WSJ 12.01.2014

“A Central Bank for the Beltway” (Review & Outlook, Nov. 19) criticizes the recent work of the “Fed Up” coalition, which is advocating for transparent processes in the appointment of Federal Reserve presidents and monetary policies that promote a full employment economy.

The editorial acknowledges that “the Fed should be held politically accountable in a democracy,” and I agree. In Dallas and Philadelphia, where the current Fed presidents will be replaced this year, the public does not know how the private search firm chooses candidates, who the candidates are, by what criteria they will be judged or even when the vote will be held.

Fed governance is dominated by financial and corporate interests: Of the 108 current directors on the 12 regional Fed boards, 36 are bankers, 62 are corporate executives and just 10 are leaders of community or labor organizations. The “independ-ent policy judgment” that comes from such a structure will be advice that benefits banks and corporations, not the general public.

Our coalition believes that the voices of workers, community leaders and faith leaders will bring important perspectives to key policy debates. The Fed hawks who argue that the economy has recovered ignore the reality of stagnant wages, plummeting workforce participation rates and the rapid growth of the involuntary part-time workforce.

While near-zero interest rates have not yet been sufficient to spur a true recovery, many prominent economists—from Adam Posen to Joseph Stiglitz —have explained that raising interest rates would be catastrophic. The public, particularly the unemployed, underemployed and underpaid, recognize that the Fed should provide robust support to the economy until it reaches full speed and is creating millions of good new jobs, and wages are rising for a broad sector of working Americans who have seen their income fall or stagnate for far too long.

Shawn Sebastian
Center for Popular Democracy

Source: Wall Street Journal