The Washington Post - December 5, 2013 - The American Civil Liberties Union has sued the Federal Housing Finance Agency, asking it to disclose efforts to stop municipalities from...
System Failure: Louisiana's Broken Charter School Law
Executive Summary
In the ten years since Hurricane Katrina, post-storm changes to the state’s charter school law have dramatically grown the number of charter schools in...
Executive Summary
In the ten years since Hurricane Katrina, post-storm changes to the state’s charter school law have dramatically grown the number of charter schools in the state. Since 2005, charter school enrollment in the state has grown 1,188 percent. Through this growth, the Louisiana Department of Education’s Recovery School District—created to facilitate state takeover of struggling schools—has become the first charter-only school district in the country, with other states lining up to copy its model. Louisiana taxpayers have invested heavily, paying billions of dollars to charters and state takeover schools since the storm, including over $831 million in the 2014/2015 school year alone.
The rapid growth and massive investment in charter schools has been accompanied by a dramatic underinvestment in oversight, leaving Louisiana’s students, parents, teachers and taxpayers at risk of academic failures and financial fraud. The state’s failure to create an effective financial oversight system is obvious, as Louisiana charter schools have experienced millions in known losses from fraud and financial mismanagement so far, which is likely just the tip of the iceberg. According to standard forensic auditing methodologies, the deficiencies in charter oversight throughout Louisiana suggest tens of millions of dollars in undiscovered losses for the 2013-14 school year alone.
Download the full report here.
In this report, we identify three fundamental flaws with Louisiana’s financial oversight of charter schools:
Oversight depends too heavily on self-reporting by charter schools or the reports of whistleblowers. Louisiana’s oversight agencies rely almost entirely on audits paid for by the charters themselves and whistleblowers. While important to uncover fraud, neither method systematically detects or effectively prevents fraud. The general auditing techniques used in charter school reports do not uncover fraud on their own. The audits commissioned by the charter schools use general auditing techniques designed to expose inaccuracies or inefficiencies. Without audits specifically designed to detect and uncover fraud, however, state and local agencies will rarely detect deliberate fraud without a whistleblower. Inadequate staffing prevents the thorough detection and elimination fraud. Louisiana inadequately staffs its charter-school oversight agencies. In order to carry out high-quality audits of any type, auditors need enough time. With too few qualified people on staff—and too little training for existing staff—agencies are unable to uncover clues that might lead to fuller investigations and the discovery of fraud.As the state has insufficiently resourced financial oversight, it has failed to create a structure that provides struggling schools and their students with a pathway to academic success. While underinvesting in the dissemination and implementation of successful strategies to lift academically struggling schools up, state lawmakers have continued to invest in both charter expansion and conversions of public schools to charters. Coupled with an unwillingness to help failing schools succeed, the rapid growth of charters has failed Louisiana children, families and taxpayers. Since 2005, approximately $700 million in public tax dollars have been spent on charter schools that currently have not achieved a C or better on the state’s grading system.
In this report we identify two fundamental flaws with Louisiana’s academic oversight of charter schools:
Underinvestment in systems that help struggling schools succeed. Lawmakers and regulators have invested in systems that set high standards and then close schools that fail to meet them, rather than helping them improve to meet the standards. This investment in a severe accountability system does not support schools achieve academic success. Heavy reliance on data that is vulnerable to manipulation. The state’s academic oversight system relies largely on sets of data that can be manipulated by regulators, authorizers, or the charters themselves. Without reliable data, schools, parents and the public have no way to accurately gauge academic quality at their schools.To address these serious deficiencies in Louisiana’s system, we recommend the following:
Mandate New Measures Designed to Detect and Prevent Fraud
Charter school governing boards should be required to institute an internal fraud risk management program, including an annual fraud risk assessment. Charter school governing boards should be required to commission an annual audit of internal controls over financial reporting that is integrated with the audit of financial statements charter schools currently commission. The Louisiana Legislative Auditor should conduct regular fraud audits, prioritizing charter schools with heightened levels of fraud risk. Auditing teams should include members certified in financial forensics trained to detect fraudIncrease Financial Transparency & Accountability
Oversight agencies should create a system to categorize and rank charter audits by level of fraud risk they pose to facilitate public engagement. Center for Popular Democracy & Coalition for Community Schools 3 The Louisiana Legislative Auditor should create a dedicated charter school fraud hotline for whistleblowers. Charter school governing boards should post the findings of their annual fraud risk internal assessments on their websites. Oversight agencies should determine what steps the nonprofit governing boards and executives of charter schools have taken to guard against fraud over the past 10 years and issue a report to the public detailing their findings and recommendations. Charter school governing boards should provide parents of students enrolled in charter schools free access to all materials related to their fraud risk management program.The state should impose a moratorium on new charter schools until the state oversight system is adequately reformed.
Redesign the System to Support Struggling Schools
Under the current system, when regulators find that a school is not performing well, they put the school on the “Intervention Ladder”. The Intervention Ladder should be replaced with mandatory hands-on long-term strategic support from the state and stakeholders. Lawmakers should invest additional resources to ensure that regulators have enough staff with the appropriate expertise to meet the significant turnaround needs in the state.Redesign the Data Collection System
Lawmakers should mandate that underlying data comparators remain consistent from year-to-year to allow oversight officials and the public to accurately compare school performance. In cases where changes to underlying data are unavoidable, data should be presented using both old and new cut-scores for a period of three years. The state should invest in ongoing test erasure analysis. Regulators should implement a process to ensure that the school reported data used to calculate the School Performance Score (SPS) is reliable by conducting regular audits of school-reported data. The state and authorizers must make funding for regular data audits a priority. The Louisiana Legislative Audit should include a review of the LDOE’s data auditing in its regular audits of the agency. Finally, the legislature should mandate that all of the data used to calculate School Performance Scores be made available to the public, in its raw form.Given the rapid and continuing expansion of state school takeovers and the charter school industry in the state through the investment of public dollars, Louisiana must act now to reform its oversight system. Without reform, Louisianans face many more years of failing schools and millions—if not billions—of dollars more lost to charter school fraud and financial mismanagement.
Download the full report here.
Groups sue feds over foreclosure fighting tactic
The Washington Post - December 5, 2013 - The American Civil Liberties Union has sued the Federal Housing Finance Agency, asking it to disclose efforts to stop municipalities from using eminent domain to bail out underwater homeowners and make its dealings with the financial industry more transparent.
The ACLU, Center for Popular Democracy and other nonprofits filed a freedom of information lawsuit against the agency Thursday in federal court in San Francisco.Richmond, Calif., was the first city to officially codify the divisive foreclosure fighting plan, which has drawn zealous opposition from Wall Street and Washington. Two lawsuits challenging the use of eminent domain have been thrown out, but will likely be refiled. The city has not yet used eminent domain to seize a mortgage.Irvington, N.J., is moving forward with the strategy, and the city council in Newark took its first steps toward moving forward with a plan Wednesday. Yonkers, N.Y., is considering it, but other places have scrapped the idea because of opposition from banks or legal hurdles.The agency said in August it may initiate legal challenges against municipalities that want to use eminent domain to fight foreclosures and could direct regulated entities to stop doing business in those places. The nonprofits said most of the cities exploring the use of eminent domain have been besieged by foreclosures and have predominantly low-income, minority populations.The nonprofits filed freedom of information requests with the agency in October, seeking communication between agency leadership and representatives of the banking, mortgage and financial industry, and records of meetings between the agency and financiers, among other requests.FHFA acknowledged, but did not complete, the requests, according to the lawsuit, so the groups sued. The nonprofits are asking for the documents to be procured on an expedited basis.“The FHFA has taken an aggressive stance on this issue in a way that has harmed minority communities. The public deserves to know why,” said Linda Lye, a staff attorney with the ACLU of Northern California, in a statement.A FHFA spokeswoman said the agency is not commenting on the lawsuit.By using eminent domain, municipalities can circumvent mortgage contracts, acquire loans from bondholders, write them down and give them back to the bondholders with reduced principals. According to Cornell University law professor Robert C. Hockett, who devised the plan, only government has the power to forcibly sidestep mortgage contracts.The tactic only works with so-called private label security mortgages, or ones that are not backed by the federal government.FHFA oversees government-backed loans owned by Fannie Mae or Freddie Mac. They cannot be seized by eminent domain.The lawsuit said one of the agency’s “statutory mandates is to help the housing market recover,” and threatening to sue municipalities that try to use eminent domain conflicts with that obligation.“By threatening legal action,” the suit said, the agency “effectively blocks the communities hit hardest by the foreclosure crisis from pursuing one potentially effective solution on behalf of their residents.”The suit also said the agency’s threats to deny credit to communities raises Fair Housing Act and Equal Credit Opportunity Act concerns.Members of the financial industry have said they fear using eminent domain could be a slippery slope, and penalizes people who save and invest in mortgage-backed securities.In Washington, Texas Republican Rep. Jeb Hensarling and Calif. Republican Rep. John Campbell proposed legislation that would bar the federal government from backing mortgages in places that use eminent domain to seize mortgages. SIFMA, a group that represents security firms, banks and asset managers and 11 other groups sent a letter to Congress opposing the use of eminent domain.Last month, 10 members of Congress sent a letter asking the head of FHFA to rescind its threat to sue places that use eminent domain.Source
[created] | Published by: In These Times
Why Labor and the Movement for Racial Justice Should Work Together
Why Labor and the Movement for Racial Justice Should Work Together
The Movement for Black Lives (M4BL) has made tremendous strides in exposing and challenging racial injustice, and has won real policy victories. The policies, while often imperfect, are a...
The Movement for Black Lives (M4BL) has made tremendous strides in exposing and challenging racial injustice, and has won real policy victories. The policies, while often imperfect, are a testament to the strength of the organizing and activism of the moment. Not coincidentally, this uprising comes at a time when income and wealth inequality are at peak levels and the economy for most black people looks markedly different than the economy for their white counterparts.
Just as we are in a critical moment in the movement for racial justice, we are in a critical moment for the right to unionize. Unions, which have been a major force for economic justice for people of color in the past 50 years, have been decimated to historically low levels.
Labor should work alongside the Movement for Black Lives, a coalition with more than 50 organizations, to usher in a radically new economic and social order. The path won’t be easy. But recent history has shown that one of the ways to get at this new reality is through union bargaining. Consider the example of Fix L.A.
Fix L.A. is a community-labor partnership that fought to fund city services and jobs alike, using city workers’ bargaining as a flashpoint to bring common good demands to the table. The coalition started after government leaders in Los Angeles drastically cut back on public services and infrastructure maintenance during the Great Recession. The city slashed nearly 5,000 jobs, a large portion of which had been held by black and Latino workers. Not only did these cuts create infrastructure problems—like overgrown and dangerous trees and flooding—but they also cost thousands of black and Latino families their livelihoods.
Fix L.A. asked why the city was spending more on bank fees than on street services, and demanded that it renegotiate those fees and invest the savings in underserved communities.
What was the result of this groundbreaking campaign?
The creation of 5,000 jobs, with a commitment to increase access to those jobs for black and Latino workers, the defeat of proposed concessions for city workers and a commitment from the city to review why it was prioritizing payment of bank fees over funding for critical services in the first place!
Bargaining for the common good
Fix L.A. may seem novel, but the context is no different from many places. We have seen massive disinvestment from public services in a way that disproportionately affects black people. This structurally-racist disinvestment is often driven by the corporate interests that bankroll elected officials’ campaigns and by Wall Street actors that use their influence over public finance to push an austerity agenda. Everywhere you look, public officials are making a choice between paying fees and providing critical services.
Chicago Public Schools paid $502 million to banks in toxic swap fees at the same time that it was slashing special education programs and laying off teachers to close a budget deficit. Detroit raised its water rates and paid $537 million in Wall Street penalties, setting the stage for mass water shutoffs when tens of thousands of poor residents of the overwhelmingly black city could not afford the higher water bills.
Wall Street and other corporations don’t hesitate to profit off of and perpetuate disinvestment in communities of color, and too often we forget to look up the food chain to see that at the other end of community crises there are rich bankers and billionaires lining their pockets. Campaigns, like Fix L.A., that involve direct actions targeting banks, hedge funds, corporations and billionaires are effective.
This sort of organizing can be hard. In order to isolate workers from their broader communities, the other side has done a terrific job of narrowly defining the scope of bargaining as wages and benefits. In many states, labor laws prohibit public sector workers from bargaining over issues that concern the welfare of the broader community or the quality of the services they provide.
The theory of “bargaining for the common good” seeks to challenge this status quo. As articulated by Joseph McCartin of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor, bargaining for the common good has three main tenets: 1) transcending the bargaining frameworks written in law and rejecting them as tools for the corporate elite to remain in power; 2) crafting demands between local community groups and unions at the same time and in close coordination with each other from the very beginning; and 3) embracing collective direct action as key to the success of organizing campaigns.
These may seem like simple ideas, but they stand in complete opposition to the way the power elite expects union bargaining to be done. Therein lies their power.
Therein also lies the opportunity for unions to partner with the Movement for Black Lives. For all of their complicated racial histories, unions are some of the largest organizations of black people in the country. About 2.2 million black Americans are union members—some 14 percent of the employed black workforce.
That’s a huge number of black people who are already members of organizations with the capacity to organize and mobilize. And these black workers, like all black people in America, face real challenges of structural economic racism in almost all aspects of their lives. Their communities have been underfunded; their schools are being dismantled; they face massive poverty and are under economic assault; and they regularly encounter police violence.
Stronger together
Widening the scope of bargaining in Los Angeles led to real wins for the city’s black and Latino communities. The rest of the labor movement should take note. Imagine the power that could be added to the Movement for Black Lives if unions, recognizing the trauma that systematic racism wreaks on their membership, brought solutions that have been elevated by the Movement for Black Lives to the bargaining table in negotiations with employers ranging from the City of Baltimore to private equity giant Blackstone.
But unions cannot do this unilaterally and expect unconditional support from the black community.
Unions must make the effort on the front end to build a real relationship with Movement for Black Lives groups and members, and partner with them in developing common good bargaining demands that start to go on the offense against Wall Street and the structurally-racist economic power structure. There are groups of people organizing for racial justice under the banner of the Movement for Black Lives near every union local in the country. The onus is on labor leaders and rank-and-file union members to reach out to those groups and start to build a strong relationship where one does not exist. This process will not be easy, especially because of the history of racism that plagues unions, especially police unions. But the truth remains that there is a real opportunity to leverage the power of both movements to win real gains for black people and other people of color through a strong partnership.
It is exciting to imagine potential bargaining demands major unions could undertake alongside racial justice organizations. For example, they could demand that their employers make a commitment to job training programs to strengthen the pipeline for black workers; city and state workers could demand progressive taxation measures that raise funds from corporate actors to fund schools and services in black communities; teachers could demand school districts enact restorative justice policies to stem the school-to-prison pipeline; hospital workers could bargain for targeted health care access programs in communities of color; retail workers could demand that their employers “ban the box” and let the formerly incarcerated work. The list is almost infinite.
Bargaining for racial justice is a radical idea and will not be easily won. It will require concerted direct action targeting the real decision makers in both the public and private sectors that have a vested interest in keeping racial inequities in place. The Movement for Black Lives has proven that it can execute effective and creative direct actions backed by solid demands. They are also innovating creative tactics that move beyond traditional marches and picket lines to new types of disruptive actions that make power holders directly confront those they are harming. By combining the vision and militant tactics of the Movement for Black Lives with the membership and resources of the labor movement, we can usher in a more just and equitable society
BY MAURICE WEEKS AND MARILYN SNEIDERMAN
Source
[created] | Published by: Atlanta Black Star
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 about twice the rate of whites. A report by Progress Illinois said the...
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
Activists to Protest at Regional Feds Ahead of Jobs Data
Wall Street Journal - March 3, 2015, by Pedro Nicolaci da Costa - A network of liberal activists is planning a series of small demonstrations outside of several Federal Reserve...
Wall Street Journal - March 3, 2015, by Pedro Nicolaci da Costa - A network of liberal activists is planning a series of small demonstrations outside of several Federal Reserve district banks Thursday, intending to highlight elevated unemployment among minority communities and urging officials not to raise interest rates any time soon.
Fed officials have indicated they plan to lift their benchmark short-term interest rate from near zero, where it has been since late 2008, sometime this year if the economy continues to strengthen as expected.
The activists say the nation’s 5.7% jobless rate understates the underlying weakness of the labor market, pointing to high long-term and black unemployment as symptoms of an economy that is still ailing. The unemployment rate for blacks was 10.3% in January.
“The Federal Reserve has the power–and responsibility–to foster stronger economic conditions that create opportunity for all communities,” the Economic Policy Institute, a liberal Washington think tank backing the demonstrations, said in a statement.
The activists are planning actions outside the regional Fed banks of New York, San Francisco, Kansas City, Philadelphia, Minneapolis, St. Louis, Charlotte, N.C. (home to a branch of the Richmond Fed) and Dallas.
The Labor Department releases its February employment report on Friday.
Becky Moeller, president of the Texas AFL-CIO, said she and other community leaders have been frustrated by what they see as an opaque process for selecting the next Dallas Fed president. The current chief, Richard Fisher, is set to step down March 19.
Ms. Moeller said instead of getting a meeting with members of the Dallas Fed’s board of directors, which is in charge of the search, she and her delegation met with the bank’s general counsel in a session she described as not very helpful.
“This has been a comedy of pass the buck,” she said. “We don’t have a candidate—we’re just trying to talk processes.”
The Dallas Fed said it had recently met with the following groups regarding the search for a new bank president: Texas AFL-CIO, Texas Organizing Project, Jobs With Justice, Fort Worth Building Trades and Ironworkers, Workers Defense Project, Communication Workers of America, Dallas Central Labor Council, Harris County Central Labor Council and American Federation of Teachers.
“We had a productive conversation with representatives from these groups,” said James Hoard, a spokesman for the Dallas Fed. “We were interested in hearing their views on the selection of a new Dallas Fed president, and hope we were able to provide useful information to them, as well.”
The Center for Popular Democracy and the Fed Up Coalition, the umbrella groups coordinating the protests, expressed dismay at the lack of transparency in the selection of Patrick Harker as the new Philadelphia Fed President.
“Despite repeated requests from community, consumer, labor and academic organizations and public officials within the region, the Philadelphia Fed refused to create any mechanisms for engagement with the public,” said Kendra Brooks of Action United in Philadelphia.
“Instead, the process was entirely opaque: nobody outside of the Federal Reserve knew who the candidates were or what the criteria were for selection. This process did a disservice to the Federal Reserve System and the people of the Philadelphia region.”
The Philadelphia Fed said in response: “Several of our staff members did meet with members from Action United to hear their concerns. The Philadelphia Fed also provided them the opportunity to provide names of potential candidates to our executive search firm.”
The same group of activists showed up at the Kansas City Fed’s annual Jackson Hole symposium last summer and held a meeting with Janet Yellen at the Fed in November.
Last week, Ms. Yellen met with a group of conservative activists who argued the Fed’s low-rate policies were hurting rather than boosting employment.
The Great Recession has brought increased political scrutiny on the Fed, with prominent Republican and Democratic politicians calling for various changes in the central bank’s governance.
Source
[created] | Published by: Wall Street Journal
Democratic Lawmakers Say Fed Should Increase Its Diversity
Democratic Lawmakers Say Fed Should Increase Its Diversity
The predominantly white male composition of Federal Reserve leadership is facing criticism from Democratic elected officials who believe the institution doesn’t adequately reflect the demographics...
The predominantly white male composition of Federal Reserve leadership is facing criticism from Democratic elected officials who believe the institution doesn’t adequately reflect the demographics of the nation it is meant to serve.
The legislators said in a letter to Federal Reserve Chairwoman Janet Yellen on Thursday that central bank leaders also are drawn too frequently from business and financial backgrounds. The letter to Ms. Yellen received support from the leading Democratic candidate for the White House, Hillary Clinton.
Eleven senators and 116 members of the House of Representatives signed the letter, which was organized by Sen. Elizabeth Warren of Massachusetts and Rep. John Conyers Jr. of Michigan. No Republicans participated, although they were given the opportunity to do so.
“Given the critical linkage between monetary policy and the experiences of hardworking Americans, the importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country, cannot be understated,” the letter said. “When the voices of women, African-Americans, Latinos, and representatives of consumers and labor are excluded from key discussions, their interests are too often neglected.”
While the Fed has made “some progress” on diversity issues, the central bank has “considerable work to do” to comply with its legal mandate to represent the interests and diversity of the American people, the letter said.
The Fed said in a statement that it “is committed to fostering diversity—by race, ethnicity, gender, and professional background—within its leadership ranks.” It added 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.”
The Fed also cited a rise in both racial and gender diversity on the regional Fed boards, with 46% of all directors now meeting the label of “diverse.”
In February, Ms. Yellen also addressed the issue in testimony to Congress, saying officials in Washington are “constantly attentive in its oversight of the reserve banks to the issue of diversity of representation on those boards. And it has improved considerably.”
The legislators’ letter follows a report earlier in the year from the Center for Popular Democracy’s left-leaning Fed Up Coalition, which took a look at the Washington-based Fed governors, regional bank presidents and boards of directors overseeing the 12 regional banks. That report flagged the fact that even as the Fed is now led by a woman, three of five current governors are men, and all are white. Of the 12 regional Fed bank presidents, 11 are white, two are women, and one is Indian-American. The last black person to hold a top leadership role at the Fed was Roger Ferguson, a vice chairman who left in 2006.
Fed governors are nominated by the president and are subject to Senate approval. Regional Fed bank presidents are nominated by their local boards by members representing firms not regulated by the central bank, subject to the approval of the Fed board in Washington.
The Clinton campaign said the central bank is indeed ripe for change. “The Fed needs to be more representative of America as a whole,” it said in a statement, adding that “commonsense reforms—like getting bankers off the boards of regional Federal Reserve banks—are long overdue.”
Much of the criticism over Fed diversity centers on the make-up of the regional bank boards of directors, which are populated by members of the private sector and oversee the operations of the Fed banks.
The makeup of Fed bank president ranks has been criticized for other reasons as well. The leaders of the New York, Philadelphia, Dallas and Minneapolis branches have all worked for investment bank Goldman Sachs in some capacity.
The Federal Reserve in recent years has faced criticism from both sides of the political spectrum. Many on the right have been angered by the central bank’s aggressive stimulus actions and its role in bailouts of the financial system, and some have wanted to audit the central bank’s process for making monetary policy and force the Fed to set policy based on an explicit and simple rule.
On the left, some have said the Fed has pursued policies that have promoted income inequality and the interests of the financial sector. The low level of diversity has become a more prominent concern in recent months in part because of the report from the Fed Up Coalition.
Meanwhile, former Minneapolis Fed President Narayana Kocherlakota said in a blog post in January that a lack of black representation at the Fed appears to have left central bankers insufficiently attuned to the economic troubles of the African-American community.
The Fed has become an issue in the presidential campaign. Last week, presumptive Republican nominee Donald Trump said he likely would replace Ms. Yellen if he were president. On the Democratic side, Sen. Bernie Sanders of Vermont has long been a critic of the Fed.
By MICHAEL S. DERBY
Source
Report: Language access isn’t great
Capitol Confidential – August 7, 2013, by Jimmy Vielkind - Several immigrant advocacy groups released a report this week saying it’s still difficult to get access to government services in...
Capitol Confidential – August 7, 2013, by Jimmy Vielkind - Several immigrant advocacy groups released a report this week saying it’s still difficult to get access to government services in languages other than English, nearly two years after Gov. Andrew Cuomo decreed that written and oral interpretation would be available the state’s six most-spoken foreign languages.
Cuomo signed an executive order that took effect last October mandating state officials to offer language assistance for speakers of Spanish, French, Italian, French Creole, Russian and Chinese. But the order’s scope was necessarily limited to state agencies, even though state-funded services like food stamps, driver’s licenses and unemployment benefits are administered by New York City or other counties.
The groups — including Make the Road New York, the Center for Popular Democracy and the Center for the Elimination of Minority Health Disparities at the University at Albany — visited government offices and surveyed people with limited English proficiency to develop a measure of compliance. Overall, they found that less than half the people who needed language assistance were able to receive it.
According to Nisha Agarwal, deputy director of the Center for Popular Democracy, the survey found 63 percent of citizens using state-operated facilities that are explicitly covered by the order were not successful in their quest to gain language assistance.
“The governor’s team has been very engaged on implementation, and we’re sympathetic to the challenges of getting an entire state apparatus to change,” said Agarwal. “That said, the results are by no means satisfactory, and we were quite disappointed that the state took the position that county-run agencies for state services were not within the ambit of the order. We feel it’s a pretty big gap.”
A Cuomo spokesman did not immediately return a request for comment.
Source
Yellen Meets with Activists Seeking Fed Reforms
Associated Press - November 14, 2014, by Martin Crutsinger - A coalition of community groups and labor unions are "fed up" with the Federal Reserve.
More than two dozen activists...
Associated Press - November 14, 2014, by Martin Crutsinger - A coalition of community groups and labor unions are "fed up" with the Federal Reserve.
More than two dozen activists demonstrated outside the Fed and then met with Chair Janet Yellen on Friday as part of a new campaign seeking policy reforms and a commitment to keep interest rates low until good jobs are plentiful for all workers. Although the labor market has steadily strengthened this year, wages have remained stagnant.
During the hour-long discussion with Yellen and three other Fed board members, coalition representatives discussed problems their communities were facing with high unemployment and weak wage growth.
Ady Barkan, one of the organizers of "Fed Up: The National Campaign for a Strong Economy," said Yellen and the other Fed officials listened but made no commitments about future Fed policy.
"It was a very good conversation," said Barkan, an attorney with the Center for Popular Democracy in Brooklyn. "They listened very intently, and they asked meaningful follow-up questions."
Fed officials confirmed that the meeting took place but declined to comment on the issues raised at the meeting.
The Fed's outreach to community activists was the latest move by Yellen to focus attention on lingering problems from the Great Recession. Wearing green tee-shirts with the phrase "What Recovery?" the group had protested outside of the Fed's headquarters on Constitution Avenue under the watchful eye of nine Fed security officers.
Members of the group, some of whom had demonstrated at a central bank gathering in August in Jackson Hole, Wyoming said it was important that Fed officials not be swayed by arguments that it needs to move quickly to raise interest rates to make sure inflation does not become a threat.
"The banks are the ones that crashed the economy ... but they're the ones who got the bonuses and the bailouts while workers and homeowners like me were left to drown," said Jean Andre, 48, of New York, who said he was having a tough time finding full-time work.
In addition to Yellen, the Fed officials who took part in the meeting were Fed Vice Chairman Stanley Fischer and Fed board members Jerome Powell and Lael Brainard.
Members of the coalition said about half of the meeting was taken up by their members telling stories about the difficulty in finding jobs, particularly in disadvantaged groups and communities dealing with unemployment much higher than the 5.8 percent national average.
The Fed officials also were presented a petition signed by 5,000 people around the country urging the central bank to keep interest rates low until the country reaches full employment.
The group also pushed for a more open process in the selection of presidents of the Fed's 12 regional banks. They say the current process is too secretive and dominated by officials from banks and other businesses with little input from the public. The regional presidents, along with Fed board members in Washington, participate in the deliberations to set interest rates.
Source
[created] | Published by: AlterNet
How a Grassroots Coalition Got the Elitist Federal Reserve to Sit up and Listen on Race
How a Grassroots Coalition Got the Elitist Federal Reserve to Sit up and Listen on Race
A year ago, the Federal Reserve, our nation’s most powerful economic policy maker, said that there was nothing it could do about racial disparities. Now, according to the Wall Street Journal,...
A year ago, the Federal Reserve, our nation’s most powerful economic policy maker, said that there was nothing it could do about racial disparities. Now, according to the Wall Street Journal, there is "a rising recognition within the Fed that the racial gaps in the economy are becoming more pronounced and that there is a role for monetary policy to play in shrinking those gaps."
That's a major shift in how monetary policy gets made. How did it happen? A grassroots uprising from low-income people of color, the unemployed, and the underemployed pushed issues of racial justice front and center into debates about monetary policy – and they succeeded in changing the conversation at the Federal Reserve.
The Fed Up campaign is a coalition of community-based organizations from across the country, labor unions, policy think tanks, and expert economists who decided to take on the Federal Reserve, long considered immune to outside criticism.
The Great Recession of 2008 brought things to a head. With Congress failing to pass an adequate stimulus in the wake of the crash and authorizing almost nothing since, it’s become clear that the Federal Reserve is the country’s only institution acting to stimulate the economy.
Progressives are concerned about raising wages, getting good jobs for more people, and building the bargaining power of workers to win victories like paid sick days and fair scheduling.
But they didn’t think to target the Federal Reserve, an institution designed to remain as insulated from the public as possible. The Fed system comprises a Board of Governors, whose members are appointed to 14-year terms by the President and approved by the Senate, as well as boards of directors for each of the 12 regional Federal Reserve Banks. These regional boards are overwhelming white and male and draw their membership largely from the corporate and financial sectors, which makes sense as two thirds of them are appointed by commercial banks.
Given the Federal Reserve’s opaque, insular structure designed to keep the influence of regular people at bay, it’s nothing short of remarkable that the Fed Up campaign has altered the conversation as much as it has in two short years.
Since its launch in the summer of 2014 the Fed Up Campaign has released reports on racial disparities in the economy andthe unrepresentative composition of the Fed, met with Fed Chair Janet Yellenface to face as well as 11 out of the 12 regional Bank presidents, conducted protests, and lobbied members of Congressto question Yellen on racial disparities during her semi-annual Humphrey Hawkins testimony before Congress.
Under questioning from Congress in February 2016, Janet Yellen insisted to Congress that she could not do anything about racial disparities. Yet, not even four months later, when Janet Yellen testified at the Humphrey Hawkins hearing in June, something was different.
Yellen began her testimonywith statistics on racial disparities in income and employment among Blacks and Latin@s. This is something the Fed has never done before. By including data on racial disparities, Yellen signaled that the status of communities of color is relevant to the Fed's decisions on the economy and she said that broad-based inclusion in the recovery is a priority..
Yellen made this historic move on racial justice because of the pressure the Fed Up coalition put both on the Fed and on Congress. In May, Fed Up worked with Congress members to send a letter to Yellen urging better public representation and diversity on the 12 regional Banks' boards of directors, which was ultimately signed by 127 senators and representatives.
Then Fed Up released aslate of candidatesfrom more diverse backgrounds who could be appointed to the leadership of the Federal Reserve Regional and a new reportabout potential conflicts of interest among current directors, which received coverage in the Wall Street Journal.
The advocacy with Congress worked. After meeting with Fed Up coalition member Common Good Ohio, Sen. Sherrod Brown (D-OH) urged Yellen at her Congressional hearing to appoint people from more diverse backgrounds to the regional Banks. Sen. Robert Menendez(D-NJ) urged Yellen to improve on diversity, citing the fact that 83% of regional board directors are white – a figure from our February report.
And Sen.Elizabeth Warren(D-MA) echoed Fed Up's callfor reforming the process for selection regional Bank presidents, calling the process "broken" and saying, "I think Congress should take a hard look at reforming the regional Fed's selection process so that we can all benefit from a Fed leadership that reflects a broader array of both backgrounds and interests."
The next day Rep. Terri Sewell (D-AL) echoed Warren's call, asking Yellen whether she'd considered our recommendation to appoint three Class C directors at each regional Bank from backgrounds in academia, labor groups, and community-based organizations.
We still have a long way to go before one of the most powerful, secretive, least democratically accountable, and thoroughly corporate dominated institutions truly represents the public and serves all of the public -- including low-income people and communities of color.
But Janet Yellen’s most recent Humphrey Hawkins testimony does show that the Federal Reserve is not completely insulated from public opinion, and that regular people standing up and demanding to be heard can push even the Federal Reserve to listen.
By Shawn Sebastian
Source
At Jackson Hole, More than 100 Fed Up Coalition Members, Stiglitz, and Other Economists Hold Press Conference Calling on the Fed Not to Slow Down the Economy
As the Federal Reserve’s interest rate debate heats up, a national coalition of workers, community-based organizations, and economists is stepping up its advocacy for a pro-jobs, pro-wages, racial...
As the Federal Reserve’s interest rate debate heats up, a national coalition of workers, community-based organizations, and economists is stepping up its advocacy for a pro-jobs, pro-wages, racial equity agenda. Todayoutside of the Fed’s annual policy summit, workers and advocates called on the Fed to follow the data, not impulses, and to give the economic recovery enough time to reach all workers, including African Americans and Latinos.
Participants also delivered more than 110,000 petition signatures from supporters across the country warning the Fed against slowing down the economy and hurting working families. The petition effort was spearheaded by major advocacy allies including CREDO Action, the Working Families Organization, Demand Progress, Daily Kos, and an onlinevideo from former Secretary of Labor Robert Reich.
The press conference is part of Whose Recovery: A National Convening on Inequality, Race, and the Federal Reserve, which the Fed Up coalition is hosting on August 27 and 28 to coincide with the Federal Reserve’s annual policy conference. The conference will feature two days of teach-ins and workshops by workers, civil rights leaders and renowned economists.
As part of the event, the Fed Up campaign released a report,A National Convening on Inequality, Race, and the Federal Reserve, that calculates the benefits of full employment for all communities, in terms of increased income, decreased poverty, and higher tax revenues. The report, available here, also features policy briefs and factsheets to accompany each of the convening’s teach-ins and a collection of articles and op-eds from the past year addressing issues of monetary policy, Fed governance, and the Black Lives Matter movement.
"Every day, my husband tries to get work. He competes with hundreds of other men who form long lines, every one of them desperate for even a temporary job at the local work pool. Together, despite our hard work and best efforts, we still struggle at the end of the month with health and household bills,” said Dawn O’Neal, a teaching assistant and member of Rise Up Georgia. “That’s not just our story, but that of our neighbors and our community. For members of the Fed looking to slow down the economy, I’d invite them to come here to East Atlanta. It’s not easy to live here; for some people the economy means our very survival.”
“This is not an economy where everyone can thrive. It is an economy where communities are struggling to survive; where parents are struggling with which bill to let slide and for how long, while still providing stability for their kids,” said Connie Razza, director of strategic research at the Center for Popular Democracy. “It is beyond clear: This is not a time for the Federal Reserve to raise interest rates. We are calling on the Fed to not raise interest rates and give the recovery to take hold in our communities.
“Whether it likes it or not, what the Federal Reserve does has significant effects on inequality in our country,” said Roosevelt Institute Chief Economist and Nobel Laureate Joseph E. Stiglitz. “It is time for the Fed to take greater recognition of this, since there are many channels through which its policies impact inequality and affect American workers and families, and reshape its polices accordingly.”
“We are here raising the voice of everyday people because no one should have to work works 60 hours a week and remain in poverty,” said Kendra Brooks, of Action United. “Our delegation is here to request transparency in the Fed with the selection process, with more access to timelines, the opportunity to preview potential candidates, and to be a part of the process. There is a clear problem with income inequality in our country. When the top 10% are controlling the financial futures of the rest of the country, the middle class and vast majority of nation are not represented nor are they heard.”
“I am in Jackson Hole because I have a personal stake in the Federal Reserve Bank focusing on full employment and living wages instead of raising rates. If the Fed continues to focus on talking about prematurely raising interest rates, it will just be harder for my two sons to get out of the trap of underpaid work that is either temporary or not nearly close to the kind full time work they need,” said Claudia Nelson, Chair of the Board of Directors at Communities Creating Opportunity in Kansas City, Missouri.
“Among other things, the Fed can do a lot to address inequality by allowing unemployment to fall to much lower levels,” said Josh Bivens, Research and Policy Director at the Economic Policy Institute.
“I am in Jackson Hole because I have a personal stake in this,” said Claudia Nelson, of Communities Creating Opportunity, in Kansas City, Mo. “The Federal Reserve must focus on full employment and living wages instead of slowing down the economy. If the Fed continues to ignore economic data and focus on raising interest rates, it would have a very real effect on my family. It will be harder for my two sons to get out of the trap of underpaid work that is either temporary or low-quality. My sons and my community deserve a fighting chance at better jobs and better wages.”
The Fed Up campaign, led by the Center for Popular Democracy, is hosting the Whose Recovery convening in order to elevate the voices of working families in the national debate about monetary policy. With the central message of “Let Our Wages Grow,” the convening is meant to highlight to Fed policy makers and the public that it makes no sense to slow down the national economy now. The teach-ins will be led by workers, economists, and Fed Up allies and will cover an array of topics like the Fed’s role in full employment, the intersection of Black Lives Matter and the Fed, the selection process for regional bank presidents, a historical look at inflation, and more.
###
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
2 days ago
8 days ago