St. Louis Post-Dispatch - March 5, 2015, by Jim Gallagher - About a dozen chilly protesters gathered outside the Federal Reserve Bank of St. Louis on Thursday to...
[created] | Published by: Forbes
These Organizations Are Working To Help Puerto Rico's Recovery Efforts
These Organizations Are Working To Help Puerto Rico's Recovery Efforts
Puerto Rico was badly damaged by Hurricane Maria. The storm caused billions of dollars worth of property damage. Efforts to repair and rebuild houses, roads, and telecom infrastructure are going...
Puerto Rico was badly damaged by Hurricane Maria. The storm caused billions of dollars worth of property damage. Efforts to repair and rebuild houses, roads, and telecom infrastructure are going to take months. Around half of the U.S. territory's residents lack cell phone service. More than eight out of every ten people in Puerto Rico still don't have electricity.
Read the full article here.
Jackson Hole Summit To Provide Forum For Policymakers Amid Market Turmoil
Also getting under way at the lodge is a protest conference organized by the Center for Popular Democracy, a liberal group that has been cajoling the Fed to hold off on raising...
Also getting under way at the lodge is a protest conference organized by the Center for Popular Democracy, a liberal group that has been cajoling the Fed to hold off on raising interest rates. Some researchers, for example, argue that “core inflation” – which strips out food and energy prices and is often used by bankers as their preferred gauge – may be less relevant in a world where futures contracts, global shipping and worldwide trade help even out retail level price swings for some of those goods.
Some analysts have also said that globalization has been a factor in holding down U.S. wages and prices even at times of solid growth.
When the Fed met in June, US oil prices had recovered to over $60 a barrel, and there had been a belief that we’d seen the lows.
Inflation has been a concern for the Fed, as it has been running well below its 2 percent goal and some signs have indicated that it may fall further. London Business School professor Lucrezia Reichlin is the discussant. Yet the theory is still a useful framework to think about monetary policy. This year central bankers, finance ministers, academics and financial market participants will chewing over why inflation is so low, whether this is unsafe and what they can do about it. Investors have cut the probability of a move at that gathering to 28 percent Tuesday from 48 percent on August 18 based on trading in fed funds futures.
They confront a big disparity between the world’s two largest economies, the U.S. and China.
China’s stock market is swooning and its economy slowing.
Goldman Sachs economists wrote Wednesday that they “expect liftoff in December, and see the recent market sell-off as another argument against a hike in September“.
U.S. counterparts will experience both advantages and disadvantages if their currencies behave according to textbooks and their currencies weaken against the dollar if the Fed raises rates.
Dudley said a final decision would reflect how the market acts over the next few weeks, as well as the end-of-montheconomic data.
The absence of Yellen and Draghi has lowered expectations for a major policy announcements at Jackson Hole.
The official roster of attendees at the invitation-only event included Fed Vice Chairman Stanley Fischer and Fed governors Lael Brainard and Jerome Powell, and presidents from eight of the 12 regional Fed banks. “So you look around the world and ask who can take up the slack, and really the answer is nobody”, said Kevin Logan, chief U.S. economist at HSBC Securities, in New York.
The opening session at 10 a.m. Eastern will examine a paper on “Inflation dynamics though firms’ pricing behavior” by Simon Gilchrist, a professor at Boston University and Egon Zakrajsek, an associate director for monetary affairs at the Fed Board of governors.
The vice chairman is considered extra inclined than Yellen to boost charges prior to later, so his statements might make clear how the talk contained in the central financial institution might transpire when officers meet September 16 and 17.
Source: Rapid News Network
Fed Splits Evident Amid Wait for Yellen: Jackson Hole Journal
Bloomberg News - August 22, 2014, by Jeff Kearns, Simon Kennedy and Michael McKee - Divisions within the Federal Reserve over how long to...
Bloomberg News - August 22, 2014, by Jeff Kearns, Simon Kennedy and Michael McKee - Divisions within the Federal Reserve over how long to keep easy monetary policy are already in evidence in Wyoming as investors prepare for Chair Janet Yellen’s keynote speech.
Fed Bank of St. Louis President James Bullard told Bloomberg Radio that the U.S. central bank may begin tightening monetary policy earlier than officials previously expected.
“The evidence is leading toward an earlier increase than would have been in the works earlier this year,” said Bullard. “Labor markets have improved quite a bit relative to what the committee was thinking.”
Bullard spoke after Kansas City Fed President Esther George told Bloomberg Television that broad-based employment gains suggest the U.S. economy is strong enough to withstand higher interest rates. Philadelphia Fed President Charles Plosser, who voted against the Fed’s policy statement last month, told CNBC he’s concerned about the Fed not adjusting policy appropriately.
By contrast, Atlanta Fed President Dennis Lockhart urged more patience, warning in a separate interview with Bloomberg Radio against “moving prematurely and snuffing out some progress.”
* * *
Robots don’t steal jobs, the U.S. labor market is less flexible than it was and workers haven’t suffered unprecedented periods out of work.
Photographer: Bradly Boner/Bloomberg
Fed Chair Janet Yellen arrived at the dinner to be greeted by about 10 people wearing bright green T-shirts emblazoned with “What Recovery?” and carrying placards with labor market data. Close
Those are among the conclusions of papers being presented at the symposium. Here is a review of their contents, which can be read in full on the Kansas City Fed’s website.
Robots and computers don’t steal as many jobs as some believe, and automation actually benefits many workers, Massachusetts Institute of Technology Professor David Autor said in his paper.
A key reason humans aren’t obsolete yet is that simple tasks such as visually identifying a chair, which any child can do, aren’t so easy for engineers to teach to computers, Autor said.
“Journalists and expert commentators overstate the extent of machine substitution for human labor and ignore the strong complementarities that increase productivity, raise earnings, and augment demand for skilled labor,” he wrote. “Challenges to substituting machines for workers in tasks requiring flexibility, judgment, and common sense remain immense.”
* * *
The U.S. labor market became less fluid in recent decades partly because of an aging workforce, a shift to older businesses, and the spread of occupational licensing and certification, economists Steven J. Davis and John Haltiwanger wrote in their paper.
The economists define labor market fluidity as “flows of jobs and workers across employers.” The paper found the U.S. “underwent a large, broad-based decline in the pace of labor market flows in recent decades.”
“An aging workforce is a factor behind the slowdown of worker reallocation,” the paper said.
* * *
U.S. workers in the aftermath of the 2007-2009 recession haven’t experienced unprecedentedly long bouts of non-employment, according to a paper by economists Jae Song and Till von Wachter.
Their findings “suggest that the potential for hysteresis in the aftermath of the Great Recession is moderate,” the paper said. Hysteresis posits that people out of work for too long have a harder time finding work, leading to a persistent decline in the employment-to-population rate
* * *
Policy makers would benefit from a better understanding of labor markets, economist Giuseppe Bertola argued in a paper that weighed the impact of rules making those markets rigid or flexible.
Rules that protect workers from job losses and provide more generous unemployment benefits can soften and smooth shocks to the economy, said Bertola.
* * *
George opened the symposium late yesterday by putting the presenters on the spot.
The last conference devoted to labor markets was 20 years ago, George told the group of almost 200 as they ate steak and salmon dinners beneath elk antler chandeliers.
The presenters and discussants back then included five future Nobel Prize winners and two academics who would go on to be central bankers: Bank of England Deputy Governor Charles Bean and Stanley Fischer, the Bank of Israel governor who became Fed vice chairman in June. Fischer sat at one of the front tables last night.
“So for those of you that will be on the program,” George said to laughter, “We’re either setting you up for a blessing or a curse.”
This year’s topic is “Re-Inventing Labor Market Dynamics.” In 1994 it was “Reducing Unemployment: Current Issues and Policy Options.”
George said she went through the 1994 proceedings only to find central bankers and economists are still grappling with some of the same basic issues today.
“I saw that the discussion included things like the decline in demand for low-skilled workers due to technology and the challenge of the long-term unemployment,” George said. “And questions were raised by that symposium, as they are today, about the usefulness of the unemployment rate as a measure of economic slack.”
It reads like a list of the most vexing issues the Fed faces now and will be attempting to tackle today and tomorrow.
* * *
Fed Chair Janet Yellen arrived at the dinner to be greeted by about 10 people wearing bright green T-shirts emblazoned with “What Recovery?” and carrying placards with labor market data.
The protesters had traveled to Wyoming to highlight the plight of “struggling workers from around the country” who want the Fed to pursue “full employment that reduces poverty and expands the middle class,” according to the Center for Popular Democracy, a Brooklyn-based organization. The backs of their T-shirts had a graph comparing the performance of wage growth among the top 1 percent and the rest.
Ady Barkan, a staff attorney with the group, spoke briefly with Yellen at the door of the lodge’s Explorers Room. “She said she understands the issues we’re talking about and is doing everything they can,” he said, after she had entered the room.
Yellen has regularly cited weak labor markets as a scourge of the economy she’s trying to boost with easy monetary policy.
Shemethia Butler, who works part time at a McDonald’s Corp. restaurant in Washington, was one of those to make the trip. The 34-year-old said that while she isn’t up on monetary policy, she wants policy makers to know she fears higher interest rates for her and her community. She said she works 25 to 35 hours a week for $9.50 an hour at a job she’s had for just over a year. Before that she was unemployed for two years.
“There’s no recovery,” Butler said. “The economy is broken because there aren’t enough jobs for people like me.”
* * *
Yellen’s speech will be the main event of the first full day of the conference. She will speak at 8 a.m. Mountain Time today.
Her address will be followed by the presentation of the paper by Davis and Haltiwanger.
Autor will then discuss job polarization before a panel on demographics featuring Karen Eggleston of Stanford University, David Lam of the University of Michigan and Ronald Lee of the University of California, Berkeley.
European Central Bank President Mario Draghi will deliver the keynote luncheon speech.
Tomorrow, Von Wachter and then Bertola will present their papers.
The final panel will provide an overview of labor markets and monetary policy. It will include Bank of England Deputy Governor Ben Broadbent, Bank of Japan Governor Haruhiko Kuroda and Brazilian central bank chief Alexandre Tombini.
* * *
The conference is lacking Wall Street participants for the first time.
An exception is Jacob Frenkel, chairman of JPMorgan Chase International, who is attending in his capacity of chairman of the board of trustees of the Group of 30, a private-sector group of mainly former policy makers which advises central banks and governments. Tim Adams, president of the Institute of International Finance, is also present.
Draghi, Kuroda and Bank of Canada Governor Stephen Poloz provide international central banking firepower.
Among academics in attendance are Alan Blinder of Princeton University, Harvard University’s Kenneth Rogoff and Martin Feldstein, and John Taylor of Stanford University. President Barack Obama’s administration is represented by Jason Furman, chairman of the Council of Economic Advisers and Jeffrey Zients, director of the National Economic Council.
* * *
The backdrop for the symposium and Yellen’s speech was set by the release of the minutes from the Federal Open Market Committee’s July discussions.
Fed officials in July raised the possibility they might raise rates sooner than anticipated, as they neared agreement on an exit strategy. Some participants were “increasingly uncomfortable” with the pledge to keep interest rates low for a “considerable period,” the minutes said.
At the same time, “many participants” still saw “a larger gap between current labor market conditions and those consistent with their assessments of normal levels of labor utilization.”
* * *
* * *
Some recent stories on the U.S. labor market:
* * *
The opening day of Jackson Hole has been associated with stock-market gains in each of the past seven years. The Standard & Poor’s 500 Index rose an average 1.3 percent on each of them from 2007 to 2012, following speeches by then-Chairman Ben S. Bernanke, who skipped last year’s conference.
The biggest climb was the 1.9 percent of 2009, when Bernanke said the economy appeared to be “leveling out.” Gains also followed his signals of 2010 and 2012 that fresh asset-purchases were imminent.
The bar is therefore set high for Yellen who identifies slack labor markets as a reason for easy monetary policy. Economist Ed Yardeni says the “Fairy Godmother of the Bull Market” won’t let us down.
Still, Steven Englander of Citigroup Inc. says that because “dovishness is increasingly anticipated,” Yellen may have to intensify her support for low interest rates if risk-assets such as stocks are to rally anew.
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Don't Raise Rates, Protesters Tell St. Louis Fed
St. Louis Post-Dispatch - March 5, 2015, by Jim Gallagher - About a dozen chilly protesters gathered outside the Federal Reserve Bank of St. Louis on Thursday to complain that the Fed may soon make it harder to find work.
The Federal Reserve is widely expected to raise interest rates later this year, a move intended to prevent inflation in years hence. The protesters complained that higher interest rates can also cut off the jobs recovery.
The Fed represents “the 1 percenters,” said Derek Laney, an organizer with Missourians Organizing for Reform and Empowerment. “They are the big banks, the big corporations, and their mandate is to keep inflation low at all costs.”
People at the bottom of the economic ladder would trade some inflation for jobs, he said.
The protesters complained that the Fed has set a target for inflation at 2 percent — slightly above the current inflation rate — but has no target for reducing unemployment.
Rising rates tend to slow an economic rebound eventually, although there is usually a long lag.
The protest was timed for release of a report by three national advocacy groups, including the Economic Policy Institute, the Center for Popular Democracy and Fed Up: The National Campaign for a Stronger Economy.
The report complained that the boards of the Fed's 12 regional banks, which influence national decisions, are heavy on banking and business executives, but light on representatives of other citizens, such as labor and clergy.
The boards also don't fully reflect their community's racial mix, the report said. For instance, the St. Louis Fed's board is 10 percent black while its multi-state region is 17 percent black, according to the report.
The Federal Reserve Bank of St. Louis did not immediately provide a comment.
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[created] | Published by: Vox
Retail and restaurant workers have the worst schedules. Oregon plans to change that.
Retail and restaurant workers have the worst schedules. Oregon plans to change that.
In the next upcoming battle for workers’ rights, activists aren’t asking for more money or more time off. They just want workers to get a little advance notice about what their schedule will be....
In the next upcoming battle for workers’ rights, activists aren’t asking for more money or more time off. They just want workers to get a little advance notice about what their schedule will be.
Activists for better working conditions have scored victories lately. This year, 19 states increased their minimum wage — the result of a coordinated state-by-state campaign to take action on an issue that the federal government has basically ignored for a decade. And a handful of cities and states have passed laws requiring employers to offer workers paid parental leave.
Read the full article here.
Clinton Joins Crowd Calling for an Overhaul of Fed Governance
Hillary Clinton is the latest voice calling for changes at the Federal Reserve.
A spokesman for the front-runner for the Democratic presidential nomination released...
Hillary Clinton is the latest voice calling for changes at the Federal Reserve.
A spokesman for the front-runner for the Democratic presidential nomination released a statement Thursday saying that the Fed “needs to be more representative of America as a whole” and arguing that “commonsense reforms -- like getting bankers off the boards of regional Federal Reserve banks -- are long overdue.”
The statement, sent by Clinton spokesman Jesse Ferguson and first reported by the Washington Post, comes as Democrats unleash a volley of criticism against the central bank. Earlier on Thursday, lawmakers called for more consideration of African American, Latino and female candidates for top Fed posts in a letter to Chair Janet Yellen. The missive was signed by a majority of the Democratic members of Congress.
Clinton’s position garnered praise from the union-backed Fed Up coalition, which coordinated the congressional letter.
The campaign’s comment also partly echoed a proposal that Fed Up put out last week, in which former Fed economist Andrew Levin suggested structural reforms for the central bank. Levin argued that the Fed should be made a more public institution.
Currently, regional reserve bank boards have nine directors: six are elected by member banks, with three representing commercial banks and three representing the public. The final three directors are appointed by the Board of Governors in Washington, and are also meant to represent the public.
Bank Control
That means two-thirds of the board seats at the 12 regional Fed banks are controlled by commercial banks, Levin wrote, saying that the directors should instead be affiliated with small businesses and non-profit organizations and selected through a “process overseen by the Federal Reserve Board and involving the elected officials in each Fed district.”
“The process should ensure that directors are representative of the public in terms of racial/ethnic and gender diversity and educational background and professional experience,” Levin wrote.
Esther George, president of the Kansas City Fed, said Thursday that “diversity for the Federal Reserve is critical,” and that progress has been made both at the board of directors and at the staff level in making sure the Fed reflects the communities that it serves.
Preserving Independence
Richmond Fed President Jeffrey Lacker pushed back against proposals to make the Fed more public in an article posted Thursday. He said the regional branches’ hybrid governance structure “has come to play an important role in the independence of monetary policy” and “independence allows monetary policy to place greater weight on the long-term benefits of low and stable inflation.”
“The current Fed governance structure may not be ideal,” Lacker wrote. “But until there is a proposal that preserves the monetary policy independence that is so vital to the Fed’s mandate, we should stick to what we have.”
While there have been various Congressional attempts at shaking up Fed structure in recent years, those have made little headway. For instance, Republican Senator Richard Shelby proposed a bill last year that would have tweaked the New York Fed, making its leader a presidential appointee, among other changes, but it never passed.
Donald Trump, the presumptive Republican presidential nominee, has also weighed in on the Fed in recent days. On CNBC last week, Trump said that he’s a “low-interest” person and that he would replace Yellen when her term ends.
By Jeanna Smialek
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Let’s Be Real Episode 6: We’re Fed Up!
This episode, we take a look at a campaign that focuses on the Federal Reserve System and its impact on working people and people of color. We take you to a rally in front of the Federal Reserve...
This episode, we take a look at a campaign that focuses on the Federal Reserve System and its impact on working people and people of color. We take you to a rally in front of the Federal Reserve Bank of New York where we spoke with two protesters about how the Fed impacts their communities. Then, we sit down with the Director of the Center for Popular Democracy’s Fed Up! Campaign to hear about the fight to put working people and communities of color at the center of the Fed’s decision-making process.
Read the full article here.
Forum Held On Report That Calls For Minimum Wage Raise To $10 An Hour
NY1 - A forum was held Wednesday at the CUNY Murphy Institute on a new report by United New York and the Center for...
NY1 - A forum was held Wednesday at the CUNY Murphy Institute on a new report by United New York and the Center for Popular Democracy that recommends increasing the city's minimum wage to $10 an hour.
It also calls for earned sick leave, schedule predictability, and passing legislation that allows the city to adjust its own minimum wage above that of the state.
The report focused mostly on service industry jobs.
"This is a moment in New York City where we can finally demand that this be a city that stands up for low-wage workers and doesn't shy away from that role," said Deborah Axt of Make the Road New York.
"If we are to maintain our progressive reputation as the bright shining star, then New York City really needs to claim a lot of the recommendations that came out of this forum here today," said City Councilwoman Letitia James, whose district covers part of Brooklyn.
The report said that the city's unemployment rate rose from 5 to 10 percent since 2007, while its homeless population has doubled since 1992.
It also found that real median income is down $3,000 since 2008.
Source
Fed Rate Hike Threatens Jobs and Wages
12/16/2015
Statement & Booking Opportunity : Connie Razza, Director of Strategic Research for the Center for Popular Democracy (CPD) released...
12/16/2015
Statement & Booking Opportunity : Connie Razza, Director of Strategic Research for the Center for Popular Democracy (CPD) released the following statement in advance of the likely interest rate hike this afternoon:
“The presumption underlying the Fed’s decision today is that the economic recovery is nearing completion, a determination wholly at odds with the data on which the Fed is committed to depending. Inflation is well below the Fed’s own target and wages remain stagnant, yet Fed officials voted today to intentionally slow down the economy. Today’s announcement lays the foundation for unnecessary economic obstacles in the way of the tens of millions of working people across the country who deserve higher wages and better jobs, and particularly the Black and Latino communities still mired in a Great Recession. We urge the Federal Reserve to deliberate carefully in considering future increases.” The Fed Up campaign is bringing the voices of working families and communities of color into the national debate about Federal Reserve policy. In the past year, our members have met with 9 of the 12 regional presidents and 4 of the 5 sitting Governors, sharing with them the human realities that underlie the economic numbers. We are urging the Fed to fulfill both sides of its dual mandate and build an economy with genuine full employment, where everybody who wants a good job can find one. In the event that the Federal Reserve does not raise interest rates, you will receive another statement following the Fed’s announcement on Wednesday afternoon.
To schedule interviews with Connie Razza, send an email to ajain@populardemocracy.org
###
www.populardemocracy.org
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
Media Contact:
Anita Jain, press@populardemocracy.org, 347-636-9761
Sofie Tholl, stholl@populardemocracy.org, 646-509-5558
The Federal Reserve's moral imperative
The Federal Reserve is usually understood as the bankers' bank. But what if it was the people's bank?
At the Fed's annual Jackson Hole conference last week, an assortment of community...
The Federal Reserve is usually understood as the bankers' bank. But what if it was the people's bank?
At the Fed's annual Jackson Hole conference last week, an assortment of community organizers, activists, labor organizations, and economists showed up to push America's most important financial institution towards putting the concerns of working and nonwhite Americans at the center of monetary policy. The group, called Fed Up, has met with Federal Reserve officials before, but Thursday's meeting was nonetheless unprecedented and striking — both for being on the record, and for the detailed, impassioned, occasionally heated, and remarkably pointed conversation that resulted.
Fed Up's complaints are several. The Fed is too worried about inflation, the activists say, and not worried enough about pushing the boundaries of maximum employment when it sets interest rates. They also argue the population of Fed officials is not diverse enough along racial, gender or class lines, and that the Fed itself could do with some institutional reform.
To a large extent, Fed officials agreed: "I'd be surprised if anyone in the Federal Reserve thinks we've done well on [diversity]," said New York Fed President William Dudley. "We're going to run this economy hot. Get unemployment down lower," added San Francisco Fed President John Williams. "So I don't think we disagree about that basic view."
And in Fed official's defense, some of this balancing is a judgment call. The Fed's inflation target is 2 percent, but since that is neither a ceiling nor a floor, officials must decide how far to overshoot that target and for how long in the name of spurring job growth. There is also generally a lag time between a change in interest rates and when it's felt in the economy. So Fed officials have to make educated guesses about when to drop rates to firm up a stumbling economy or raise them to get ahead of inflation.
Finally, Fed officials themselves can disagree over the full extent of their powers. That point was illustrated in Thursday's meeting when Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer disagreed over just what tools the Fed has to deal with asset bubbles. (Rosengren argued there were lots of tools while Fischer insisted there were few.)
The first complication here is that, even from a technical perspective, it's hard to see why the Fed is even contemplating another interest rate hike in December. Rod Adams, a neighborhood organizer from Minneapolis, noted in a particularly impassioned moment that there's essentially no indication that inflation is on the rise. Fed officials' own projections show inflation will just barely touch 2 percent through 2018. Josh Bivens, an economist at the Economic Policy Institute who joined Fed Up at Jackson Hole, argued that fully healing the damage from the Great Recession will require a prolonged period of overshooting the Fed's inflation target.
And in truth, none of the Fed officials at the meeting really debated any of these points. What did come up was the threat of asset bubbles and financial instability. "One of the ways that you get maximum employment is that you don't allow excesses to build up to the point that you actually have another recession, which hurts everybody in the room," Rosengren said.
This is where the unspoken moral problem of Fed policy really becomes inescapable. In very broad terms, the effects of lower interest rates and higher inflation tend to fall harder on the more fortunate members of society: retirees with savings portfolios, people with financial assets, those who work in the financial industry, and so on. Meanwhile, the effects of raising interest rates and slowing down jobs and wage growth tend to fall hardest on the least fortunate: Racial minorities, people with only a high school education, or people with prior criminal records.
At any given moment, unemployment for African-Americans is roughly double the national unemployment rate. But that gap tends to close during boom times and widen during downturns. "The economy has recovered for much of white America, but for black and Latino workers it has not," said Adams. "If you decide that we're at maximum employment now and you intentionally slow down the economy, you'll be leaving us behind, pulling up the ladder right after you've climbed it."
The brutal truth is that when the Fed slows down the economy by raising rates, it is throwing people out of work. And the people most likely to be thrown out of work first are those forced to the fringes of the labor market already by discrimination and other circumstances. So raising interest rates to fight financial instability essentially means black, Latino, and other underprivileged workers are the first to be thrown on the sacrificial alter to save us all from Wall Street's irrational exuberance.
This is partly why Fed Up is pushing for more racial and gender diversity among Fed officials, and to remove the financial industry from its privileged position among those officials. The idea is that the voices of those people the Fed will help or harm should all be equally heard in its deliberations. Fed officials may agree on running the economy hot for a while, but the lack of those voices may be hiding just how hot we need to run it.
There are practical policy changes the Fed could make as well. Bivens has released work on alternative tools the Fed could develop to pop bubbles without causing all that collateral damage: Higher capital requirements for banks, more use of its research powers and public relations to alert the markets to bubbles, and other ideas that already lie in the scope of the Fed's powers. Rosengren said the Fed should use all tools at its disposal to fight financial instability. But if Fed officials are looking for practical ways to build Fed Up's concerns more fully into its ways of doing business, it could start by developing those tools and explicitly rejecting interest rate hikes as a way to combat bubbles.
Another would be to adopt a higher inflation rate target like 3 percent or even 4 percent. If the effects of maximum employment take longer to reach marginalized communities, then the 2 percent target is driving the Fed to cut off job growth before those communities can ever heal.
It should be noted, as Fed Up activists did, that within the scope of its tools, the Fed has actually done a far better job maximizing jobs for marginalized Americans than Congress or the state governments. To some extent, the Fed is catching heat because these it's actually willing to listen to reason.
But it's long been said that societies are judged by how they treat their weakest and most vulnerable citizens — that the powerless have a uniquely powerful claim on our responsibilities. And Thursday reminded us that truism applies to the Fed too.
By Jeff Spross
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23 hours ago
3 days ago