One Word Could Be Worth a Million Jobs
One Word Could Be Worth a Million Jobs
Supporting a strong job market is a big part of the U.S. Federal Reserve's mandate. Fed officials, though, interpret...
Supporting a strong job market is a big part of the U.S. Federal Reserve's mandate. Fed officials, though, interpret that goal differently than most observers do. For the economy's sake, Congress should step in to resolve the discrepancy.
Specifically, the Federal Reserve Act instructs the central bank to promote "maximum employment" and "stable prices." Most people understand these instructions as meaning the Fed should seek to generate as much demand for workers as possible without causing an unduly large increase in prices.
The website of the Fed's Board of Governors, however, makes a slight modification to the jobs mandate: "maximum sustainable employment." Innocuous as it may seem, that one word can make a big difference.
How? Well, suppose inflation is running below the Fed's 2 percent target and the unemployment rate is at 5 percent, which officials consider to be its long-run level (pretty much the current situation). They can choose between two monetary policies, which are expected to result in the following paths for the unemployment rate:
Most observers would opt for the second policy. It's more aggressive, so it will get inflation back to target sooner. Even better, the unemployment rate is the same or lower every year, and by a significant amount: One percentage point is worth more than a million jobs.
The word "sustainable," however, means that the Fed views any deviation from the long-run unemployment rate -- up or down -- as undesirable. When officials speak of the economy “overheating” or “running hot” in the absence of inflationary pressures, this is what I think they have in mind. So they would see unemployment as running too low under policy 2.
Some Fed officials worry that “overheating” could trigger a recession. (I don’t understand the precise economic mechanism, but let’s leave that aside.) They think policy 2 might generate the following path for the unemployment rate:
Policy 2: Possible Recession Outcome
In 2019 and 2020, the economy falls into recession. From the Fed’s perspective, this unemployment path is terrible, because the rate is either too low or too high for the next four years.
It's easy to imagine, though, that many people would be willing to trade the risk of recessionary pain in 2019 and 2020 for the near-term gain of 2017 and 2018. They might even believe there's some chance that policy 2 will generate an outstanding outcome -- if, for example, the long-run unemployment rate is actually lower than the Fed thinks it is. Here's how that would look:
This interpretational divide was on full display last month, when Fed officials met with representatives of the pro-employment activist group Fed Up. The activists largely assumed that the central bank was contemplating near-term interest-rate increases to keep inflation in check. But most of the officials downplayed inflation, invoking instead the need to keep the economy from running too hot (which some said could lead to a recession).
I find it hard to believe that the Fed's approach is consistent with Congress's intent as expressed in the Federal Reserve Act. That said, it's really up to legislators to provide an unequivocal answer, which could matter a lot for the economy over the next few years.
By Narayana Kocherlakota
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The Fair Workweek bill is approved by City Council
The Fair Workweek bill is approved by City Council
Philly is following the example of New York City, Seattle, San Francisco, Washington D.C. and the state of Oregon, all...
Philly is following the example of New York City, Seattle, San Francisco, Washington D.C. and the state of Oregon, all of which have been lobbied by the "Fair Workweek Initiative," a program of the left wing non-profit Center for Popular Democracy, which has been funded by several large groups including the Ford Foundation and George Soros' Open Society Foundation.
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Low-Income Tenants Fight for Affordable Housing, Protest Proposed Trump Cuts
Low-Income Tenants Fight for Affordable Housing, Protest Proposed Trump Cuts
WASHINGTON – More than 700 people from 16 states rallied Wednesday at a Capitol Hill church to oppose the Trump...
WASHINGTON – More than 700 people from 16 states rallied Wednesday at a Capitol Hill church to oppose the Trump administration’s proposed $6.2 billion cut to federal housing programs.
Protesters held signs while shouting, “Housing is our right,” “Stop selling our neighborhoods to Wall Street,” and “No cuts to housing.”
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The DNC Is Voting On Whether To Keep Superdelegates. Get Ready For Controversy
The DNC Is Voting On Whether To Keep Superdelegates. Get Ready For Controversy
PHILADELPHIA — Democrats are about to have a delegate fight of their own. Following the Republican’ controversy over...
PHILADELPHIA — Democrats are about to have a delegate fight of their own. Following the Republican’ controversy over bound and unbound delegates, the Democratic National Convention is about to go headlong into a conflict over superdelegates in its rules committee this weekend.
The DNC’s rules committee is expected to convene Saturday morning, where groups are planning to gather outside the city’s convention center and urge the party to end the superdelegate system.
According to a media advisory, the pre-vote press conference with rules committee members includes a formal petition delivery of more than 500,000 signatures collected by Democratic-leaning groups working to end the use of superdelegates at the Democratic National Convention.
A superdelegate is a party official or elected official who is free to cast a vote for any candidate for the presidential nomination at the party’s national convention, regardless of whom the voters of their state prefer. This is in contrast to a “pledged delegate” who must cast their ballot in accordance to the winner of their state party’s primary.
DNC rules committee members are expected at the press conference and include Aaron Regunberg, the amendment’s chief sponsor. Groups presenting the signatures will include: MoveOn.org, Demand Progress, Daily Kos, Social Security Works, Democracy for America, New Democrat Network, National Nurses United, The Other 98%, Courage Campaign, Progressive Kick, Credo, PCCC, Progressive Democrats of America, Center for Popular Democracy, Social Security Works, and Reform the DNC.
“This is a historic moment for the Democratic Party,” said Aaron Regunberg, Rhode Island state representative and rules committee member. “Saturday we vote on whether to end the undemocratic superdelegate system. It’s time to restore democracy in the Democratic Party.”
Supporters of former Democratic presidential candidate Bernie Sanders became frustrated with the superdelegate system, as they saw it as a way that damaged the Vermont senator’s candidacy during the party’s primary against former secretary of state Hillary Clinton.
“The super delegate system undermines the promise of one person one vote that is bedrock of democracy,” added Deborah Burger, RN, co-president of National Nurses United and rules committee member. “It was created to block the nomination of candidates who would challenge a political system that has for far too long been dominated by corporate interests and a wealthy elite. Ending this undemocratic selection process would be a strong step forward to making the Democratic Party more responsive to those thirsting for real change and a healthier America.”
By KERRY PICKET
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These Wall Street Companies Are Ready To Call In On Trump’s Border Wall
These Wall Street Companies Are Ready To Call In On Trump’s Border Wall
Much of the discussion on President Donald Trump’s border wall has focused on its cost and impracticality, as well as...
Much of the discussion on President Donald Trump’s border wall has focused on its cost and impracticality, as well as the anti-immigrant and racist rhetoric it embodies. Little attention, however, has been paid to who specifically might profit from building the structure.
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Who were the women who confronted Sen. Jeff Flake about Kavanaugh vote in an elevator?
Who were the women who confronted Sen. Jeff Flake about Kavanaugh vote in an elevator?
Two women who said they were survivors of sexual assault angrily confronted Republican Sen. Jeff Flake of Arizona in an...
Two women who said they were survivors of sexual assault angrily confronted Republican Sen. Jeff Flake of Arizona in an elevator Friday morning over his decision to vote yes on Brett Kavanaugh’s nomination to the U.S. Supreme Court.
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The Queer Activists Working to Reverse America's Opioid Crisis
The Queer Activists Working to Reverse America's Opioid Crisis
“As queer people, we come out of this AIDS activist ACT UP tradition, where we’ve been very vulnerable around...
“As queer people, we come out of this AIDS activist ACT UP tradition, where we’ve been very vulnerable around healthcare and health coverage and have had to fight for our lives,” says Jennifer Flynn Walker, 46, a Brooklyn-based organizer with the progressive nonprofit Center for Popular Democracy. She is working on establishing an ACT UP-like national network of drug-user-led activism to demand comprehensive federal funding for the opioid epidemic. That idea, recently endorsed by Senator Elizabeth Warren, is modeled after the 1990 Ryan White CARE Act, which was sparked by activism and has since funded treatment and services for people with HIV/AIDS.
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Activists: US Justice Department Response to Baltimore Police Racism Falls Short
Activists: US Justice Department Response to Baltimore Police Racism Falls Short
The response by the US Department of Justice to exposing Baltimore Police Department (BPD) violations of citizens’...
The response by the US Department of Justice to exposing Baltimore Police Department (BPD) violations of citizens’ constitutional rights falls short of addressing the systemic problem of racism in US policing, activists said.
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If Politicians Actually Want to Make Change, They Have to Think Like Organizers
If Politicians Actually Want to Make Change, They Have to Think Like Organizers
In 2011, after years of entrenched fighting between businesses and labor supporters, and months of negotiation in the...
In 2011, after years of entrenched fighting between businesses and labor supporters, and months of negotiation in the city council, Seattle’s paid sick-leave ordinance came down to a walk in the park. The bill’s sponsor, councilmember Nick Licata, invited his colleague Tim Burgess, the council’s stalwart fiscal conservative, for a stroll around Green Lake. At that point, few council members were willing to support the bill and Licata was nowhere close to the five-vote majority he needed.
“I figured, in some ways, the swing vote would be Burgess,” Licata explained. “Given his standing in the business community, if he supported it, then other council members would come out and support it. It would have a domino effect.”
Walking side-by-side around the park’s lakeside path, Licata learned that Burgess wanted only minor concessions. Licata brought those back to his coalition of sick-leave supporters, who agreed to most of them. The bill, which had been stuck for years in legislative limbo, began to move. Burgess voiced his support, other councilmembers followed, and Licata wrangled the votes necessary to pass one of the country’s first laws requiring all employers to provide paid sick time to workers.
Laws like this help make Seattle the progressive city it is. In the past five years alone, Seattle has become the first major city to enact a $15 minimum wage; banned the use of plastic bags; sanctioned homeless encampments on city property; helped lead the charge on statewide votes for legal marijuana and marriage equality, and more. To hear most residents tell it, this progressive streak is as inevitable as good coffee or the craggy face of Mount Ranier—the natural outcome of a city peopled by good liberals who want to do the right thing.
But, as the long fight to win paid sick leave suggests, Seattle’s progressive laws are anything but inevitable. The city’s businesses fight tooth and nail against every attempt to improve worker rights and pay, threatening an exodus to friendlier climates. And while Seattle residents say they want the city to be affordable and want to help the rapidly growing homeless population, they also show up in force to protest affordable-housing measures and proposals to open more temporary homeless encampments.
What has fueled Seattle’s progressive victories, then, isn’t some mystery potion or innate Northwestern goodness, but the same hard work that has forced progress in other cities: grassroots organizing, tenacity, and political allies like Nick Licata. For 18 years, Licata has been one of the most reliable forces inside City Hall pushing and prodding Seattle to be a more humane city.
Since his election in 1998, Licata has had his hands in every piece of progressive legislation to pass through City Hall. He fought years of serious opposition to pass the Rental Registration and Inspection Ordinance, championed paid sick leave and the $15 minimum wage, created Seattle’s first lobbyist-registration law, pushed for sanctioned homeless encampments, and much more. He also fought against public funding of sports stadiums, a bill to outlaw panhandling, and plenty of other attempts at city-sanctioned discrimination.
Throughout his time in office, Licata was doggedly consistent in both his political ideology and his commitment to progressive causes. Among his colleagues, he was often the one vote to the left of all others, but they respected his attention to detail and willingness to work with everyone. Licata’s consistency and legislative success helped him build a citywide progressive base that reelected him every time he ran. Occasionally, it even won him accolades outside his adopted city. The Nation named him Most Valuable Local Official in 2012.
Beyond advancing progressive policy, Licata’s time in office helped carve out a space for the current progressive bloc of councilmembers, including Kshama Sawant, Mike O’Brien, and Licata’s longtime legislative aide turned successor, Lisa Herbold. It is of course overly simplistic to draw a straight line from Licata to those that came after him, but his ability to stay true to his values while getting things done helped pull Seattle’s traditionally centrist electeds to the left and proved that voters support progressives.
“Nick, for so long, fostered and cultivated this progressive wing of Seattle,” said O’Brien. “One of the things I learned from Nick is you don’t need to shy away from progressive values. You can embrace them.”
Since his election in 1998, Nick Licata has had his hands in every piece of progressive legislation to pass through Seattle's City Hall.
Last December, Licata finished his final term as a city councilor—a move he was careful not to frame as retirement. He is not ending his political work, just changing the form it takes. Some of his time will be spent working with Local Progress, the nonprofit network of progressive local politicians he helped found in 2012. Some of it will be spent promoting his recently published book, Becoming A Citizen Activist, which is part memoir and part how-to guide for navigating local government. All of it is in service of Licata’s theory of the city as a tool for movement-based social and political change.
“With Congress deadlocked and state governments largely taken over by the right wing, large urban areas are the last bastions of progressive strength,” he explained. “But it’s hard to manifest that into political power. We need to start going where our strength is and building out from that.”
* * *
Licata’s attempt to seed state and national change by fomenting shifts at the local level is, in many respects, the logical conclusion of a career built on grassroots activism.
Licata was born in Cleveland in 1947, the son of traditional working-class Catholics who never graduated from high school. His turn towards progressive politics began during his college years at Bowling Green State University, where he helped found the school’s chapter of Students for Democratic Society, and solidified in 1970, when he was a graduate student at the University of Washington protesting the war.
After grad school, Licata moved into PRAG House, a commune that would serve as home base for 25 years of organizing and activism that eventually launched his political career. Like a true Renaissance lefty, he had hand in almost all the consequential battles of the age, as well as some of the less consequential ones. He published a directory of Seattle community groups and social services called the People’s Yellow Pages; helped form Coalition Against Redlining; launched an alternative weekly called the Seattle Sun; helped organize an annual 24-hour dance marathon called Give Peace A Dance to raise money for nuclear disarmament TV ads; and co-founded Citizens For More Important Things to fight public funding of new baseball and football stadiums in Seattle, among other things.
Much of Licata’s activist career was paid for by his work as an insurance broker, a kind of Wallace Stevens of the activist left. But after 15 years of this arrangement, Licata was unhappy and his bosses expected him to become a manager.
He left to run for city council.
* * *
In Licata’s first run at council, he was the underdog against Aaron Ostrom, a popular city staffer with establishment backing. Despite being outspent and running without major endorsements, Licata was able to organize his broad activist networks to show up at the polls and elect him.
“I was somewhat isolated [as a progressive]. I could tell my new colleagues thought I was going to be temporary. The first day in office I didn’t have a chair, though I think it was an oversight,” Licata said.
Nonetheless, Licata managed to prove his efficacy. Years of working in insurance gave him a keen eye for detail and in his first year in office, he found an extra $50,000 that had not been allocated in the budget.
Licata’s attempt to seed state and national change by fomenting shifts at the local level is the logical conclusion of a career built on grassroots activism.
“It’s a trite term, but I think I earned their respect,” said Licata. “Not that I was brilliant, but I dug into things more than usual.”
He also proved he knew how to work the system. Licata’s first major victory was killing Seattle’s bid to host the 2012 Olympics.
“It was almost like drowning the golden child. Even I was very supportive to start. Who doesn’t like the Olympics?”
But as he dug into the contract and read about other host cities, Licata realized Seattle would have to take on any financial liabilities from the games and likely wind up with a pile of debt.
“The people we’re supposed to serve most, not the tourists, not the people coming in, not the investors, not the businesses, but the people living here? They don’t gain. In fact a lot of them lose,” Licata said.
He started his uphill battle with his most conservative colleagues, highlighting the financial case against hosting the Olympics. He got his message out to local journalists who started covering the issue. He also hosted a public forum downtown in the go-to journalist watering hole. The room was packed with people who had come to listen to a panel of experts make the case against the Olympics (the pro side declined his invitation). He commissioned a countywide poll that showed people were against the bid when they knew about the debt. The council slowly came around and, in the end, eight of nine members signed a letter in opposition to the bid. Because no councilmember was willing to sponsor a resolution in support, the issue died.
Licata’s organizer approach to legislating and willingness to work with everyone was a recurring theme of his time in office and served him well in his proudest victories.
Getting the Rental Registration and Inspection Ordinance—a basic law that requires landlords to register rental properties so the city can make sure they’re up to code—took six years of negotiations between advocates and the Rental Housing Association.
The Paid Sick and Safe Time bill was a similarly big lift that required years of brokering negotiation between labor, activists, and businesses. Councilman O’Brien says that tenacity was an example of Licata at his best.
“He’s watching it and figuring out ‘where are my votes, who’s with me, now where do I get the next vote? I think we need to have a brown bag, we need a town hall, I need to build momentum. What are the obstacles that keep you from supporting this? Can we work on that?’” O’Brien explained.
Licata’s organizer approach to legislating and willingness to work with everyone was a recurring theme of his time in office
He continued, “The bill that came out in the end wasn’t exactly how anyone wanted it in the start, but it was great. He had the ability when he was driving something to be really aware of the politics on the floor, what changes he needed to make, how to manage that dynamic.”
Licata readily admits he can’t take sole credit for $15 Now’s success or many of the city’s big progressive victories. But he’s proud of the role he’s played as an activist on the inside connecting the fist-raised activists he came up with and the establishment whose support and votes are critical for political success.
“I’m not very good at sports analogies. But I think I’m like the midfielders in soccer. They make sure the ball gets to the striker or keeps the ball away from their own goalie. But they don’t end up on the front cover.”
Now that he’s left office, Licata wants to see if he can take his mid-fielding talents national to see if cities’ progressive momentum can combat state and national conservatism.
* * *
The idea that like-minded local politicians need to work together to bolster regional and national progressive policy is at the heart of Local Progress, the nonprofit Licata co-founded with New York City Councilman Brad Lander in 2012. They point to the minimum-wage movement as example of their success. The $15 Now effort started in Seattle then spread to other cities and gained enough momentum to get introduced at state and national levels.
The organization is young and only recently raised enough money to hire staff, but it has succeeded in recruiting 400 members in 40 states, the majority of whom are elected officials. Local Progress’ work is a mix of big-picture enthusiasm building and nitty-gritty policy work.
Licata is working part-time with Local Progress to explore how best to accomplish regional organizing. The work is rooted in a feeling that there’s no choice but to focus on cities.
Lander said, “There’s still a lot cities can do on their own through legislation and policy, as we’ve been seeing. When cities get together they can make changes in their states. Then start to make those changes nationally.”
"I think you can change the world and you have to. You just have to go about it strategically and it takes some time.” —Nick Licata
Michael Kazin, Georgetown University history professor and co-editor of Dissent magazine, agreed that ever-more-progressive city politics have helped shift the national conversation. But without a corresponding movement of national progressives activists, local politicians can only do so much.
“There has to be a left populist movement. It can’t at all dismiss the importance of race and gender and sexual orientation and environment. All that’s right. But you’re not going to win majority without having a majority,” said Kazin.
He continued, “You need a lot of young people who are excited about politics and activists, and not just at election time.”
That is, in some ways, what Licata hopes to engender with his new book. As the name implies, Becoming A Citizen Activist is Licata’s attempt to share the lessons he’s learned to help people effectively navigate city politics.
Perhaps the most important of those lessons is that success comes from barely perceptible micro-victories that build into movements and major victories in the long term.
“Everyone becomes disappointed in the gap between the ideal and the deliverable,” said Licata. “You’re not going to change the world overnight. I think you can change the world and you have to. You just have to go about it strategically and it takes some time.”
Licata’s 18 years in office and over 40 years of community activism in Seattle are certainly evidence of that. His many losses and half wins and small steps forward have added up to marked change in Seattle over time. Of course, like most cities, Seattle is still a deeply inequitable place with a growing gap between rich and poor. But Licata’s work has helped give progressives a platform from which to combat those inequities. And given that, it seems possible that bringing that same detail-focused, local approach to the national stage might eventually bring about national progressive change.
By Josh Cohen
Source
These Southern Cities Are at the Heart of the Struggle Against White Supremacy
These Southern Cities Are at the Heart of the Struggle Against White Supremacy
The Black Lives Matter activists and anarchists, the socialists and anti-fascists, the religious leaders and local...
The Black Lives Matter activists and anarchists, the socialists and anti-fascists, the religious leaders and local residents who risked their bodies and their well-being in Charlottesville this month should be celebrated for their courage and praised for their good sense and smart tactics. Violent fascists, neo-Confederates, Ku Klux Klanners, and other racist extremists don’t care about justice or civility or our common humanity. Their express aim is to annihilate anyone who isn’t white, straight, and Christian. And they have made it clear that they are willing to use raw and murderous force to get their way.
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