Campaign News

Update 3 PM EDT:

In a decision that aligns with progressive demands, the Federal Reserve announced on Thursday that it would keep interest rates near zero in light of "recent global economic and financial developments" and in order to "support continued progress toward maximum employment and price stability."

Presidential candidate Bernie Sanders issued the following statement today after the Federal Reserve announced that it would hold off on raising interest rates:

“It is good news that the Federal Reserve did not raise interest rates today. At a time when real unemployment is over 10 percent, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people. It is now time for the Fed to act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”

 The New York Times reports that the Fed’s decision, "widely expected by investors, showed that officials still lacked confidence in the strength of the domestic economy even as the central bank has entered its eighth year of overwhelming efforts to stimulate growth."

Progressives cheered the news, with Josh Bivens of the Economic Policy Institute saying, "Today’s decision by the Federal Reserve to keep short-term rates unchanged is welcome. [...] We hope they continue their pragmatic, data-based approach and allow unemployment to keep moving lower, and only tighten after there is a significant and durable increase in inflation."

He continued: "Tightening before the economy has reached genuine full-employment is not just a mistake, it’s a regressive mistake that would hurt the most vulnerable workers—low-wage earners and workers from communities of color—the most."

However, Reuters reports that "the central bank maintained its bias toward a rate hike sometime this year, while lowering its long-term outlook for the economy."

Which means that pro-worker organizations, which have largely opposed a rate increase that they say would slow the economy and stifle wage growth, will have to keep up the fight.

"We applaud Chair Yellen and the Federal Reserve for resisting the pressure being put on them to intentionally slow down the economy," said Ady Barkan, campaign director for the Fed Up coalition, which rallied outside the Federal Reserve on Thursday. 

"Weak wage growth proves that the labor market is still very far from full employment," Barkan continued. "And with inflation still below the Fed’s already low target, there is simply no reason to raise interest rates anytime soon. Across America, working families know that the economy still has not recovered. We hope that the Fed continues to look at the data and refrain from any rate hikes until we reach genuine full employment for all, particularly for the Black and Latino communities who are being left behind in this so-called recovery."

Earlier...

Progressives are cautioning the U.S. Federal Reserve against slowing the economy by raising interest rates "prematurely"—a decision the Fed will announce Thursday. 

The U.S. central bank will issue its highly anticipated short-term interest rate decision following a two-day policy meeting, with a 2 pm news conference led by Fed Chair Janet Yellen.

As CBS Moneywatch notes, "[t]he decision affects everything from the returns people get on their bank deposits to how much consumers and employers pay for credit cards, mortgages, small business loans, and student debt." That's because a higher rate makes it more expensive for individuals and businesses to borrow, with rising bank lending rates shrinking the nation's money supply and pushing up rates for mortgages, credit cards, and other loans.

Just before the announcement, the advocates, economists, and workers of the Fed Up coalition will be joined by Rep. John Conyers (D-Mich.) at a rally outside the Fed, calling on the central bank to keep interest rates low to allow for more jobs and higher wages.

"The point of raising rates is to rein in an overheating economy that is threatening to push inflation outside the Fed’s comfort zone," explained Josh Bivens of the Economic Policy Institute in the Wall Street Journal on Wednesday. "But inflation has been running below the Fed’s target for years—and its recent moves have been down, not up."

Furthermore, wrote economist Joseph Stiglitz at the Guardian earlier this month: "If the Fed focuses excessively on inflation, it worsens inequality, which in turn worsens overall economic performance. Wages falter during recessions; if the Fed then raises interest rates every time there is a sign of wage growth, workers’ share will be ratcheted down—never recovering what was lost in the downturn."

Progressive activists opposed to an interest rate hike overwhelmed the Fed's public comment system on Monday in a last-minute effort to sway the central bank. Raising the rate, they said, would be catastrophic for working families, particularly in communities of color that are still struggling. The Fed Up campaign, which includes groups like the Center for Popular Democracy, Economic Policy Institute, and CREDO Action, say the central bank "privileges the voices and needs of corporate elites rather than those of America's working families."

"A higher interest rate means that fewer jobs will be created, and that the wages of workers at the bottom will remain too low to live on," wrote Rod Adams, a member of Neighborhoods Organizing for Change in Minneapolis, in an op-ed published Wednesdayat Common Dreams. "That’s because when the Fed raises rates, they are deliberately trying to slow down the economy. They’re saying that there are too many jobs and wages are too high. They’re saying that the economy is exactly where it should be, that people like me are exactly where we should be."

However, at this point, "many observers believe the Fed will not raise rates this week," analyst Richard Eskow wrote on Wednesday.

"The Fed is really the central bank of the world. If the Fed raise rates a little bit, it will have an impact all over the world, particularly in emerging markets," billionaire private equity professional David Rubenstein told CNBC's "Squawk Box" on Thursday.

"I think the Fed is sensitive to that," Rubenstein said, "and I think therefore the Fed is likely to wait for another month or two to get additional data and probably telegraph a little bit better than it has now that it's about ready to do it at a particular time."

Meanwhile, global markets are fluctuating wildly in anticipation of Yellen's announcement and subsequent news conference.

But as Eskow noted, Thursday's real surprise "is that there’s any question at all what [the Fed] will do. That suggests that our economic debate is not yet grounded in economic reality, at least as most Americans experience it."

While the Guardian is providing live updates on the Fed's decision, others are making comment under hashtags that reflect the unbalanced economic recovery:

Source: CommonDreams

Our city is facing a tough question: how do we make schools safer?

New York City schools are on the precipice of returning to ineffective policies and practices like more policing and metal detectors that have harmed the students who are most in need. The city could and should instead take this opportunity to move further towards school culture and climate priorities that are designed to meet the social, emotional, and mental health needs of young people.

Read the full article here.

Euronews - November 14, 2014, by Agence France-Presse - Fait rare pour un dirigeant de la Réserve fédérale des Etats-Unis, la présidente de la Fed Janet Yellen a reçu vendredi des représentants d’associations qui réclament une reprise économique plus équitable et une banque centrale plus transparente.

Une vingtaine de représentants d’organisations sociales et syndicales se sont entretenus pendant une heure avec Janet Yellen dans la salle de réunion du Comité monétaire de la Fed à Washington, ont-elles indiqué.

Celles-ci sont réunies au sein de la coalition baptisée “Fed up”, jeu de mot entre le sigle de la Fed et l’expression anglaise signifiant “ras-le-bol”.

Outre Mme Yellen, les gouverneurs Stanley Fischer, Lael Brainard et Jerome Powell ont participé à la rencontre.

“Nous avons eu une bonne discussion. Ils nous ont écoutés très attentivement”, a indiqué à l’AFP après l’entretien Ady Barkan, représentant du Center for Popular Democracy. “Les gens ont apporté leurs témoignages sur l‘économie d’aujourd’hui et Mme Yellen les a interrogés sur leur expérience personnelle”, a-t-il précisé.

La coalition a remis aux représentants de la Fed une liste de six propositions pour rendre la Réserve fédérale “plus transparente et démocratique”.

“Economiquement, ça ne marche pas pour une vaste majorité de la population”, avait affirmé Ady Barkan lors d’une conférence de presse organisée peu avant l’entretien, devant le massif bâtiment de la banque centrale. – Processus transparent –

“La Fed a une énorme influence sur le nombre de gens qui ont un emploi, sur les salaires (...) et pourtant nous n’avons pas les discussions et les échanges que nous devrions avoir sur ce que devrait être la politique monétaire”, avait-il ajouté.

Vêtus de T-shirts verts estampillés “Quelle reprise?”, ces activistes dénoncent une banque centrale “isolée” qui a besoin “d‘être à l‘écoute” des citoyens.

Il est très rare qu’un dirigeant de la Fed s’entretienne avec des représentants d’organisations sociales et syndicales. La coalition “Fed up” avait déjà interpellé Mme Yellen lors d’une conférence de banquiers centraux cet été et lui avait demandé un futur entretien à cette occasion.

“Je ne trouve plus d’emploi à plein temps”, a témoigné Amador Rivas, un New-Yorkais d’origine cubaine qui a travaillé en usine pendant vingt ans.

“Nos salaires stagnent depuis trente ans”, a dénoncé Anthony Newby, directeur d’une association sociale de Minneapolis qui réclame que la Fed prête sans intérêt aux villes pour qu’elles créent des emplois dans la construction d’infrastructures.

Alors que deux des présidents de Fed régionales sont sur le départ – Charles Plosser pour la Fed de Philadelphie et Richard Fisher pour celle de Dallas -, la coalition réclame un processus transparent pour la nomination de leurs remplaçants.

La Fed de Philadelphie a innové vendredi en indiquant sur son site qu’elle avait engagé un cabinet de recrutement pour trouver le nouveau président et publié une adresse email où le public peut s’exprimer.

“Nous voulons que la Fed passe du temps dans les quartiers où vivent les gens qui travaillent”, a lancé Kati Sipp, directrice de l’association Pennsylvania Working Families.

Source

Dustin Moskovitz and his wife, Cari Tuna, have become billionaires since he started the behemoth social networking site with his former Harvard University roommate Mark Zuckerberg. (Moskovitz left the company in 2008 to found Asana, which streamlines task management). The couple is bringing Silicon Valley-style analytics to the world of philanthropy through their fund, Good Ventures.

The goal is to find and incubate projects with the potential to create the most change for every dollar of funding. Many of the fund’s initiatives tread traditional charitable ground. Good Ventures has backed research on the connection between crime, cannabis and incarceration and helped stop the spread of drug-resistant malarial parasites in Myanmar.

But the group is also broadening its reach into public policy issues, including macroeconomics. It has granted $850,000 to the Center for Popular Democracy over the past year to fund a campaign urging the Fed not to raise its target interest rate until the economy is much stronger. Good Ventures is the single largest backer of the campaign -- dubbed Fed Up -- whose budget this year is about $1 million.

“The central reason we believe that marginally more dovish Fed policy relative to the current baseline would carry net benefits is that, at roughly their current rates, we see unemployment as more costly in humanitarian terms than inflation,” Good Ventures wrote explaining its decision to fund the project. “Dovish” policy generally supports lower interest rates, while a “hawkish” stance would raise them.

The funding has helped the group expand its presence at an annual symposium of economic elite that kicked off Thursday here in the foothills of the Grand Tetons and sponsored by the Federal Reserve Bank of Kansas City. The group arrived at the conference last year with a handful of workersholding up signs and wearing green T-shirts.

This year, Fed Up held “teach-ins” in a meeting room at the same hotel as the Fed’s conference and drew prominent economists such as Nobel Prize winner Joseph Stiglitz, University of California-Berkeley professor Brad DeLong and Center for Economic and Policy Research Co-Director Dean Baker.

The campaign also flew in dozens of workers to underscore the disparity in the nation’s economic recovery. Wage growth has remained stagnant for years, and unemployment among black and Hispanic workers is significantly higher than that of whites.

“An economy that doesn’t deliver for most of its citizens is a failed economy,” Stiglitz said in a press conference in Jackson Hole.

Monetary policy has not traditionally been subject to populist activism, and Good Ventures acknowledges that the success of the campaign is uncertain at best. Fed Up is also working to increase public input in the selection of regional Fed presidents, an effort that Good Ventures rates as more unequivocably positive and, at the very least, easier to measure.

But, the funders note, if the campaign works -- and if easy money is indeed the way to go -- the payoff could be massive:

Our best guess is that the campaign is unlikely to have an impact on the Fed's monetary policy, but that if it does, the benefits from a tighter labor market would be very large; we think this small chance of a large positive impact is sufficient to justify the grant.

However, this is an unusually complex policy area, and we could be mistaken.

Source: Washington Post