Urban Outfitters heeds call to end on-call shifts
WELL, THAT was fast!
Yesterday I wrote about an "on-call" scheduling practice at Urban Outfitters that's unbelievably abusive to its lowest-wage workers. Within...
WELL, THAT was fast!
Yesterday I wrote about an "on-call" scheduling practice at Urban Outfitters that's unbelievably abusive to its lowest-wage workers. Within hours of the column hitting print, Urban announced it was killing the practice for good.
Coincidence? You decide.
Here's yesterday's statement from the Philly-based billion-dollar retailer, which also owns the brands Anthropologie, Free People, Terrain and Bhldn.
"We are always looking for ways to improve, and as such we have decided to end on-call scheduling for all [Urban] brand associates throughout North America. We look forward to continuing to find ways to better fulfill our mission of providing fashion and lifestyle essentials to our dedicated customers."
This is amazing news for employees at Urban's 518 North American stores.
For years, they'd been receiving their work schedules only a few days in advance, with some shifts designated as "on call." But they wouldn't be told, until three hours before the shift was to begin, whether they'd actually be needed to work. If they weren't, they wouldn't be paid, even though they'd been required to hold that time for the company.
The unpredictability had wreaked havoc on workers, who are mostly young and female.
They were unable to schedule classes if they were in school. Or to schedule hours at a second job if they needed a full-time income. Or to reliably arrange day care or pay their bills, since their cost to do both was fixed even though their working hours weren't.
What a crappy way to treat members of the demographic that Urban targets so heavily.
"It's pretty messed up," one worker, a college student, told me. She was paying her way through school, but Urban's scheduling meant she couldn't schedule other work to help pay tuition. "It's hard to plan."
Readers reacted with disgust to the column.
"Retail needs to be called on the carpet!" wrote emailer rgrassia. "We need more people with the ability to do something to pressure these companies to change the ways they conduct themselves."
Reader Madeleine Pierucci excoriated Urban for "co-opting the '60s struggles and playing it to the detriment of its 2015 workers. Not cool." She also planned to picket Urban's Center City store next week.
And a furious churchgoer named Samantha C. vowed to spread the word throughout the National Baptist Convention to have its 100,000 church members boycott Urban's stores in protest.
"It's time for slavery to stop," she declared.
Urban's change of heart is a testament to the power of the press, says Carrie Gleason. She's director of the fair-workweek initiative at the Center for Popular Democracy and has been working for a very long time to get employers to end on-call staffing.
"The media has helped shift the public opinion in terms of what is acceptable around employers' expectations of their employees' time," she told me. "I think Urban's announcement is a direct response to the fact that the public is now holding the whole retail industry to higher standards."
I'd like to take credit for Urban's reversal, but the truth is, another media outlet has been hammering at on-call scheduling by retailers - and not just Urban - for a while now.
The online news site BuzzFeed has chronicled the issue so doggedly that the New York state attorney general in April called companies on the carpet for the practice, following his investigation into the legality of on-call staffing at 13 retailers whose New York stores employ thousands of low-wage workers.
As a result, huge chains like Victoria's Secret, Bath & Body Works, Abercrombie and Gap announced plans to discontinue the practice not just in New York but nationally, improving hundreds of thousands of workers' lives.
Urban, though, had said it would discontinue the practice only in New York. Everywhere else, it would be exploitation as usual.
It turned my stomach that Philly-based Urban - a company that so many of us grew up with and feel affinity for - would treat its workers so shabbily. And I said as much in my column, which we - ahem - pushed on the Daily News front page and on Philly.com.
If that helped nudge Urban into doing the decent thing, then yesterday was a good day.
Not just for Urban's workers. But for Urban's shareholders:
As news hit that Urban would end its on-call scheduling, CNBC reported, the company's stock rallied 4.68 percent.
You're welcome, Urban.
And thank you.
Source: Philly.com
For immigrants fighting deportation, a push for government-funded lawyers
For immigrants fighting deportation, a push for government-funded lawyers
Nearly 4,000 immigrants in the Washington region face deportation every year without a lawyer, according to a report that calls on area governments to follow the lead of New...
Nearly 4,000 immigrants in the Washington region face deportation every year without a lawyer, according to a report that calls on area governments to follow the lead of New York and Los Angeles and provide funding for legal aid to immigrants.
The Center for Popular Democracy, a national nonprofit organization, analyzed thousands of deportation cases at immigration courts in Baltimore and Arlington and found that immigrants were far more likely to prevail if they had a lawyer...
Read full article here.
How Can We Combat Wage Theft And Protect Immigrant Workers?
How Can We Combat Wage Theft And Protect Immigrant Workers?
Every year, millions of workers suffer from wage theft when employers or companies do not pay them what they are owed. Wage theft, which costs America’s low-wage workers an estimated $50 billion...
Every year, millions of workers suffer from wage theft when employers or companies do not pay them what they are owed. Wage theft, which costs America’s low-wage workers an estimated $50 billion each year, comes in different forms. An employer could keep customer tips instead of paying them out to workers, force employees to work off the clock without compensation, or illegally deduct the cost of uniforms or work tools from employees’ paycheck.
Read the full article here.
Time for a Moratorium on Charter Schools
Al Jazeera America - April 14, 2015, by Amy Dean - Charter schools are everywhere. Not long ago, these publicly funded but privately run institutions were a relative rarity. Those that existed...
Al Jazeera America - April 14, 2015, by Amy Dean - Charter schools are everywhere. Not long ago, these publicly funded but privately run institutions were a relative rarity. Those that existed served mostly as experimental academies whose successful lessons could be applied elsewhere in their host school districts. But in the last 15 years, swaths of the U.S. public education system have been turned over to charters. In fact, they are being used as a means to crush teachers’ unions and to pursue high-stakes testing.
Charter advocates justify this ascent by promising an antidote to the disappointing outcomes of traditional public schools in segregated and underfunded urban districts. But the research is in: Charter schools have failed to deliver on their promises.
It is time lawmakers freeze their growth and consider how to provide the best education possible for all students.
Underwhelming performance
There are recent precedents for a moratorium on charter schools. Philadelphia, which issued dozens of charter licenses before 2008, did not allow any new ones from 2008 to 2015. The Chicago School District declared a freeze on charters for the 2015–16 school year. Connecticut and Delaware are considering similar actions. Other school boards and states should follow suit.
As a bevy of recent studies prove, charter schools are not substantially outperforming neighborhood public schools. In Arizona, for example, “on average, charter schools in Arizona do no better, and sometimes worse, than the traditional public schools” according to a study by the Brookings Institution. A similar study in Ohio showed that public schools were producing better results than their charter peers in most parts of the state. In Illinois the Institute on Metropolitan Opportunity found that Chicago’s charter schools are “less likely to be racially or ethnically diverse” than and “consistently underperform” their public school peers.
That charter schools are not doing better than traditional public schools is particularly disturbing, since they have a host of advantages. Notably, many charters cherry-pick their students. A 2013 study by Reuters found that charter schools employ complicated screening mechanisms to admit only students who are most likely to succeed. This ensures that students from deeply impoverished families or households where English is not spoken at home are less likely to gain admission. These methods include using English-only documents, demanding proof of citizenship (which is illegal) and narrowing application windows to a few hours.
Charters also regulate the composition of their student bodies through expulsions. In 2014 the Chicago School District reported that public schools expelled 182 students out of 353,000. By contrast, charter schools booted 307 students out of 50,000. The expelled students end up back in the public schools, which become the institution of last resort. Charter schools should in theory register superior test scores, since they are not serving some of the highest-need students. Yet that has not been the case on the whole.
Charters have fallen short in terms of transparency and accountability too. A 2010 review from the Philadelphia controller’s office found that the city’s charter schools had little oversight from the understaffed and underfunded school district. Numerous charter operators have been charged with corruption and misuse of funds.
A national moratorium on charter schools would stop the hemorrhaging of funds from traditional public schools.
A 2014 report by two anti-education-privatization organizations, the Center for Popular Democracy and Integrity in Education, found $136 million in fraud and abuse in 15 states. A follow-up study (PDF) in Pennsylvania revealed “charter school officials have defrauded at least $30 million intended for Pennsylvania schoolchildren since 1997.” Some of the questionable dealings may not be illegal because of the intricacies of state laws, but there is little doubt that public money is being wasted.
A recent review of charter school scandals in Florida and Michigan by The Washington Post listed numerous cases of real estate flipping, in which charter schools were used as vehicles for exorbitant profits. Michigan’s largest charter operator, National Heritage Academies gets a 16 percent return on its investment in rent from the state — nearly twice what most commercial properties receive.
A nationwide moratorium
Chicago and Philadelphia provide good examples for setting moratoriums on charter schools, but the freeze has been limited in both cities. Philadelphia’s School Reform Commission did not approve a new charter school in the last seven years. But the number of students enrolled at the existing charters continued to grow, doubling from 2007 to 2015. This year the commission approved five new charters — a regrettable reversal of the moratorium.
Chicago Mayor Rahm Emanuel has declared that no new charter schools will be funded during the 2015–16 year. However, there is good reason to believe that he is simply playing politics and that he will not extend the moratorium. He faced a tough re-election battle, and the temporary halt was seen as an attempt to lure supporters of public education back into his camp. His poll numbers plunged in 2013 when he closed 50 neighborhood public schools, mostly in black and Hispanic neighborhoods that turned out for him in the 2011 election. His attempts to use the moratorium to appeal to disaffected voters shows that black and Latino parents, whom advocates of the charter industry insist want more charter schools, are hardly as enamored with charters as previously thought.
Nationwide, the expansion of charter schools continues unabated. Charter advocates report that 500 new charter schools opened during the 2014–15 school year, enrolling 348,000 students. One in 20 American students is enrolled in a charter school.
It is time for this to stop.
Charter advocates claim that they are data-driven technicians who pay attention to evidence of what works. But research does not support their preferred education policies. A national moratorium on charter schools would stop the hemorrhaging of funds from traditional public schools. It would also allow time to address the corruption that has plagued the charter industry. This would create an opportunity for some reflection on what actually works best for educating our children.
Amy B. Dean is a fellow of the Century Foundation and a principal of ABD Ventures, a consulting firm that works to develop innovative strategies for organizations devoted to social change. She is a co-author, with David Reynolds, of “A New New Deal: How Regional Activism Will Reshape the American Labor Movement.”
The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.
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“These Disasters Aren’t Natural Anymore”: A Dispatch from Puerto Rico After Maria
“These Disasters Aren’t Natural Anymore”: A Dispatch from Puerto Rico After Maria
Several weeks ago, Puerto Rico avoided a direct hit from Hurricane Irma, which shifted north at the last minute. But Hurricane Maria hit head on, and has left a humanitarian crisis in its wake....
Several weeks ago, Puerto Rico avoided a direct hit from Hurricane Irma, which shifted north at the last minute. But Hurricane Maria hit head on, and has left a humanitarian crisis in its wake. Power on the island could be out for as long as six months, and many parts of the island have yet to be contacted.
Read the full article here.
With few other takers, the government has to sell its distressed mortgages to Wall Street
With few other takers, the government has to sell its distressed mortgages to Wall Street
Nearly a decade after the housing bubble burst, one grim legacy endures.
Far too many homeowners are still struggling to make mortgage payments, or have quit paying altogether. But one of...
Nearly a decade after the housing bubble burst, one grim legacy endures.
Far too many homeowners are still struggling to make mortgage payments, or have quit paying altogether. But one of the most robust attempts to address the overhang of delinquent loans is bumping up against an uncomfortable reality.
Since 2010, government entities like the Department for Housing and Urban Development, Fannie Mae and Freddie Mac have auctioned off thousands of delinquent mortgages. The auctions should be a win-win: they take those problem loans off the government’s books so taxpayer dollars aren’t strained. They also offer homeowners the possibility of a fresh start: investors who pay far less than the loan is worth are able to cut the borrowers a better deal than the government can.
But there’s been some pushback. Groups like the Center for Popular Democracy and progressives like Massachusetts Senator Elizabeth Warren criticized the government for enabling what they called a “land grab” by the same Wall Street investors whom many saw as responsible for faulty lending in the first place.
The government responded by encouraging nonprofit organizations to compete alongside financial institutions. Groups focused on helping homeowners, rather than realizing a bottom line, would do good and do well, the agencies reasoned.
But there’s a catch.
The scale of the auctions is so big — some are measured in the billions of dollars — and the scope of what’s being asked so vast that only two nonprofits have successfully purchased mortgages. What’s more, that doesn’t seem likely to change soon.
There are plenty of nonprofits with ample experience in community development and helping homeowners, said Julia Gordon, executive vice president of the National Community Stabilization Trust, a nonprofit focused on the blight left behind by vacant properties.
What nonprofits lack is access to capital, particularly equity funding, Gordon told MarketWatch. While there are plenty of investors interested in the distressed mortgage space, the yields such investors want may not be compatible with the mission focus of a nonprofit.
“Some nonprofits are realizing that the returns private investors are demanding can’t be achieved if you also want to achieve good neighborhood outcomes,” Gordon said.
Of the two nonprofits that have successfully bid in the government auctions, one, New Jersey Community Capital, dominates. They’ve won about $290 million of loans so far. The sole other nonprofit, Hogar Hispano, has won $16 million. Hogar did not respond to a request for comment.
NJCC is a community development organization whose mission is helping New Jersey cities and towns. But as one of the best-established nonprofits in the country in this space, they’ve been asked to work more broadly than that since the early days of the government auctions.
From the beginning, NJCC understood the tension between returns for investors and results for communities, said Peter Grof, deputy to the president of the organization. But NJCC believed that it was not only possible to strike that balance, but also that it could chart a course that other nonprofits could follow.
NJCC funds its purchases with a ratio of about 50% to 60% debt to equity, Grof said. The equity investors are often private-equity firms, while the debt piece comes from what Grof calls “socially-motivated investors” or major financial institutions like Prudential Financial PRU, +3.94% and MetLife MET, +3.81% .
Grof says NJCC is uncomfortable with the “Wall Street vs. Main Street” concept that surrounds discussions about how to handle the delinquency overhang. “We understand and appreciate housing advocates. We couldn’t do a lot of our work if not for them,” he said. “They make it simple, beat up on the banks and Wall Street. That’s fine, there has been some bad behavior. But we don’t see it as us vs. them, ‘property investors are evil.’”
Instead, Grof said, NJCC focuses on achieving appropriate outcomes for troubled homeowners and for their neighborhoods. Sometimes that means fighting the natural urge to want to keep borrowers in their homes, and realizing it’s best to let them walk away.
“We’re about trying to bring back normal real estate market dynamics to these communities,” he said. “We understand communities have a normal ebb and flow. It’s not just about creating opportunities for people to stay, it’s about creating opportunities for people to leave, if that’s appropriate.”
To some extent, some of those advocates would agree. “What’s most important is outcomes not ownership,” Julia Gordon said. “The government agencies have a responsibility to have an idea of what they want to have happen with these notes once they sell them. It’s their responsibility to communities and the housing market. Bad outcomes weaken housing markets.”
Amy Schur, a campaign coordinator for the Center for Popular Democracy, agrees. “We believe that both HUD and FHFA should set much higher standards for all notes sales around the commitment to and quality of modifications, and around affordable housing and meeting community needs,” she said.
Schur and her group believe that if the government set more stringent requirements, it would prompt for-profit investors to partner with local community organizations. She believes such partnerships would produce the yields institutional investors are seeking while enabling the mission-driven groups to do their work. Schur also believes that while many smaller nonprofits would prefer to buy smaller tranches of mortgages, many of the investors who provide equity to more established organizations would like bigger pools.
NJCC is “on course” to achieve more than the government’s “neighborhood stabilization outcome” goals, Grof said. He stresses that it’s still too early to total up the final outcomes for all loans. In New Jersey, where NJCC focuses on principal reduction mortgage modifications and developing affordable rentals out of homes where modifications aren’t possible, the NSO rate should be about 85%. In Florida, he estimates it will be about 65% to 70%.
Government agency spokesmen speak carefully about the note sales. “We believe the program is doing what it was designed to do,” said a spokesman for HUD. He answered a question about how the nonprofit portion of the sales were going by ticking off a list of ways the government has tried to improve the program to benefit nonprofits: lengthening the amount of time between a sale announcement and when it takes place, making smaller pools of loans, and concentrating them by geography.
A spokesman for Freddie Mac said it’s “certainly an objective” to encourage more nonprofit participation. Asked about whether the type of investor is as important as making sure good outcomes are achieved, he said only that “the winning bidder is determined on the basis of economics.”
Fannie Mae did not respond to a request for comment.
As of January, in all of HUD’s sales, foreclosure had been avoided in 27.9% of the homes, 34.3% had been foreclosed on, and 35.5% had no resolution. Fannie and Freddie have not yet reported on the outcomes of their sales, although such a report was expected by the end of the first quarter, as previously reported.
Despite the government’s efforts, “the appetite isn’t there,” Grof said. “The risks and the challenges turn off our competitors.”
By Andrea Riquier
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"Give Them Hell": Exposing the Corporate Backers of Anti-Immigrant Hate
"Give Them Hell": Exposing the Corporate Backers of Anti-Immigrant Hate
Since election night 2016, the streets of the US have rung with resistance. People all over the country have woken up with the conviction that they must do something to fight inequality in all its...
Since election night 2016, the streets of the US have rung with resistance. People all over the country have woken up with the conviction that they must do something to fight inequality in all its forms. But many are wondering what it is they can do. In this ongoing "Interviews for Resistance" series, experienced organizers, troublemakers and thinkers share their insights on what works, what doesn't, what has changed and what is still the same. Today's interview is the 61st in the series.
Today we bring you a conversation with José Lopez, one of the co-organizing directors at Make the Road New York, and Daniel Altschuler, the director of civic engagement and research at Make the Road New York.
Read the full article here.
Progressive Activists Keep Up Campaign to Thwart Rate Rises
NEW YORK—A group of activists lobbying the Federal Reserve to hold off on raising interest rates is pressing its campaign amid signs from the central bank that it is moving closer to lifting...
NEW YORK—A group of activists lobbying the Federal Reserve to hold off on raising interest rates is pressing its campaign amid signs from the central bank that it is moving closer to lifting borrowing costs.
Members of the Fed Up Coalition, a left-leaning organization affiliated with the Center for Popular Democracy and connected with labor unions and community groups, met with Fed Chairwoman Janet Yellen and other central bank governors late last year.
They recently have met with the leaders of the Boston, Kansas City and San Francisco Fed banks, and are scheduled to meet next with Atlanta Fed President Dennis Lockharton Aug. 12 and with New York Fed President William Dudley on Aug. 14.
Most Fed officials, including Ms. Yellen, have indicated they expect to start raising short-term interest rates this year if the economy keeps improving. They have held their benchmark rate near zero since December 2008 to bolster the economy.
The activists say they want the Fed to hold off a bit longer to ensure the expansion benefits all Americans, not just the wealthiest.
They also want the Fed to become more open about its actions and how it selects the presidents of the 12 regional reserve banks.
And they want the Fed to engage with banks to promote affordable housing.
“Over the last few weeks we’ve had a lot of success engaging with Fed officials,” said Ady Barkan, who leads the Center for Popular Democracy Fed campaign. His group is “seeing that [Fed officials] are really being responsive” to the case they are making, he said.
Mr. Barkan said a recent meeting with St. Louis Fed President James Bullard was particularly fruitful. Mr. Bullard said in an interview with the Journal Friday the Fed has a balancing act when it comes to setting interest rate policy.
He favors raising interest rates this year and says the central bank’s September meeting is likely a good time to start.
“I think I have the better policy for the type of people they want to help,” Mr. Bullard said. “If you go for too much in monetary policy you can get some sort of financial bubbles and imbalances that fall apart and cause a recession,” and modest rate rises soon will help reduce those risks.
The activist group also is calling for greater representation on regional banks’ boards of directors for noncorporate interests. By law, the regional Fed directors are drawn from a mix of financial industry professionals, community and business leaders. Each board oversees individual reserve bank operations, and the directors from outside the financial sector manage the selection of new reserve bank presidents.
Mr. Barkan said Fed boards are dominated by the perspectives of leaders from large institutions. While he welcomes union and nonprofit representation on the boards, Mr. Barkan said the diversity should extend further and include a more ground-level perspective on how the economy is functioning.
Jean-Andre Sassine, age 48, of New York City, plans to attend the group’s meeting with Mr. Dudley. Mr. Sassine, who said he works on television and advertising productions, became interested in the Fed when his family ran into difficulties during the recession. He said that led him to ask questions about the role the central bank was playing to help everyday people.
When he went with the group to the meeting with Ms. Yellen, Mr. Sassine said he walked away with “the sense they aren’t used to dealing with people. It seems like they just get reports” and work off that data, and little else, to make their decisions, Mr. Sassine said.
“We are supposed to have input and recognition and we don’t have it,” Mr. Sassine said. “It can’t all be corporate heads and bankers…We’ve got to have real people who buy groceries” on the Fed’s various advisory boards, he said.
The Fed has tried to broaden its public outreach in recent years. The central bank this year has been recruiting people to serve on a new Community Advisory Council, which will meet twice a year with Washington-based Fed governors. Ms. Yellen last year visited a job-training program in Chicago and a nonprofit in Chelsea, Mass., that helps unemployed people find work.
Mr. Dudley has conducted a number of public tours of the New York Fed’s district, in which he has met with business leaders, academics, community groups and others. In a Wall Street Journal interview in March 2014 he explained he had been using the tours to make the Fed seem less abstract. And he also said the visits had in particular deepened his understanding of the housing crisis and sharpened his response to those troubles.
Staff at the regional Fed banks who have met with the activists say their meetings are part of regular efforts to engage with their communities, and can offer valuable insight into the state of the economy.
In a statement, the Atlanta Fed said it regularly meets with community based interest groups “through its various outreach programs including community and economic development, economic education, and supervision and regulation.”
Source: The Wall Street Journal
Why the Federal Reserve is due for a radical reinvention
Why the Federal Reserve is due for a radical reinvention
The Federal Reserve is a hot topic in the news these days. Usually, the stories revolve around the merits of its decisions: Was quantitative easing a good idea? Should it raise interest rates...
The Federal Reserve is a hot topic in the news these days. Usually, the stories revolve around the merits of its decisions: Was quantitative easing a good idea? Should it raise interest rates again in April? But Andrew Levin, a Dartmouth economist and former aide to Federal Reserve Chair Janet Yellen, thinks our questions need to go much deeper.
On Monday, Levin and the activist campaign Fed Up proposed four major reforms that would radically alter the structure of the Federal Reserve. The reason they cite is compellingly simple: How the Fed works is basically out of whack with what it does today.
The Federal Reserve began around a century ago as a decentralized and private institution aimed at avoiding financial panics and making sure the interactions between the nation's for-profit banks remained stable. Since then, it's basically become a kind of government agency, with a fundamental role in shaping the American economy and the supply of wages and jobs for everyday workers. But the design and governance of the Fed has not kept up with that shift in responsibilities.
To understand why, let's start at the very beginning. Western economies began creating central banks several centuries ago as modern capitalism was first coming into focus, to serve as a "lender of last resort." Private banks could go and borrow from the central bank when times were tight — even if was just for a few days — and that would quell potential financial panics and bank runs. As a result, central banks were generally created by government charters, but as private corporations whose shares were owned by the banks that borrowed from them. "When the Bank of England and some other major central banks were founded, they were viewed as mostly providing services to commercial banks," as Levin explained to The Week.
America's Federal Reserve was created in 1913 under very similar circumstances. A potential financial crisis in 1907 was averted only when J.P. Morgan stepped in to backstop the country's private banks with his own personal fortune. No one wanted a repeat of that, so the Fed was created. It's actually a system of 12 regions, each overseen by a Fed branch bank — there's one in Dallas, in Richmond, in New York City, and so forth — with the private banks owning the shares of whatever Fed bank oversees their region.
More importantly, each regional Fed bank is run by a board of nine directors, six of whom are appointed by the private banking industry. The other three are appointed by the Federal Reserve system's national Board of Governors — a seven-member group appointed by the U.S. president and confirmed by the Senate. Together, the directors appoint a president to run their particular regional bank, rather like a CEO and a corporate board: They set the president's salary, review his or her performance, etc. All nine used to do that, but Dodd-Frank reformed the system in 2010 so that three of the six governors appointed by the private banks no longer play a role in selecting the president.
Over the course of the 20th Century, various developments like the end of the gold standard and the creation of federal deposit insurance diluted the importance of the regional banks as lenders of last resort. At the same time, however, the regional banks found themselves owning large amounts of financial instruments as a result of serving that role. So they created a joint national group to manage all those holdings called the Federal Open Market Committee (FOMC), and over time it grew in importance. Its decisions are determined by 12 votes: the seven members of the Board of Governors, plus five of the 12 regional presidents. (The 12 presidents rotate through the voting positions, while the other seven sit in on the FOMC but don't vote.)
Today, when we talk about the Fed setting interest rates or meeting to decide monetary policy — which in turn decides the rate of wage growth and the supply of jobs throughout the entire national economy — we're talking about the FOMC. "For all practical purposes, the Federal Reserve today is a public enterprise," Levin said. "It's serving the public. It's making nationally critical decisions."
The problem is the Federal Reserve system was originally conceived of and designed as an add-on to the private banking industry, and that design has remained even as the nature and responsibilities of the Fed have change enormously: "This whole rationale that made perfect sense in 1913 doesn't make sense anymore," Levin said. The result is an institution that, while of enormous import to the public good, is incredibly complex, opaque, and governed with comparatively little input from everyday Americans.
"The Fed, in order to be effective, has to have the confidence of the public," Levin said. But allowing the banks to hold such enormous sway over the decision-making of the institution tasked with both setting national interest rates and regulating the financial system undermines that confidence. Economist Dean Baker analogized it to "reserving seats on the Federal Communications Commission’s board for the cable television industry." Levin himself likened it to allowing criminal attorneys or defense lawyers to select the director of the FBI and set his or her salary and performance review.
So Levin has put forward four major reforms. They're broad, and the details for how they could play out are negotiable, but they're aimed at starting a conversation around the topic.
One is to eliminate private ownership of shares in the Federal Reserve system and make it fully public, but more importantly to completely reform how the nine directors of each regional bank are appointed. This could involve reducing the number of directors, but mostly it would involve selecting them all via the same process, one that brings in all aspects of the community — small businesses, community groups, unions, non-profits, etc. In particular, directors should not come from institutions — i.e. private banks and financial entities — that the Fed system is tasked with overseeing.
The next step would be to make the process by which the nine directors for each region select their president public and transparent. As Ady Barkan, the campaign director for Fed Up, pointed out in a press call, when all 12 regional president slots were up for replacement in February, all 12 were quietly and opaquely re-appointed — even after the Fed Up campaign pressed Fed officials to lay out a system by which the public could participate. The ones for Dallas, Minneapolis, and Philadelphia were all previously associated with Goldman Sachs. St. Louis Federal Reserve President James Bullard once told Barkan that, "To call the reappointment process pro forma would be an understatement."
Third would be to set term limits for Fed officials. Make them long enough to insulate those officials from political pressure. But don't allow them to serve multiple terms one after the other as they can now.
And finally, apply the same transparency standards to the Fed that are applied to other government agencies: Allow the Government Accountability Office to publish an annual review of all the Fed's operations and policies, and make sure both the Fed's Inspector General and the Freedom of Information Act apply to the 12 regional banks as well as the national Board of Governors.
"What I've proposed is something that seems incremental, workable, and helpful," Levin concluded. And despite arguments over whether the Fed is making the right choices in the here and now about things like interest rates, Levin's goal is much bigger: to make the Fed a healthy functioning member of our democracy long after the current economic situation — and whatever particular monetary policy stance it calls for — has passed.
"These reforms are to improve governance, accountability and transparency," Levin said. "We live in a democracy — and the government is supposed to serve the public."
By Jeff Spross
Source
Sexual assault testimony in the Senate Judiciary Committee hearing triggers trauma, reports
Sexual assault testimony in the Senate Judiciary Committee hearing triggers trauma, reports
The political became personal for many this week, as Christine Blasey Ford’s testimony of sexual assault reopened old wounds for other victims — including two women who dramatically confronted a...
The political became personal for many this week, as Christine Blasey Ford’s testimony of sexual assault reopened old wounds for other victims — including two women who dramatically confronted a key US senator Friday in a Capitol elevator.
Read the full article here.
5 days ago
5 days ago