De Blasio’s Executive Order Increases, Expands Living Wage
Amsterdam News - October 9, 2014, by Stephon Johnson - Last week, New York City Mayor Bill de Blasio signed an...
Amsterdam News - October 9, 2014, by Stephon Johnson - Last week, New York City Mayor Bill de Blasio signed an executive order to increase and expand the living wage to benefit more New Yorkers.
At City Hall, while announcing the signing of his executive order, De Blasio said “$13.13 for those without benefits, $11.50 for those who have health insurance and other benefits. This applies to employers, excuse me, employees, I should say, of large groups of employers who do business with the city. Meaning, there’s a lot of companies that do business with the city, that come to the city for subsidies. We think if you want a subsidy, you can prove the need for a subsidy. We want to help you achieve your goals, but we have a standard we hold.”
De Blasio continued, “We need to make sure people are paid a living wage. That’s a fair exchange for that subsidy. What it means—let me put this in real terms—what this means, is the difference between the $8-an-hour minimum wage right now, and the $13.13 that will take effect immediately for those employees of companies that get subsidies going forward. That is a difference of over $10,000 dollars in earnings a year. $10,000. Someone who would have made $16,000—not enough to get by—will now make over $27,000 a year. And that’s a difference maker.”
According to de Blasio, any project that gets more than a million dollars in city subsidies qualifies, stating that it will reach people in lines of work like retail, food services and construction.
Advocates for a raise in the minimum wage have said this action was a long time coming. Shantel Walker, a Papa John’s employee who makes $8.50 an hour and who is a member of Fast Food Forward, praised de Blasio’s actions.
“Nearly two years ago, 200 fast-food workers in New York City walked off our jobs, calling for $15 and union rights,” said Walker in a statement. “Our demand may have sounded crazy at the time, but more and more, $15 is becoming a reality for workers across the country. As we’ve gone on strike again and again and a movement that started here in New York has spread to 150 cities, $15 suddenly doesn’t seem so impossible. From Seattle to Los Angeles to San Francisco and now New York, cities are raising wages so we don’t have to rely on public assistance to support our families.”
Walker also stated that the recent developments are a sign, to her, that minimum wage advocates are on the right side of history.
“While he works with Gov. Cuomo to raise wages for all New Yorkers, Mayor de Blasio’s move today to put workers at city-subsidized projects on a path to $15 is a sign that we are winning,” Walker said. “It’s a step in the right direction and helps push us forward in our fight for $15 for workers across the entire country.”
While the city’s working class has achieved a major victory, the state’s working class is still making the push collectively. Andrew Friedman, co-executive director of the Center for Popular Democracy, pushed for Albany to follow suit in a statement.
“The Albany wage board should eliminate the tipped minimum wage to make this vision a reality and end the wage segregation that traps workers in poverty—workers who are overwhelmingly female and of color,” said Friedman. “Partnering with progressive local, state and federal leadership means we can work together to afford a dignified life for all residents, which means comprehensive policies that include a $15 minimum hourly wage, a predictable and fair workweek, paid sick days and a healthy macro-economy that nurtures equity, creates viable new jobs and protects us from risk-taking by financial institutions.”
Back in the five boroughs, Brooklyn Borough President Eric Adams praised de Blasio for the executive order, citing it as another example of New York City leading the pack. He said that de Blasio had “reaffirmed his commitment to civic innovation and our residents’ welfare by raising the living wage and furthering its reach to thousands more workers. This is a measure that recognizes the cost of living challenges that New Yorkers face and builds a meaningful bridge over the inequality gap we have sought to close across Brooklyn and the rest of the five boroughs.
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Report: Millions of Dollars in Fraud, Waste Found in Charter School Sector
The Washington Post - April 28, 2015, by Valerie Strauss - A new report released on Tuesday details fraud and waste...
The Washington Post - April 28, 2015, by Valerie Strauss - A new report released on Tuesday details fraud and waste totaling more than $200 million of uncovered fraud and waste of taxpayer funds in the charter school sector, but says the total is impossible to know because there is not sufficient oversight over these schools. It calls on Congress to include safeguards in legislation being considered to succeed the federal No Child Left Behind law.
The report, titled “The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And Abuse,” was released jointly by the nonprofit organizations Alliance to Reclaim Our Schools and the Center for Popular Democracy. It follows a similar report released a year ago by the same groups that detailed $136 million in fraud and waste and mismanagement in 15 of the 42 states that operate charter schools. The 2015 report cites $203 million, including the 2014 total plus $23 million in new cases, and $44 million in earlier cases not included in last year’s report.
It notes that these figures only represent fraud and waste in the charter sector uncovered so far, and that the total that federal, state and local governments “stand to lose” in 2015 is probably more than $1.4 billion. It says, “The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.”
The report makes these policy recommendations:
■ Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers. ■ Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability. ■ Increase transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.
It also says:
State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.
The charter school sector has expanded significantly in the last decade and now educates about 5 percent of the students enrolled in public schools. The Obama administration has supported the spread of charter schools; President Obama’s proposed budget for fiscal year 2016 includes $375 million specifically for charters, a 48 percent increase over last year’s actual budget.
Proponents say charters offer choices for parents and competition for traditional public schools. Critics say that most charters don’t perform any better — and some of them worse — than traditional public schools, take resources away from school districts, and are part of an effort to privatize public education.
The report says that any “effective, comprehensive fraud prevention system” should include:
■ Taking proactive steps to educate all staff and board members about fraud; ■ Ensuring that one executive-level manager coordinates and oversees the fraud risk assessment and reports to the board of directors, oversight bodies, and school community; ■ Implementing reporting procedures that include conflict disclosure, whistleblower protections, and a clear investigation process; ■ Undergoing and posting a fraud risk assessment conducted by a consultant expert in applicable standards, key risk indicators, anti-fraud methodology, control activities, and detection procedures; and ■ Developing and implementing quality assurance, continuous monitoring, and, where necessary, correction action plans, with clear benchmarks and reporting
The report details cases across the country, among them:
The District of Columbia In February 2015, the DC Public Charter School Board unanimously voted to revoke the charter of the Dorothy I. Height Community Academy Public Charter School. The DC Attorney General is suing the founder, Kent Amos, for diverting public education funding to a private company for his personal profit. That private management company paid Amos more than $2.5 million over the last 2 years. Over the past 10 years, the school has paid the private entity more than $14 million and, while costs to the private company declined over that time, management fees rose. The charter board’s oversight report showed “no pattern of fiscal mismanagement.” Members of the DC Public Charter School Board have described their limited ability to oversee for-profit management companies, which face no requirement to disclose salaries or other pertinent information.
Michigan In April 2014, Steven Ingersoll, founder of Grand Traverse Academy, was convicted on federal fraud and tax evasion. He did not report $2 million of taxable income in 2009 and 2010. The school’s audit revealed a $2.3 million prepayment to Ingersoll’s school management company. The school’s later decision to write down $1.6 million of the loan put the school in a deficit position for the first time. Ingersoll then used half of a $.8 million loan for school construction to pay down some of his debt to the school.13 After the founder’s ouster, his daughter-in-law continued to handle the finances of the school.
Ohio In January 2015, the state auditor released a report of the results of unannounced visits by inspectors to 30 charter schools. In nearly half of the schools, the school-provided headcount was significantly higher than the auditors’ headcount. Schools are funded based on headcount, so these inflated figures amount to taxpayer dollars siphoned away from students. Among the seven schools with the most extreme variances between reported head count and the auditors’ headcount, almost 900 students were missing, at a cost of roughly $5.7 million.16 Auditors identified eight other schools with troubling, but less significant variances. In June 2014, a grand jury indicted the superintendent and 2 board members of Arise! Academy in Dayton of soliciting and accepting bribes in exchange for awarding a “lucrative” consulting contract to a North Carolina-based company. The contract was worth $420,919 and the charter personnel received kickbacks in the form of cash, travel, and payments to a separate business.
California In July 2014, the Los Angeles Unified School District performed a forensic audit of Magnolia Public Schools. They found that the charter-school chain used education dollars to pay for six nonemployees’ immigration costs and could not justify $3 million in expenses over four years to outsource curriculum development, professional training, and human resources services that the school itself reported doing.
New York Fed taps Williams for top post, ignoring Democrats on diversity
New York Fed taps Williams for top post, ignoring Democrats on diversity
Sen. Elizabeth Warren (D-Mass.) had called for the co-chairs and Williams to appear before the Senate Banking Committee...
Sen. Elizabeth Warren (D-Mass.) had called for the co-chairs and Williams to appear before the Senate Banking Committee if Williams ended up as the choice. Fed Up co-director Shawn Sebastian said the coalition supports that call. “Today, the Fed concluded another opaque and controversial Reserve Bank presidential selection process by ignoring the demands of the public and choosing another white man whose record on Wall St regulation and full employment raises serious questions,” he said in a tweet.
Read the full article here.
Would independent prosecutors make police shooting investigations fairer?
Would independent prosecutors make police shooting investigations fairer?
Critics say the close connections between prosecutors and local police leads to unjust decisions not to prosecute...
Critics say the close connections between prosecutors and local police leads to unjust decisions not to prosecute officers following officer-involved shootings.
The absence of indictments of police officers in shooting deaths – especially in high-profile cases like the deaths of Michael Brown in Ferguson and Tamir Rice in Cleveland – is raising questions about the fairness of using local prosecutors to investigate police officers with whom they may have close ties.
Critics say the close working relationships between local prosecutors and law enforcement injects a bias into investigations of shootings and other deaths at the hands of police. A solution, some suggest, would be to use independent prosecutors to investigate charges of wrong-doing by police officers.
The investigation into the death of Alton Sterling in Baton Rouge, La., offers one example of the closeness often seen between prosecutors and police departments. East Baton Rouge District Attorney Hillar Moore recused himself from the investigation, as he had worked closely with both police-officer parents of one of the officers involved in the shooting.
When a police officer is involved in a shooting, often the officer's own police department opens an internal investigation into the incident. In some cases, says Walter Katz, an independent police auditor of the city of San Jose, Calif., who has studied investigations of police use of lethal force, there is evidence that suggests the investigator's close relationship to the officer can lead to a lack of objectivity.
"That can be amplified when also the local prosecuting agency is the agency that reviews to decide whether or not to file criminal charges against a police officer," Mr. Katz tells The Christian Science Monitor. "In smaller jurisdictions ... they're going to have a close working relationship, so it creates the potential impression that it's not an arm's length review of the use of force."
The scarcity of indictments in a variety of high-profile shootings has increased scrutiny of officer prosecutions by local authorities. The prosecutors in both the Tamir Rice case in Cleveland and the Michael Brown case in Ferguson said they believed the officers involved had acted legally. Both were accused of not presenting a fair review of possible charges to the grand juries, as Ari Melber, MSNBC’s chief legal correspondent, explained in The Washington Post.
The problem of officer-involved shootings of blacks wouldn't be solved with independent prosecutors, Marbre Stahly-Butts, the deputy director of racial justice for the Center for Popular Democracy, a progressive advocacy organization, tells the Monitor. But "certainly accountability is an essential step that needs to happen," she says.
"We have the common sense that asking prosecutors who work everyday with police and depend on police for their cases, to then be objective in prosecuting them, is just not reasonable," Ms. Stahly-Butts says.
Local advocates are working to address these issues, Stahly-Butts says, especially in St. Louis and New York, where it has contributed to the passage of an executive order ensuring independent prosecutors.
On the federal level, Congressman Steve Cohen (D) of Tennessee is sponsoring a bill that would withhold federal funding from law enforcement unless the use of independent prosecutors to address instances of deadly force by police is instituted.
"There's no good reason not to have independent prosecutors," he tells the Monitor. "If you have the prosecutors who work with the law enforcement agency, which they do hand-in-glove to investigate cases and present cases, there is... an appearance of, if not outright, impropriety."
This can limit the citizenry's faith in the justice system, especially if no charges are brought against the officers, Representative Cohen says. On the flip side, when local prosecutors do bring charges, police can react negatively. After Baltimore State's Attorney Marilyn J. Mosby brought charges against officers in the death of Freddie Gray, some believe there was a work slowdown among Baltimore Police, which police officials denied, the Baltimore Sun reported. This hurts the entire community, Cohen says.
The bill, introduced in October 2015, has 80 co-sponsors as of Wednesday morning. Several states have made moves to implement independent prosecutors, including Connecticut and New York. Cohen says it is important to set a nation-wide standard, but House Judiciary Chairman Rep. Bob Goodlatte (R) of Virginia has not yet scheduled a hearing.
The bill is opposed by the National Association of Police Organizations, a law enforcement advocacy group. The organization's executive director, William Johnson, wrote a letter to Cohen expressing fears that officers would face "a great deal of pressure" if investigated by independent prosecutors, The Hill reported.
"There is a risk that decisions to prosecute would be made based on politics, not on the law and admissible evidence," Johnson wrote. "NAPO is concerned that an officer would be indicted, even if he/she did nothing wrong."
Johnson did not respond to requests for comment from the Monitor.
Cohen says local law enforcement may oppose his bill because they benefit from the current system and may be "getting home cooking".
"That's not what justice is about," he says. "All games should be on neutral courts."
By AIDAN QUIGLEY
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Seeking Better Legal Help for Immigrants
New York Times - January 28, 2013, by Kirk Semple - In the next several days, the deans of the nation’s top law schools...
New York Times - January 28, 2013, by Kirk Semple - In the next several days, the deans of the nation’s top law schools will be notified of a new job opportunity for their graduating students. Applicants must be high achievers who want to be part of a groundbreaking start-up, live in New York City, train with veteran lawyers and help create a new paradigm in immigration representation.
The call comes from the Immigrant Justice Corps, a new group that received a life-giving injection on Tuesday when the board of the Robin Hood Foundation, a poverty-fighting philanthropy, approved more than $1.3 million in funding.
The initiative is the long-nurtured idea of Robert A. Katzmann, the chief judge of the United States Court of Appeals for the Second Circuit, who has for years campaigned to redress a grave problem: the shortage of competent legal representation for immigrants, particularly those of modest means facing deportation.
The group’s plan is to recruit 25 graduating law students or recent graduates, immerse them in immigration law and then farm them out to community-based organizations. The young lawyers would commit to at least two years of service and as many as three.
“It’s a very simple concept, but it’s one that will not only ensure fairness for immigrants but will infuse our legal system with a generation of lawyers committed to serving those in need,” said Judge Katzmann, whose father was a refugee from Nazi Germany and whose maternal grandparents were immigrants from Russia.
The corps intends to hire a cadre of 25 lawyers every year, each earning a salary of $47,000 plus benefits. They will be assisted by recent college graduates with multilingual skills who will handle less complex cases, such as naturalization applications. The team will be supervised by a group of staff lawyers and advised by veteran lawyers.
Organizers estimate that by the third year, the corps will be handling nearly 15,000 cases a year, about double the number of immigration cases currently overseen by nonprofit organizations in New York City.
Robin Hood’s grants, while enough to get the initiative off the ground, will cover only a fraction of the project’s operating costs, which are expected to total about $4 million in the first year and about $7 million in each successive year.
But foundation officials and corps board members anticipate that they will be able to raise money from other foundations as well as philanthropists and the government.
During an interview this month, with the foundation’s approval nearly certain, Judge Katzmann turned emotional.
“The dream is about to come true, after lots of hopes and some disappointments,” he said, pausing for a moment. “I’m choked up as I’m thinking about it.”
In 2007, deeply concerned about the quality and availability of representation for immigrants, he sounded a clarion call and started a study group that investigated the issue’s impact on immigrant populations. Among its findings: Most detained immigrants in the New York region did not have counsel at the time their cases were completed.
Judge Katzmann and his allies have warned that, absent new programs, the problem would grow worse should Congress pass comprehensive immigration reform providing legal status for undocumented immigrants.
The study group spawned an initiative, the New York Immigrant Family Unity Project, which seeks to provide legal representation for every poor immigrant facing deportation in New York.
But Judge Katzmann pressed for more: a national army of young lawyers in the style of public service programs like AmeriCorps Vista or the Peace Corps.
Robin Hood heard about the idea last spring and agreed to fund a planning process. Organizers decided to limit the project to New York City, at least until it had sufficient funding to expand nationally.
Nisha Agarwal, the executive director of the Immigrant Justice Corps, views the pilot project as something that could be replicated in other cities with large immigrant populations, and as a kind of feeder system for legal talent. “Maybe these fellows will leave these fellowships and go elsewhere in the country,” she said, “and be leaders in immigrant representation.”
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ABQ, SF receive grants to help immigrants become citizens
ABQ, SF receive grants to help immigrants become citizens
Cities for Citizenship is a national initiative supported by advocacy groups Center for Popular Democracy and the...
Cities for Citizenship is a national initiative supported by advocacy groups Center for Popular Democracy and the National Partnership for New Americans, with Citi Community Development as founding corporate sponsor. Fourteen cities were awarded challenge grants of either $25,000 or $40,000 a year over two years after 66 cities submitted proposals.
Read the full article here.
Report Shows Illinois Has One of the Nation’s Highest Black Unemployment Rates Despite an Improving Economy
Report Shows Illinois Has One of the Nation’s Highest Black Unemployment Rates Despite an Improving Economy
Across the country, the economy is supposed to be slowly picking up, but the unemployment rate for Blacks is still...
Across the country, the economy is supposed to be slowly picking up, but the unemployment rate for Blacks is still about twice the rate of whites. A report by Progress Illinois said the state’s Black unemployment rate is one of the worst in the nation.
According to analysis by the Economic Policy Institute (EPI,) only two other states, New Jersey and South Carolina have higher Black unemployment rates than Illinois. D.C. had the highest Black unemployment rate at 14.2 percent, while Tennessee had the lowest at 6.9 percent. Illinois’ Black unemployment rate declined to 11.5 percent in the second quarter of 2015, according to Progress Illinois.
The nationwide unemployment rate has fallen to about 9 percent. However, the Black jobless rate is twice the white unemployment rate of 4 percent, according to the Bureau of Labor Statistics.
“African Americans are still unemployed at a higher rate than their white counterparts in almost every state,” said EPI economist Valerie Wilson, who conducted the unemployment analysis. “We need policies that look beyond simply reducing unemployment to pre-recession levels as an end goal.”
In a press release, Connie Razza, director of strategic research for the Center for Popular Democracy (CPD), said, contrary to the improving economy, “Black America is still in the middle of a Great Recession.”
According to Progress Illinois, EPI and the Center for Popular Democracy both called on the Federal Reserve to support policies that would help Black America.
“When [Fed] Chair [Janet] Yellen and other Fed officials talk about raising interest rates in 2015, they are talking about intentionally slowing down the economy and job growth, which would make it harder for most Americans, and particularly Black workers, to find good-paying jobs,” Razza said. “The direct consequences of the Fed’s projected interest rate hikes would harm millions of workers.”
A tight labor market, which we have now, benefits employers since there are more people looking for fewer jobs. This allows employers to keep labor costs low and easily fire workers, because there are hundreds of people lined up to replace them. Razza said the Fed needs to support policies that would move towards a full employment economy.
“A full-employment economy, as we saw in the late 1990s, shrinks racial inequity and will bring particular benefits to Black workers, who are disproportionately unemployed, underemployed, underpaid, and endure more difficult scheduling circumstances in the workplace,” Razza said.
Black unemployment has been a long-standing problem. The Labor Department began tracking employment figures by race in 1972 and since then the Black jobless rate has stubbornly remained at twice the white rate. Employment experts say its not just a matter of training and education. Studies have shown Black men with college educations have higher unemployment rates than white men with just a high school education.
However, economists say the improving economy is making it easier for all Americans, including Black people, to find work.
“Now, you’re starting to see a broad recovery which is reaching groups with high unemployment rates like African-Americans and teens,” said Michael Madowitz, an economist at the American Center for Progress in a CNN article.
This issue was also brought up during the last Republican debate.
“Once you have economic growth, it’s important we reach out to people who live in the shadows… which includes people in our minority community and people who feel they don’t have the chance to move up,” said Ohio Gov. John Kasich, a Republican presidential candidate.
Source: Atlanta Black Star
Hundreds of activists crashed Senate GOP offices, yelling about Medicaid and getting arrested
Hundreds of activists crashed Senate GOP offices, yelling about Medicaid and getting arrested
Art Jackson was diagnosed with HIV in 1989 and given three years to live. Almost 30 years later, the social worker...
Art Jackson was diagnosed with HIV in 1989 and given three years to live. Almost 30 years later, the social worker entered the offices of Sen. Richard Burr (R-NC) — and began shouting that the Republicans’ Senate health care bill must be defeated.
“I’ve lived each day I’ve been given to speak for other who can’t,” said Jackson, 52, of Fayetteville, North Carolina, on Monday afternoon minutes before entering Burr’s office with about 10 other activists from his home state. “We have to stop this.”
Read the full article here.
The Tragedy of Janet Yellen
In December 2012, a new Federal Reserve governor and unseasoned monetary policymaker, Jerome Powell, told his...
In December 2012, a new Federal Reserve governor and unseasoned monetary policymaker, Jerome Powell, told his colleagues that the risks of continued stimulus likely outweighed the benefits. Vice Chair Janet Yellen, even then one of the most experienced policymakers in the Fed’s 104-year history, acknowledged the concerns but pushed back forcefully. She argued that “slow progress in moving the economy back toward full employment will not only impose immense costs on American families and the economy at large, but may also do permanent damage to the labor market.” In other words, if we don’t take risks now to get more Americans employed, the country might lose the opportunity to ever fully recover from the Great Recession. She reminded her colleagues of the promise they had made: “We communicated that we will at least keep refilling the punch bowl until the guests have all arrived, and will not remove it prematurely before the party is well under way.”
Read the full article here.
Why It's a Big Deal Hillary Clinton Plans to Shake Up the Fed
Why It's a Big Deal Hillary Clinton Plans to Shake Up the Fed
Hillary Clinton is taking on the United States Federal Reserve System, but in a wonky, bottom's-up way that shows her...
Hillary Clinton is taking on the United States Federal Reserve System, but in a wonky, bottom's-up way that shows her understanding of a complex and widely misunderstood organization. This is not "End the Fed" or even "audit the Fed" — she wants to rebuild it from its fundamentals at the regional level.
To paraphrase Mitt Romney, the Federal Reserve is people, my friend. Hillary Clinton's recent proposal to change the roster of Fed officials who ultimately make monetary policy and regulatory decisions might be the most effective Fed-reform idea since the financial crisis. Generally, the public pays attention to little more than the face of the organization — the Fed's chairperson, currently Janet Yellen — who announces and explains the Fed's decisions. But beneath Yellen functions an intricate and influential bureaucracy that's dominated by interests from the financial sector, the vast majority of them white men, and may well be blind to the reality of a vast majority of Americans.
The Federal Reserve was set up in 1917, in the wake of a financial crisis, as a private national bank that could serve as lender of last resort to other banks. If a bank needed money to make good on deposits, it could go to the Fed for a short-term loan. It was, since its inception, a bankers' institution, run for banks, by banks. But its role has clearly evolved as credit markets have developed and as the Fed's mandate was changed to pursue price stability (low inflation) and full employment at the same time, while helping to regulate the sector for which it also serves as lender.
As the Fed's mission has expanded, its governance has not. The Fed is run by a seven-member board in Washington, D.C., and a dozen regional bank presidents based in financial centers throughout the country (New York, St. Louis, Kansas City and Cleveland, among others). While the crew in D.C. is selected by the president and vetted by Congress, the regional bank presidents are chosen by the financial industry and tend to be either bankers or career Fed employees. Of the 12 bank presidents, two are women and only one is not white.
New York's regional president is Willian C. Dudley, previously a Goldman Sachs managing director. Robert S. Kaplan of Dallas was a former vice chairman at Goldman. Neel Kashkari, a known financial reformer, is nonetheless a former employee of PIMCO, one of the world's largest asset managers and a subsidiary of German financial behemoth Allianz. Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta is a former Citigroup executive.
Clinton's proposal would remove bankers from the regional boards of directors. Those boards choose the regional presidents and generate most of the information and perspective that the Federal Reserve governors use to set monetary policy. Clinton clearly understands how the Fed functions. Donald Trump has said he would not reappoint Janet Yellen as chair. Fine. But appointing the Fed chair is merely the most high-profile action a president can take in this regard. It doesn't change the system, and the Fed is known as the Federal Reserve System for a reason.
This is Clinton at her best – she knows how the government works. The region Federal Reserve boards do not get a lot of press. Most people do not know that they are staffed with chief executives from Morgan Stanley, Comerica, KeyCorp and private-equity firms like Silver Lake, and if they do know it, they do not understand its importance.
The Fed is generally a topic of political bluster. "I appointed him and he disappointed me," complained George H.W. Bush about Alan Greenspan, when the Fed chair refused to cut interest rates in the face of a recession that probably cost Bush his re-election in 1992. Before that, Ronald Reagan had to endure Chairman Paul Volcker raising interest rates so high in an effort to combat inflation that out-of-work construction workers were mailing bricks and wooden beams to the Fed in protest.
The idea that the Fed often acts contrary to the interests of working people is not new, but aside from requiring the Fed to pursue full employment in addition to price stability in 1977, presidents who are unhappy with the Fed have done little more than complain. Even after Greenspan disappointed Bush, Bill Clinton reappointed him to the post. When Greenspan retired, Ben Bernanke, an intellectual heir, took the helm. When he retired, Yellen, also an intellectual heir, took over. The power to appoint the Fed chair and governors is not, clearly, the power to change things.
Clinton is digging deeper. Changing the roster of the regional boards will hopefully help more accurate economic information trickle up to the chairperson and the federal governors. Perhaps, even, a labor representative or somebody with closer ties to the common American experience could become a regional bank president.
In her quiet way, tinkering with the inner workings of a near-century old quasi-government institution that is arcane to most, Clinton has a chance to achieve radical, lasting financial reform.
BY MICHAEL MAIELLO
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