 2016, representatives from the commercial and industrial sector and the banking sector filled 68 percent of seats, up from 63 percent in 2006 to 2010. The service sector's representation fell from 26 percent of seats to 18 percent and agriculture and food processing saw their representation fall from 6 percent of seats to 3 percent. Interestingly, even though they are relatively poorly represented compared to the other sectors, the number of directors affiliated with consumer and community organizations rose from 3 percent to 8 percent.
For your illumination, here are a few of the Directors for each of the Federal Reserve Banks that you can get a sense of who is dictating America's monetary policies:
If you are interested in who is on the boards of the other Federal Reserve Banks, please see the original report.
Interestingly, during the "financial crisis" of 2008, there was some question about directors' independence and actions taken by the Federal Reserve banks since there was at least the perception of conflicts of interest when director-affliated institutions took part in the Federal Reserve System's emergency programs. With a preponderance of representation from the banking and commercial sectors, it certainly doesn't take a genius to figure out which sectors of the economy will likely be favoured by Federal Reserve policies should there be another "financial crisis", does it?
By A Political Junkie
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Full Employment for All: The Social and Economic Benefits of Race and Gender Equity in Employment
How much stronger could the economy be if everyone who wanted a job could find one—regardless of race, ethnicity, or gender?
To inform the Fed UP campaign, PolicyLink and the...
How much stronger could the economy be if everyone who wanted a job could find one—regardless of race, ethnicity, or gender?
To inform the Fed UP campaign, PolicyLink and the Program for Environmental and Regional Equity (PERE) estimated the potential economic gains of full employment for all. The following 13fact sheets illustrate what the United States economy—and the economies of the metropolitan regions where each Federal Reserve office is located—could look like with true full employment for all.
For additional information about Fed Up: The National Campaign for a Strong Economy, visit http://whatrecovery.org.
Download the full report here
Does Your Bay Area Neighborhood Have a High Wells Fargo Foreclosure Rate?
KQED - March 12, 2013 - California is still struggling to get back on its feet after a devastating housing crisis. And Wells Fargo is partly to blame for the sluggish recovery because it is...
KQED - March 12, 2013 - California is still struggling to get back on its feet after a devastating housing crisis. And Wells Fargo is partly to blame for the sluggish recovery because it is refusing to modify home loans, according to a coalition of homeowners groups.
By foreclosing on homeowners who can't make their payments, the San Francisco-based bank will suck billions of dollars out of the state's economy, according to the Alliance of Californians for Community Empowerment, the Center for Popular Democracy and the Home Defenders League.
In a new report, the coalition charges that Wells Fargo has been less inclined to reduce the principle of home loans than have other banks, such as Bank of America.
Wells Fargo responded that it has a low foreclosure rate compared to the industry in general.
Wells Fargo's bias toward foreclosures is disproportionately affecting predominantly black and Latino neighborhoods, the report charges.
Right now, about 65,000 California homeowners have received notice of a pending foreclosure, and about 20 percent of these loans are serviced by Wells Fargo, the report says.
The report estimates that as of February 2013, Wells Fargo had 11,616 homes in its "foreclosure pipeline."
Foreclosing on the homes will have the following effects, according to the report:
Each home would lose approximately 22 percent of its value, for a total loss of approximately $1.07 billion,
Homes in the surrounding neighborhood would lose value as well, for an additional loss of about $2.2 billion, and
Government tax revenues would be cut by $20 million, as a result of that depreciation.
If the bank were to reduce the principle on the borrowers' loans, homeowners would have more money to spend. This would boost the state's economy, the coalition says.
Wells Fargo often bundles loans to sell to other entities, such as Fannie Mae, but acts as an agent for the new lender, collecting payments and handling foreclosures. In that capacity, Wells Fargo makes more money through foreclosures than loan modifications, the report says.
Wells Fargo has had an aggressive principal reduction program for loans that we own since 2009. Wells Fargo conducts all lending and servicing activities in a fair and responsible manner without regard to race or ethnicity. We are proud to be the nation’s leading lender.
Wells Fargo issued a written statement in response to the report:
Over the last four years, Wells Fargo has: • Helped more than 841,000 customers with loan modifications. • Provided $6.3 billion in principal forgiveness—most of which has gone to borrowers in California.
Wells Fargo consistently provides assistance to customers facing financial challenges. Wells Fargo’s delinquency and foreclosure rates continue to rate below the industry average. Here are the facts: • The combined national industry delinquency and foreclosure rates are roughly 11%. Wells Fargo’s is 7.04%. • The Wells Fargo foreclosure rate in California is 1.04%*, less than half of our national rate.
*As of Q4 2012
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Liberals and conservatives blast the Fed
WISN 12 ABC - November 11, 2014, by Patrick Gillespie - The economy might be improving, but Federal Reserve chair Janet Yellen can't catch a break.
Conservatives in Congress demanded an...
WISN 12 ABC - November 11, 2014, by Patrick Gillespie - The economy might be improving, but Federal Reserve chair Janet Yellen can't catch a break.
Conservatives in Congress demanded an audit of the Fed last month. Now liberals have their list of grievances.
A coalition led by the left-leaning Center for Popular Democracy has launched a "Fed Up" campaign. They say the Fed is out of touch with Main Street and isn't focusing enough on getting people back to work.
America's central bank has a dual mandate to keep prices of goods stable and get the economy to full employment.
The coalition sent a public letter to Yellen on Tuesday calling for "public engagement" in the selection of the replacements for two regional Fed Presidents who are resigning. Dallas Fed President Richard Fischer and Philadelphia Fed President Charles Plosser are leaving their posts soon.
Yellen will meet with three dozen coalition representatives on Friday.
The timing of the demands is a bit odd. Since taking over as Fed chair in early 2014, Yellen has repeatedly stressed that full employment and higher wages are among her top goals.
America's unemployment rate is now at a six-year low. The economy added another 214,000 jobs in October and is on track for its best year of jobs gains since 1999. Wages, however, have not improved since the recession.
"We continue to hear reports that the economy is recovering, but millions of workers and their families are still struggling, whether from involuntarily part-time hours, poverty wages, or a lack of earned sick time," said Ady Barkan, a staff attorney at the Center for Popular Democracy.
Both conservative and liberal groups say their aim is simply for more transparency at the Fed, although there is concern about politics impacting the central bank.
The Fed's decisions on interest rates which influence everything from mortgage rates to the bond market are intended to be free of outside influence.
In October, Sen. Ted Cruz, R-Texas, led the conservative critics and said the Fed should be audited by a Congressional oversight office. Two auditors already look at the Fed's finances every year, but Cruz wants closer scrutiny of whether the Fed made the right monetary policy choices.
Yellen and Cruz have not scheduled a meeting, although Yellen appears before Congress twice a year.
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How to Help Residents of Puerto Rico and the U.S. Virgin Islands Recover After Hurricane Maria
How to Help Residents of Puerto Rico and the U.S. Virgin Islands Recover After Hurricane Maria
These organizations are helping with immediate needs—like food—and long-term efforts, including rebuilding...
...
These organizations are helping with immediate needs—like food—and long-term efforts, including rebuilding...
Read the full article here.
Puerto Rico was just hit by an island-wide power outage — here are the best charities to donate to for victims of Hurricane Maria
Puerto Rico was just hit by an island-wide power outage — here are the best charities to donate to for victims of Hurricane Maria
The Center for Popular Democracy – located in Brooklyn, New York – has launched the Maria Fund, which is focusing on aid for low-income communities of color, women, and girls in Puerto Rico.
...The Center for Popular Democracy – located in Brooklyn, New York – has launched the Maria Fund, which is focusing on aid for low-income communities of color, women, and girls in Puerto Rico.
Read the full article here.
Senate's Kavanaugh Vote Ends in Chaos After GOP Sen. Flake Asks for FBI Sex-Assault Probe
Senate's Kavanaugh Vote Ends in Chaos After GOP Sen. Flake Asks for FBI Sex-Assault Probe
One day after Brett Kavanaugh and Christine Blasey Ford testified about her sexual assault allegations against the Supreme Court nominee, the Senate Judiciary Committee on Friday voted to send...
One day after Brett Kavanaugh and Christine Blasey Ford testified about her sexual assault allegations against the Supreme Court nominee, the Senate Judiciary Committee on Friday voted to send Kavanaugh’s confirmation to the full Senate — but it wasn’t without drama.
Read the full article here.
Drawing Undocumented Immigrants Out of The Shadows
USA Today - July 17, 2014, by Jake Grovum - With federal immigration bills stalled on Capitol Hill, many states are charging ahead on their own to open doors to unauthorized immigrants, from...
USA Today - July 17, 2014, by Jake Grovum - With federal immigration bills stalled on Capitol Hill, many states are charging ahead on their own to open doors to unauthorized immigrants, from allowing them to pay in-state tuition at state colleges and universities, to giving them driver's licenses and providing them with welfare or Medicaid benefits.
Sixteen states now offer in-state tuition rates to students who are in the country illegally and at least four other states (Hawaii, Michigan, Oklahoma and Rhode Island) seem to be moving in that direction, according to the National Conference of State Legislatures (NCSL). Unauthorized immigrants can now get driver's licenses in 11 states and the District of Columbia. Just five years ago, no state issued the licenses.
Other states are pursuing smaller, yet still significant, measures to make life easier for unauthorized immigrants and draw them out of the shadows. Some of the proposals would allow them to vote in state elections and even run for office, while others are looking to smooth immigration-related problems in foster care programs, for example.
It's all part of a trend of states moving away from the enforcement-focused immigration laws that took hold after the 2010 elections, most notably in Arizona, which pushed local law enforcement to check the status of people suspected of being in the country illegally. Courts have largely blocked enforcement of the Arizona law.
One measure of the momentum is that some Republicans are getting on board. Florida Gov. Rick Scott, who took a hard line on illegal immigration during his campaign in 2010, signed a bill this year to offer unauthorized students in-state tuition. Last year, Nevada's Republican Gov. Brian Sandoval signed a driver's license law, which cleared the Democratic-controlled legislature.
"It seems like it's becoming more widely accepted across political lines that it makes sense to invest in immigrants who live and work in our communities," said Tanya Broder of the National Immigration Law Center, an immigrant advocacy group.
Washington state Rep. Sharon Tomiko Santos, a Democrat who co-chairs the NCSL immigration task force, said states are filling the vacuum left by Congress.
"Without federal action states are really focusing in on what is the specific nature of immigration or immigrant integration policy that resonates or that is a priority at home," she said. Santos is worried, however, that the recent influx of Central American children on the U.S.-Mexico border could reverse the trend. "It does make me concerned that we may see a resurgence of border security proposals," she said.
California Courts
Few states have gone as far as Democratic-dominated California in aiding unauthorized immigrants. For example, Democratic Gov. Jerry Brown last year signed a law directing child welfare courts and agency workers not to let a potential guardian's citizenship status stand in the way of placing a child in the guardian's care.
Previously, courts or social workers across California handled the issue inconsistently, sometimes placing children with noncitizen guardians, other times seeing immigration status as a roadblock, said Phil Ladew, legal director at the California CASA Association, whose members serve as court-appointed advocates for children in the foster care system.
"When you do that, and you have a system that's overburdened, time passes and after a year the child is still in foster care, then you just threw a grenade into the entire family," Ladew said. "This is getting back to that notion that in the first instance you need to keep the child with that family."
In 2012, Brown signed another measure designed to keep immigrant families together. Under the Immigrant Family Reunification Act, immigrant parents who have been placed in immigration custody or deported now have an additional six months to meet the requirements of the courts for family reunification. The bill also allows children who cannot be reunited with their parents to be placed under custody of a relative without taking into consideration the relative's legal status.
For years, many California cities have been "sanctuary cities," offering assistance and protection to undocumented immigrants. And California is one of four states (New Mexico, Texas and Washington are the others) to offer state financial aid to unauthorized immigrants, in stark contrast to those states where even offering discounted in-state tuition rates paid by all other residents remains a political nonstarter.
Citizens of the State
New York state Sen. Gustavo Rivera, a Democrat from the Bronx, last month introduced what might be the most sweeping state-based immigration measure in the country. Under the New York is Home Act, New York could declare both documented and undocumented immigrants citizens of the state, regardless of federal immigration status.
The measure would make unauthorized immigrants eligible to participate in most aspects of civic life, from voting in state elections and serving on juries to holding public office, earning professional licenses and enrolling in safety-net programs such as Medicaid.
"There has not been a proposal that is this broad and this comprehensive," Rivera said. "The purpose of this bill is to recognize that there are people who are already contributing."
While the measure has limits—applicants would have to prove their identity and that they have lived in the state and paid taxes for the previous three years —it has garnered plenty of skeptical and negative headlines. Even Rivera sees a long road ahead before it would become law, although he's already in contact with interested lawmakers in other states.
"I understand that it is new and out-of-the-box thinking," he said. "There are a lot of details that would have to be worked out."
Others see it as simply the latest attempt to whittle away at the distinction between citizens and noncitizens, all but neutering federal immigration policy in the process. Indeed, some see the New York proposal as the culmination of the chipping away at immigration policies that has been underway for years.
"This is usually how these things start," said Ira Mehlman of the Federation for American Immigration Reform, an organization that supports more border security and limiting illegal immigration. "It is part of this incremental acceptance based on helping people who have violated the law in the first place."
The problem, he added, is "if you sort of take the position, 'Well they're here, so we have to accommodate,' you're going to have to keep accommodating."
The New York move also sets up a potential clash with federal law, although Rivera said his measure is designed to focus only on areas under state control.
Nevertheless, components like allowing unauthorized immigrants to sign up for Medicaid — the joint state-federal health care program for the poor — would surely raise questions about whether federal money is being used to care for people who are in the country illegally under federal law.
City-State Clash
Clashes between local governments, states and the federal government have become a defining feature of the immigration debate.
Earlier this month, for example, the Maine Municipal Association filed a lawsuit against Republican Gov. Paul LePage over his order to stop payments from the state's General Assistance welfare program to unauthorized immigrants.
The LePage administration, citing a 1996 federal law against states offering certain benefits to those immigrants, ordered the state's cities (which administer the benefits and are reimbursed by the state) to stop paying them.
"We are moving forward and will continue our efforts to align programs with federal rules to ensure that precious taxpayer dollars are used appropriately for those in need and protected for those who are legal residents of Maine and this country," Department of Health and Human Services Commissioner Mary Mayhew said in a statement announcing the change.
But the cities balked, saying LePage circumvented proper rule-making procedure. The state's Democratic Attorney General Janet Mills has questioned the order as well.
In the meantime, a number of cities are continuing to pay the benefits, even though the LePage administration has raised the stakes, threatening to withhold funding for benefits for anyone on the program, regardless of their immigration status, if cities refuse to remove unauthorized immigrants from their welfare rolls.
The cities say their lawsuit is intended to clarify procedure, leaving aside for now the politics of offering welfare to unauthorized immigrants.
Jerre Bryant, city administrator for Westbrook, Maine, said many of people in question are asylum-seekers who need help.
"The bottom line is these individuals, regardless of their current citizenship status, are members of our community, they live in our community, they have children in our schools," Bryant said. "The whole concept behind General Assistance is, when you have members of your community, who, for whatever reason, can't provide their basic needs, the community is there to assist them."
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For immigrants fighting deportation, a push for government-funded lawyers
For immigrants fighting deportation, a push for government-funded lawyers
Nearly 4,000 immigrants in the Washington region face deportation every year without a lawyer, according to a report that calls on area governments to follow the lead of New...
Nearly 4,000 immigrants in the Washington region face deportation every year without a lawyer, according to a report that calls on area governments to follow the lead of New York and Los Angeles and provide funding for legal aid to immigrants.
The Center for Popular Democracy, a national nonprofit organization, analyzed thousands of deportation cases at immigration courts in Baltimore and Arlington and found that immigrants were far more likely to prevail if they had a lawyer...
Read full article here.
Austin Passed a Landmark Paid Leave Policy. Will Texas Republicans Undermine It?
Austin Passed a Landmark Paid Leave Policy. Will Texas Republicans Undermine It?
It can have a chilling impact on the introduction of policies that have the potential to be pre-empted,” said Sarah Johnson, director of Local Progress, which was involved in advocating for the...
It can have a chilling impact on the introduction of policies that have the potential to be pre-empted,” said Sarah Johnson, director of Local Progress, which was involved in advocating for the legislation. But Austin decided to take a different approach. The city “realiz[ed] their power and [fought] back and [went] on offense despite that.
Read the full article here.
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