Campaign News

St. Louis Public Radio - March 5, 2015, by Maria Altman - What recovery? That was the question being asked Thursday by a small group of activists outside the Federal Reserve Bank of St. Louis.

About a dozen protesters called on the Fed to focus on unemployment, especially among minorities, rather than on keeping inflation rates low. They said if the Federal Open Market Committee raises the interest rate this year, as anticipated, it would likely mean fewer jobs.

"We’re calling on the Fed to do the right thing by most people, because the people they’re helping by changing the policy is a very small minority people and a very influential and affluent group of people," said Derek Laney of Missourians for Reform and Empowerment.

The protest was one of several held at Federal Reserve Banks around the country to highlight a new report by the Center for Popular Democracy and the Economic Policy Institute. The report calls on the Fed to focus on “full unemployment,” and highlights disparities between white and minority unemployment levels.

In Missouri last year the unemployment rate for African-Americans was 14.4 percent, while the rate for whites was just 5.1 percent, according to the Bureau of Labor Statistics. Several of the protesters, who represented a variety of local groups, including MORE, the Organization for Black Struggle, Veterans for Peace, Pro-Vote and Young activists United STL, had personal stories of being out of work and struggling.

Reginald Rounds with MORE said he had recently gotten a bachelor’s degree but still couldn’t find work.

"There is no recovery in the community in which I live," said Rounds. "I talked to many people in different organizations and churches throughout the city as we worked on the Don’t Shoot Coalition. It’s my personal belief that a lot of things that happened in Ferguson just boiled over from all the tensions of unemployment, job creation, housing and our educational system."

The Federal Reserve Bank of St. Louis said in an emailed statement that officials reached out to protesters on Wednesday and asked them to meet to discuss the report. 

"The Fed has a dual mandate to keep inflation low and stable and to foster maximum sustainable employment. It takes these responsibilities very seriously," said Karen Branding, senior vice president of public affairs, in the statement.

Washington University economist Jennifer Dlugosz said the Fed has good reason not to focus too tightly on lowering unemployment levels.

"We know from macroeconomics that if the Fed tries to push the rate of unemployment below the natural rate, which people think is 5.5 percent, that it wouldn’t work and that it would just accelerate inflation," she said.

Dlugosz, who previously worked for the Fed’s Board of Governors in Washington, D.C., said monetary policy is not the right tool to address unemployment disparity. Instead, she said, targeting labor market and education policies to create more equality would likely have better results.

The report also took aim at the Fed’s transparency, especially in choosing the board of directors for each of the 12 Federal Reserve Banks. The protesters argued too many corporate and bank executives take those positions, including in the Federal Reserve Bank of St. Louis’ board of directors.

"It’s basically bankers, and that’s in the charter, and there’s whole bunch of other folks who could be from labor and working people, but are instead from big corporations," said Jeff Ordower of MORE.

The board of directors in each of the Federal Reserve districts is responsible for choosing the president of the Reserve Banks. Those presidents rotate onto the Federal Open Market Committee, which meets eight times a year and decides the nation’s monetary policy. (Learn more about how it all works here on the Federal Reserve Bank of St. Louis' website.)

In her statement, Branding said the Fed was designed by Congress to “represent the voice of Main St."

"At the St. Louis Fed we have significant dialogue with business leaders, community development organizations, educators and the public,” she wrote. “We have a diverse board of directors who are familiar with economic and credit conditions in the district.”

Professor Dlugosz said the make-up of the boards is somewhat limited by statute. Each district’s community bank members choose three bankers to sit on the board and three non-bankers. The other three directors are chosen by the Fed’s Board of Governors in Washington, D.C, and are supposed to represent a mix of labor, agriculture, industry, and consumers.

Dlugosz said the last group, known as “Class C,” is the most likely group to represent the interests of the public, since they’re appointed by the Board of Governors.

"That’s really, I’m guessing, the main place where you’re going to see heads of labor unions or consumer advocates. If they’re getting on there, I imagine it’s the Board that’s electing them," she said. "I don’t know if that’s changed over time, but one would hope that they’re keeping an eye on it."

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New Haven, Conn., was the first city to issue a municipal ID in 2007 following the fatal stabbing of a 36-year-old undocumented immigrant while he cashed a check, according to a 2013 report by the Center for Popular Democracy on municipal ID programs.

Read the full story here.

O’Neal is one of dozens of activists and policy experts traveling to Jackson Hole this week to urge the Fed against raising rates. The campaign, called Fed Up, includes some two-dozen unions, community groups, and think tanks, from the AFL-CIO to the Working Families Party. In Jackson Hole, organizers will deliver a petitiondemanding that the Fed rethink its plan to raise interest rates until the recovery can reach more Americans. Fed Up also plans to hold a series of teach-ins exploring questions like “How Do We Build a Fed that Works for Us?” and “Do Black Lives Matter to the Federal Reserve?”

While there’s only so much the Fed can do when spending on public investments and social programs is well below where it should be, the absence of fiscal support makes monetary policy that much more critical to promote a broadly shared recovery. At its core, the Fed Up campaign is about answering two questions, said Ady Barkan of the Center for Popular Democracy during a press call previewing the upcoming meeting: “Whose recovery is this?” and “Whose Federal Reserve is this?”

“I don’t think that those at the Fed know how life is here in south DeKalb County when they say that the economy is recovering,” O’Neal said during the call. O’Neal makes $8.50 an hour at the daycare center she works at in Atlanta. That’s not enough, she says, to cover rent, food, and utilities for her household, let alone the medication she needs to treat asthma and high blood pressure. “Our life is a constant struggle,” she says. “We have to decide whether, you know, are we going to buy meat, or are we going to buy medicine, or are we going to pinch off the electric bill this month?”

But, she emphasized, she’s hardly alone. “It’s also my neighbor. It’s also the person down the hall, my neighbor next door, around the corner. The whole community is suffering.”

The Atlanta area has been particularly hard hit by the financial crisis and weak economic recovery. In 2009, the Pew Hispanic Center named Metro Atlanta one of a handful of “distinct epicenters” of the nationwide foreclosure crisis. According to their report, less than 300 U.S. counties had foreclosure rates of more than 1.8 percent, and 19 of those counties, including DeKalb, are in Metro Atlanta. As elsewhere, the crisis had a particularly severe impact on black communities: All of the 19 counties Pew singled out as centers of the crisis are majority-black.

Since then, the weak recovery has in some ways only worsened inequities like this. In 2011, the unemployment rate for blacks in the Atlanta area stood at 14.4 percent, or twice the rate of their white neighbors. Three years later, black unemployment had dropped to 13.7 percent, but because joblessness among whites in Atlanta had fallen much faster, blacks were now nearly three times as likely to be jobless as whites. Today, DeKalb County has a poverty rate of 19 percent, well above the average for Georgia and the nation as a whole. And most of that poverty has been concentrated on the county’s majority-black south side.

But among black communities nationwide, DeKalb has actually fared relatively well. The area was hit hard by the downturn, but it remains the second-most affluent black-majority county in the country. By contrast, in Washington, D.C., a majority-minority city, black unemployment is a staggering 15.8 percent, more than five times the rate for whites, according to the Economic Policy Institute. Nationwide, after hitting its highest levels since the 1980s, black unemployment remains about double the rate for whites. The mortgage crisis and subsequent downturn destroyed a full 47 percent of black families’ wealth, and that wealth is far from recovered.

Despite that, the Federal Reserve seems perilously close to raising interest rates, possibly as soon as next month—a change that could have a disastrous effect on the already-weak recovery.

“We shouldn’t mince words,” said Barkan. “When the Federal Reserve raises interest rates, it is doing so in order to slow the economy down in order to prevent the economy from creating more jobs.” A slowdown like that would not only make it harder for the labor market to recover, but it also has a good chance of widening the gap in unemployment between blacks and whites. Historically, the joblessness gap between black and white workers tends to grow when the economy slows down.

But Fed officials remain stubbornly committed to a rate hike, even as instability grips the stock market this week. In a speech on Monday, following another day of market volatility, Atlanta Fed President Dennis Lockhart sought to allay suspicionthat the Fed’s plans to raise rates this year had changed. In June, 15 out of 17 senior Fed officials indicated that they’d like to see a rate hike this year, echoing a similar statement from March. As Lockhart put it in another speech on August 10, “The economy has made great gains and is approaching an acceptable normal.” Nowhere in his speech did Lockhart mention the poverty and racial inequality gripping communities just a few miles from the Atlanta Federal Reserve Bank he chairs.

For O’Neal, places like south DeKalb are very far from an acceptable normal. “When the Fed says that the economy is recovering and they want to raise the interest rates,” she said, “I look around and I don’t see recovery in my community.” 

Unfortunately, plenty of Fed leaders don’t seem to think an unequal recovery is their responsibility to address. In testimony before Congress last month, Fed Chair Janet Yellen said that while black unemployment remains very high, “there really isn’t anything directly the Federal Reserve can do to affect the structure of unemployment across groups.”

But Barkan begs to differ. “We think that’s really a mistake,” he said. “A strong economy—more job growth and more wage growth—has a disproportionately positive effect on African Americans because of the racial disparities that exist in our labor market.” Keeping interest rates low is far from the only solution to racial inequality in the job market (and not even the only thing the Fed can do by itself), but it’s a good start.

Josh Bivens of the Economic Policy Institute, another Fed Up signatory, agrees.Because low-wage workers and workers of color tend to feel changes in unemployment much more dramatically, he said, keeping unemployment low should be the Fed’s first priority. “A policy that lets the unemployment rate get as low as it can possibly go without sparking inflation is one that’s going to have disproportionate benefits to workers of color,” he added.

Unfortunately, Barkan said, Fed officials have a long history of overlooking issues like racial gaps in unemployment and wealth. A big part of the problem is the central bank’s leadership, which is heavily skewed toward the banking sector. By law, 72 out of 108 directors of the Fed’s 12 regional banks must represent workers. But currently, just two officially do, compared with 91 who come directly from banks and financial institutions. “Of course when you have leadership like that you get policies that don’t advance the needs of American working families,” Barkan said.

Which is exactly why Fed Up plans to confront the central bank’s leadership today in Jackson Hole. In doing so, the coalition will help connect monetary policy and policymakers to the people and communities it most impacts.

And demanding that interest rates stay low is just a first step. During the conference, Fed Up will also present a report from PolicyLink on what a more equitable recovery would look like. The report explores how genuinely full employment—which has long been a core policy mandate for the Federal Reserve—would reshape our economy. The report defines full employment as no more than 4 percent unemployment for all groups and a labor-force participation rate no lower than 75 percent for men and 60 percent for women. (Currently, labor-force participation remains stuck at 69 percent for men and 56.7 percent for women, the lowest levels in decades.)

As Barkan and Bivens emphasized, a change like that would have a particularly dramatic impact on communities of color. In Atlanta, black unemployment would drop 10 percent while average household income would increase by 11 percent for black families. A full 175,000 people would be lifted out of poverty and the local economy would grow by $24 billion. Nationwide, the change would be just as dramatic. Genuine full employment would cut black unemployment by two-thirds and lift more than nine million people out of poverty.

It’s this kind of recovery that the Fed needs to begin thinking seriously about, said Barkan. The first step, he added, is to rethink how monetary policy is formulated and who gets a seat at the table. 

Correction: In a previous version of this article, Dawn O'Neal's name was mispelled as O'Neil. 

Source: The American Prospect

Isaacson to sit on City Planning Commission

Author and former CNN CEO Walter Isaacson may be only a part-time resident of New Orleans, but Mayor Mitch Landrieu has appointed him to the City Planning Commission.

Isaacson, 64, who now heads the Aspen Institute in Washington, D.C., will replace lawyer Alexandra Mora in January.

The City Council approved the appointment Thursday.

“I'm deeply honored and excited about the prospect of helping to protect the city and plan for its future,” said Isaacson, who splits his time between New Orleans and Washington.

Isaacson, a New Orleans native, is also a former editor of Time magazine and the author of books about Steve Jobs, Albert Einstein, Benjamin Franklin, Henry Kissinger and the "group of hackers, geniuses and geeks (who) created the digital revolution."

He was vice chairman of the Louisiana Recovery Authority, the agency that oversaw the state’s rebuilding after Hurricane Katrina. He is also on the boards of Tulane University and the New Orleans Tricentennial Commission.

Landrieu also appointed Jason Hughes to the commission to fill the unexpired term of Nolan Marshall III, who left New Orleans in October for a job in Dallas.

Hughes’ tenure will end in 2021, while Isaacson's will end in 2023.

City Council condemns anti-Muslim rhetoric

At the end of a heated election season that has included calls from Republican presidential nominee Donald Trump to ban Muslims from entering the country, the New Orleans City Council approved a resolution Thursday condemning anti-Muslim rhetoric.

The resolution is part of a national effort by the liberal group Local Progress to get similar measures passed across the country

"We have seen dangerous levels of anti-Muslim and racist rhetoric as well as a rise in hate crimes," said Councilwoman LaToya Cantrell, a board member of Local Progress. "This rhetoric and violence is not only a threat to our communities but also a direct threat to us as U.S. citizens."

The resolution passed 6-0, with Councilman Jason Williams absent.

"Love really does trump hate," Cantrell said, echoing a slogan used by Democratic presidential nominee Hillary Clinton.

The resolution says the council "condemns all hateful speech and violent action directed at Muslims, those perceived to be Muslims, immigrants and people of color," "categorically rejects political tactics that use fear to manipulate voters or to gain power or influence" and "reaffirms the value of a pluralistic society, the beauty of a culture composed of multiple cultures, and the inalienable right of every person to live and practice their faith without fear."

Clinton is expected to easily carry New Orleans in Tuesday's election.

Jeff council backtracks, OKs disputed contract

The Jefferson Parish Council on Wednesday suspended a disputed ordinance in order to keep the parish's Carnival parades rolling in 2017, hiring a company owned by a local political consultant to build the grandstands from which revelers will cheer on the annual spectacle.

The council voted 7-0 to suspend a ban passed a year ago that would prevent parish contracts from being awarded to any firm partially owned by a consultant who had represented an elected official during a prior election.

That ordinance, which was proposed by Councilman Chris Roberts last November, is under challenge in federal court.

Buisson Creative, a firm owned by political consultant Greg Buisson, was the only firm to respond to the most recent request for proposals to provide the grandstands for the upcoming Carnival season.

Because of the pending legal challenge and the fact that no other proposals for the work were submitted, the council suspended the ban and also voted 6-0 to negotiate a contract with Buisson Creative. Roberts abstained from that vote.

The ordinance was controversial because some saw it as being aimed specifically at Buisson, who had just worked for Roberts’ political opponent in the prior election cycle.

Roberts dismissed the criticism, saying the ordinance was a good-government measure designed to prevent conflicts of interest by making sure those who worked on political campaigns did not then get contracts with parish government.

BGR: Its report to save taxpayers millions

The Bureau of Governmental Research put out a release last week taking credit for uncovering an issue that it said is "expected to yield millions in savings to taxpayers."

On Oct. 27, an Orleans Parish Civil District Court judge ruled in the city's favor on how to apply the formula for calculating pension benefits for city firefighters. The BGR release said the "matter stemmed from a 2013 report in which BGR revealed that the New Orleans Firefighters' Pension and Relief Fund was applying the benefits formula on more generous terms than those spelled out in state law."

The court order directs the fund "to apply the formula as set forth in law," the research group said. 

"According to a pension consultant's estimate, if the formula were properly applied to current employees alone, taxpayers would save roughly $1.3 million per year. But under the judgment, the formula is to apply to current retirees as well, increasing the potential savings," BGR said.

By Jessica Williams, Jeff Adelson, Chad Calder and Bruce Eggler

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