More states adopt tough paid sick-leave laws
More states adopt tough paid sick-leave laws
PHOENIX — A new paid sick-leave law took effect Saturday in Arizona, which joins a cluster of other states in continuing momentum on an issue that has seen broadening political support.
...
PHOENIX — A new paid sick-leave law took effect Saturday in Arizona, which joins a cluster of other states in continuing momentum on an issue that has seen broadening political support.
Measures adopted across the nation typically require a minimum number of paid sick hours or days each year and often mandate other guidelines in terms of permissible reasons for leave and record-keeping duties for employers.
Read the full article here.
New York to Boost Scheduling Protections for Hourly Workers
New York to Boost Scheduling Protections for Hourly Workers
New York's governor says his administration is implementing new regulations that require employers to pay extra to workers who are called to their jobs at the last minute.
...
New York's governor says his administration is implementing new regulations that require employers to pay extra to workers who are called to their jobs at the last minute.
Read the full article here.
Albany Must Keep the Charter Cap
Earlier this year, the New York City Council passed my resolution urging the state legislature to keep the cap on charter schools. That was nothing new: Council Members have long showed their...
Earlier this year, the New York City Council passed my resolution urging the state legislature to keep the cap on charter schools. That was nothing new: Council Members have long showed their opposition to raising the cap. But, with recent efforts by powerful special interests, including more than $13 million spent in lobbying and campaign ads, we need to remind New York why raising the cap is not only unnecessary, but also harmful to our public school children.
First, there is the capacity question. Charter schools have 2,500 unfilled seats in New York City. In addition, current charter agreements could allow for more than 27,000 additional authorized seats. In other words, these charter schools already are not handling their assigned share of students, and that burdens crowded public schools, making it more difficult for those schools to provide quality education.
Second, charter schools are not required to serve students who transfer to or join schools mid-year because of disciplinary measures or because of a family's choice. They also do not serve nearly the same amount of students with special needs as public schools. This means that when the school year starts, charters receive funding for a certain number of students yet actually end up teaching fewer than they are budgeted for. They then pocket the remainder and can boast lower class sizes while public schools again shoulder the burden.
Finally, the Center for Popular Democracy reported that New York stood to lose over $54 million to charter school-related fraud in 2014 alone. Audits can help uncover instances of fraud, mishandling of funds, conflicts of interest within governing boards, and a number of other troubling findings, yet charter schools largely oppose efforts to increase transparency. The State Comptroller's attempt to audit charter schools has already been foiled at every turn, meaning New Yorkers are left in the dark about how exactly our public dollars are spent.
Meanwhile, more than $5 billion in state money is owed to our traditional public schools to provide every child access to a "sound basic education" per the Campaign for Fiscal Equity ruling. Forty-four percent of all schools in New York City are overcrowded. The City's Independent Budget Office reports that most schools are at 102 percent capacity or more, and 88 percent of the city's charter schools are co-located within a district school, adding to the space crunch.
Co-located charter schools, by the way, are an exercise in inequality: privately run schools, with access to both private and public funds, that are taking resources from underfunded district schools. What does this mean for the social climate in these schools? Many students feel, and rightfully so, that district schools and their students are not valued the way they should be.
It is sensible to provide the money and attention owed to our public schools to keep them strong. Charter schools already divert resources from the majority of students, who attend public schools. Charter schools do not serve our children, especially the most needy, with enough accountability to justify increasing their share of funding.
All children deserve an education system that celebrates their potential by giving them the space and funding necessary to achieve educational excellence. The raising of the charter cap would be damaging to our public school system in terms of morale, space, funding, and overall quality. Leaders in Albany should finish their legislative session without altering the cap. Instead, it is time to ensure a feasible means of success for public schools by giving them the focus they need and not investing in a private enterprise that has yet to fulfill its promise to New Yorkers.
***Daniel Dromm is the Education Committee Chair of the New York City Council.
Source: Gotham Gazette
America Needs a Network of Rebel Cities to Stand Up to Trump
America Needs a Network of Rebel Cities to Stand Up to Trump
“I want New Yorkers to know: we have a lot of tools at our disposal; we’re going to use them. And we’re not going to take anything lying down.” On the morning after Donald Trump was declared the...
“I want New Yorkers to know: we have a lot of tools at our disposal; we’re going to use them. And we’re not going to take anything lying down.” On the morning after Donald Trump was declared the victor in the U.S. presidential election, Mayor of New York, Bill de Blasio, wasted no time in signaling his intention to use the city government as a bulwark against the policy agenda of the President-Elect. The move made one thing very clear; with the Republican Party holding the House and Senate, and at least one Supreme Court nomination in the pipeline, it will fall to America’s cities and local leaders to act as the institutional frontline of resistance against the Trump administration.
However, cities can be more than just a last line of defense against the worst excesses of an authoritarian central government; they have huge, positive potential as spaces from which to radicalize democracy and build alternatives to the neoliberal economic model. The urgent questions that progressive activists in the States are now asking themselves are, not just how to fight back against Trump, but also how to harness the momentum of Bernie Sanders’ primary run to fight for the change he promised. As we consider potential strategies going forward, a look at the global context suggests that local politics may be the best place to start.
The election of Trump has not occurred in a vacuum. Across the West, we are witnessing a wholesale breakdown of the existing political order; the neoliberal project is broken, the center-left is vanishing, and the old left is at a loss for what to do. In many countries, it is the far right that is most successful in harnessing people’s desire to regain a sense of control over their lives. Where progressives have tried to beat the right at its own game by competing on the battleground of the nation state, they have fared extremely poorly, as recent elections and referenda across Europe have shown. Even where a progressive force has managed to win national office, as happened in Greece in 2015, the limits of this strategy have become abundantly clear, with global markets and transnational institutions quickly bullying the Syriza government into compliance.
In Spain, however, things are different. In 2014, activists in the country were wrestling with a similar conundrum to their counterparts in the U.S. today: how to harness the power of new social and political movements to transform institutional politics. For pragmatic rather than ideological reasons, they decided to start by standing in local elections; the so-called “municipalist wager.” The bet paid off; while citizen platforms led by activists from social movements won mayoralties in the largest cities across the country in May of 2015, their national allies, Unidos Podemos, stalled in third place at the general elections in December later that same year.
In Spain, this network of “rebel cities” has been putting up some of the most effective resistance to the conservative central government. While the state is bailing out the banks, refusing to take in refugees and implementing deep cuts in public services, cities like Barcelona and Madrid are investing in the cooperative economy, declaring themselves “refuge cities” and remunicipalizing public services. U.S. cities have a huge potential to play a similar role over the coming years.
Rebel cities in the USA
In fact, radical municipalism has a proud history in the U.S. One hundred years ago, the “sewer socialists” took over the city government of Milwaukee, Wis., and ran it for almost 50 years. They built parks, cleaned up waterways and, in contrast to the tolerated level of corruption in neighboring Chicago, the sewer socialists instilled into the civic culture an enduring sense that government is supposed to work for all the people, not just the wealthy and well-connected.
More recently, too, cities have been proving their ability to lead the national agenda. In the last few years alone, over 200 cities have introduced protections against employment discrimination based on gender-identity and 38 cities and counties have introduced local minimum wages after local “Fight for 15” campaigns.
Now we need a dual municipalist strategy that includes both supporting and putting pressure on existing progressive city governments from the streets, and standing new candidates with new policy platforms in upcoming local elections so that we can change institutional politics from within.
Why cities?
There are a number of reasons why city governments are particularly well-placed to lead resistance to Trumpism. Most obviously, much of the popular opposition to Trump is physically located in cities. With their younger, more ethnically diverse demographics, urban voters swung heavily against Trump and, in fact, played a large role in handing Hillary Clinton the majority of the national popular vote. Not only did Clinton win 31 of the nation’s 35 largest cities, but she beat Trump by 59% to 35% in all cities with populations of over 50,000. In most of urban America, then, there are progressive majorities that can be harnessed to challenge Trump’s toxic discourse and policy agenda.
But alternative policies will not be enough to create an effective challenge to Trump; different ways of doing politics will also be needed, and local politics has great potential in this regard. As the level of government closest to the people, municipalities are uniquely able to generate new, citizen-led and participatory models of politics that return a sense of agency and belonging to people’s lives. This new process must have feminism at its heart; it must recognize that the personal and the political are intimately connected, something that is clearer at the local level than at any other.
It’s for this reason that the municipalist movement need not be limited to the largest cities. Though large cities will inevitably be strategic targets in any “bottom-up” strategy, given their economic and cultural power, all local politics has radical democratic potential. Indeed, some of the most innovative—and successful—examples of municipalism around the world are found in small towns and villages.
Bringing the political conversation back to the local level also has a particular advantage in the current context; the city provides a frame with which to challenge the rise of xenophobic nationalism. Cities are spaces in which we can talk about reclaiming popular sovereignty for a demos other than the nation, where we can reimagine identity and belonging based on participation in civic life rather than the passport we hold.
Why a network of rebel cities?
By working as a network, cities can turn what would have been isolated acts of resistance into a national movement with a multiplier effect. Networks like Local Progress, a network of progressive local elected officials, allow local leaders to exchange policy ideas, develop joint strategies, and speak with a united voice on the national stage.
On the issue of racial equity, an essential question given the racist nature of Trump’s campaign and policy platform, cities across the U.S. have already started to mobilize to combat Islamophobia, as part of the American Leaders Against Hate and Anti-Muslim Bigotry Campaign, a joint project of Local Progress and the Young Elected Officials Action Network. The campaign pushes for local policies to tackle hate crimes against Muslims, including the monitoring of religious bullying in schools, intercultural education programmes, and council resolutions condemning Islamophobia and declaring support for Muslim communities.
Climate change will be another contentious issue over the coming years. While much has been made of the policy implications of Trump’s claim that global warming was invented by the Chinese, it has been local administrations, rather than the federal government, that have led on the environmental agenda over recent years. Sixty two cities are already committed to meet or exceed the emissions targets announced by the federal government and many of the largest cities in the country, including New York, Chicago and Atlanta have set emissions reductions goals of 80 percent or higher by 2050. U.S. mayors must continue on this path, working with international networks of cities like ICLEI and UCLG to exchange good practices and to lobby for direct access to global climate funds in the absence of support from the federal government.
Even on issues that are under the jurisdiction of the federal government, like immigration, cities have some room for maneuver. For example, although Trump has pledged to deport all undocumented immigrants from the U.S., 37 “sanctuary cities” across the U.S. are already limiting their cooperation with Immigration and Customs Enforcement detainer requests to reduce deportations. The mayors of New York and Los Angeles have already pledged to continue with this practice, and De Blasio has promised New Yorkers that the city will protect the confidentiality of users of the city ID-card scheme and continue to ensure that police officers and city employees won’t inquire about residents’ immigration status, predicting that Trump will face “a deep, deep rift with all of urban America” if he does not re-evaluate his stance on sanctuary cities.
What next?
First we must push our allies who are already in office at local level, including self-identified “Sanders Democrats,” to use all available means to act against any attempt by the federal government to roll back civil liberties, cut services or sow division among communities. Such cities must work, not only to counteract the worst excesses of the Trump administration, but also to continue to move forward on issues like gay rights and climate change, as well as forging new ground by standing up to corporate interests, increasing citizen participation in decision-making, and promoting the social and cooperative economies.
But we also need a new generation of local leaders, particularly women and people of color, who are prepared to take the leap from protest to electoral politics. The recent announcement by Black Lives Matter activist, Nekima Levy-Pounds, that she will be standing for election as mayor of Minneapolis is an inspiring example of the kind of candidate that is needed; someone with real-world experience and an insider’s understanding of social movement politics. But the search for new local leaders needs to be scaled up so that there is a pipeline of candidates to stand for school boards, zoning boards and local councils in 2017 and beyond. This is something that the Working Families Party is already doing successfully in many states, as well as supporting these candidates in primary campaigns against Establishment Democrats.
Finally, we must undertake new ways of doing politics at the local level to prove that there is an alternative to corporate lobbying, secret donors and career politics. There is no reason why candidates should wait until taking office to invite people to participate in decision-making. Local candidates should open up their policy platforms to public participation, integrating demands from social movements and local residents. There is also no reason why elected officials should use only the most generous interpretation of the law to guide their conduct; in Spain, the citizen platforms drew up their own codes of ethics for their elected representatives, including salary and term limits and strict transparency requirements. By leading by example, local movements can send a very powerful message: there is another way.
A resurgence of rebel cities in the U.S. would tap into a long-forgotten American tradition of radical municipalism and align with a new and growing international network of municipalist movements. Now is the time for us to seize this opportunity and to reclaim democracy from the bottom up.
BY KATE SHEA BAIRD AND STEVE HUGHES
Source
“The People’s Fed”: Manufacturing Popular Support for Global Theft
“The People’s Fed”: Manufacturing Popular Support for Global Theft
How does one get invited to attend one of the most exclusive palavers on the planet? Well, if it’s the annual Jackson Hole economic summit sponsored by the Federal Reserve System, it’s virtually a...
How does one get invited to attend one of the most exclusive palavers on the planet? Well, if it’s the annual Jackson Hole economic summit sponsored by the Federal Reserve System, it’s virtually a prerequisite that one belong to that elite fraternity of beings known as central bankers. Or a pointy-headed professor with a certified globalist bent. Or, it seems, a loudmouthed, obnoxious street radical with a Marxist-Leninist “social justice/economic democracy” bent.
So, if you’re a screaming activist with the Center for Popular Democracy, apparently, you have an open door, a welcoming hand, and a place at the table with the Jackson Hole uber-elite.“Federal Reserve officials sought to reassure a group of labor activists that the central bank isn’t going to cool down the economy just as a stronger labor market is reaching a broader swath of Americans,” reported the Wall Street Journal on August 26.
Here is an excerpt from the Journal’s report:
“We’re going to run [the economy] hot, get the unemployment rate down lower,” San Francisco Federal Reserve Bank President John Williams said at an unprecedented meeting with activists from the Campaign [sic for Popular Democracy’s Fed Up Campaign.
The meeting of activists and high-ranking Fed officials took place shortly before the start of the Kansas City Fed’s high-profile policy conference in Jackson Hole, Wyo. Central bankers in attendance included Fed Chairwoman Janet Yellen’s two top lieutenants, New York Fed President William Dudley and Vice Chairman Stanley Fischer....
The left-leaning activist group Fed Up publicly met with eight Federal Reserve presidents Thursday to discuss inequality and interest rates during the central bank's annual meeting in Jackson Hole, Wyoming.
Serious, responsible critics of the Fed of a conservative/libertarian bent would never receive similar cordial treatment, of course. That’s understandable, since they want to restrict the power of the Fed, or abolish it altogether. The left-wing activists, on the other hand, want to expand the power of the Fed, and to use those expanded powers to further socialize our economy and society. That is surprising to many people, but it shouldn’t be; it’s completely in line with Karl Marx’s handbook. The fourth plank in Marx’s 10 planks of the Communist Manifesto calls for “Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” Bingo: That’s the Federal Reserve.
So, what is the Center for Popular Democracy (CPD) and who is supporting it and its Fed Up Campaign? Not surprisingly, one of its major supporters is the Ford Foundation, which has been notorious for funding “progressive,” socialist, pro-communist, and outright communist organizations and individuals for more than seven decades. Also, among the CPD financial angels is the Open Philanthropy Project, which has generously funded CPD’s Fed Up Campaign, it boasts, to the tune of at least $2 million. And it has pledged millions more.
In our previous report on the Fed’s conference last weekend (Jackson Hole’s Gangsters and Banksters: What Are They Planning?) we utilized the Fed’s official list of conference attendees to underscore the fact that the Fed’s top echelon officials and advisers hail almost entirely from that elite cabal of globalist one-worlders, the Council on Foreign Relations (CFR). Moreover, we pointed out, this confirmed a virtually non-stop control of the Fed by CFR members since the Fed’s inception, under the guidance of elite Wall Street banker Paul Warburg, who was also a founder of the CFR.
The same CFR hands are at work in the creation of the Astroturf Fed Up Campaign posing as a grassroots “opposition” force to the Fed. The Ford Foundation and many of the other tax-exempt foundations supporting this faux CPD effort are longtime funding arms for the globalist agenda. Ditto for many of the other controlled opposition groups that CPD/Fed Up list as their “Partners.” Here is a partial list of those CPD partners, most of which would scarcely exist, if not for the activist cash they regularly receive from their globalist paymasters they pretend to oppose:
Arkansas Community Organization
Living United for Change in Arizona
ACCE Institute (Alliance of Californians for Community Empowerment)
Working Partnerships USA
CASA de Delaware
New Florida Majority
Illinois Coalition for Immigrant and Refugee Rights
Good Jobs Now
Neighborhoods Organizing for Change
TakeAction Minnesota
New York Communities for Change
Common Good Ohio
CASA de Pennsylvania
Ohio Organizing Collaborative
Texas Organizing Project
Wisconsin Jobs Now
Clearly, as with #BlackLivesMatter and the many other Astroturf “progressive” organizations funded by billionaire George Soros (a CFR member and CFR President's Circle corporate supporter), the Fed Up Campaign is another example of CFR Insiders providing simultaneous pressure from above and below to effect social/political/economic/moral revolution.
By William F. Jasper
Source
Dear Senators Flake, Collins, and Murkowski
Dear Senators Flake, Collins, and Murkowski
Senator Flake, you were confronted on national television by two activists, both claiming to be rape survivors. Maria Gallagher and Ana Maria Archila gained national fame over the video of that...
Senator Flake, you were confronted on national television by two activists, both claiming to be rape survivors. Maria Gallagher and Ana Maria Archila gained national fame over the video of that confrontation, and both say they’ve never spoken about their experiences before. The testimony of Christine Blasey Ford gave them the strength, they said, to come forward. But they haven’t, at least as far as I’ve seen so far.
Read the full article here.
Kansas City Social Justice Group Says Too Many Are Left Behind in Today’s Economic Growth
Kansas City Star - March 5, 2015, by Diane Stafford - When Andrew Kling dug into an economic research project, he was shocked to find there were more payday loan shops in Missouri than there were...
Kansas City Star - March 5, 2015, by Diane Stafford - When Andrew Kling dug into an economic research project, he was shocked to find there were more payday loan shops in Missouri than there were Wal-Mart, McDonald’s and Starbucks locations combined.
“In a time when Wall Street is reporting record profits, many low-income people are feeling the pain,” said Kling, communication manager for Communities Creating Opportunity.
His social justice organization, better known as CCO, held a rally Thursday in front of a small strip center at 63rd Street and Troost Avenue that houses a payday loan company and a fast-food restaurant.
“It’s an appropriate site for releasing our report,” he said.
CCO is seeking support for a “covenant for a moral economy” that among other things asks the Federal Reserve to pay attention to those at the bottom of the economic ladder when it considers raising interest rates this year.
Kling said CCO is concerned that the unemployed and underemployed are being victimized by predatory lending practices, and they’re getting no help because of “political gridlock” and employers that have kept “wages dangerously low.”
The Rev. Stan Runnels, rector of St. Paul’s Episcopal Church, 11 East 40th St. in Kansas City and a CCO participant, said a moral economy would include “wages that cover the costs of raising a family, where everyone has access to affordable credit in their communities.”
The rally also was planned to focus on racial inequality in the Kansas City area, where unemployment among blacks is 12.6 percent, compared with 5 percent for whites.
Kling said CCO research also found that from 2000 to 2014, the median wage for workers in Kansas was basically flat and the median wage in Missouri declined 2.5 percent.
Source
Read more here: http://www.kansascity.com/news/business/article12522674.html#storylink=cpy SourceRestaurant group preps for fight against Ariz. minimum wage boost
Restaurant group preps for fight against Ariz. minimum wage boost
PHOENIX -- The head of the state's restaurant industry is gearing up to convince voters to quash an initiative that would boost the state's minimum wage to $12 an hour by 2020.
Steve Chucri...
PHOENIX -- The head of the state's restaurant industry is gearing up to convince voters to quash an initiative that would boost the state's minimum wage to $12 an hour by 2020.
Steve Chucri, president of the Arizona Restaurant and Hospitality Association, said Wednesday the campaign against the measure will be based on showing them how much wages in Arizona have gone up since voters enacted the first minimum wage law in 2006.
Prior to that, Arizona employers had to pay only what was mandated in federal law, which was $5.15 an hour. The ballot measure pushed that to $6.75, with a requirement for annual adjustments based on inflation.
That has pushed the current state minimum to $8.05.
"The public will say, 'Enough's enough,'" Chucri said. And he said polls done for the industry in the spring show people believe that $12 is "too much."
The comments come as Arizonans for Fair Wages and Healthy Families is planning to submit its petitions for the $12 wage plus required paid leave today to the secretary of state's office.
Spokeswoman Suzanne Wilson said organizers have collected more than 250,000 signatures. That is 100,000 more than are needed to qualify for the ballot.
But Chucri said he's not convinced his organization will even have to fight the battle in November. He questioned whether petition circulators, both volunteer and paid, were careful to ensure that those who signed are qualified to vote in the state.
Arizona has become the latest battleground over what can be considered a living wage.
Several states have enacted their own laws, often through legislation. Most recently, California Gov. Jerry Brown signed a measure that will take that state's minimum, now $10 an hour, up to $15 by 2022 for large employers; small companies will get another year to comply.
Chucri said part of the campaign against the ballot measure will be to remind voters here that Arizona already has a minimum wage that's higher than what federal law requires.
And that same law requires annual revision. Chucri pointed out that has meant a boost every year except for two when the rate of inflation was too small for even a nickel more, the bare minimum adjustment.
The difference, though, is not great: That $8.05 an hour is just 80 cents more than the federal minimum.
What Chucri also faces is that $8.05, assuming it's a family's sole source of income, translates out to $16,744 a year.
For a single person, the federal government considers anything below $11,880 a year to be living in poverty. That figure is $16,020 for a family of two and $20,160 for a family of three.
That's part of what has driven similar living wage efforts elsewhere in the country. But Chucri said the idea of a $12 minimum won't sell here.
"That is too high of a wage for a place like Arizona,'' he said.
Chucri said part of the campaign against the ballot measure will be the argument that higher wages mean fewer jobs.
"Restaurateurs are going to survive,'' he said. But what they will do, Chucri said, is simply hire fewer people.
He pointed out the push toward automation already is underway.
At Panera Bread, customers place their orders through computer screens and then can pick up what they want. And even at more traditional sit-down place like Applebee's, orders can be placed through tablets at each table.
Chucri conceded, though, that is happening even in places where the minimum wage is not going up. What approval of this measure would do, he said, is hasten the day.
"I don't think it's a matter of 'if,' '' Chucri said. "It's a matter of 'when.' ''
He would not say how much his group and other business organizations intend to spend to kill the measure.
The most recent campaign finance reports show campaign organizers have raised more than $342,000. Virtually all of that comes from Living United for Change in Arizona. But Tomas Robles, former executive director of LUCHA, said much of that is from a grant to the organization from The Center for Popular Democracy, an organization involved in efforts to establish a $15 minimum wage nationally.
Another $25,000 came from The Fairness Project which has its own efforts to push higher minimum wages on a state-by-state basis.
By Howard Fischer
Source
Corporate power on the agenda at Jackson Hole
Corporate power on the agenda at Jackson Hole
Protesters from the Fed Up group will once again be on hand this year as they campaign for central bankers to focus more on inequality and depressed wages.
Protesters from the Fed Up group will once again be on hand this year as they campaign for central bankers to focus more on inequality and depressed wages.
Why It's a Big Deal Hillary Clinton Plans to Shake Up the Fed
Why It's a Big Deal Hillary Clinton Plans to Shake Up the Fed
Hillary Clinton is taking on the United States Federal Reserve System, but in a wonky, bottom's-up way that shows her understanding of a complex and widely misunderstood organization. This is not...
Hillary Clinton is taking on the United States Federal Reserve System, but in a wonky, bottom's-up way that shows her understanding of a complex and widely misunderstood organization. This is not "End the Fed" or even "audit the Fed" — she wants to rebuild it from its fundamentals at the regional level.
To paraphrase Mitt Romney, the Federal Reserve is people, my friend. Hillary Clinton's recent proposal to change the roster of Fed officials who ultimately make monetary policy and regulatory decisions might be the most effective Fed-reform idea since the financial crisis. Generally, the public pays attention to little more than the face of the organization — the Fed's chairperson, currently Janet Yellen — who announces and explains the Fed's decisions. But beneath Yellen functions an intricate and influential bureaucracy that's dominated by interests from the financial sector, the vast majority of them white men, and may well be blind to the reality of a vast majority of Americans.
The Federal Reserve was set up in 1917, in the wake of a financial crisis, as a private national bank that could serve as lender of last resort to other banks. If a bank needed money to make good on deposits, it could go to the Fed for a short-term loan. It was, since its inception, a bankers' institution, run for banks, by banks. But its role has clearly evolved as credit markets have developed and as the Fed's mandate was changed to pursue price stability (low inflation) and full employment at the same time, while helping to regulate the sector for which it also serves as lender.
As the Fed's mission has expanded, its governance has not. The Fed is run by a seven-member board in Washington, D.C., and a dozen regional bank presidents based in financial centers throughout the country (New York, St. Louis, Kansas City and Cleveland, among others). While the crew in D.C. is selected by the president and vetted by Congress, the regional bank presidents are chosen by the financial industry and tend to be either bankers or career Fed employees. Of the 12 bank presidents, two are women and only one is not white.
New York's regional president is Willian C. Dudley, previously a Goldman Sachs managing director. Robert S. Kaplan of Dallas was a former vice chairman at Goldman. Neel Kashkari, a known financial reformer, is nonetheless a former employee of PIMCO, one of the world's largest asset managers and a subsidiary of German financial behemoth Allianz. Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta is a former Citigroup executive.
Clinton's proposal would remove bankers from the regional boards of directors. Those boards choose the regional presidents and generate most of the information and perspective that the Federal Reserve governors use to set monetary policy. Clinton clearly understands how the Fed functions. Donald Trump has said he would not reappoint Janet Yellen as chair. Fine. But appointing the Fed chair is merely the most high-profile action a president can take in this regard. It doesn't change the system, and the Fed is known as the Federal Reserve System for a reason.
This is Clinton at her best – she knows how the government works. The region Federal Reserve boards do not get a lot of press. Most people do not know that they are staffed with chief executives from Morgan Stanley, Comerica, KeyCorp and private-equity firms like Silver Lake, and if they do know it, they do not understand its importance.
The Fed is generally a topic of political bluster. "I appointed him and he disappointed me," complained George H.W. Bush about Alan Greenspan, when the Fed chair refused to cut interest rates in the face of a recession that probably cost Bush his re-election in 1992. Before that, Ronald Reagan had to endure Chairman Paul Volcker raising interest rates so high in an effort to combat inflation that out-of-work construction workers were mailing bricks and wooden beams to the Fed in protest.
The idea that the Fed often acts contrary to the interests of working people is not new, but aside from requiring the Fed to pursue full employment in addition to price stability in 1977, presidents who are unhappy with the Fed have done little more than complain. Even after Greenspan disappointed Bush, Bill Clinton reappointed him to the post. When Greenspan retired, Ben Bernanke, an intellectual heir, took the helm. When he retired, Yellen, also an intellectual heir, took over. The power to appoint the Fed chair and governors is not, clearly, the power to change things.
Clinton is digging deeper. Changing the roster of the regional boards will hopefully help more accurate economic information trickle up to the chairperson and the federal governors. Perhaps, even, a labor representative or somebody with closer ties to the common American experience could become a regional bank president.
In her quiet way, tinkering with the inner workings of a near-century old quasi-government institution that is arcane to most, Clinton has a chance to achieve radical, lasting financial reform.
BY MICHAEL MAIELLO
Source
2 months ago
2 months ago