Campaign News

The Federal Reserve has long faced fierce scrutiny from members of Congress, community leaders, and the press for its lack of transparency. Fed Chair Janet Yellen, still early in her term, has signaled an intention to improve transparency and hold the Fed accountable to the public interest, and she’ll face an important test this month as she starts deciding whom to appoint to the newly formed Community Advisory Council.

In the most recent example of Fed’s insular system of governance, Bloomberg Business revealed concerning news about the recent appointment of Patrick Harker as president of the Philadelphia Federal Reserve. Harker had served on the bank’s Board of Directors prior to his appointment, and was even on the search committee interviewing candidates for the presidential slot. Then, in a behind-the-scenes maneuver reminiscent of Dick Cheney’s infamous self-selection as George W. Bush’s running mate, Harker became a candidate for the job himself, and was swiftly chosen by his Board colleagues. Harker’s shadowy appointment process was par for the course at the Fed. In Dallas, the presidential appointment process has been downright dynastic: the outgoing president, Richard Fisher, appointed an advisory committee made up of the people who appointed him to help select his successor. 

Chair Yellen has an immediate opportunity to reverse course and change the face of the Fed. This year, the Fed announced the creation of a Community Advisory Council, intended to offer Fed leaders “diverse perspectives” on the economy, “with a particular focus on the concerns of low- and moderate-income populations.” Applications for the Community Advisory Council were due last week. The question facing Fed officials is whether they will appoint individuals to the Council who represent low- and moderate-income voices, or whether the Council will be another elite echo chamber (one earlier predecessor to the Council was heavy on members from for-profit lenders like Capital One and Citigroup—hardly organizations representing the interests of working families).

The announcement of the CAC was a direct response to growing demand for greater public representation at the Fed, and it’s not hard to see why. Of the 108 members of the 12 banks’ boards of directors (which select and oversee those 12 presidents), only 15 come from the nonprofit sector, academia, or labor organizations. The other 93 come from corporations or banks, even though the law requires that two-thirds represent a “diverse” set of interests, including those of labor and consumers. Fed officials lack diversity in other ways, too: among governors and presidents, all but one are white, and the vast majority are men.

Fed officials have huge power over the American economy: They vote on crucial monetary policy decisions, determining whether we reach full employment with rising wages for all or whether the economy continues toward stagnation and inequality. As long as Fed bodies are dominated by the financial sector, their decisions will reflect the perspectives of the very entities the Fed is meant to oversee, rather than the working families across the country who need higher wages and more equitable economic growth.

So, who will lead the Fed in the years to come? Next February, the terms of all 12 regional Fed presidents expire. Their respective Boards of Directors will decide whether to reappoint the presidents or replace them. A coalition of community-based organizations, faith leaders, policy advocates, and labor unions are calling for the Federal Reserve to make this process more transparent. At a bare minimum, the banks should publicize the schedule for the decision-making, the names and roles of the decision-makers, the criteria that will govern the process, and the names of candidates under consideration. A more public process would involve the opportunity for members of the public to serve on the search committees, mechanisms for the public to submit questions and receive answers from prospective candidates, and public forums where Fed officials actually engage in dialogue with the people whom they are supposed to represent. Chair Yellen and officials at the Fed have the power to implement such reforms, and their decisions will speak volumes about their commitment to building an independent central bank with democratic legitimacy.

Janet Yellen’s appointment as the first woman to lead the Fed signaled that change might be coming to a historically opaque institution. But to truly transform the Fed, Yellen and her fellow governors must ensure that the voices of working families aren’t drowned out by wealthy financial interests. The first step is ensuring that the new CAC lives up to its mission by including women, people of color, and representatives of organizations with low- and moderate-income members. It could even directly install some low- and moderate-income individuals on the Council. That would indeed bring new perspective to an institution that has, for too long, been dominated by the voices of America’s elite.

Source: The American Prospect

“Jerome Powell’s most important qualification is that he served with Janet Yellen. His confirmation should depend on his willingness to follow in Yellen’s footsteps on both monetary and regulatory policy,” Shawn Sebastian, co-director of Fed Up, a campaign from the Center for Popular Democracy, told the Washington Post.

The two-day event, Whose Recovery: A National Convening on Inequality, Race, and the Federal Reserve, is organized by the Fed Up campaign, a coalition of groups led by the nonprofit Center for Popular Democracy. It serves as a counter-conference to the annual Federal Reserve Bank of Kansas City symposium, where Fed officials come together to discuss monetary policy -- and which is currently taking place at the same resort as the Fed Up gathering.  

Fed Up’s member organizations brought over 100 primarily low-income grassroots activists from across the country for the gathering. It's a dramatic increase from its inaugural visit to Jackson Hole last year, when the campaign brought a group of 10 activists. 

The size of Fed Up’s delegation of activists and presence of prominent economists -- including Nobel laureate Joseph Stiglitz -- attests to the rapid growth of a once-unlikely campaign that began just a year ago. Fed Up has managed to turn the esoteric issue of central bank interest rates into a key element of the progressive agenda -- and a rallying cry for low-income workers. 

Rod Adams, a recent college graduate from Minneapolis, said he was attending the convention because he was disappointed in the job market. Despite his college degree, he currently makes $10.10 an hour working at the Mall of America.

“I have seen Wall Street’s recovery and corporate America’s recovery -- where is ours?” Adams demanded, eliciting cheers at a spirited press conference outside the Jackson Lake Lodge on Thursday. 

The activists oppose the Federal Reserve increasing interest rates before the economy creates enough jobs to generate substantial wage growth for all workers. They believe that a premature interest rate hike would be especially harmful to workers in communities of color, who continue to suffer higher rates of unemployment than the overall population. Activists say this is partly the result of discrimination in the job market. Fed Up released a report on Thursday that uses original data to show that if there was the same low unemployment rate in every community in America, African-Americans and American Indians would experience the largest income gains.

The delegation plans to present officials attending the exclusive Fed symposium with an online petition opposing an interest rate hike that bears 110,000 signatures. The petition effort was the result of Fed Up's collaboration earlier this month with online progressive heavyweights including CREDO Action, Daily Kos, the Working Families Organization and Demand Progress. Robert Reich, former secretary of labor and an economist at the University of California, Berkeley, gave the petition drive a high-profile boost with a popular video promoting the effort.

A similar petition that Fed Up brought last year had 10,000 signatures.

The Kansas City Federal Reserve Bank, which convenes the annual Jackson Hole symposium for Fed officials, declined to comment on this year's parallel protest conference. 

Kansas City Fed President Esther George met with Fed Up activists during last year's symposium.

Janet Yellen, chair of the Federal Reserve Board of Governors, is not attending this year's symposium, precluding even the possibility of an impromptu encounter with protesters. 

“Janet Yellen is missing a great opportunity to see what real people look like,” Adams said. “We are not data on a spreadsheet.”

Proponents of a Federal Reserve interest rate hike in the near future argue that the Fed should begin raising rates to prevent excessive price and asset inflation. The Fed has a dual mandate to maintain full employment and stable price inflation. 

William Dudley, president of the Federal Reserve Bank of New York, signaled on Wednesday that they would postpone an interest rate hike that Fed officials had previously indicated would occur in September. Dudley said turmoil in China and other emerging market economies that sparked massive swings in the U.S. stock market earlier in the week made a September rate hike “less compelling.”

Josh Bivens, the progressive Economic Policy Institute’s research and policy director, applauded the Fed’s move away from an interest rate hike, but said the reason for the Fed’s decision confirmed the need for more grassroots activism.

“A week ago the case against raising rates for the labor market was clear as day, but all of a sudden when wealthy people lost money in the stock market the tide turned against a rate increase,” Bivens said at Thursday's press conference. “I’m happy rates are less likely to go up because of that, but it is a terrible reason.”

Source: Huffington Post

"From increases in severe weather such as hurricanes and droughts, to the toxins that are poisoning our soil, air and water, the human impact of the worsening climate crisis is undeniable. Also undeniable is the disparate impact the effects of the climate crisis have on low income communities and communities of color. We know that the poisoned children and families of Flint, Michigan still have no clean water more than three years after the corrupt and willful negligence of their state government was exposed. A decade after Hurricane Katrina, the residents of the Gulf Coast are still trying to put their lives together. In California, farmers and farm workers alike have lost income and in some cases their entire livelihoods thanks to the drought that plagued the state for the past few years."

Read full article here.