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Andrew Levin, professor at Dartmouth College and former special adviser to former Federal Reserve Chair Ben Bernanke and then-Vice Chair Janet Yellen, released a proposal for reform of the Federal Reserve Board's governing structure in a press call sponsored by the Fed Up campaign. The proposal has a number of important features, but the main point is to make the Fed more accountable to democratically elected officials and to reduce the power of the banking industry in monetary policy.

Under its current structure, the banks largely control the 12 Federal Reserve district banks. This matters because the presidents of these banks are part of the Federal Reserve Board's Open Market Committee (FOMC) which determines monetary policy. At any point in time, five of 12 district bank presidents will be voting members of the FOMC, but all 12 take part in the discussion. The voting presidents will typically be outnumbered by the seven Federal Reserve Board governors, who are appointed by the president and approved by the Senate, although there have been just five sitting governors for the last two years, as the Senate has refused to consider President Obama's nominees.

There is no obvious reason why the banking industry should have special input into the country's monetary policy. This would be comparable to reserving seats on the Federal Communications Commission's board for the cable television industry. While there is no way to prevent an industry group from trying to influence a government regulatory body, in all other cases, they at least must do so from the outside. It is only the Fed where we allow the most directly affected industry group to actually have a direct voice in the policies determined by its regulatory agency.

This is an especially important issue because the Fed's policies are so central to the health of the economy. If the Fed's fears over inflation lead it to raise interest rates to slow the economy and reduce the rate of job creation, there is little that Congress will be able to do to counteract the Fed's actions. For example, if the Fed wants to prevent the unemployment rate from getting below 4.5 percent unemployment, there will be little that Congress and the president can do to get unemployment lower. In that case, the Fed may have needlessly be keeping millions of people out work — disproportionately affecting minorities and less-educated workers — because of a possibly mistaken view of the economy's limits. Furthermore, by deliberately weakening the labor market, the Fed will be keeping tens of millions of workers from having the bargaining power they need to secure wage gains.

While governors who are appointed by democratically elected officials are likely to recognize the importance of reducing unemployment and balance it against the risk of inflation, the district bank presidents are likely to be less concerned about unemployment. It is worth noting that all the dissenting votes calling for more a hawkish stance since the start of the Great Recession have been cast by bank presidents. It is likely that the need to maintain the support of the bank presidents on the FOMC has prevented the Fed from being more aggressive in trying to stimulate the economy and reduce unemployment.

It would be good to see the presidential candidates address the proposal put forward by Levin and the Fed Up campaign. There are very few areas of government that are more important in people's daily lives than the Fed's monetary policy. It literally determines how many people will hold jobs and has a huge effect on workers' wages.

While it would not be appropriate for the president or other politicians to try to micromanage monetary policy, they certainly should be setting its general course. This is analogous to the relationship with the Food and Drug Administration (FDA). No one expects Congress or the president to decide which drugs get approved; however, if the FDA were to allow two years to pass in which it approved no new drugs, it would be entirely appropriate for Congress and the president to question its conduct. The same would apply if the FDA were found to regularly approve drugs that turned out to be harmful.

In the case of the Fed, it is appropriate for the presidential candidates to be telling voters what sort of people they would appoint to the Fed. It is also appropriate for them to comment on its governance structure, which can only be changed by an Act of Congress, which would have to be signed by the president.

Baker is co-director of the Center for Economic and Policy Research (CEPR).

By Dean Baker, contributor

Source

Make the Road New York and the Center for Popular Democracy recently exposed President Trump’s corporate “backers of hate,” companies that stand to profit off an agenda so steeped in hate, prejudice, and greed, you would have to be willfully blind not to see it.

Nothing is more dangerous than business as usual when it is conducted in a moral vacuum, and these companies have been more than happy to go along for the ride: Goldman Sachs, Blackstone, JPMorgan Chase, Wells Fargo, Blackrock, Boeing, IBM, Uber, and Disney all seem eager to cash in on the Trump agenda.

Read the full article here.

Be a Hero is an offshoot of the Center for Popular Democracy’s CPD Action group (Barkan previously worked for the center) and will concentrate on boosting Democratic candidates focused on protecting health care and entitlement programs like Medicare, Medicaid, and Obamacare, as well as ousting Republican incumbents who voted for the GOP tax plan or have voiced support for cutting entitlements.

Read the full article here.

Last weekend, California Governor Jerry Brown signed a historic bill making California the second state in the country to automatically register voters. The new legislation will give 6.6 million eligible but unregistered voters an opportunity to exercise their citizenship right.

The bill, which registers voters who show up at the Department of Motor Vehicles to obtain a driver’s license or an identification card, follows record low turnout in last year’s midterm elections, for which only 42 percent of those eligible to vote in California went to the polls. California’s low turnout is a snapshot of what’s happening across the country.

Beset with long lines on Election Day, strict voter ID laws and teetering piles of paper records full of errors, the country’s voter registration system is fundamentally broken—leaving nearly a third of all eligible Americans unregistered to vote. By comparison, 93 percent of eligible voters are on the rolls in our neighboring country of Canada.

In the United States, we take pride in our democracy and freedom, and voting should serve as the cornerstone of that proud democracy. Automatic voter registration is critical to that democratic process.

Imagine if all 50 states implemented automatic voter registration. The Center for Popular Democracy did, crunched the numbers and found that a voter registration system collecting data from not just the DMV but also revenue agencies, the Postal Service and others could result in the registration of 56 million more voters. This is assuming that automatic voter registration systems would capture approximately 90 percent of the total electorate.

Right now, our state of democracy is far from what it should be. In the 2012 presidential election, a mere 133 million out of 215 million Americans eligible to vote exercised their right to do so. The U.S. ranks 120 out of 162 countries in electoral participation.

Our current outmoded paper-based voter registration system makes the process of registering to vote unnecessarily cumbersome, disproportionately disenfranchising low-income communities, blacks, Latinos and young people.

Roughly 62 million eligible voters are currently unregistered, either because they never registered or their registration information is incorrect. In a 2008 Current Population Survey, blacks and Latinos cited “difficulties with the registration process” as their reason for not registering to vote, while whites disproportionately reported not registering because they were “not interested in elections or politics.”

Automatic voter registration could change this scenario, and the tide is right now turning toward building a stronger democracy. Political leaders and grassroots movements across the nation are succeeding in pushing universal voter registration forward.

A strong democracy with easy access to voter registration would give power to communities frequently marginalized by the system. Universal automatic voter registration would provide power to push for causes such as affordable high-quality child care, better wages, job security and quality public education.

A truly democratic America doesn’t make its citizens jump through hoops to gain access to a basic entitlement: the right to vote. It’s time for automatic voter registration.

Source: Newsweek