Democratic Lawmakers Say Fed Should Increase Its Diversity
Democratic Lawmakers Say Fed Should Increase Its Diversity
The predominantly white male composition of Federal Reserve leadership is facing criticism from Democratic elected officials who believe the institution doesn’t adequately reflect the demographics...
The predominantly white male composition of Federal Reserve leadership is facing criticism from Democratic elected officials who believe the institution doesn’t adequately reflect the demographics of the nation it is meant to serve.
The legislators said in a letter to Federal Reserve Chairwoman Janet Yellen on Thursday that central bank leaders also are drawn too frequently from business and financial backgrounds. The letter to Ms. Yellen received support from the leading Democratic candidate for the White House, Hillary Clinton.
Eleven senators and 116 members of the House of Representatives signed the letter, which was organized by Sen. Elizabeth Warren of Massachusetts and Rep. John Conyers Jr. of Michigan. No Republicans participated, although they were given the opportunity to do so.
“Given the critical linkage between monetary policy and the experiences of hardworking Americans, the importance of ensuring that such positions are filled by persons that reflect and represent the interests of our diverse country, cannot be understated,” the letter said. “When the voices of women, African-Americans, Latinos, and representatives of consumers and labor are excluded from key discussions, their interests are too often neglected.”
While the Fed has made “some progress” on diversity issues, the central bank has “considerable work to do” to comply with its legal mandate to represent the interests and diversity of the American people, the letter said.
The Fed said in a statement that it “is committed to fostering diversity—by race, ethnicity, gender, and professional background—within its leadership ranks.” It added that when it comes to the members of the regional boards, “by law, we consider the interests of agriculture, commerce, industry, services, labor, and consumers. We also are aiming to increase ethnic and gender diversity.”
The Fed also cited a rise in both racial and gender diversity on the regional Fed boards, with 46% of all directors now meeting the label of “diverse.”
In February, Ms. Yellen also addressed the issue in testimony to Congress, saying officials in Washington are “constantly attentive in its oversight of the reserve banks to the issue of diversity of representation on those boards. And it has improved considerably.”
The legislators’ letter follows a report earlier in the year from the Center for Popular Democracy’s left-leaning Fed Up Coalition, which took a look at the Washington-based Fed governors, regional bank presidents and boards of directors overseeing the 12 regional banks. That report flagged the fact that even as the Fed is now led by a woman, three of five current governors are men, and all are white. Of the 12 regional Fed bank presidents, 11 are white, two are women, and one is Indian-American. The last black person to hold a top leadership role at the Fed was Roger Ferguson, a vice chairman who left in 2006.
Fed governors are nominated by the president and are subject to Senate approval. Regional Fed bank presidents are nominated by their local boards by members representing firms not regulated by the central bank, subject to the approval of the Fed board in Washington.
The Clinton campaign said the central bank is indeed ripe for change. “The Fed needs to be more representative of America as a whole,” it said in a statement, adding that “commonsense reforms—like getting bankers off the boards of regional Federal Reserve banks—are long overdue.”
Much of the criticism over Fed diversity centers on the make-up of the regional bank boards of directors, which are populated by members of the private sector and oversee the operations of the Fed banks.
The makeup of Fed bank president ranks has been criticized for other reasons as well. The leaders of the New York, Philadelphia, Dallas and Minneapolis branches have all worked for investment bank Goldman Sachs in some capacity.
The Federal Reserve in recent years has faced criticism from both sides of the political spectrum. Many on the right have been angered by the central bank’s aggressive stimulus actions and its role in bailouts of the financial system, and some have wanted to audit the central bank’s process for making monetary policy and force the Fed to set policy based on an explicit and simple rule.
On the left, some have said the Fed has pursued policies that have promoted income inequality and the interests of the financial sector. The low level of diversity has become a more prominent concern in recent months in part because of the report from the Fed Up Coalition.
Meanwhile, former Minneapolis Fed President Narayana Kocherlakota said in a blog post in January that a lack of black representation at the Fed appears to have left central bankers insufficiently attuned to the economic troubles of the African-American community.
The Fed has become an issue in the presidential campaign. Last week, presumptive Republican nominee Donald Trump said he likely would replace Ms. Yellen if he were president. On the Democratic side, Sen. Bernie Sanders of Vermont has long been a critic of the Fed.
By MICHAEL S. DERBY
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Pittsburgh marchers decry racial, economic injustice
Pittsburgh marchers decry racial, economic injustice
The message was often strident, but the mood of Friday afternoon’s “Still We Rise” march was spirited. More than 1,500 demonstrators, some in strollers, marched down Grant Street under the wing of...
The message was often strident, but the mood of Friday afternoon’s “Still We Rise” march was spirited. More than 1,500 demonstrators, some in strollers, marched down Grant Street under the wing of a gold-crested phoenix, a mythical bird whose rebirth from its own ashes captured the march theme.
“It was beautiful, it was powerful, and it was peaceful,” said Erin Kramer, the head of local activist group One Pittsburgh.
The march drew support from People’s Convention, a two-day gathering of left-leaning community activist groups from 30 states. Demonstrators wielded caricatures of Republican presidential candidate Donald Trump and UPMC head Jeffrey Romoff, in complementary shades of red-orange. And they made frequent stops along Grant Street, where speakers denounced what they saw as cases of racial and economic injustice.
Check back for more updated video with interviews and more scenes from the "Still We Rise" march to protest growing inequality and hate. (Video by Pam Panchak; edited by Melissa Tkach)
A key concern was rising distrust between police and minority groups nationwide. This week, two African-American men, Louisiana resident Alton Sterling and Minnesota resident Philando Castile, died at the hands of police. Five officers were killed by a sniper during a Thursday protest in Dallas.
Outside the Allegheny County Courthouse, demonstrators chanted “Indict, convict, send those killer cops to jail. The whole damn system is guilty as hell.” Still, while a stepped-up police presence was noticeable during the march, there was little tension.
“I’m not feeling any concern” about the marchers, said Police Chief Cameron McLay, who was on hand for the event. Police, he said, were watching for “what else is out there,” including possible attacks on the marchers themselves. The chief called the event “a positive demonstration of First Amendment rights.”
Michelle Tremillo, executive director of the Texas Organizing Project, said members of her organization had participated in the Dallas protest. "It took us until 1 a.m. to make sure that all of our people were home safely," she said. "I was struggling to be here."
"My heart aches for Alton’s family, my heart aches for Philando’s family, and my heart aches for those police officers and their families," Ms. Tremillo said.
But she and others said they hoped shock over the Dallas shooting wouldn’t obscure the racial- and economic-justice issues raised by the march. "I'd hate for that to get lost."
Outside the federal courthouse, demonstrators called for the release of Martin Esquivel-Hernandez, a Mexico-born Pittsburgh resident facing deportation. In May, the Department of Justice said Mr. Esquivel-Hernandez had previously been removed from the United States four times. But Friday his wife, Alma, held aloft his shoes and through an interpreter called him a “father of a U.S. citizen [and] a hard worker. The system has failed him and all of us.”
The march ended outside Republican Sen. Pat Toomey’s office in Station Square, where demonstrators decried fracking for natural gas.
“We wanted to display unity and make the connection between racial justice and economic justice,” said Ana Maria Archila, a co-executive director of the Center for Popular Democracy, which is hosting the convention. “And the march really achieved that.”
By Chris Potter
Source
Immigrants, unions march on May Day for rights, against Trump
NEW YORK — Immigrant and union groups will march in cities across the United States on Monday to mark May Day and protest against President Donald Trump's efforts to boost deportations.
...
NEW YORK — Immigrant and union groups will march in cities across the United States on Monday to mark May Day and protest against President Donald Trump's efforts to boost deportations.
Tens of thousands of immigrants and their allies are expected to rally in cities such as New York, Chicago, Seattle and Los Angeles. Demonstrations also are planned for dozens of smaller cities from Ft. Lauderdale, Florida, to Portland, Oregon.
Read full article here.
38 Triangle area leaders now urge ‘No’ vote on all 6 constitutional amendments
38 Triangle area leaders now urge ‘No’ vote on all 6 constitutional amendments
More than three dozen Triangle area mayors and council members now publicly oppose six constitutional amendments on the ballot Nov. 6. Thirty-eight leaders from Apex, Carrboro, Chapel Hill, Durham...
More than three dozen Triangle area mayors and council members now publicly oppose six constitutional amendments on the ballot Nov. 6. Thirty-eight leaders from Apex, Carrboro, Chapel Hill, Durham, Garner, Hillsborough, Holly Springs, Morrisville, Raleigh, Chatham County, Orange County and Wake County governments have signed a letter criticizing the amendments’ “potentially damaging impact.” The letter was released Thursday by Local Progress and Common Cause NC.”
Read the full article here.
The Controversial New Argument For The Fed To Raise Interest Rates
The Federal Reserve has kept its main interest rates, which banks use to lend to one another and determine the cost of credit throughout the rest of the economy, at or near zero since December...
The Federal Reserve has kept its main interest rates, which banks use to lend to one another and determine the cost of credit throughout the rest of the economy, at or near zero since December 2008. The central bank has maintained the low rates so as not to disrupt the country's recovery from the largest financial crisis and recession in decades.
But several current and former senior economic officials told the Wall Street Journal earlier this month that the virtually unprecedented, prolonged period of near-zero rates risks depriving the Fed of the “ammunition” to address the next recession -- let alone another financial crisis. The Fed's primary method of economic stimulus, they note, has traditionally been cutting interest rates, something that is not possible if rates are already so low.
That could force the government to rely disproportionately on fiscal stimulus, these experts warn, holding a recovery hostage to a partisan ideological divide that has paralyzed Congress and shows no signs of abating.
None of the officials who spoke to the Wall Street Journal explicitly called for an interest rate increase in order to keep the Fed’s options open for the next crisis. The main reason that Fed officials publicly provide for a rate hike is still that they believe price inflation is on track to hit the Fed’s 2 percent target. (William Dudley, president of the Federal Reserve Bank of New York, signaled on Wednesday that the the Fed was reconsidering a September interest rate hike after several days of volatility in the stock market.)
But Fed watchers believe that a desire to replenish the Fed’s proverbial firepower for the next recession is part of the motivation of Fed officials who want to “normalize” -- i.e., increase -- rates.
Narayana Kocherlakota, the outgoing president of the Federal Reserve Bank of Minneapolis,vehemently opposes an interest rate hike in the near future. Kocherlakota nonetheless believesthat his central bank colleagues’ perception that low interest rates have given the Fed less “monetary policy ‘space’” will prompt them to raise rates sooner and higher than is desirable.
Jack McIntyre, a portfolio manager and senior research analyst at Brandywine Global, a Philadelphia-based asset management firm, also said those concerns are part of the Fed’s calculus. “Yes, the [Fed would] like to remove emergency-level monetary stimulus to build up ammunition for the next slowdown in the U.S. economy,” McIntyre told The Huffington Post. “It would be a net positive to move us off of zero interest rates to build up some ammunition so they can cut them when it slows down.”
Many economists insist, however, that these fears are misplaced. They instead argue that the best way for the Fed to prepare for the next recession is to prevent the economy from slowing down too soon in the near term.
“I would much rather have the Fed engage in slowdown and recession prevention by getting us to reach levels at which a rate hike would not be premature,” Josh Bivens, research and policy director at the left-leaning Economic Policy Institute, said earlier this week.
If the Fed raises rates in the coming months to give itself leeway for the next recession, Bivens warned, it risks “creating the crisis you are trying to have tools to fight against.”
Bivens is one of a number of liberal-leaning economists and activists who argue that the economy is still far from full employment. They want the Fed to wait for widespread wage growth to take hold before raising rates, and they were in Jackson Hole, Wyoming, on Thursday and Friday to make their case to Fed officials directly.
When the economy slows down more substantially, Bivens said, the Fed could still stimulate growth using quantitative easing, the massive asset purchasing program it initiated during the most recent recession after interest rates had already bottomed out.
There are other even less conventional techniques available to the central bank, like instituting negative interest rates, which would effectively charge banks for depositing their money rather than lending. It is an idea that former Fed chair Ben Bernanke told The Wall Street Journal has merit.
Richard Parker, an economist at Harvard, agrees with Bivens and other economists that middle- and lower-income workers have yet to share in the gains of the current recovery, but is less worried about the damaging effect of a rate hike.
Instead, Parker believes that lawmakers and activists concerned about low wage growth should focus on changing the regulatory and fiscal policies that he believes would have a bigger impact.
Parker supports a “retained earnings tax” that would penalize corporations for hoarding cash for stock buybacks and other actions “meant to bolster share prices (and hence bonuses)” that do little for the real economy.
And while Parker acknowledges that partisan gridlock makes the prospects of pro-growth fiscal policy dim at the federal level, he sees the success of efforts to raise the minimum wage at the state and local level as a model for incremental progress.
“It is beginning to look like the early Progressive Era, when states were the laboratories for democracy,” he said.
Source: Huffington Post
BREAKING: Maryland Legislature Restores Voting Rights To 40,000 Ex-Offenders
Source: ThinkProgress
Maryland’s legislature voted on Tuesday to override Gov. Larry Hogan (R)’s veto of a bill to give more than 40,000 ex-offenders in the state the right to vote while still on parole or probation.
Maryland joins 13 other states and the District of Columbia where citizens are permitted to vote immediately after serving their sentences. Hogan vetoed the legislation in May of last year after the legislature passed it with large majorities.
In response to the override, Hogan’s office issued a statement saying that he was disappointed with the decision and that “our citizens deserve better.”
“Today, twenty-nine people in the Maryland Senate decided to ignore reason and common sense and support an action that the vast majority of Marylanders vehemently oppose,” a spokesperson for the governor said. “For too long, voters have been completely ignored by their elected representatives in Annapolis.”
But there’s no evidence that a “vast majority” of Maryland voters opposed the bill, and national polls show that strong majorities of Amercians support restoring voting rights to non-violent offenders who have served their sentences. Emma Greenman, director of voting rights and democracy at the Center for Popular Democracy, told ThinkProgress that the legislature’s override is crucial for ensuring full political participation in Maryland.
“A lot of those voters are in Baltimore,” she said. “When we talk about political participation, it’s really important. This is a disenfranchised by law community. It’s so important to restore the rights for these 40,000 folks who are paying taxes, raising families, and want to have a political voice in the decisions that are affecting their lives.”
Ex-offenders and their allies unsuccessfully demonstrated in favor of the legislation in Baltimore last year to pressure the governor to sign the bill. Those in favor of the bill also wrote letters and phone banked to emphasize the importance of voting in helping people reintegrate into society after jail or prison.
The bill’s author, freshman Delegate Cory McCray (D-Baltimore), told ThinkProgress last May that it was crucial that people demonstrated to keep elected officials like Hogan accountable.
“When you can’t vote, you don’t have a seat at the table,” said McCray, whose Baltimore district has one of the highest ex-offender populations in the state. “Obviously, they’ve made mistakes, but these are our family members, our friends, our neighbors. These folks pay taxes. You can’t leave 40,000 people out of the conversation on subject matters that directly and indirectly impact them, like criminal justice reform, housing, access to fresh foods, employment, and transportation.”
Greenman, who was involved in the campaign to introduce the legislation, also said its passage will make it much easier to administer elections in the state because anyone not serving time in prison at the time of an election will be given the right to vote.
“It’s incredibly pragmatic for election administration,” she said. “It’s easy for folks on the ground, easy for folks coming out of prison to understand, and easy for election administration officials. Its a clear line.”
Greenman said she hopes the move creates momentum across the country to restore voting rights for ex-offenders. Currently, Minnesota lawmakers are considering a similar change. And more pressure is being put on Florida and the few states that permanently disenfranchise their former felons.
Data Brief: Challenges Facing Albuquerque’s Modern Workforce
Bernalillo County, New Mexico has almost 472,000 hourly workers—nearly two-thirds of its total workforceb—who would benefit from updating workplace protections to match our modern workweek. Across...
Bernalillo County, New Mexico has almost 472,000 hourly workers—nearly two-thirds of its total workforceb—who would benefit from updating workplace protections to match our modern workweek. Across multiple measures, hourly workers are more likely than salaried workers to experience volatile, precarious schedules. A national survey found that 41 percent of early-career hourly workers know their schedules a week or less in advance and half of the hourly workers in the study said their schedules were decided by their employer alone. Nearly three-quarters of hourly workers reported that their weekly work hours had fluctuated in the past month.
This brief examines who the County’s nearly half-million hourly workers are; the working conditions they face; and the tailored policies that public officials can enact to match the changing rhythms of today’s workplace.
Download the report here:
Donald Trump isn't crazy to attack the Fed
Today, as the Federal Reserve meets to set monetary policy, it will also be bracing for another round of attacks from Donald Trump. In one of the many twists of this strange election season, Trump...
Today, as the Federal Reserve meets to set monetary policy, it will also be bracing for another round of attacks from Donald Trump. In one of the many twists of this strange election season, Trump has gone straight after Fed chairwoman Janet Yellen, saying she should be “ashamed” of keeping interest rates low, and accusing the Fed of creating a “false economy” and doing “political things.” If the Fed declines to raise rates today, as is expected, he will likely attack the central bank yet again.
The implication of Trump’s attacks is that the Fed is just another institution rigged against Trump: that Yellen is keeping rates artificially low to help the economy, which helps the Democrats look better and thus helps his opponent, Hillary Clinton.
Economists, and a lot of political observers, have been horrified by Trump’s direct attacks: What seems normal for the pugnacious outsider candidate is a major violation of American political norms. Politicians aren’t supposed to push the Fed one way or the other; it's a point of pride for the Fed, and for the nation overall, that the central bank sets policy independent of political pressure. Economists credit central bank independence as one of the great economic success stories of the 20th century, paving the way for lower inflation and stronger growth.
But how far off is he, really? It's true that the Republican nominee is violating tradition: critiquing individual policy decisions shows that he doesn't respect the line between politics and monetary policy. And there’s an implicit threat that could genuinely damage the Fed’s autonomy: He’s signaling that Fed leaders would be on notice in a Trump administration, and could pay a price for making decisions he didn't like.
But the line between politics and the Fed is far blurrier than the conventional wisdom would have it—and politicians before Trump have crossed it in much more serious ways. Moreover, buried within Trump’s comments is a kernel of truth: The Federal Reserve is, by definition, not independent. Unlike the Supreme Court, the central bank is a creation of Congress and is accountable to lawmakers on Capitol Hill. It can be changed—or abolished—by Congress as well. And to pretend it's not—to treat the Fed as an entity totally removed from American politics—also leaves us powerless to talk about the ways it might be improved.
It's important to point out that Trump's immediate accusations are almost certainly wrong: Economists across the political spectrum reject Trump’s claims that Yellen is declining to raise interest rates to improve Clinton’s election odds. Yellen, who has also firmly rejected Trump’s claims, does not set monetary policy alone; it’s set by the 12 members of the Federal Open Markets Committee. (Currently, it has just ten members.) That means no individual member, or even small group of members, can tip the scales to benefit a certain candidate. And any collusion would also be difficult to hide: Transcripts of FOMC meetings are released publicly (though on a five-year delay), and Yellen testifies before Congress four times a year.
“The fact that I don’t happen to agree with the conduct of policy doesn’t mean that they are being political,” said Glenn Hubbard, the dean of Columbia Business School and former top economist to President George W. Bush, who believes rates should rise faster. “I think that’s very unfortunate.”
A real example of political interference with monetary policy occurred in the early 1970s. Taped recordings of Richard Nixon provide clear evidence that Nixon pressured then-Fed Chair Arthur Burns to adopt expansionary monetary policies to improve his reelection chances. For instance, before Burns was confirmed by Congress, Nixon told him: “I know there’s the myth of the autonomous Fed ... and when you go up for confirmation some senator may ask you about your friendship with the president. Appearances are going to be important, so you can call [Nixon economic advisor John] Ehrlichman to get messages to me, and he’ll call you.” Nixon met with Burns frequently and tacitly pressured the chairman to keep policy loose. The FOMC transcripts indicate that many Fed members had doubts about the policy decisions but voted for them anyways.
Trump’s criticism of the Fed on the campaign trail doesn’t approach Nixon’s actual interference in monetary policy from the White house. But it does raise the broader question of what constitutes "political interference" in the Fed, and what constitutes legitimate criticism. One key distinction: Nixon used his presidential powers to influence Burns, while Trump currently has no such power over Yellen. But Trump, if elected, will also nominate the next Fed chair. That inherently means his criticisms of the central bank veer closer to political interference than critiques from academics like Hubbard.
“The line is blurry,” said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics who has worked at the Fed intermittently for the past 30 years.
On substance, what constitutes a "political" attack versus a policy criticism isn't immediately clear: Trump’s comments on the Fed often are substantive, such as when he said the Fed’s policy has created “a big, fat, ugly bubble.” But given his penchant for changing positions on the institution—he first said he’d retain Yellen before saying he’d replace her, for instance—many economists have concluded that Trump’s motives are concerned more with his own advantage than any serious policy beliefs.
To some experts, the threat posed by "political" attacks on the Fed has always been overblown. “I don’t get as worked up as some people to do about what politicians say,” Gagnon said. “They are allowed to have their opinions. If they think the Fed should do something differently, they can say it.”
The long tradition of deference to the Fed’s policy independence can even pose a risk: It creates an environment in which any critique of the Fed is seen as out of line, including the idea of reforming how it works. "The Federal Reserve is a crucial public agency, so there are lots of important questions—including the selection of its leaders, the determination of their priorities, and the specific strategy that they're following—that should all be open to public discourse," said Andrew Levin, an economist at Dartmouth who spent two decades working at the Fed, including as a top advisor to Yellen and her predecessor, Ben Bernanke.
Levin has been part of a movement that has put a few cracks in the protective shield around the Fed this year. Earlier this year, he published a set of recommendations for reforming the Fed in conjunction with the Center for Popular Democracy’s Fed Up campaign; the goal is to make the Fed's board members—currently 83 percent white, nearly three-quarters male and nearly 40 percent from financial institutions —more representative of the American public. Although it hasn’t received as much attention as Trump’s attacks on the Fed, Hillary Clinton also quietly criticized the central bank when her campaign said she supported such reforms.
To Ady Barkan, the head of the Fed Up campaign, these efforts do not constitute an unacceptable interference with the Fed’s independence, and neither do Trump’s comments. The Fed’s independence, he said, comes from its structure; its leaders are appointed, not elected, for long terms, which inherently insulates the central bank from political pressure. The Fed must still be accountable to the public though, and one way policymakers fulfill that responsibility is through public comments. For that reason, Barkan added, monetary policy decisions “are appropriate topics for political debate.”
“The main thing about Trump’s comments is that they show real ignorance about how the Fed works,” he said. “I don’t object to the idea that Trump or Hillary would object to what the Fed is doing.”
By Danny Vinik
Source
Should Chicago Spend Money on a Police Academy?
Chicago spends 39 percent of its municipal budget on policing, while New York spends just eight percent and Los Angeles spends 26 percent, says the Center for Popular Democracy. This means the...
Chicago spends 39 percent of its municipal budget on policing, while New York spends just eight percent and Los Angeles spends 26 percent, says the Center for Popular Democracy. This means the city has less funds for things like schools and social services.
Read the full article here.
Laid-Off Workers Demand Severance Pay From Equity Firms Behind Toys "R" Us Bankruptcy
Laid-Off Workers Demand Severance Pay From Equity Firms Behind Toys "R" Us Bankruptcy
Today we bring you a conversation with Debbie Beard, an assistant manager at Babies "R" Us in Phoenix, Arizona, and Carrie Gleason, director of the Fair Workweek Initiative at the Center for...
Today we bring you a conversation with Debbie Beard, an assistant manager at Babies "R" Us in Phoenix, Arizona, and Carrie Gleason, director of the Fair Workweek Initiative at the Center for Popular Democracy. They discuss how leveraged buyout of Toys "R" Us hurt tens of thousands of retail workers and how a new campaign is fighting back to demand justice for these employees.
Read the full article here.
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