Meet the Ordinary People Who Are Mobilizing around Monetary Policy
The Washington Post - August 19, 2014, by Ylan Q. Mui - District resident Shemethia Butler never finished college or studied finance. But she plans to fly to Wyoming this week for one of the most...
The Washington Post - August 19, 2014, by Ylan Q. Mui - District resident Shemethia Butler never finished college or studied finance. But she plans to fly to Wyoming this week for one of the most elite economic conferences in the world. Her goal: schooling the central bankers gathered among the Grand Tetons in Jackson Hole about the hard realities of her own kitchen-table economics.
There’s $899 in monthly rent for the two-bedroom apartment she shares with her 5-year-old daughter, $83 to $90 for electricity, $40 for her cell phone. Meanwhile, Butler brings in less than $700 a month from her part-time job at McDonald’s. She doesn’t need a spreadsheet to know that the numbers don’t add up.
“I’m going to Wyoming to let these bankers in Jackson Hole know that we are not in recovery,” said Butler, 34. “I need them to understand. I need them to see where I’m coming from.”
The three-day meeting in Jackson Hole, sponsored by the Federal Reserve Bank of Kansas City, includes a keynote by Fed Chair Janet Yellen. In the past, notable speakers have included Columbia University economist Michael Woodford and Bank of India Gov. Raghuram Rajan. The atmosphere is decidedly academic, with strict rules governing the presentation and debate of research papers that can run 50 pages or longer -- not the typical setting for a populist uprising.
This year the conference is focused on the health of labor markets, a key consideration for the Fed as it weighs when to end its unprecedented support for the American economy. And activist groups have become increasingly worried that workers themselves are not included in the discussion.
The Center for Popular Democracy is slated to release a letter Tuesday signed by more than 60 left-leaning organizations, ranging from community groups to bigger players such as the Economic Policy Institute, Public Citizen and Demos. They are calling on the Fed to keep its easy-money policies in place until wages start to rise and what has been an exceptionally uneven recovery begins to broaden out. Butler, along with several other workers and activists, intend to trek through the mountains to deliver that message in person before the conference begins Thursday.
“We are writing to remind you that the American economy is not working,” the letter reads. “We hope that in the coming months and years, the Federal Reserve’s leaders will make a more concerted effort to listen to our voices.”
The Fed is an unusual target for this type of grassroots campaign, more typical in protests against big companies such as Wal-Mart or around issues like voting rights. Monetary policy can be an abstract concept, rife with jargon and inscrutable acronyms. Criticism of the Fed has typically come from economists debating its mathematical models, politicians bristling over the independent central bank’s powers or frustrated investors attempting to divine its intentions.
“Most people don’t really understand much about what the Fed does and certainly not why it does what it does,” said Allan Meltzer, a professor at Carnegie-Mellon University and Fed historian. “It’s rather remote from most people’s current experience and interests. It’s very hard to summon public outrage, whether it’s deserved or not.”
The Fed’s charge is to keep prices stable and encourage maximum employment. It operates by setting the interest rate at which banks lend to each other overnight. That rate, in turn, influences the cost of borrowing throughout the economy. Lower rates help stimulate consumer and business spending -- and with any luck, create jobs -- while higher rates help quell an overexuberent economy and rising prices.
The Fed slashed its target for interest rates to zero in 2008 to combat the financial crisis and has kept it there ever since. It has pumped trillions of dollars into the economy for an additional boost. But now, the unemployment rate is falling faster than many at the Fed expected. Job growth is reaching into higher-wage industries after years of being concentrated in low-paying sectors. For the first time since the recession, the central bank is seriously debating if the economy is ready to stand on its own.
That is enough to worry activist groups -- particularly since hope of federal legislation on issues such as the minimum wage, extending unemployment benefits and paid leave stand little chance of passing in a polarized Congress. The Fed is one of the only games left in town.
“Monetary policy is central to our economy and our society, and the discourse around monetary policy needs to be democraticized,” said Ady Barkan, senior attorney for the Center for Popular Democracy. “We can’t leave the debate about Fed policies up to academics and elite bankers and corporate executives.”
The unusually contentious battle last year over who would lead the Fed also help stoke interest in the institution, he said. President Obama had initially planned to nominate former Treasury Secretary and close adviser Lawrence H. Summers for the post. But Democrats balked at Summers’ role in deregulating the financial industry during the Clinton administration and his disparaging comments about women made when he was president of Harvard University.
The pressure from liberal groups helped ensure that Summers could not secure the votes to win confirmation in the Senate. He eventually withdrew his name, and Obama instead nominated Yellen, who was the second-in-command at the Fed.
Yellen may be particularly sympathetic to the activists’ arguments, at least relative to previous Fed chairmen. In a speech Chicago in March, she invoked individual stories of struggling workers to illustrate the human toll of high unemployment -- an unorthodox move in an institution more famousfor obfuscation. The next month, she met with representatives from the AFL-CIO, which did not sign the joint letter, and has repeatedly cited the high number of involuntary part-time workers and those who have given up looking for a job as reasons to be patient in withdrawing the Fed’s support. Yellen is slated to speak about the labor markets Friday in Jackson Hole.
"These and other indications that significant slack remains in labor markets are corroborated by the continued slow pace of growth in most measures of hourly compensation," she said in congressional testimony last month.
It is unclear how much grassroots opposition may influence Fed thinking -- particularly since it occurs so rarely. Meltzer said he could not recall activists ever gathering at Jackson Hole. The last public campaign mobilized against the Fed was in the 1980s, when then-Chairman Paul Volcker was hiking interest rates to stem double-digit inflation. Though he successfully brought prices under control, the economy went into recession as a result. Farmers and construction workers were particularly hard hit by the rate hikes, and they mailed blocks of wood to the Fed in protest and blocked its entrances with tractors.
The measures did little to sway Volcker, according to Stephen Axilrod, who worked at the Fed for three decades and was among Volcker’s key aides. His course had been set.
“None of that, in my head, had much to do with anything,” Axilrod said.
But he and other Fed watchers acknowledge that the central bank is in a new era. Public confidence in government and financial institutions is shaky at best. The Fed has made a concerted effort to increase transparency and connect with Main Street. At the same time, lawmakers have launched several efforts to curtail the Fed’s powers -- or even get rid of it altogether. Though such proposals stand little chance of passing, they can shift public perception of the central bank.
“Part of it is part of a reputational issue,” said Sarah Binder, a professor at George Washington University and senior fellow at the Brookings Institution. “The Fed’s credibility depends on people believing that they’re going to do what they say they’re going to do.”
And right now, the Fed’s next step is not all that clear. Prominent economists outside of the institution -- and several top officials within it -- are arguing that the Fed has goosed the economy to its limit. Some worry it could be even laying the groundwork for the next bubble: The major U.S. stock indexes have roughly doubled in value since the depths of the recession. The Dow Jones Industrial Average has hit 15 record highs this year alone.
But Butler still has a long way to go to before rebuilding her life after losing her job at the Golden Corral due to budget cuts a few years ago. At McDonald’s, she makes $9.50 an hour, and she pulls in extra money by baby-sitting or doing her friends’ hair. It’s still not enough to make ends meet.
“Things may be fine on Wall Street, but they are not fine on my street,” Butler said. “And if [central bankers] lived on my street, they would definitely change their mind.”
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Fed says rate hike next month hinges on market volatility
Some top policymakers, including Fed Vice Chairman Stanley Fischer, said recent volatility in global markets could quickly ease and possibly pave the way for the U.S. rate hike, for which...
Some top policymakers, including Fed Vice Chairman Stanley Fischer, said recent volatility in global markets could quickly ease and possibly pave the way for the U.S. rate hike, for which investors, governments and central banks around the world are bracing.
With a key policy meeting set for Sept. 16-17, at least five Fed officials spoke publicly in what amounted to a jockeying for position on whether increasing the Fed's benchmark overnight lending rate was too risky amid an economic slowdown in China, a rising U.S. dollar .DXY and falling commodity prices XAU= CMCU3.
"It's early to tell," Fischer told CNBC on the sidelines of the annual central banking conference in Jackson Hole, Wyoming. "We're still watching how it unfolds." He, along with other Fed officials, acknowledged that the global equities sell-off that began last week would influence the timing of a rate hike, which until only a couple of weeks ago seemed increasingly likely to occur in September.
Concerns about China's economy have whipsawed markets, including Wall Street, even while U.S. economic data has been robust. U.S. stock indexes ended largely unchanged, capping a week that included both the market's worst day in four years and biggest two-day gain since the 2007-2009 financial crisis.
"I think they could settle fairly quickly," said Fischer, a close ally of Fed Chair Janet Yellen.
St. Louis Fed President James Bullard told Reuters he still favored hiking rates next month, though he added that his colleagues would be hesitant to do so if global markets continued to be volatile in mid-September.
The Fed's policy committee "does not like to move right in the middle of a global financial storm," Bullard, a Fed hawk, said in an interview. "So one of the advantages we have is that this storm is occurring now and, at least as of now, we think it will be settled down" by the September meeting.
The comments suggest the next two and a half weeks will be critical for the Fed as well as for global markets. A U.S. rate hike is expected to hit emerging market equities and currencies particularly hard, adding to the sell-offs already seen.
Source: Reuters
Hillary Clinton just endorsed serious Federal Reserve reform
Hillary Clinton just endorsed serious Federal Reserve reform
Hillary Clinton embraced an ambitious proposal for reforming the Federal Reserve on Wednesday, according to a statement her campaign gave to The Washington Post.
Five of the 12 Fed...
Hillary Clinton embraced an ambitious proposal for reforming the Federal Reserve on Wednesday, according to a statement her campaign gave to The Washington Post.
Five of the 12 Fed officials who decide the course of monetary policy at the national level are selected by six of the nine governors that run each regional bank in the Federal Reserve system. Three of those six governors are effectively picked by the banking industry in each region. The three who don't pick the officials for the national Fed board are drawn directly from the banking industry, but they still wield considerable influence.
Leftwing reform campaigns have argued for removing the financial industry's influence in the Fed system, and that's what Clinton endorsed. "Secretary Clinton believes that the Fed needs to be more representative of America as a whole and that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue," said campaign spokesman Jesse Ferguson.
This effectively puts Clinton in the same ballpark as Bernie Sanders on the issue. It also arrives the same day 111 representatives in the House and 11 senators — including Elizabeth Warren — released a letter calling for more diversity among Fed officials. Those officials are overwhelmingly white men, and the letter noted that racial minorities are disproportionately affected when the Fed prioritizes low inflation over high employment.
By Jeff Spross
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Coalition Calls for Racial Equality in Kansas City Economy
KSHB - March 5, 2014 - Following a Department of Justice report showing the Ferguson Police Department unfairly targeted African-Americans, a Kansas City coalition says there are racial...
KSHB - March 5, 2014 - Following a Department of Justice report showing the Ferguson Police Department unfairly targeted African-Americans, a Kansas City coalition says there are racial inequalities right here.
They say a recent economic report shows twice as many African-Americans in Kansas and Missouri are unemployed than white residents and that wages are too low to support a family.
"Our purpose here today is to call for a moral economy where wages actually provide hope for workers and their families,” Stan Runnels, a priest and CCO member, said.
The group is asking policy makers for a change.
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More Cities Should Do What States and Federal Government Aren't on Minimum Wage
More Cities Should Do What States and Federal Government Aren't on Minimum Wage
Source: Gotham Gazette
Early...
Source: Gotham Gazette
Early this month, New York City Mayor Bill de Blasio announced a guaranteed $15 minimum wage for all city government employees by the end of 2018. This is a big win for over 50,000 workers across the city struggling to provide for their families, including those directly on the payroll and tens of thousands working at non-profits that contract with the city.
Unlike in Seattle and Los Angeles, where city officials are empowered to raise the minimum wage for the entire workforce in their cities, Mayor de Blasio is unable to unilaterally raise wages for all New York City workers. That power lies with Gov. Andrew Cuomo and the state legislature. The governor's efforts to lift the minimum wage to $15 are being hampered by a Republican-controlled state Senate.
De Blasio's decision to raise wages for city employees is a crucial independent step towards a more equitable city - and should be seen as an inspiration for cities around the nation. It also reflects the power and momentum of a groundbreaking worker-led countrywide movement demanding higher wages.
Even as state and federal administrations drag their feet on the inevitable question of a decent minimum wage for working families in the United States, de Blasio's gutsy move shows cities can and should take matters into their own hands.
The mayor's minimum wage raise closely follows his announcement last month giving six weeks paid parental leave, and up to 12 weeks when combined with existing leave, to the city's 20,000 non-unionized employees. The mayor has now moved to negotiate the same benefits with municipal unions. Again, New York City private sector workers must look to Albany or Washington, D.C. to move on paid family leave for all.
Mayor de Blasio's recent actions support his goal of lifting 800,000 New Yorkers out of poverty over ten years. More than 20 percent of the city's population lives in poverty, a huge swath of a city commonly associated with extraordinary wealth.
The last couple of years have seen unparalleled momentum from workers themselves - from New York City to Los Angeles and Chicago - calling for livable wages, resulting in minimum wage raises for fast food workers and other groups.
Workers are not waiting patiently on government officials – they are organizing in an unprecedented way. Progressive mayors like de Blasio are responding with sound policy, while less responsive officials are being put on notice. Cities like Los Angeles, New York City, and Chicago are paving the way, showing that it is possible to act independently of state and federal governments.
In addition, laws raising the minimum wage to more than the pitiful federal standard of $7.25 an hour have passed in a number of states. There are now campaigns to raise the floor and standards for workers being led in 14 states and four cities. This momentum is building into a crescendo that will have deep implications for the 2016 presidential election.
Nearly half of our country's workers earn less than $15 an hour and 43 million are forced to work or place their jobs at risk when sick or faced with a critical care-giving need. Now is the time for cities to listen to their workers and override state and federal passivity to allow millions of hard-working Americans to provide for their families.
A puzzle for central bankers: Solid growth but low inflation
A puzzle for central bankers: Solid growth but low inflation
Against a backdrop of strengthening growth but chronically low inflation, Federal Reserve Chair Janet Yellen and other central bankers are taking their measure of the global economy at their...
Against a backdrop of strengthening growth but chronically low inflation, Federal Reserve Chair Janet Yellen and other central bankers are taking their measure of the global economy at their annual conference in the shadow of Wyoming's Grand Teton Mountains.
With the prospect of new leadership at the Fed within months, investors will be listening for any hint of shifting interest rate plans from the policymakers. The most watched events will come Friday, when Yellen and Mario Draghi, head of the European Central Bank, will each address the conference.
Read the full article here.
Victima de abuso sexual se identifica con Blasey Ford
Victima de abuso sexual se identifica con Blasey Ford
Para la activista Ana María Archila, víctima también de violencia sexual, el caso de Kavanaugh despierta el de muchas mujeres que han sido objeto de abuso.
...
Para la activista Ana María Archila, víctima también de violencia sexual, el caso de Kavanaugh despierta el de muchas mujeres que han sido objeto de abuso.
Read the full article here.
Janet Yellen, the first woman Fed chair, proved the skeptics wrong and got fired anyway
Janet Yellen, the first woman Fed chair, proved the skeptics wrong and got fired anyway
On February 3, Federal Reserve Chair Janet Yellen, the first woman to lead the central bank and likely the most qualified nominee ever for the post, will exit the Fed, leaving a legacy described...
On February 3, Federal Reserve Chair Janet Yellen, the first woman to lead the central bank and likely the most qualified nominee ever for the post, will exit the Fed, leaving a legacy described as “near perfection” and with an “A” grade from a majority of economists.
And yet in 2014, the US Senate confirmed Yellen by a vote of 56-26, the lowest number of “yes” votes a confirmed Fed chair has ever received.
Read the full article here.
Despite Trump, State Progressives Advance Pro-Worker Policies
Despite Trump, State Progressives Advance Pro-Worker Policies
While the president goes on the attack, Democratic-controlled states and municipalities forge ahead.
...
While the president goes on the attack, Democratic-controlled states and municipalities forge ahead.
Read the full article here.
Business Notes: Maryland Among Locations That Could Host 2026 World Cup Games
Business Notes: Maryland Among Locations That Could Host 2026 World Cup Games
“Elected officials across the country are paying close attention to how Amazon and other corporations have responded to Seattle’s efforts to confront their affordable housing and homelessness...
“Elected officials across the country are paying close attention to how Amazon and other corporations have responded to Seattle’s efforts to confront their affordable housing and homelessness crisis,” Sarah Johnson, director of Local Progress, a national association of progressive elected municipal officials, told the Times.
Read the full article here.
7 days ago
7 days ago