Campaign News

The City Council’s dominant Progressive Caucus—led by Speaker Melissa Mark-Viverito—announced their endorsement today of Minnesota Congressman Keith Ellison for chairman of the Democratic National Committee.

As Democrats look to recover from a devastating Election Day, Ellison is vying to lead the party against former Vermont Gov. Howard Dean and South Carolina chairman Jaime Harrison. Ellison, the first Muslim-American ever elected to the House of Representatives, has attracted the support of Sen. Charles Schumer and Vermont Sen. Bernie Sanders, whom the congressman backed for the presidency in defiance of most party leaders.

Now the Progressive Caucus, whose 19 members mostly though not unanimously favored Hillary Clinton in the Democratic primary, has added its backing to the Midwestern lawmaker’s bid.

“The members of the Progressive Caucus Alliance are proud to add our voices to those in support of Keith Ellison for Chair of the Democratic National Committee,” the group said in a press release today. “Congressman Ellison has been a true progressive champion in Congress, and has demonstrated the grit and tenacity that we’ll need for the tough fights ahead.”

Dean, who headed the DNC from 2005 to 2009, has asserted that the organization needs a chair who can attend to party business full-time. The Democrats have suffered severe setbacks over the past eight years under chairs who held elected office, most recently the controversial Florida Congresswoman Debbie Wasserman-Schultz.

The former Green Mountain State governor and 2004 presidential candidate has highlighted the success of his “50-state strategy” in yielding the first Democratic majority in Congress in 22 years in 2006.

More important for the Council’s Progressive Caucus, however, are Ellison’s two turns as keynote speaker at “Local Progress” gatherings of low-level left-leaning officials. This, the caucus asserted, showed an emphasis on building a party bench at the most basic levels of government.

“As municipal legislators, we are especially enthusiastic about his emphasis on progressive politics at the local level,” their statement said. “Congressman Ellison recognizes that progressive politics matter at the most local of levels: to families seeking a job that pays the bills, to kids from low-income families hoping to go to college, and to parents worried about whether their kids of color will be treated fairly by the criminal justice system. He knows the difference it makes to unite action at the local, state and federal levels, and why it is important to build strength among City Council members and other local elected officials.”

Ellison’s bid also comes as many Democrats, including Schumer, have argued the party needs to increase outreach to blue collar white voters in depressed industrial areas. But the Progressive Caucus insisted the “incredibly divisive national atmosphere” President-elect Donald Trump’s incendiary anti-immigrant rhetoric has created demands party leadership that will stick up for minorities.

“We need a leader who will stand firm against hatred, bias, discrimination, anti-Semitism, Islamophobia,” the Council members’ release said. “The members of the Progressive Caucus Alliance know that Congressman Ellison will be that type of leader, and we enthusiastically support his bid for Chair of the DNC.”

“We are enthusiastic that he will be [the] first Muslim-American DNC Chair,” it added.

Disclosure: Donald Trump is the father-in-law of Jared Kushner, the publisher of Observer Media.

By Will Bredderman

Source

Adam Galatioto’s loyalty to diesel Volkswagens predates his ability to drive.

The 29-year-old’s parents first bought a Jetta TDI in 1998, and he drove the little sedan through high school, college, and a master’s program before selling it in 2013. Mr. Galatioto and his girlfriend now share a 2011 Jetta TDI SportWagen, which he helped encourage her to buy.

“They get really good mileage,” he says. “Mine got 50 m.p.g. on the highway. By proxy that means you are being environmentally friendly.”

He’s not alone. Volkswagen has long enjoyed a reputation for reliable engineering, cheerful affordability, and, largely thanks to its efforts in clean diesel, sustainability. In Consumer Reports’ 2014 survey on how people perceive leading car brands, the German automaker was singled out (alongside Tesla) for its fuel efficiency.

That made recent revelations that VW had duped environmental regulators for years, installing software on 11 million diesel vehicles worldwide allowing them to run cleaner during emissions tests than they did on the road, all the more unnerving.

“I don’t generally trust corporations on what they say, and this was so intentionally devious it just lumps them in with any other car company for me,” Galatioto says.

This is a worst-nightmare scenario for companies trying to attract customers that increasingly want to make not just quality or affordable purchases, but ethical ones. It’s an impulse nearly every consumer industry is racing to capitalize on, from restaurant chains shifting to cage-free eggs and fair-trade coffee to retailers pledging to raise wages and give workers more predictable scheduling.

But with such promises being made left and right, and especially in the wake of Volkswagen’s fall, conscientious consumers may be wondering: Can any of them really be trusted?

Not always, clearly, but there is some comfort to be had on that front. Brands that fail to deliver risk even greater financial and reputational fallout than ever before (Volkswagen lost a third of its stock value when the scandal broke, and it faces billions in future losses from EPA fines, repairs, and lost sales). Combined with effective third-party oversight, it’s a powerful motivator for companies on the whole to behave better, experts say.

Consumers, particularly younger ones, are armed with easier access to information about what they buy than previous generations, and it’s affecting their choices. Millennials (adults ages 21 to 34) are more than twice as likely as their Gen-X and baby boomer counterparts to be willing to pay extra for products and services billed as environmentally and socially sustainable, according to a 2014 Nielsen survey. They are equally more prone to check product labels for signs of sustainable and ethical production.

“There’s an increased attention to more intangible characteristics of a product,” says Dutch Leonard, a professor who teaches corporate responsibility and risk management at Harvard Business School. “When I buy a shirt, it has a particular color, it’s soft, or wrinkle-free. But now people are also paying attention to where it was made, if the workers are being exploited, and if the company is environmentally conscious or not.”

This makes responsible changes effective marketing tools, which can create domino effects as companies try to keep up with and outdo standards in their particular industries. When Wal-Mart, the biggest retailer in the world, raised its minimum pay rate at the beginning of this year, competitors such as Target and Kohl’s quickly followed suit. The success of Chipotle, which has a carefully detailed food-sourcing policy, has been followed by major supply chain overhauls for McDonald’s, General Mills, and other giants of the corporate food world.

 “Customers want 'food with integrity,' ” Warren Solochek, a restaurant-industry analyst with NPD Group, a market-research firm, told the Monitor in May. “[Companies] that choose locally sourced, fresh ingredients can put that on their website and know that people are looking at it.” 

But especially for major corporations, “when you say you are doing things, you will attract attention from outside business groups," Professor Leonard says. "You can bet some NGO [nongovernmental organization] is going to try and figure out if that’s true or not.”

Indeed, Volkswagen isn’t the first brand to have its positive positioning face pushback, especially as global companies work to strike an operational balance between ethics and profitability. Wal-Mart’s wage hikes were followed by cutbacks in worker hours when the retailer’s earnings suffered, a move that led labor advocacy groups to call the earlier wage hikes “a publicity stunt.” Earlier this week, the Center for Popular Democracyreleased a report showing that Starbucks has so far failed to live up to a much-publicized vow from a year ago to give workers more consistent schedules.

While Volkswagen eluded the Environmental Protection Agency, it was eventually found out by the International Council on Clean Transportation, an independent nonprofit aided by researchers at West Virginia University.

In addition to catching such discrepancies, watchdog groups can be helpful in weeding out credible claims of positive change from the less so. In the mid-2000s, the Unions of Concerned Scientists’ annual environmental consumer guide largely dispelled the idea that washable cloth diapers are significantly better for the environment than disposable ones.

Furthermore, some major corporations and industry groups have partnerships with independent, NGO-like organizations to set ethical industry standards and submit to outside monitoring. Unilever, for example, teamed up with the the World Wide Fund for Nature (WWF) in the 1990s to create the Marine Stewardship Council, a certification program for sustainable fisheries. In 2008, Starbucks embarked on a decade-long project with Conservation International to improve the sustainability of its coffee supply around the world. Home Depot sells lumber certified by an outside organization.

Such collaborations may not catch everything, Leonard says, but they are effective because they are “constructed in such a way that the [certification groups] are not beholden to an industry. We may not be able to get full agreement on the standards, but we might make real progress by creating safe harbors through development of standards that are negotiated in advance.”

Source: The Christian Science Monitor

Democratic presidential candidate Hillary Clinton joined the fray Thursday in the debate over how the nation’s central bank operates, saying banking industry insiders need to be removed from the Federal Reserve System.

Mrs. Clinton’s campaign said, if elected, she would appoint officials who will carry out “unwavering oversight” of the financial sector and “defend” both sides of the central bank’s inflation and employment mandates. The campaign also said “commonsense reforms—like getting bankers off the boards of regional Federal Reserve banks—are long overdue.”

Mrs. Clinton’s comments on central bank changes appeared to be her first on the topic in a campaign season where the Fed has intermittently been an issue, albeit mostly on the Republican side. Mrs. Clinton’s views emerged on a day in which dozens of Democratic congressional members, led by Sen. Elizabeth Warren of Massachusetts and Rep. John Conyers Jr. of Michigan, criticized the central bank for a leadership largely made up of white males with business and finance backgrounds.

While the Fed is led by its first-ever woman chief, all of its governors are white and three of the five are men. Of the 12 regional bank presidents, none are black and 10 are men. The last African-American to serve in a key leadership role left in 2006.

The letter to Ms. Yellen, referencing a recent study by the left-leaning Center for Popular Democracy’s Fed Up Coalition, also flagged a lack of diversity among the boards of directors that oversee the regional Fed banks. The letter said a Fed that doesn’t look like the nation it works for will struggle to make policy that benefits an increasingly diverse nation. Regional Fed board members are drawn from the private sector to watch over institutions that are quasi-private. By law, the boards are supposed to represent their broader communities with three classes of directors reserved for differing interests, including the financial sector, in a process set out by a complicated set of rules. These boards oversee regional Fed bank operations, provide local economic insights and help select new bank presidents.

But the presence of bankers on the boards, representing firms regulated by the Fed, has been a sore spot for Fed critics. Over the years, the New York Fed faced notable controversies on this front.

Recent legal changes have removed financial-market participants from the process of selecting new bank presidents. Also, the Fed’s regulatory operations are managed in Washington even as they operate out of regional banks, and are insulated from the influence of the regional boards. Most regional Fed boards are spoken of in glowing terms by their respective bank presidents.

Financial-market professionals are well represented among Fed leaders. Most top central bankers are either economists by training or former bankers. The leaders of the New York, Minneapolis, Dallas and Philadelphia Fed banks all have worked in some capacity for investment bank Goldman Sachs. Current Fed Vice Chairman Stanley Fischer was vice chairman of Citigroup from 2002 to 2005.

Mrs. Clinton’s desire to remove financial-sector leaders from the regional Fed boards would mark a historic change for a central bank that was founded on the mission of promoting financial stability, and whose monetary policy actions work through private financial-market channels to affect the performance of the broader economy.

In response to the congressional letter, the Fed said in a statement that when it comes to the members of the regional boards, “by law, we consider the interests of agriculture, commerce, industry, services, labor, and consumers. We also are aiming to increase ethnic and gender diversity.“ It also said there has been a rise in both racial and gender diversity on the regional Fed boards, with 46% of all directors now meeting the label of “diverse.”

A recent overhaul proposal by former top Fed staffer Andrew Levin, now a professor at Dartmouth College, called for the regional Fed banks to be made fully public, ending their private ownership structure operating within the Fed board, which is explicitly part of the government. Mr. Levin also called for directors representing firms regulated by the central bank to be removed.

By MICHAEL S. DERBY

Source

About 50 demonstrators gathered in Jackson Hole, Wyoming, holding signs reading "whose recovery is this" and "how many jobs do I have to work to be middle class?" Surrounded by the protesters, Nobel laureate economist Joseph Stiglitz also lent his voice, saying "this is not the time" to tighten policy.

"We are not algorithms in your computers. We are real people with real bills and real responsibilities," said Rod Adams, a protester who added that he makes $10.10 per hour.

The Fed's plans to abandon its yearslong near-zero interest rate policy have taken a turn recently amid stock market volatility fueled by concerns about the Chinese economy. The U.S central bank in recent months said it saw a strengthening labor market, describing job gains as "solid" after its July policy meeting.

Two former top Fed officials told CNBC that the central bank needs to evaluate how best to boost conditions for workers. Based on the last few years, easy policy may not necessarily fuel wage and job gains, noted former Philadelphia Fed President Charles Plosser.

"It's very important that we look beyond what's happening now and are looking to the long run," he told CNBC from Jackson Hole on Thursday.

While the central bank takes worker concerns "very seriously," it needs to evaluate how best to boost employment and wages, said Randall Kroszner, a former Fed governor. He added that it cannot base its decision on the fundamentals of another economy.

"You can't have Fed policy responding to every bump and wiggle that are coming out of the markets," he told CNBC from Jackson Hole.

He added that a rate liftoff in September of December of this year could make sense without a "negative downward shock" to inflation.