Protesters Converge On Stephen Schwarzman's Water Mill Home
About 35 protesters from various political organizations—the Center for Popular Democracy, Make the Road New York, New York Communities for Change, and Strong for All Economy Coalition—converged...
About 35 protesters from various political organizations—the Center for Popular Democracy, Make the Road New York, New York Communities for Change, and Strong for All Economy Coalition—converged on the Water Mill Home of Stephen Schwarzman on Friday afternoon.
Mr. Schwarzman is the chairman and CEO of The Blackstone Group and an adviser to President Donald Trump.
Read the full article here.
EXCLUSIVE: City Lawmaker Demands that Charter Schools Show How They Use Tax Money
New York Daily News - February 24, 2015, by Ben Chapman and Lisa Colangelo - A lawmaker is asking the city’s charter schools to hand over paperwork showing how they use millions of dollars in tax...
New York Daily News - February 24, 2015, by Ben Chapman and Lisa Colangelo - A lawmaker is asking the city’s charter schools to hand over paperwork showing how they use millions of dollars in tax money. And they have five days to do it.
City Councilman Daniel Dromm, who chairs the Education Committee, said he is troubled by the “lack of transparency and accountability” of charter schools.
“They receive over a billion dollars in taxpayer funds and we don’t know what’s going on,” Dromm, a Queens Democrat, told the Daily News on Monday.
Dromm sent a letter to all 197 charter schools in the city asking them for copies of their committee board minutes and fraud prevention policies. He also asked if they would voluntarily submit to the city Conflict of Interest Board to examine relationships between school board members and developers.
Dromm’s action comes after The News reported in November that an analysis by the Center for Popular Democracy found more than $28 million in questionable spending and probable financial mismanagement in 95% of the charter schools examined by state auditors since 2002.
James Merriman, CEO of the New York Charter School Center, dismissed Dromm as an “attack dog” for the United Federation of Teachers, which is opposed to charter schools.
Source
Thanks to York School Board for Rejecting Charter Takeover
York Daily Record - November 4, 2014, by Rev. Aaron Willford, Sandra Thompson and Clovis Gallon - Over the past few months, something remarkable happened in York. Parents, teachers, students,...
York Daily Record - November 4, 2014, by Rev. Aaron Willford, Sandra Thompson and Clovis Gallon - Over the past few months, something remarkable happened in York. Parents, teachers, students, neighbors and faith leaders united to send a clear message that the education of York's children is more important than the profit margin of an out-of-state charter operator.
On behalf of that community, we would like to thank the York City School Board for standing up for our students, making sure their education comes first, and rejecting a charter takeover of our schools.
When the school board met on Oct. 15, Chief Recovery Officer David Meckley pressured board members to vote on an incomplete, poorly researched charter plan that was rolled out less than a week before. With so little time to review the plan and so many unanswered questions about it, the community urged the board to cast a no vote.
Rejecting the charter plan was not an easy decision for the school board, but it was the right decision — and we applaud their courage. If the plan had been enacted, money that should support students in the classroom would have flowed to a for-profit management company instead. City school children would have been treated like guinea pigs in a radical experiment, and their parents would have lost any say in how their neighborhood schools are run.
Perhaps the school board was looking into a crystal ball when it cast that vote. Just a week later, a federal judge appointed a receiver for Mosaica Education Inc., one of the two charter companies initially in the running to take over York city's schools. The heavily indebted Mosaica was sued by its primary lender in September after defaulting on its debt.
AdvertisementImagine where York's students would be if a charter operator took over their schools and, right out of the gate, found itself under enormous financial pressure for "a series of bad business decisions," as lender Tatonka Capital Corp. claims in its lawsuit against Mosaica.
The case against Mosaica followed a string of troubling studies questioning charter school oversight and accountability in Pennsylvania. A spring report from Auditor General Eugene DePasquale found that a lack of state oversight of charters was creating problems — with some observers comparing the current charter environment to the "wild, wild west."
A blistering report from the Center for Popular Democracy this fall revealed more than $30 million in proven or alleged fraud, waste, or abuse in Pennsylvania's charter school system over the past 17 years.
Giving Meckley a blank check on charterization in York would have been a big mistake.
Fortunately, the school board recognized how fraught with risk this plan was and chose to maintain local control of all the city's schools.
Now, it is critical for the school board to work in partnership with York's educators to improve the city's schools and give every child a shot at success.
Educators and administrators are already implementing a road map to fiscal recovery that will strengthen educational programs. We are glad that the school board is giving this "internal option," as it is known, an opportunity to work before taking any action that will negatively impact our schools, our students, or our community.
York city schools, like many other districts across the commonwealth, face a funding crisis created by deep cuts in state funding for public schools. All Pennsylvania school children deserve better from Harrisburg. It is high time our elected leaders reverse those cuts and put our schools back on track.
Until that happens, York's children should not be treated any differently than other Pennsylvania students. They shouldn't be guinea pigs in a charter experiment. And they shouldn't be deprived of the opportunity to attend their neighborhood schools.
Our school board agrees, and now it is up to all of us to take responsibility for the future of our city's public schools and the students who learn there.
We have no doubt that the York community is strongly committed to making our schools the best they can be. Working together, we can achieve truly remarkable things.
Rev. Aaron Willford is a member of York Concerned Clergy. Sandra Thompson is president of the York NAACP. Clovis Gallon is a teacher and York Education Association member.
Source
Progressive Activists Take A Seat For The People At Federal Reserve Retreat
Progressive Activists Take A Seat For The People At Federal Reserve Retreat
Two years ago this week, the nonprofit Center for Popular Democracy and allied groups launched the Fed Up campaign, aimed at making the Federal Reserve more accountable to workers and communities...
Two years ago this week, the nonprofit Center for Popular Democracy and allied groups launched the Fed Up campaign, aimed at making the Federal Reserve more accountable to workers and communities of color. They converged then on the Jackson Lake Lodge in Wyoming, where Fed officials decamp every year to discuss policy and hobnob with the economic elite.
How much political headway has the campaign made since then? This year, Fed Up activists were essentially put on the schedule for senior Federal Reserve officials, with a major meeting at the Jackson Hole summit.
The group met Thursday, the first day of the summit, with eight of the 12 presidents of the regional Federal Reserve banks and two members of the Federal Reserve Board of Governors.
Fed Up activists have met individually with the governors and regional bank presidents before; they spoke with some Fed officials less formally at the past two Jackson Hole gatherings. This is the first time, however, that their delegation of some 120 rank-and-file activists had met with so many of the central bank’s decision-makers in one place.
“It is kind of like a mini-FOMC,” said Fed Up campaign manager Jordan Haedtler prior to the event, likening it to a meeting of the Federal Open Market Committee, the Fed’s policymaking body.
The progressive campaign is calling for the central bank to wait for the economic recovery to reach more broadly across America before raising its benchmark interest rate again, a move that slows the pace of economic growth to head off price inflation.
It has also criticized the Fed for the lack of racial, gender and professional background diversity among its senior officials, arguing that only a central bank that looks like America can craft policy in the best interests of all citizens.
The Fed officials at the meeting were Esther George, president of the Federal Reserve Bank of Kansas City, which hosts the annual symposium; New York Fed president William Dudley; Dallas Fed president Robert Kaplan; Minneapolis Fed president Neel Kashkari; Cleveland Fed president Loretta Mester; Boston Fed president Eric Rosengren; San Francisco Fed president John Williams; Richmond Fed president Jeffrey Lacker, and Fed governors Stanley Fischer and Lael Brainard.
“They were really impressed with how well prepared we were,” said Haedtler after the meeting. “They were heartened by the discussion.”
“We’ll see how things go in September,” he added, referring to the next opportunity for an interest rate hike.
Bill Medley, a spokesman for the Kansas City Fed, also gave positive feedback about the meeting.
“It was a productive dialogue, as it always is, and we look forward to continuing the conversation,” Medley said.
Fed Up has had a banner year so far. Democratic presidential nominee Hillary Clinton embraced the broad contours of its platform in May after weeks of private discussion with group representatives.
“Secretary Clinton believes that the Fed needs to be more representative of America as a whole as well as that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue,” a Clinton spokesman said at the time.
But Clinton stopped short of signing on to a bolder reform proposal that Fed Up rolled out in April, which would turn the central bank system into an entirely public institution. The Federal Reserve Board of Governors is already a federal agency, whose top officials are nominated by the president and confirmed by the Senate. But the 12 regional banks it supervises are owned by the private financial institutions they serve. (Fed Up released a more detailed version of its idea on Monday.)
The private nature of these banks is a major reason why they are run overwhelmingly by white men with backgrounds in finance, Fed Up argues. There has never been a black or Latino president of one of the regional banks, the group notes in its reform proposal, and one-third of the current bank heads are alumni of Wall Street power player Goldman Sachs.
Fed Up’s moment at this year’s Jackson Hole symposium was not without its hiccups.
Earlier this month, Fed Up were informed that the Jackson Lake Lodge had canceled over a dozen of its room reservations. The hotel said a “computer glitch” had led to the overbooking of 18 rooms. But the fact that 13 of those rooms were booked by Fed Up raised concerns that they were being targeted.
Although the activists found lodging at a nearby resort, Fed Up filed a complaint with the U.S. Department of Justice, and members of Congress sympathetic to their cause sent Fed Chair Janet Yellen a letter asking for an explanation.
In an apparent gesture of detente, George, the Kansas City Fed president, offered Fed Up the big meeting, and the campaign withdrew its objections to the lodging snafu.
Fed Up agreed also to limit its presence in the lodge’s halls during a scheduled cocktail hour. In the past, activists have clustered inside the hotel to confront Fed officials in person. The group held a press conference-cum-rally outside the lodge before Thursday’s meeting. It also plans to run teach-in seminars and to canvass the city’s low-income neighborhoods to spread the word about Fed reform.
But Haedtler, Fed Up’s campaign manager, wanted to focus on Thursday’s meeting. It is evidence, he said, that his fledgling movement’s priorities have made it into the mainstream.
“We have clearly reshaped the discourse,” Haedtler said.
By Daniel Marans
Source
After minimum wage changes, Bay Area workers push for ‘fair’ scheduling
After minimum wage changes, Bay Area workers push for ‘fair’ scheduling
As cities all over the state have raised their minimum wages in recent years, labor advocates in the Bay Area are turning to what they see as another piece of the puzzle for improving workers’...
As cities all over the state have raised their minimum wages in recent years, labor advocates in the Bay Area are turning to what they see as another piece of the puzzle for improving workers’ lives: scheduling.
From ensuring workers get the full-time hours they desire, to preventing retaliation against them for turning down last-minute schedule changes, several initiatives are aimed at making employees’ schedules more stable and reducing underemployment.
“Now, it’s about getting fair wages and fair hours,” said Jennifer Lin, deputy director of the East Bay Alliance for a Sustainable Economy (EBASE).
Business interests have railed against the idea of regulating scheduling across diverse sectors, and warn of unintended consequences that could actually hurt workers looking for additional hours and flexibility in their schedules.
Angie Manetti, director of government affairs for the California Retailers Association, said that has already happened in San Francisco since that city’s Retail Workers Bill of Rights was passed last year. Managers now choose to leave shifts unfilled to avoid penalty pay from scheduling workers on short notice, leaving heavier workloads on the employees who are working, she said.
San Jose’s Opportunity to Work initiative, an ordinance on the ballot Nov. 8, would require businesses there to offer extra hours to part-time employees before hiring more workers.
The initiative would apply to businesses with 35 or more employees but exclude government jobs and allow companies to apply for a “hardship” exemption.
Dilsa Gonzalez, a San Jose resident who has held a variety of positions in the fast food sector there, hopes the measure will support people like her. Gonzalez works 16 hours per week, but she would like to work 40. When she asks supervisors for additional hours, they tell her there is no work available.
“But then they hire other people,” Gonzalez said through a translator. She tries other means of making money, including recycling or helping her husband, a mechanic, work. But in San Jose, it’s “hard to survive with just a few hours of work,” she said.
“There is a crisis of underemployment in Silicon Valley,” said Ben Field, executive officer of the South Bay AFL-CIO Labor Council, which gathered the required signatures to place the measure on the ballot. “It’s symptomatic of a problem across the country in which more and more wage earners are dependent on part-time work as a main source of income.”
Matthew Mahood, CEO of the San Jose Silicon Valley Chamber of Commerce, counters that the San Jose ordinance would “pit workers against each other” for full-time hours rather than creating more jobs and that the ordinance is too far-reaching.
Meanwhile, in the East Bay city of Emeryville, the City Council passed its “Fair Work Week Initiative” last week.
The initiative requires retail and fast food establishments that have more than 56 employees globally to:
• provide employee schedules two weeks in advance of their shifts;
• allow employees to decline schedule changes that happen within seven days of the changed shift;
• offer extra hours to part-time employees before bringing on new ones;
• provide employees with extra pay for taking on shifts on short notice, known as “predictability pay.”
The initiative also would require employers to allow employees to deny back-to-back closing and opening shifts and to request alternate work schedules without retaliation.
Emeryville has often been a trendsetter when it comes to passing worker protection legislation, EBASE’s Lin said. That includes the $14.44-per-hour minimum wage it established last year that at the time was the highest in the nation. She hopes to push the effort throughout the East Bay in the near future.
Moriah Larkins, an Oakland resident who has worked in retail in Emeryville for five years, is among those who say the unpredictability of retail scheduling has made life difficult. As a single mother, Larkins said, taking on last-minute shifts was difficult because child care is not easy to schedule, but she also often did not get scheduled as many hours as she wanted to pay her bills.
She now works at Home Depot, where her schedule is more secure, allowing her to plan better for her family and financially, she said. Home Depot store manager Lionel Stevens said at the City Council meeting that it issues schedules three weeks in advance, and has an open-door policy for employees who need flexibility.
A study commissioned by Emeryville indicates that relatively few workers believe work scheduling has a negative effect on their life. According to the study, 87 percent of employees said they have influence in creating their schedules, and 76 percent said their schedule has never changed with less than 24 hours of notice.
A separate study led by the backers of the Fair Work Week initiative, EBASE, the Alliance of Californians for Community Empowerment and the Center for Public Democracy found different results: that more workers — roughly two-thirds — get their schedule less than a week in advance and want to work more hours.
Many workers believe an ordinance is needed to close any loopholes for businesses who are not scheduling fairly.
Kelby Peeler, a Union City resident who worked at Barnes and Noble for seven years, said he would often be scheduled 30 hours one week and 10 the next, making it impossible to plan financially, and he often lost sleep with late-night closing shifts paired with opening shifts the next day.
“There are definitely good actors — it’s not like every store is having these problems,” Peeler said. “But you can’t have your schedule based on the whim of a manager.”
By ANNIE SCIACCA
Source
It’s true: HUD policy really does hurt our neighborhoods
HUD has a program that sells tens of thousands of troubled mortgages across the country, many in black and Latino neighborhoods hard hit by the housing crisis, to Wall Street speculators - at a...
HUD has a program that sells tens of thousands of troubled mortgages across the country, many in black and Latino neighborhoods hard hit by the housing crisis, to Wall Street speculators - at a discount! Please let that sink in.
Since 2010, the Department of Housing and Urban Development (HUD) has been auctioning off pools of very delinquent mortgages through a program they call Distressed Asset Sales Program, or DASP. In most cases, the sales have gone to the highest bidder, which have been hedge funds and private equity firms.
Lone Star Fund, a private equity firm started by a Texas billionaire, and Bayview Asset Management, an affiliate of the private equity firm Blackstone Group, have been two of the primary beneficiaries of these sales. The result? Struggling homeowners lose their homes and speculators turn the properties into high-cost rentals that contribute to displacement in communities across the country.
This month, over 110,000 people from across the country signed a petition calling on HUD Secretary Julian Castro, to change this program. This comes on the heels of a March 1st letter to HUD from 45 members of Congress issuing a similar call for reforms to this mortgage sale program. In fact, for over two years, housing advocates and national policy groups have been pushing HUD to fix this program.
In an interview on WNYC Studio’s “The New York Radio Hour,” Secretary Castro referred to our protests that his program is enriching Wall Street as “sloganeering.” We wish that were the case. Unfortunately, it is simply a fact that 98% of the mortgages sold through HUD’s DASP program are going to Wall Street, one that can be verified on HUD’s own website where they post reports from these sales. Most, if not all, of these Wall Street buyers are what the industry itself calls “vulture capitalists” – investors that specialized in distressed assets in the hopes of making them more profitable and selling them for a profit.
In an effort to suggest that he has addressed the problem, Secretary Castro touts the agency’s 2015 auctions of troubled mortgages in which only non-profits were eligible to bid. Let’s be clear. Only 172 mortgages were sold to non-profits through these auctions, while a whopping 15,309 went to Wall Street investors in 2015. So yes, a gesture was made by the agency, but at such a miniscule scale he surely cannot suggest that the problem is solved.
There is no reason to sell such a high percentage of these loans to some of the same culprits responsible for the housing crisis in the first place. In fact, it seems to be in direct conflict with HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all. Call me skeptical, but I don’t trust a private equity firm like Blackstone – a company whose CEO made $734 million last year - to help fulfill that mission. Blackstone and other major speculators have a goal of making as much money as possible, and in the process are chipping away at the wealth and stability of neighborhoods in the process.
There is a viable alternative, that housing and civil rights groups across the country are calling for. HUD should prioritize selling these loans to good actors that have a community-centered plan to save homes from foreclosure when possible and, when foreclosure cannot be avoided, to meet the affordable housing needs of the community with their property disposition plans.
A growing number of Community Development Financial Institutions (CDFIs) have programs to do just this, and have raised the capital needed to buy pools of these delinquent mortgages. But so far, they haven’t been able to get their hands on the number of mortgages that they can afford. HUD should do all it can to make sure CDFIs and other good actors are prioritized for these sales.
I have seen too many people in my community lose their homes and their wealth to Wall Street speculators. We cannot allow the same policies that ravaged our communities to continue. For me the choice is very clear: will Secretary Castro make sure that HUD helps families stay in their homes, or will he allow HUD to continue to sign over these loans to Wall Street and fuel neighborhood displacement?
It’s time for HUD to make the right choice and partner with non-profit CDFIs and other organizations that will keep our neighborhoods together. I encourage everyone who cares about the stability of neighborhoods across the country to join with me in calling on Secretary Castro and HUD to change the DASP program so that it prioritizes foreclosure avoidance and the creation of affordable housing.
By Ana Maria Archila
Source
FL-Sen: Nelson (D) Refuses To Let Trump Privatize Air Traffic Control, PCCC Pushes Dems To Join Him
FL-Sen: Nelson (D) Refuses To Let Trump Privatize Air Traffic Control, PCCC Pushes Dems To Join Him
Here’s another big fight to get ready for:
"President Donald Trump threw his weight behind a proposal to privatize the nation’s air traffic control system on Monday, and...
Here’s another big fight to get ready for:
"President Donald Trump threw his weight behind a proposal to privatize the nation’s air traffic control system on Monday, and a White House adviser called the multibillion dollar effort “low-hanging fruit” that can get through Congress quickly.
Florida Sen. Bill Nelson doesn’t see it that way."
Read the full article here.
Wall Street Journal: Citigroup Pact Has Detailed Plan for $2.5 Billion in Relief to Consumers
Wall Street Journal - July 14, 2014, by Alan Zibel - Citigroup’s $7 billion settlement with the Justice Department over the sale of flawed mortgage securities includes an agreement by the bank to...
Wall Street Journal - July 14, 2014, by Alan Zibel - Citigroup’s $7 billion settlement with the Justice Department over the sale of flawed mortgage securities includes an agreement by the bank to provide $820 million worth of loan forgiveness and other assistance, plus nearly $300 million in refinancing. The money is also earmarked to help with down payments, donations to community groups and financing for rental housing.
These requirements, outlined in a 15-page appendix to the agreement, provide more specificity for consumer assistance than a $25 billion 2012 state/federal settlement with Citigroup and four other banks over mortgage-servicing problems. They also are more detailed than a November 2013 settlement with J.P. Morgan Chase & Co. over similar flawed mortgage securities sold to investors.
At a press conference in Washington on Monday, Associate Attorney General Tony West said the department aimed to improve on previous settlements by establishing an “an innovative consumer relief menu—one that not only includes the principal reductions and loan modifications we’ve built into previous resolutions, but also new, consumer-friendly measures.”
The Citigroup settlement, unlike previous pacts, directs the bank to provide half of its loan assistance to particularly hard-hit parts of the country. It also mandates that borrowers whose loan balances are cut won’t remain “underwater” —or owe more on their homes than their properties are worth.
The J.P. Morgan settlement addresses similar issues, but in a less targeted way. It gave the bank a bonus for providing aid to hard-hit areas, but set no specific requirement. In addition, the J.P. Morgan settlement encourages loan write-downs but does not specify how much of a borrower’s debt must be forgiven. The Citigroup settlement contains $180 million in financing for affordable rental housing—a provision not included in other settlements.
“This settlement is far more nuanced than previous settlements with respect to consumer relief,” said Andrew Jakabovics, senior director for policy development and research Enterprise Community Partners, a large affordable-housing nonprofit group. The pact, he said, “reflects many of the best practices we’ve seen develop with respect to creating sustainable loan modifications.”
A Justice Department official said the consumer-assistance portion of the Citigroup settlement reflects refinements to the government’s thinking after previous settlements. In addition, the official said the smaller size of Citigroup’s mortgage-lending portfolio caused the government to consider additional avenues for relief because the bank had fewer loans to modify.
There has been tension between the Obama administration and liberal activist groups over efforts to resolve cases related to banks’ mortgage-crisis conduct.
Consumer groups have been unhappy with previous settlements of mortgage-related cases. For example, the 2012 mortgage-servicing settlement allowed banks to receive credit for short sales, in which a bank agrees to allow the sale of a property with a mortgage worth more than the home’s value, and for granting “deeds in lieu of foreclosure,” where a homeowner voluntary surrenders the home.
Some activists are still skeptical of the government’s settlements with the financial industry. Kevin Whelan, national campaign director for the Home Defenders League, an activist group representing homeowners, said there’s been no noticeable impact from last fall’s J.P. Morgan settlement.
“We haven’t seen any evidence that they’ve done anything at all,” Mr. Whelan said.
No statistics on the J.P. Morgan settlement have been released. A J.P. Morgan spokeswoman declined comment.
Joseph Smith, a former North Carolina banking regulator, is serving as the independent monitor overseeing the J.P. Morgan settlement and is expected to release a report on its progress in the coming weeks.
Thomas Perrelli, a former Justice Department official who helped broker the 2012 mortgage settlement, will serve as the monitor of the Citigroup agreement. Mr. Perrelli is now at the law firm Jenner & Block in Washington.
Source
Support Asylum Seekers From the Migrant Caravan Vilified by Trump
Support Asylum Seekers From the Migrant Caravan Vilified by Trump
With 71 percent of people detained by ICE held in privately-operated facilities, the private prison industry is one of the largest beneficiaries of anti-immigrant policies. The Center for Popular...
With 71 percent of people detained by ICE held in privately-operated facilities, the private prison industry is one of the largest beneficiaries of anti-immigrant policies. The Center for Popular Democracy, Make the Road New York, Enlace International, New York Communities for Change, and the Strong Economy for All Coalition recently released a report that found that Wall Street companies such as JP Morgan and Wells Fargo not only profit from the industry: they massively increased their investments after Donald Trump was elected president. Check out the report here, then write a letter to one of the companies and share some of the report’s most potent facts on social media using the hashtag #BackersofHate.
Read the full article here.
Warren blasts Yellen for endorsing very white, very male regional Fed presidents
Warren blasts Yellen for endorsing very white, very male regional Fed presidents
Around this time last year, as another white male took the reins at the Federal Reserve Bank of Philadelphia, the Fed’s archaic and opaque system of choosing its regional presidents started to...
Around this time last year, as another white male took the reins at the Federal Reserve Bank of Philadelphia, the Fed’s archaic and opaque system of choosing its regional presidents started to come under fire. At first the criticism was over the way the system appeared to favor insiders. Patrick Harker, at the time the new Philadelphia Fed President, had sat on the regional Fed board that was tasked with filling that position. Later that summer the Dallas Fed would name Robert Kaplan, who is also white, as its president despite the fact that he was a director at the executive search firm that that regional Fed board hired to find candidates. When the Minneapolis Fed named Neel Kashkari its president later in 2015, groups like the Fed Up Coalition pointed out that while he was the only non-white regional president, he, like Harker and Kaplan, had former ties to Goldman Sachs.
Since these presidents have rotating votes on U.S. interest rate policy, many saw the selections as a critical failure to reflect the country’s diversity of gender, race and background. As it stands, 11 of the 12 regional Fed presidents are white, 10 of them are male, and none are black or Latino. Fed Up, a network of community organizations and labor unions calling for changes to the central bank, also points out that there has never been a black regional president in the Fed’s 102-year history.
To be sure, the central bank was set up in 1913 in this decentralized way to check the power of the Washington-based Fed Board, whose seven governors are nominated by the U.S. President and confirmed by the Senate in public hearings and votes. The Fed presidents scattered around the country, meanwhile, are quietly chosen by their regional directors (usually corporate, industry and civic heads) and then, again with little or no public input or transparency, approved by the Fed governors after a series of private interviews with them in Washington. All 12 presidents had their terms extended earlier this year.
So the stage was set on Tuesday for Senator Elizabeth Warren, the Massachusetts Democrat who some see as a potential running mate for U.S. presidential candidate Hillary Clinton, to make a point about diversity at the Fed while making things rather uncomfortable for Fed Chair Janet Yellen, who was testifying before the Senate Banking Committee – and who, it may be noted, is the first woman to lead the central bank:
Warren: “Does the lack of diversity among the regional Fed Presidents concern you?”
Yellen: “Yes, and I believe it is important to have a diverse group of policymakers who can bring different perspectives to bear. As you know, it’s the responsibility of the regional banks’ Class B and C directors to conduct a search and to identify candidates. The (Fed) Board reviews those candidates and we insist that the search be national and that every attempt be made to identify a diverse pool of candidates…”
Warren: “The Fed Board recently re-appointed each and every one of these presidents without any public debate or any public discussion about it. So the question I have is, if you’re concerned about this diversity issue, why didn’t you take (any) of these opportunities to say, ‘Enough is enough, let’s go back and see if we can find qualified regional Fed presidents who also contribute to the overall diversity of the Fed’s leadership’?”
Yellen: “We did undertake a thorough review of the re-appointments of the performances of the presidents. The Board of Governors has oversight of the reserve banks, there are annual meetings between the Board’s bank affairs committee and the leadership of those banks to review the performance of the presidents, and there were thorough reviews of…”
Warren: “But you’re telling me diversity is important and yet you signed off on all these folks without any public discussion about it. I appreciate your commitment to diversity and I have no doubt about it. I don’t question it. It just shows me that the selection process for regional Fed presidents is broken because the current process has not allowed you and the rest of the Board to address the persistent lack of diversity among the regional Fed presidents. I think that Congress should take a hard look at reforming the regional Fed selection process so that we can all benefit from a Fed leadership that reflects a broader array of both backgrounds and interests.”
As it happens, Clinton said last month that she, too, supports an ongoing push by Warren and other liberal members of Congress to exclude bankers from the regional Fed boards and to make the central bank more diverse.
By Jonathan Spicer
Source
7 days ago
7 days ago