Despair over Supreme Court immigration ruling turns to optimism, promises of action
Despair over Supreme Court immigration ruling turns to optimism, promises of action
The outrage sparked by the defeat of President Obama’s effort to shield millions of immigrants from deportation morphed Friday into a promise of political action.
“This will be my first...
The outrage sparked by the defeat of President Obama’s effort to shield millions of immigrants from deportation morphed Friday into a promise of political action.
“This will be my first presidential election and I will spend all my time, my sweat, my being also registering voters,” said Marian Magdalena Hernandez, an El Salvadorian immigrant who now lives in Long Island.
Hernandez was among nearly 100 immigrants and supporters who gathered at Foley Square to voice their anger over the Supreme Court’s failure to greenlight Obama’s immigration program.
The President’s 2014 executive action called for up to 4 million undocumented immigrants — primarily parents of U.S. citizens — to be spared from deportation and made eligible for work permits.
But the Supreme Court was deadlocked in its decision on the proposal, leaving in place a lower-court decision that blocked Obama’s plan on the grounds that he exceeded his authority.
“In November when elections come, we're going to remind people what we're made of,” said Eliana Fernandez, 28, an Ecuadorian immigrant who now lives in Long Island and workes as a case manager for the nonprofit Make the Road NY.
Protesters at the midtown rally carried signs that read “Today we suffer ... in November we are voters!”
Shayna Elrington, the child of Central American immigrants, called the Supreme Court’s deadlock a “travesty of justice.”
If you want immigration reform, you must fight for it
“Our government is broken. It is not working and we are going to make a stand,” said Elrington, 34, of the Center for Popular Democracy. “We're going to fight. We may have lost yesterday but we did not lose the battle."
By PATRICJA OKUNIEWSKA & RICH SCHAPIRO
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Labor Advocates Ready To Push For Paid Sick Leave, Pay Equity In Maryland
Workers issues aren't just something highlighted on Labor Day. In fact, next year's session of the Maryland General Assembly will likely be full of them.
Labor...
Workers issues aren't just something highlighted on Labor Day. In fact, next year's session of the Maryland General Assembly will likely be full of them.
Labor advocates have been rallying around the "Fair Work Week" bill, which would make employers post schedules for workers at least three weeks in advance. Supporters says workers at bars, restaurants, and in the hospitality industry are especially susceptible to sudden schedule changes.
But that will be far from the only bill to help workers that lawmakers will debate next year in Annapolis, according to Montgomery County Del. David Moon.
"We also hope to see paid sick leave, which has been a top priority for a lot of justice advocates, move in the next session. Women's pay equity has been another top priority that didn't move in the last legislative session. And lastly collective bargaining rights at community colleges has been a topic," he says.
Since state lawmakers adjourned for the year in April, the Montgomery County Council enacted a paid sick leave law at the local level, but it doesn't take affect until next year.
Most employers in Maryland's most populous jurisdiction will have to offer workers one-hour of paid sick leave for every 30 hours worked. The most those workers can accrue is one week of paid sick leave per year.
Source: WAMU 88.5
NY Daily News Letter to the Editor: Body Count
New York Daily News - April 15, 2014, by Josie Duffy - Re “Hardhat in fatal plunge” (April 15): How many more deadly accidents have to happen before the construction and insurance industries drop...
New York Daily News - April 15, 2014, by Josie Duffy - Re “Hardhat in fatal plunge” (April 15): How many more deadly accidents have to happen before the construction and insurance industries drop their campaign to weaken workplace safety laws? In the past month alone, there have been two fatal construction accidents in Midtown, underscoring the dire need to protect and expand worker safety rules, especially the Scaffold Law. Instead, construction and insurance companies are pouring money into a high-priced campaign to convince Albany to weaken common-sense safety rules that hold building owners and contractors responsible if their safety lapses lead to injuries or deaths. Weakening the law would make dangerous jobs more deadly, especially for immigrant and Latino workers who, studies show, are more likely get hurt on the job. The latest construction deaths should end this debate. Source
Retail and restaurant workers have the worst schedules. Oregon plans to change that.
Retail and restaurant workers have the worst schedules. Oregon plans to change that.
In the next upcoming battle for workers’ rights, activists aren’t asking for more money or more time off. They just want workers to get a little advance notice about what their schedule will be....
In the next upcoming battle for workers’ rights, activists aren’t asking for more money or more time off. They just want workers to get a little advance notice about what their schedule will be.
Activists for better working conditions have scored victories lately. This year, 19 states increased their minimum wage — the result of a coordinated state-by-state campaign to take action on an issue that the federal government has basically ignored for a decade. And a handful of cities and states have passed laws requiring employers to offer workers paid parental leave.
Read the full article here.
The Actions of the Federal Reserve Bank Have Created an Economy That Hurts Workers And Has Devastated The Black Community
Atlanta Black Star - March 4, 2015, by Nick Chiles - The actions of the Federal Reserve have typically been undertaken to benefit banks and the financial services sector collectively known as Wall...
Atlanta Black Star - March 4, 2015, by Nick Chiles - The actions of the Federal Reserve have typically been undertaken to benefit banks and the financial services sector collectively known as Wall Street, but a new report by the Center for Popular Democracy reveals that the Fed’s traditional policies substantially contribute to the dire economic conditions of African-Americans across the country.
While there have been many reports showing how badly African-Americans suffered from the Great Recession and how middle and low-income Americans have not benefitted from the so-called economic recovery, which was really just a recovery for Wall Street, this report is one of the first to link the fortunes of specific groups like African-Americans to the actions of the Federal Reserve.
The Federal Reserve, the nation’s central bank, remains a shadowy presence to most rank-and-file Americans, who would hardly think of the Federal Reserve when assigning blame for their financial struggles.
The intentions of the Center for Popular Democracy, with assistance from the Economic Policy Institute, are clear just by reading the name of its report—”Wall Street, Main Street, and Martin Luther King Jr. Boulevard: Why African Americans Must Not Be Left Out of the Federal Reserve’s Full-Employment Mandate.”
In the explanation for the report’s rather trite title, the primary author, Connie M. Razza of the Center for Popular Democracy, said Martin Luther King Jr. Boulevard refers to African-American communities because “hundreds of U.S. cities have streets named for Martin Luther King Jr., often located in persistently lower-income Black neighborhoods.”
The report’s premise is that the Fed’s goal of keeping the national employment rate at about 5.2 percent—which the Fed considers “full employment” because it allows for movement in the job market—is actually devastating to the African-American community. The reason: When the national unemployment rate stays in the vicinity of 5.2 percent, the African-American unemployment rate is typically about 11 percent.
But because the Fed is dominated by the interests of Wall Street, the impact of its policies on Main Street or on African-Americans is not ever truly considered.
“Although the Great Recession officially ended nearly six years ago, the American economy is still far from healthy,” the report states. “Wall Street has had a robust recovery. Large corporations are making record profits. But the labor market remains weak.”
As Razza points out, the policy decisions of the Federal Reserve directly affect Main Street and MLK Blvd. The Fed’s primary job is keeping inflation stable, regulating the financial system, and ensuring full employment. But corporate and finance executives generally want to limit wage growth so that they maximize their future profits.
“But most people in America earn their living from wages, not capital income, and it is in their interest to see full employment whereby wages grow faster than prices in order to lift working and middle-class families’ living standards,” Razza writes.
Typically the Feds resolve this dilemma in favor of Wall Street, by intentionally limiting wage growth and keeping unemployment excessively high.
“The Fed’s policy choices over the past 35 years have led to increased inequality, stagnant or falling wages and an American Dream that is inaccessible to tens of millions of families—particularly Black families,” the report says.
As detailed in the report, the last eight years have been catastrophic for the nation’s African-American community in virtually every financial indicator studied by economists:
* In January 2015, the national African-American unemployment rate was 10.3 percent, more than twice the current white unemployment rate and higher than the 10.0 percent U.S. unemployment rate reached in October 2010, at the height of the recession.
* The contraction in public-sector jobs—which are disproportionately held by Black people and women—has meant that the African-American workforce has been disproportionately impacted by the recession. In 2011, the number of African-Americans who were unemployed and had most recently been employed in state or local government was higher than their share in the decline of state and local government job loss, suggesting that they were disproportionately laid off and faced more barriers to finding work after losing their public-sector jobs, according to the report. The loss of public-sector jobs also has potential implications for wage inequality since African-Americans and women who are employed in public service have historically suffered significantly less wage inequality than their peers in the private sector.
* Wages have been stagnant or falling for the vast majority of workers since 2000, the report states. While at the median, wages for white workers have risen only 2.5 percent in 14 years, African-American workers have seen a wage cut of 3.1 percent over the same period. In fact, in two-thirds of the states for which data are available, the median real wages of African-American workers declined between 2000 and 2014. The fastest declines were in Michigan (down 15.8 percent), Ohio (down 13.7 percent) and South Carolina (down 11.6 percent).
* Between 1989 and 2001—a period of comparatively robust job growth and a tight labor market during the late 1990s—the wealth gap between whites and African-Americans narrowed. In 2001, Black households had roughly 16 percent the wealth of white households, compared with 6 percent in 1989. By 2013, median African-American household wealth was only 8 percent that of whites.
The report states that the wealth disparity began growing during the housing boom, precisely because of the racist practices of American banks. Between 2004 and 2007, at the height of the boom, white household wealth increased 23 percent, while African-American household wealth actually declined by 24 percent.
“The convergence of wage stagnation and banks’ preying on African-American communities with risky mortgage products (which banks backed with overvaluations of collateral property), led to African-American borrowers being more likely to receive subprime loans than white borrowers,” the report says. “These loans were frequently made as second mortgages, drawing down equity that homeowners had built up. Discriminatory subprime lending practices drained wealth from African-American homeowners before the recession and certainly made Black wealth significantly more vulnerable during the housing crisis.”
One of the most telling statistics in the report is the detailing of the jobs that the economy has regained during the recovery. If the public needed a clear indication of why so many people are still struggling though Wall Street is back, here it is:
While lower-wage industries accounted for 22 percent of job losses during the recession, they account for 44 percent of employment growth over the past four years. That means lower-wage industries today employ 1.85 million more workers than at the start of the recession.
Mid-wage industries accounted for 37 percent of job losses, but 26 percent of recent employment growth. There are now 958,000 fewer jobs in mid-wage industries than at the start of the recession.
Higher-wage industries accounted for 41 percent of job losses, but 30 percent of recent employment growth. There are now 976,000 fewer jobs in higher-wage industries than at the start of the recession.
And here’s another startling fact showing how much America’s economy has been tilted in favor of corporate America and against workers for a generation. Between 1948 and 1973, the hourly compensation of a typical worker in America grew in tandem with productivity. But since 1973, productivity grew 74.4 percent while the hourly compensation of a typical worker grew just 9.2 percent.
“This divergence between pay and productivity growth has meant that workers are not fully benefiting from productivity improvements,” the report says. “The economy—specifically, employers—can afford much higher pay, but is not providing it.”
So what should the Fed do to help Main Street and MLK Blvd. begin to enjoy the economic “recovery?” The report suggests a change in the structure of the Federal Reserve System so that fewer representatives from the financial industry and corporate America are appointed to the Fed’s governing board and more regular people are added. This would make the Fed more sensitive to the needs of Main Street and MLK Blvd., so that “the voices of consumers and working families can be heard.”
The Center for Popular Democracy suggests that the Fed keep interest rates low “so that the numbers of job openings and job seekers are balanced and everybody who wants to can find a good job.”
In addition, it wants the Feds to provide low- and zero-interest loans so that cities and states can invest in public works projects like renewable energy generation, public transit and affordable housing that will create good new jobs.
The Fed should study the harmful effects of inequality, according to the Center, and examine how policies like raising the minimum wage and guaranteeing a fair work week can strengthen the economy and expand the middle class.
Source
As the Stock Market Swings
Yet it’s hard to escape a vague sense of unease. The swoon that began a week before last was quickly attributed, at least in part, to China’s economic problems. Just as quickly, many investors and...
Yet it’s hard to escape a vague sense of unease. The swoon that began a week before last was quickly attributed, at least in part, to China’s economic problems. Just as quickly, many investors and policy makers concluded that China’s leaders would manage those problems in ways that would allow the global economy to chug along. But what if they don’t? A prolonged slowdown is more likely to provoke social unrest in China than in other developed economies, because stability there has been based on high growth rather than political and other institutional arrangements. The prospect of social unrest, in turn, raises economic and national-security concerns not raised by economic crises elsewhere.
Closer to home, market volatility has significantly reduced the odds that the Federal Reserve will begin to raise interest rates at its next meeting in mid-September. A delay is nothing to lament, because the still significant slack in the labor market would make an increase this year premature. The Fed has generally played down the potential impact of China and other international headwinds, while asserting that the negative effects of low oil prices and a strong dollar were likely to be temporary. But these forces are proving potent and long lasting — further reason to give the Fed pause.
Renewed stock market downdrafts could disrupt the economy, and the Fed’s plans, in other ways. The recovery in housing is an important gauge of economic health. But this year, the big increases in sales and prices have come at the high end of the market, where investment wealth is assumed to be more of a factor in the decision to buy than wages and salary. The very real possibility is that if the stock market falters again, so too will the housing market.
Economic fundamentals today are no different than they were before the market took a walk on the wild side. Inflation is well below the Fed’s target of 2 percent. Unemployment is still higher than it was before the last recession and wages have shown no signs of rising. The economy is being propelled forward by consumers and other advantages, and being held back by insufficient government spending and other disadvantages.
It all works out to an economy growing at 2.5 percent. At that modest pace, the United States cannot be of much help if other economies falter. But it can rebound from a market swoon, at least for now.
Source: New York Times
The Week Ahead in New York Politics, May 1
What to watch for this week in New York politics:
President Donald Trump is due back in New York City for the first time since taking office this week -- see below for details and expect...
What to watch for this week in New York politics:
President Donald Trump is due back in New York City for the first time since taking office this week -- see below for details and expect protests, traffic gridlock, and political statements from all corners.
Read full article here.
Democrats Criticize Fed for Lack of Diversity in Leadership
The U.S. Federal Reserve came under criticism Thursday from some lawmakers over the lack of diversity in the central bank’s leadership.
A majority of Democratic...
The U.S. Federal Reserve came under criticism Thursday from some lawmakers over the lack of diversity in the central bank’s leadership.
A majority of Democratic members of Congress -- 11 from the Senate and 116 from the House of Representatives -- signed a letter addressed to Janet Yellen, calling on the Fed chair to include more African Americans, Latinos and women when it considers candidates for top posts. The letter was written by staff for Representative John Conyers of Michigan, according to Ady Barkan of the Fed Up campaign, an activist group that lobbied members of Congress to add their names. No Republicans signed.
“We remain deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation in terms of gender, race and ethnicity, economic background and occupation,” according to the letter, whose signatories included presidential candidate Senator Bernie Sanders of Vermont and Massachusetts Senator Elizabeth Warren.
The letter said more than 80 percent of directors at the Fed’s 12 regional banks are white and about three-fourths are men. Of 12 regional Fed presidents, who participate in monetary policy meetings, 11 are white and 10 are men, it added.
Improvements Made
Fed spokesman David Skidmore said the central bank and its branches have focused in recent years on increasing ethnic and gender diversity. Minority representation on Reserve Bank and branch boards has risen to 24 percent this year from 16 percent in 2010, he said, and the proportion of female directors has increased to 30 percent from 23 percent over the same period. “We are striving to continue that progress,” Skidmore said.
Fed Up is organized by the Center for Popular Democracy, non-profit groups and unions who are lobbying for the Fed to reject raising interest rates.
Regional Fed presidents are chosen by non-banking members of their respective boards of directors. The appointments are subject to the approval of the Board of Governors in Washington.
Regional boards have nine members, as stipulated in the Federal Reserve Act. Three are chosen by and represent banks in the district; three are chosen by the same banks to represent the public; three are designated by the Board of Governors to represent the public.
Jesse Ferguson, a spokesman for Hillary Clinton, issued a statement on Fed diversity after the letter was released saying the leading Democratic presidential candidate “believes that the Fed needs to be more representative of America.” She also thinks “commonsense reforms” such as removing bankers from regional Fed boards, “are long overdue,” Ferguson said.
Lockhart Retiring
Barring a surprise resignation, the Atlanta Fed presidency will be the next seat on the Federal Open Market Committee to open. Dennis Lockhart, the current president, will be required to step down in March 2017 after serving for 10 years.
“Diversity for the Federal Reserve is critical. This is the very nature of this institution, to broadly represent the communities we serve,” Kansas City Fed President Esther George said in response to a question Thursday after a speech in Albuquerque, New Mexico. “That means industry diversity. It means diversity of thought. And it means racial and gender diversity in the institution.”
There are two governorships already open. President Barack Obama has nominated Allan Landon, the former chief executive officer of Bank of Hawaii Corp., and Kathryn Dominguez, an economics professor at the University of Michigan in Ann Arbor, to fill the posts. Republican Senator Richard Shelby has refused to hold confirmation hearings for the pair in a dispute with the White House over its failure to fill a separate Fed post.
By Christopher Condon & Steve Matthews
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California Eminent Domain Isn't Government Run Amok
To judge from the disparaging reaction to its plan to use eminent domain to cope with underwater homes, you'd think the city leaders of Richmond, California, had proposed an outrageous and...
To judge from the disparaging reaction to its plan to use eminent domain to cope with underwater homes, you'd think the city leaders of Richmond, California, had proposed an outrageous and unprecedented distortion of state power.
Filing suit against Richmond, BlackRock Inc., Pacific Investment Management Co. and other plaintiffs alleged that the city's proposal amounts to an “unconstitutional application of eminent domain” and a “brazen scheme.” The Federal Housing Finance Agency announced that it was considering ceasingto do business in municipalities that pursue this course. Media coverage generally echoed the plaintiffs’ take. USA Today’s headline summed up the conventional wisdom, declaring that Richmond “runs amok with eminent domain.”
In fact, the city's plan relies not on a novel use of eminent domain but on one endorsed by the conservative Supreme Court of 1935. And although there is a long history of excessive use of eminent domain, Richmond's plan has no place in it. Richmond's plan is to seize 624 mortgages valued at more than the homes for which they were written. Relying on a private intermediary, the city would compensate the investor holding a mortgage at a price reflecting the home's current value rather than an inflated bubble value. The city would then sell a more modest loan to the homeowner. Richmond hopes this will induce residents to remain in their homes and pay their mortgages and property taxes. Proponents of the plan also point out that this probably will lower the risk of default, protecting investors holding the mortgages.
Nonetheless, the big players in the bond markets are angry that they’re being forced to accede to the demands of a small city in California. Before they fight city hall, the plaintiffs should appreciate that use of eminent domain to seize intangible assets like mortgages has a solid history. Federal courts have long sanctioned the taking of everything from shares of stock to contract rights, insurance policies and even hunting rights.
But mortgages? Yes. Consider a famous Supreme Court case from the Great Depression. During that crisis, banks foreclosed on farmers who fell behind on their mortgage payments. In response, Congress passed the Farm Bankruptcy Act granting farmers five years to negotiate a reduction in the principal of their loans. Farmers were entitled to buy the property at the current appraised value, even if it fell short of the value attached to the original mortgage.
Then, as now, banks didn’t like the policy and went to court, arguing that it violated their property rights, as guaranteed under the Fifth Amendment. In May 1935, the Supreme Court overturned the law in a unanimous decision, the first of several such rulings that made the court into a conservative counterweight to the New Deal. Nevertheless, in the final paragraph of its decision, the court laid out an alternative course for just the kind of remedy the Farm Bankruptcy Act had sought.
Justice Louis Brandeis observed, "If the public interest requires, and permits, the taking of property of individual mortgagees in order to relieve the necessities of individual mortgagors, resort must be had to proceedings by eminent domain.”
In effect, the court stated that if the government wished to modify loans, it could only do so via an eminent domain proceeding of precisely the sort now being contemplated in Richmond. Brandeis didn’t think this a particularly controversial point; he made no effort to defend it or explain his reasoning because it was an established doctrine.
And so it remains today: Intangible assets have again and again been deemed fair game for eminent domain proceedings, so long as “just compensation” is given. In California, the state Supreme Court has taken a similar stance: A decision in 2008, for example, affirmed longstanding precedent that the state’s eminent domain law “authorizes the taking of intangible property.”
None of this is to suggest that eminent domain hasn’t been abused. In the postwar era, however, its victims have not been investors but poor, black, inner city residents.
The case that opened the door to mass evictions and confiscations was Berman v. Parker, decided by the Supreme Court in 1954. In it, a black department store owner in the District of Columbia sued to stop an eminent domain proceeding against his profitable business, which had the misfortune of being situated in an area designated as blighted.
The court rejected Berman’s protest, defining eminent domain in remarkably broad terms. If the public interest demanded that his property be torn down with less desirable properties to rescue an entire neighborhood from blight, it ruled, there was nothing Berman could do. His store was soon reduced to rubble. While many urban planners celebrated the decision, Harvard Law School Professor Charles Haar was more prescient, noting that the ruling “may cause a lot of trouble some day.”
This was an understatement: in the ensuing years, municipalities across the country used and abused their powers to confiscate the property of poor, often black residents, rarely giving “just compensation.” Entire, thriving neighborhoods vanished before the wrecking ball, destroying communities and leaving behind gaping holes in the urban fabric that remain eyesores in many cities today.
This didn’t end with the 1960s. In 2005, the Supreme Court handed down its controversial decision in Kelo v. City of New London. The case grew out of efforts by New London, Connecticut, to use eminent domain to evict working-class residents from a neighborhood in the hopes of handing the land to a private developer who promised to attract more affluent residents with a mixed-use project. The court ruled in favor of the city, vastly expanding the powers of eminent domain. The project foundered during the financial crisis and today remains a series of vacant lots, monuments to an extreme vision of eminent domain.
These are examples of eminent domain “run amok.” Yet to listen to the hysterical denunciations of the Richmond plan, a proposal to bring 624 mortgages in line with market prices is the epitome of eminent domain abuse. History suggests otherwise.
Source:
Why You Should Care About the Federal Reserve’s Secrecy and Elitism
New Republic - Last weekend, Cee Cee Butler, a 34-year-old McDonald’s worker from Washington D.C., became sick with the flu, or at least something that resembled the flu. Her phone had been cut...
New Republic - Last weekend, Cee Cee Butler, a 34-year-old McDonald’s worker from Washington D.C., became sick with the flu, or at least something that resembled the flu. Her phone had been cut off and she missed work Friday, Saturday and Sunday. “I did a ‘no-call, no-show’ for three days and I’ve never done that in over the year and a half I’ve been working here at McDonald's,” she said. “They terminated me Tuesday morning. So I lost my job, my rent is going up in December, I have two kids—19 and 5, a girl and boy—and I can’t afford to take care of them.”
On Friday, Butler gathered outside the Federal Reserve building with around two dozen activists from labor unions and progressive groups before an afternoon meeting with Fed Chair Janet Yellen. The groups are part of a new campaign called “Fed Up” that is pressuring Yellen and her colleagues to keep interest rates at zero until the recovery strengthens and wages rise. “The economy is not working for the vast majority of people,” said Ady Barkan, a lawyer from The Center for Popular Democracy, which is the lead organizer of the campaign. Fed Up wants to rectify that problem by putting direct pressure on the Federal Reserve itself—a quest that may not captivate the public’s attention but could have a very real effect on the lives of working Americans.
In August, for instance, members of Fed Up staged protests outside of the Federal Reserve’s annual monetary policy conference in Jackson Hole, Wyoming. Many reporters there said it was the first time they could remember protestors at the conference—but their tactics must have worked, because Yellen agreed to meet with the protesters Friday afternoon in the boardroom where the Federal Open Markets Committee (FOMC) meets eight times a year to set monetary policy. Three other Federal Reserve governors—Vice Chair Stanley Fischer, Jerome Powell and Lael Brainard—joined the meeting and the activists said that Yellen was engaged throughout and was moved by the stories she heard. They hope that this meeting was just the first of many in the future.
The message the Fed Up campaign delivered is the same one voters sent loud and clear last week: The recovery is not being felt by millions of Americans. Exit polls indicated that 45 percent of voters considered the economy the most important issue of the midterms. Wage growth for low-income workers, like janitors and fast food workers, are barely keeping up with inflation. “That’s not an economic recovery,” said Jean Andre, who does location support for film production and is a member of New York Communities for Change. “That’s not the way thing should be.”
But the slow recovery isn’t always noticeable in leading economic indicators. The unemployment rate, for instance, has fallen 2.1 percentage points since the start of 2013 and is now at 5.8 percent, its lowest point in more than six years. As a result, some economists inside and outside the Fed, including inflation hawk Charles Plosser, have called for a hike in interest rates in the near future. “Beginning to raise rates sooner rather than later reduces the chance that inflation will accelerate and, in so doing, require policy to become fairly aggressive with perhaps unsettling consequences,” Plosser, the president of the Federal Reserve Bank of Philadelphia, said Wednesday.
Plosser’s worry about rising inflation, even though it is nowhere to be found, could prove dangerous. If the FOMC listens to the hawks, it will prematurely raise rates and choke off the recovery before workers see wage growth. So far, Yellen has done a good job ignoring Plosser and Co. And, luckily, Plosser and Richard Fisher, the president of the Dallas Federal Reserve Bank and another hawk at the FOMC, announced that they would retire in the spring of 2015, opening up two positions that have a significant impact on monetary policy. Fed Up sees their retirements as a boon—and is keen to have a say in the selection process.
Under the current rules, Plosser and Fisher’s replacements will be chosen by the board of the Philadelphia and Dallas reserve banks, respectively. Each board has nine members, three from banks and six from nonbanks—companies and organizations that are not financial institutions. Because of Dodd-Frank restrictions, only the six non-bank members are involved in selecting the replacements. But of those six members, three are chosen by banks and three are chosen by the Fed board in Washington. Workers and consumers are supposed to be represented on the board, but of the 108 members, 91 are from financial institutions and corporations. Just two are leaders of labor groups and another 15 represent non-profit organizations.
Fed Up has a list of demands to make the replacement process more transparent and to ensure the public has adequate representation within the central bank. They want a public schedule of the process, a list of criteria for how the replacements will be chosen, a chance for members to question the candidates, and public forums where citizens can discuss monetary policy with candidates and the search committee. These reforms, they hope, will keep presidents like Plosser and Fisher—who activists say are disconnected from the daily struggles of their constituents—out of office. “We need a president in Philadelphia who will listen to working people,” said Kati Slipp, the director of Pennsylvania Working Families. “Charles Plosser hasn’t been or he would not believe that our economy has really recovered.” In fact, Fed Up is already getting results. On Friday morning, the Philadelphia Fed announced that it was setting up an email to receive inquiries about the search process. “That would never have happened if this campaign hadn’t happened,” Slipp said. The campaign said it expected the same things from the Dallas Fed.
After Republicans destroyed Democrats in the midterms, many liberal commentators argued that a fresh agenda for raising wages could help the Democratic Party win back voters, particularly those in the white working class. But the problem isn’t that Democrats’ ideas—raising the minimum wage, investing in infrastructure and strengthening the safety net—won’t help middle- and lower-class Americans. It’s that the weak recovery has destroyed those ideas’ political salience. It’s a political problem much more than a policy one.
Such arguments almost always ignore monetary policy. After all, no one but Ron Paul fanatics care about the Federal Reserve. And the Fed is independent from the federal government. If a Democratic candidate’s economic message was to fill the FOMC with economists committed to keeping interest rates low or even adopting a different monetary policy regime altogether, voters would likely roll their eyes. It would be a political disaster. But given congressional gridlock, it might also be far more effective at boosting the recovery.
The Fed Up campaign isn’t going to change that. Millions of Americans will not suddenly realize that the most important economic actor in the United States is not the president or Congress but the Federal Reserve. They will not understand that some inflation is needed, especially right now, to convince businesses to invest and consumers to spend money to get the economy back going again. But the campaign may convince some Americans of the Fed’s importance. That’s why Cee Cee Butler, the former McDonald's worker who was fired Tuesday, and Jean Andre, the man who scouts out locations for films, spent a cold Friday morning outside the Fed.
“I just got out of the shelter two years ago and here I am about to be back in one. I’m not trying to go back there,” Butler said. “My daughter will never walk in my shoes. She doesn’t need to. That’s why my voice needs to be heard.”
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