Activists Seek More Public Input in Fed President Picks
Wall Street Journal - December 11, 2014, by Pedro Nicolaci da Costa - A group of left-leaning activists is taking aim at the process for selecting the presidents of the Federal...
Wall Street Journal - December 11, 2014, by Pedro Nicolaci da Costa - A group of left-leaning activists is taking aim at the process for selecting the presidents of the Federal Reserve‘s 12 regional banks, saying it lacks sufficient transparency and public input.
Philadelphia Fed President Charles Plosser and Dallas Fed President Richard Fisher have announced they will retire next year and both district banks are conducting searches for successors. The two men have been critics of the central bank’s prolonged low-rates policies, saying they aren’t doing very much to boost employment or growth.
Federal law dictates the process for choosing the regional presidents. They are picked by a subset of the banks’ boards of directors, with approval from the Fed’s Washington-based board of governors. The regional bank boards include bankers, business executives and some community representatives, but directors from banks supervised by the Fed don’t have a vote in hiring the banks’ presidents.
Commercial banks that are members of the Fed system own the stock of their district’s reserve bank and elect most of its directors. Remaining directors are appointed by the Fed board in Washington.
The activist group, led by the Center for Popular Democracy, a national nonprofit organization, said it is in talks with the Dallas Fed about increasing transparency in its selection process and is planning a march in Philadelphia from Constitution Hall to the Philadelphia Fed on Monday. Members of the group plan to hold a press conference outside the regional Fed bank like the one they held in Washington in November, at which community members and leaders will tell some of their stories.
The appointments are “too important to be done behind closed doors, too important to be dominated by financial and corporate interests,” said Ady Barkan, a staff attorney at the center.
“We are concerned there is not going to be enough community and public engagement,” Mr. Barkan said. “Corporate and financial elites already have tremendous influence over monetary policy and interest rates. The Fed should also listen to the tens of millions of working families who are not experiencing a recovery.”
The Fed board, the Dallas Fed and the Philadelphia Fed declined to comment.
In response to the activists’ concerns, voiced during a conversation with Fed Chairwoman Janet Yellen in November, the central bank has just published a new list of “frequently asked questions” about the regional president selection process.
Kendra Brooks, a member of Action United in Philadelphia, a community organizing group, said she and others have met with some officials at the Philadelphia Fed, but have yet to be granted a meeting they’ve requested with Mr. Plosser or received an answer to their offer to take top officials around local communities.
“We’re hoping we can push them a little harder about allowing a meeting or taking a tour of their communities,” said Ms. Brooks.
Her story is an all-too-familiar one in the Great Recession of 2007-09. Having lost a 15-year job as a program director at Easter Seals, a nonprofit that helps people with disabilities, Ms. Brooks, 42 years old, said it took her a year and a half to find work again—and she now makes just half what she used to. She also lost her home to a foreclosure.
Fed governors are appointed by the U.S. president, subject to Senate confirmation. They all are voting members of the central bank’s powerful policy-setting Federal Open Market Committee.
The New York Fed president is the vice chairman of the FOMC and a permanent voting member. The other 11 presidents vote on a rotating basis. The presidents run the regional Fed banks, which supervise the private banks in their districts. The presidents also move markets and influence Fed policy through their public remarks.
The center organized activists to appear at the Kansas City Fed’s exclusive annual conference in Jackson Hole, Wyo., in August. They argued the Fed should not start raising its benchmark short-term interest rate from near zero until the labor market improves more.
U.S. unemployment has fallen to 5.8%, historically elevated but much lower than postrecession peaks. Some policy makers worry that number masks pockets of weakness including a large number of workers who are only working part-time because they cannot find full time jobs.
Many investors and top Fed officials expect the first rate increase in the middle of next year.
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#Cville2DC marchers pledge to fight white supremacy in all its forms after 118-mile journey
#Cville2DC marchers pledge to fight white supremacy in all its forms after 118-mile journey
WASHINGTON — They kept a grueling pace.
More than 250 marchers completed a 118-mile journey from Charlottesville, Virginia, to the nation’s capital on Wednesday. A core group of faithful...
WASHINGTON — They kept a grueling pace.
More than 250 marchers completed a 118-mile journey from Charlottesville, Virginia, to the nation’s capital on Wednesday. A core group of faithful marchers walked a third of the length of Virginia, a former Confederate slave-holding state, to speak out against racial hatred.
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The Real Reason Workers Can’t Get A Raise
The Real Reason Workers Can’t Get A Raise
Congress could revise the Federal Reserve’s mandate to emphasize running the economy at full employment with rising wages and moderate inflation. Progressives should follow the lead of Fed Up, the...
Congress could revise the Federal Reserve’s mandate to emphasize running the economy at full employment with rising wages and moderate inflation. Progressives should follow the lead of Fed Up, the project of the Center for Popular Democracy, and challenge appointments to Federal Reserve and its member banks, demanding greater representation of workers, consumers and poverty advocates.
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Activists swarm Senate offices to protest Republican health care bill; 155 arrested
Activists swarm Senate offices to protest Republican health care bill; 155 arrested
Crowds of activists swarmed Senate offices Wednesday to protest the Republican Party's proposed plan to repeal Obamacare.
Lining hallways across Washington, participants staged multiple...
Crowds of activists swarmed Senate offices Wednesday to protest the Republican Party's proposed plan to repeal Obamacare.
Lining hallways across Washington, participants staged multiple demonstrations looking to voice their dissatisfaction with Majority Leader Mitch McConnell's intent to dismantle Obamacare without a replacement following the implosion of the Republican Party's latest Senate health care bill.
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Citizen Green: First Flint and New Orleans, then North Carolina
Citizen Green: First Flint and New Orleans, then North Carolina
Take it as a given that the state General Assembly will pass legislation to increase teacher pay when it reconvenes for the short session on April 25, albeit somewhere below the 5-percent raise...
Take it as a given that the state General Assembly will pass legislation to increase teacher pay when it reconvenes for the short session on April 25, albeit somewhere below the 5-percent raise Gov. Pat McCrory wants.
Improving teacher salaries is the kind of popular public policy the governor can take to the voters, in addition to the infrastructure bond referendum that passed last month, in his reelection bid. He’s the only one who will have to face voters across the state in November, but the ultra-conservatives in the legislature who are protected by gerrymandering owe McCrory big time after he signed HB 2.
But also expect the emboldened Republican super-majority to aggressively push through a legislative agenda that radically promotes for-profit education while punishing students in poor, low-achieving schools.
The NC School Board Association is closely monitoring a proposal by state Rep. Rob Bryan (R-Mecklenburg) to create a so-called Achievement School District. The proposal, released in the form of draft legislation in January, would yank five low-performing schools across North Carolina from the control of local school boards and place them under the administration of a statewide Achievement School District to be operated by a private company contracted by the state.
The model of states superseding local control of education by turning academically struggling schools over to charters was pioneered in 2003 in Louisiana, where it rapidly expanded in the aftermath of Hurricane Katrina. Tennessee followed suit in 2010, and Michigan got in the game in 2013. Parallel to taking control of local schools, the state of Michigan also placed the city of Flint in receivership, with disastrous consequences when citizens were exposed to lead poisoning from the water in Flint River. It should be obvious that opaque administration and lack of local accountability invites abuse and undermines democracy.
A study by the New York-based Center for Popular Democracy found that takeover districts in Louisiana, Tennessee and Michigan failed to improve test scores, while metrics were “altered from year to year, confounding accountability and transparency.”
The authors wrote, “Additionally, lawsuits and student protests demonstrate that when local oversight is stripped away, children may face harmful practices such as discriminatory enrollment, punitive disciplinary measures, and inadequate access to special education resources. Students suffer in the wake of high teacher turnover and personnel instability brought on by the rushed firing of staff. Finally, we find that a consistent lack of oversight can create an environment rife with fraud and mismanagement, where private interests gain financially while taxpayers, students and teachers are left behind. We conclude that takeover districts actually hinder children’s chances of academic success rather than improving them.”
As further warning that the Republican lawmakers intend to take away control and funding from public education, take it from Bryan Holloway, a former Republican lawmaker who now works as a lobbyist for the NC School Board Association.
A remarkable story published by the Elkin Tribune on March 30 quotes Holloway as telling the Elkin City School Board: “There could be numerous education bills go through in this short session you may not like at all.”
Last year, the state Senate approved legislation to shift funding from public schools to charters, including federal child nutrition funds, even though many charter schools don’t provide free lunch, prompting sharp criticism from many Democratic lawmakers. The House could move on the legislation and present it for Gov. McCrory’s signature in the short session.
If that’s not strange enough, the article also quotes Holloway as saying, “A bill to eliminate school boards throughout the state we’ve been told is going to be introduced. I don’t think it has legs to go anywhere, but because they are brazen enough to even be willing to file it means you’ll probably have to deal with it in the future.”
The General Assembly started down this path in 2014 when they passed a law to give every public school in the state a letter grade from A to F. Predictably, the schools that consistently earn Ds and Fs are the ones that serve communities with concentrated poverty.
Fortunately, teachers and principals see very clearly what our lawmakers in Raleigh are trying to do.
“They are putting a big red X on the schools that already have a big red X on them,” Michelle Wolverton, the principal at Hunter Elementary in Greensboro, told a few intrepid souls who braved the blustery cold for a Rally for Public Education at Greensboro’s Governmental Plaza on April 9. “They have a big red X on them because of poverty. They have a big red X on them because a high percentage of the students are immigrants. They have a big red X on them because of poverty and because the economics are not equal.”
by Jordan Green
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These Wall Street Companies Are Ready To Call In On Trump’s Border Wall
These Wall Street Companies Are Ready To Call In On Trump’s Border Wall
Much of the discussion on President Donald Trump’s border wall has focused on its cost and impracticality, as well as the anti-immigrant and racist rhetoric it embodies. Little attention, however...
Much of the discussion on President Donald Trump’s border wall has focused on its cost and impracticality, as well as the anti-immigrant and racist rhetoric it embodies. Little attention, however, has been paid to who specifically might profit from building the structure.
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Activists ‘Fed Up’ With Rate Rise Talk Offer Plosser a City Tour
Bloomberg News - November 15, 2014, by Jeff Kearns & Christopher Condon -Labor and community organizers meeting with Federal Reserve Chair Janet Yellen challenged officials who are ready to...
Bloomberg News - November 15, 2014, by Jeff Kearns & Christopher Condon -Labor and community organizers meeting with Federal Reserve Chair Janet Yellen challenged officials who are ready to raise interest rates to first come visit the poorest neighborhoods with them before saying that the economy has recovered.
Kati Sipp, one of about two dozen activists meeting Yellen, said at a press conference yesterday in front of the central bank in Washington that she would show Philadelphia Fed President Charles Plosser “what life is like in this economy” for his city’s unemployed.
“Clearly Charles Plosser hasn’t been coming out the way that I work,” said Sipp, director of Pennsylvania Working Families. “I work on 60th Street in West Philadelphia in a storefront office, and every single day someone or a couple of people come in to my office because they are looking for work.”
A spokeswoman for the Philadelphia Fed declined to comment.
Members of the group met with Yellen and Fed governors Stanley Fischer, Jerome Powell and Lael Brainard. The coalition of 20 community groups, labor unions and religious leaders from around the U.S. wants the Fed to hear the concerns of ordinary Americans as it prepares to raise rates. It’s part of wider public pressure, including from lawmakers of both parties, who want more accountability and transparency from the central bank.
The Fed has been criticized by Democratic and Republican groups over its rescue of big Wall Street banks in the 2008-2009 financial crisis, and over subsequent steps to support the economy through zero interest rates and massive bond purchases.
Yellen Meeting
The group meeting with Yellen and her colleagues yesterday included individuals struggling to find work despite the improving economic picture in the U.S., Ady Barkan, senior staff attorney at the Brooklyn-based Center for Popular Democracy, one of the organizers of the meeting, said in an interview.
“They all listened very intently and asked questions,” Barkan said of Yellen and the three governors. “They were very interested in hearing about the personal stories of the folks we brought.”
Those included Reginald Rounds, a resident of Ferguson, Missouri, near St. Louis, where protests erupted after an unarmed black teenager was shot and killed by police in August. The predominantly black town became a symbol of racial inequality and militarized policing as armored trucks and tear-gas canisters rolled through the suburban community after the shooting.
‘Sky-High’
Barkan said Rounds told the Fed officials that “sky-high unemployment” in the St. Louis area had contributed to “desperation” in the town.
Another speaker was Shemethia Butler, an unemployed woman from Washington. She recounted for Yellen how she was laid off from a job that offered no paid sick days after becoming ill and missing time at work, Barkan said.
Barkan said he had agreed with Fed officials not to recount how Yellen and the governors responded.
Eric Kollig, a Fed spokesman, declined to comment on the meeting.
The jobless rate has fallen to 5.8 percent from a 26-year high of 10 percent in October 2009. Interest rates have been held near zero since December 2008, and most Fed officials project that they will raise borrowing costs sometime in 2015.
Still, millions of Americans can find only part-time work, and average hourly wages have risen at about a 2 percent pace for the last five years, barely outpacing inflation.
Big Banks
“The economy is not working for the vast majority of people,” Barkan told reporters before the meeting in front of the central bank headquarters facing the National Mall. “It’s too important of an institution to be controlled and dominated by big banks and corporations rather than the public.”
In addition to low rates to help the unemployed, the groups are pushing for a more open and transparent search process for regional bank presidents that includes more community input. Barkan said the group asked Yellen for support in arranging meetings with each regional Fed president.
While formal changes to the process of selecting regional Fed leaders would require legislation, Barkan said the Fed board of governors held significant informal influence over the process.
“I’m sure they could change the process if they wanted to,” he said.
Plosser, Fisher
Plosser and Richard Fisher of Dallas both plan to retire next year and the “Fed Up” coalition wants more public input in naming their successors. Both banks have said they have hired executive search firms to find candidates.
Regional bank chiefs are picked by their respective boards, which are typically composed mostly of banking and business executives. Philadelphia’s nine-member board includes Comcast Corp. Chief Financial Officer Michael Angelakis.
Both presidents have cast dissenting votes this year against the Fed’s policy, and have been among officials favoring raising rates sooner to prevent inflation and financial-instability pressures from building.
“It’s important that real people are also representing the public and Federal Reserve policy making,” Sipp said. “We want publication of the names that are under consideration so that we know who they are, that it’s not just a puff of white smoke and suddenly we have a new” president.
Search Firms
The Philadelphia Fed has hired executive search firm Korn/Ferry International and said yesterday that the Los Angeles-based company has set up an e-mail address -- PhiladelphiaFedPresident@KornFerry.com -- to receive inquiries.
The Dallas Fed announced two days ago that it hired Heidrick & Struggles International Inc. to seek a replacement for Fisher.
Economist Josh Bivens, research and policy director at the Economic Policy Institute in Washington, told reporters yesterday that the Fed’s willingness to arrange the meeting was “incredibly encouraging” because the central bank “is one of the most important institutions in the world but few Americans know it.”
While the unemployment rate has declined to a six-year low, there remains “too large a gap between today and a healthy economy,” he said, adding that stakes are highest for disadvantaged groups, including African-Americans. Their unemployment rate tends to be twice as high as the broader U.S. level both “in good times and in bad,” Bivens said.
The rate was 10.9 percent in October, and rose to a 26-year high of 16.9 percent in March 2010, Labor Department data show. The rate for whites was 4.8 percent last month.
Wider Inequality
Yellen, a labor market economist for most of her three-decade career in government and academia, has shown concern for people who aren’t fully benefiting from a stronger economy. Last month, in a speech in Boston, she questioned whether widening inequality is “compatible with values rooted in our nation’s history.”
Since becoming chair in February, Yellen has focused attention on those who have been left behind after five years of economic expansion. In March, she told a community development conference in Chicago the Fed hadn’t done enough to combat unemployment and cited local residents who have struggled with joblessness.
In August, the Center for Popular Democracy brought low-wage workers to the Fed’s annual monetary policy symposium in Jackson Hole, Wyoming, where they spoke briefly with Yellen on the sidelines of the event and met with Kansas City Fed President Esther George, who also wants to raise rates sooner.
The activists arrived at the Fed wearing the same shirts that they wore when they gathered in the lobby of the Jackson Lake Lodge during the symposium: bright green T-shirts emblazoned with the question “What Recovery?”
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In Minneapolis, a Strong ‘Fair Scheduling’ Law for Workers Runs Into a Corporate Roadblock
Less than a year after San Francisco passed a first-of-its-kind fair scheduling ordinance for retail employers, progressive activists in Minneapolis began pushing for an even stronger scheduling...
Less than a year after San Francisco passed a first-of-its-kind fair scheduling ordinance for retail employers, progressive activists in Minneapolis began pushing for an even stronger scheduling ordinance of their own—along with paid sick leave, wage theft protections, and the possibility of a $15 minimum wage.
But the campaign, dubbed the Working Families Agenda, ran into a roadblock earlier this month when its most powerful political ally, Mayor Betsy Hodges, decided to abandon the fair scheduling component. Language in the proposed ordinance called for scheduling notice of at least two weeks in advance and extra “predictability pay” for workers who were scheduled after that threshold.
Those requirements quickly awoke the local business lobby, typically a fairly dormant political power in a city with a strong progressive streak. In late September, opponents formed the Workforce Fairness Coalition by the Chamber of Commerce, and included prominent members like the Minnesota Business Partnership (which represents about 80 businesses, including Target, U.S. Bancorp and Xcel Energy) and the Minnesota Restaurant Association. They took specific issue with the scheduling law, saying that it would impede operations and could force businesses to flee the city.
Many progressive activists don’t buy that argument.
“We heard the same arguments from the Chamber of Commerce that are being made in Minneapolis,” says Gordon Mar, who led the campaign to pass San Francisco’s Retail Worker Bill of Rights, which includes fair scheduling. “As we’ve been implementing the law, those arguments have proven to be just as hollow as they were in business’s opposition to other worker-friendly laws."
Minneapolis Mayor Betsy Hodges ran in 2013 on a campaign that promised to directly address the city’s stark racial disparities, aspiring for a “One Minneapolis.” The city has some of the largest gaps in the country between whites and people of color for a number of indicators including rates of high school graduation, homeownership, low-level arrests and employment.
Those disparities are rampant in the workplace, too. For example, 63 percent of white workers in Minneapolis have access to earned sick time compared with just 32 percent of Latino workers. A Minnesota Department of Health report found that 79 percent of food workers—many of whom are minorities—lacked paid sick time.
In her 2015 State of the City address just six months ago, Hodges outlined an agenda she said would address economic disparities, specifically calling for an ambitious plan to implement fair scheduling, wage theft protection and paid sick leave. But since then, Hodges appears to have taken business’s concerns to heart.
“When it comes to fair, predictable scheduling, I have heard from many people, including many business owners, that the issue is complicated and that more time is needed to engage in this important issue,” the mayor said in a statement on October 14. “As a result, I have come to the conclusion that we are not in a position to resolve the concerns satisfactorily on the timeline currently contemplated.”
While Hodges pledged to continue pushing for paid sick leave and wage theft enforcement, activists felt blindsided by her sudden retreat.
“Our progressive champions were not prepared for the pushback and frankly folded under the pressure, … caving to conservative business elements,” says Anthony Newby, executive director for Minnesota Neighborhoods Organizing for Change, a member of the coalition supporting these policies. “Where does [Hodges] want to be allied? With working people or with the worst actors of the business community?”
The day after Hodges’ announcement, about 300 people streamed into City Hall in downtown Minneapolis to reaffirm support for all aspects of the Working Families Agenda. Workers and organizers spoke about the daily burdens of low-wage work and how they contribute to the racial disparities that plague a city often portrayed as a progressive wonderland. Minneapolis NAACP President Nekima Levy-Pounds described the city’s situation as a tale of two cities: “It’s the best of times if you’re white and the worst of times if you’re black.”
While the scheduling law language had not been set in stone, many businesses were concerned with its details. At first, advanced notice for schedules was set at four weeks, which was eventually scaled back to two. For every change an employer made to a worker’s schedule within two weeks of the shift, that worker would earn an hour’s wage worth of “predictability pay.” For any schedule change within 24 hours of a shift, a worker would get four hours’ pay.
Opponents were quick to cast this as an unrealistic policy with a costly burden placed on employers, and would be completely unworkable for restaurants, retailers and many other businesses that they say are dependent on “flexible” scheduling models. Advocates are quick to point out, though, that current workplace scheduling standards put all the cost on workers. For example, if a worker relies on childcare during her shifts and an employer tells her to stay late, many childcare centers charge fees for late pickups; or, having already spent money on childcare and transit, she could arrive at work to find her shift has been cut.
On fair scheduling, says Elianne Farhat with the Center for Popular Democracy’s Fair Workweek Initiative, it’s clear there’s going to be a cost. “What gets lost in the conversation is that it’s not that there isn’t a cost right now— it’s just that the workers are bearing that cost,” Farhat says. “What [fair scheduling] is trying to do is balance that cost.”
Despite Hodges’ call for more time to parse out details on scheduling, activists aren’t backing off. Her announcement seems to have galvanized many local organizations that previously were on the fence. Organizers say they will continue to advocate for paid sick leave and wage theft protections in the immediate future while aiming for an eventual victory on fair scheduling.
Compromises will likely need to be made. While San Francisco’s scheduling law applied only to big chain stores, Minneapolis’s fair scheduling proposal is universal. That may need to be scaled back, according to activists: Some added flexibility for “predictability pay” requirements may be needed, and further discussion about phase-in periods for smaller businesses will likely be coming. But organizers say they didn’t expect an easy path to passing the strongest scheduling law in the country. In fact, at a city council meeting last week two members announced a plan to refer the proposed paid sick leave policy to a new committee made up of workers, labor leaders, employers and business associations that would meet in mid-November and hash out details.
“‘No’ is not an answer. The question is what does it take to get a yes,” says Newby. “We need to figure out what is that sweet spot that’s gonna work for us. That may take a little bit more time.”
Source: In These Times
When Lawsuits Protect Hardhats
New York Daily News - April 17, 2014, by Errol Louis - New York is about to embark on a historic building boom — and that has touched off a furious new round in a long-running battle about how to...
New York Daily News - April 17, 2014, by Errol Louis - New York is about to embark on a historic building boom — and that has touched off a furious new round in a long-running battle about how to protect the health and safety of the workers who create the city’s glittering skyline. This month alone, two men have fallen to their deaths while working on midtown buildings under construction — a grim reminder that the skyscrapers we boast about come at a high cost, and sometimes a tragic one.
We’ll see many more projects get off the ground in the months ahead. The de Blasio administration is set to announce plans this week to rebuild areas devastated by Hurricane Sandy, and in early May will unveil a larger plan for building or maintaining 200,000 units of housing.
That’s a lot of work to be done — and thousands of men and women needed to engage in one of the most dangerous professions in America.
In 2011 and 2012, a staggering 1,513 construction workers died on the job nationwide, more than in any other industry, according to Public Citizen, a national think tank. Thirty-six of them were in New York City.
“You literally see people who are not making a ton of money losing their lives to grow the economy of this city,” says Jose Duffy, a policy advocate at the Center for Popular Democracy, a Brooklyn-based nonprofit group.
“These are people literally dying because employers aren’t putting in basic safety regulations.”
At the center of the current fight is Local Law 240, also known as the Scaffold Law, which allows construction workers who get injured or killed on the job to sue the companies that hired them. The law was passed in the 1880s as New York began constructing the world’s first skyscrapers — and losing workers maimed or killed as the structures went up.
The construction industry has been trying for more than a century to shrink or repeal the law, and allow firms to avoid or limit liability if they can prove that an accident was the fault of the dead or injured worker. Industry lobbyists duly prowled the halls of the statehouse this year.
Lawsuits are a less-than-perfect way to force the industry to take safety seriously, but there aren’t many alternatives. Public Citizen estimates it would take the Occupational Safety and Health Administration more than 100 years to inspect every New York State construction site even once.
So workers sue when they get hurt on unsafe job sites, and insurance companies charge building companies hefty premiums in exchange for paying the claims of those killed or injured workers. A recent report by pro-industry researchers at SUNY’s Rockefeller Institute estimates that the law costs New York $150 million in economic output and 12,000 jobs — expenses imposed by insurance companies, which charge construction firms.
Duffy’s group, in turn, issued its own report this week attacking the methods and motives of the Rockefeller Institute study.
While the political battle goes on in Albany, people like Walter Cabrera are caught in the middle. Speaking through a translator, Cabrera, who came here from Peru a decade ago, told me how his supervisor had him work on a defective scaffold at 240 West Broadway in 2011.
The rig didn’t have hand rails, and Cabrera ended up falling and injuring his knee, wrist and elbow. Three years and two surgeries later, he remains unable to work and is in the process of suing the company that hired him.
While Cabrera waits out the legal process in his Jackson Heights apartment, the building he helped construct — a swank Tribeca condo now called 1 North Moore — has a penthouse that listed at $8 million and units that sold for $5 and $6 million, according to curbed.com.
It would be unthinkably immoral to build the city on the injured backs of disabled immigrant workers. Until there’s a better alternative, it looks like the Scaffold Law is here to stay.
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Fed Draws on Academia, Goldman for Recent Appointees
Fed Draws on Academia, Goldman for Recent Appointees
When the Federal Reserve was established, Congress called for its policy makers to have “fair representation of the financial, agricultural, industrial, and commercial interests, and geographical...
When the Federal Reserve was established, Congress called for its policy makers to have “fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.”
But Fed officials have recently been drawn from just two backgrounds—academics, either at universities or Fed research departments, and alumni of the financial services firmGoldman Sachs & Co.
The announcement Tuesday that Neel Kashkari would become president of the Federal Reserve Bank of Minneapolis marked the third Goldman Sachs alumnus in a row to be picked to become a Fed bank president. The other two—Dallas’s Robert Steven Kaplan andPhiladelphia’s Patrick Harker —took office earlier this year.
Mr. Kashkari is a former investment banker at Goldman Sachs and a former Treasury official who ran the government’s Troubled Asset Relief Program (TARP) during the financial crisis. He takes the helm of the Minneapolis Fed Jan. 1, 2016.
Of the 17 Fed officials in office next year—five members of the Board of Governors and 12 regional bank presidents—all but three will have professional backgrounds as academics or with Goldman Sachs. The exceptions will be Atlanta Fed President Dennis Lockhartand Fed governor Jerome Powell, who worked at other banking institutions, and Kansas City Fed President Esther George, who was primarily a bank supervisor.
“The obvious downside of this is there’s more of a groupthink within the Fed,” said George Selgin, the director of the Center for Monetary and Financial Alternatives at the Cato Institute, a libertarian-leaning think tank, referring to the shift toward a narrow range of backgrounds at the central bank. “That can be very dangerous if the groupthink is based on ways of thinking about the economy that are not necessarily sound.”
Mr. Kaplan, a former Harvard Business School professor, had worked as a vice chairman of Goldman Sachs Group Inc., leading investment banking activities. Mr. Harker, the former president of the University of Delaware, served as a trustee of Goldman Sachs Trust and its Variable Insurance Trust.
New York Fed President William Dudley also spent most of his career at Goldman, ultimately serving as its chief economist.
Since the central bank’s founding a century ago, the background of Fed officials has undergone a dramatic shift.
In the early days after the Fed began in 1913, the people selected to run the nation’s central bank were primarily small bankers, reflecting that in the early days, the Fed’s key function was providing banking services to a highly fragmented banking industry. The notion of using Fed policies to steer the broader economy had not yet taken hold.
Through the Fed’s first 40 years, the backgrounds of officials grew increasingly diverse. In the late 1940s, for example, Fed officials included Chester Davis, a former agriculture commissioner and grain marketer; Laurence Whittemore, of the Boston and Maine Railroad and H. Gavin Leedy, a private practice attorney.
The central bank’s leadership also contained many functionaries who rose through the ranks as Fed administrators, such as Robert Gilbert, who in his 20s become one of the first 14 employees of the Dallas Fed. He worked as a loan and discount clerk and in the war loan department, before becoming manger of the Dallas Fed’s El Paso branch and eventually the Dallas Fed President.
Such quaint backgrounds were common among officials in the central bank’s early days but were beginning to dwindle by the 1960s. Today Fed officials who rose through the ranks are almost entirely Ph.D. economists who headed the regional banks’ research departments; the lone exception is Ms. George, who worked as a bank supervisor and Kansas City Fed administrator. Ms. George holds an M.B.A.
Gradually backgrounds in industry, law, and other aspects of government or administration fell out of favor.
“Keep in mind, for much of the Fed’s first half, the focus was really on financial stability,” said Sarah Binder, a George Washington University professor who is also a senior fellow at the Brookings Institution, a Washington think tank. “There wasn’t a well-worked out body of knowledge about monetary policy.”
As it became apparent that Fed policy held vast sway over the economic fortunes of the country, presidents and regional Fed boards increasingly turned to Ph.D. economists to guide the central bank and to be effective participants during the debates of the policy-making Federal Open Market Committee.
Ms. Binder thinks the narrow range of backgrounds among Fed officials may lead to a central bank that is thin on expertise when it comes to “the responsibilities that are laid on top of the board, in particular, that extend beyond monetary policy.”
The central bank is tasked, for example, with regulating much of the financial system, not only the giant Wall Street banks, but also community banks, insurers and other financial institutions. The Fed retains some responsibilities for consumer protection and community development, is responsible for the nation’s payment systems and continues to operate the discount window and other low-profile back-office banking functions.
Liberal activist groups, led by the Center for Popular Democracy, have pushed for diversity in the appointment of new Fed officials, pressing for representatives of workers and consumers or labor and community leaders. They have had no luck, and with the filling of the Minneapolis Fed presidency and inaction in Congress over two current nominees to the Fed board, there are no looming vacancies for the central bank’s composition to begin a shift.
Source: The Wall Street Journal
6 days ago
6 days ago