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Liberal activists are putting a target on the Federal Reserve for the 2016 elections, much to the delight of the Bernie Sanders campaign.

Denouncing an agenda that they say tilts toward Wall Street, members of the “Fed Up” coalition on Monday unveiled a set of reforms that would alter how the central bank does business.

“No longer are we focused only on fixing the Fed’s monetary policy and internal governance positions,” said Ady Barkan, the group’s campaign director. “We are now beginning an effort to reform the Federal Reserve itself.

“Ask all of the presidential candidates what their plans are for the Federal Reserve,” he added in a call with reporters.

While touting its reform proposals, the group was joined Monday by a top policy official with Sanders, who has made criticism of Wall Street a cornerstone of his presidential bid.

Warren Gunnels, Sanders’s policy director, said the Democratic candidate was not yet ready to endorse the coalition’s proposal, needing more time to review it.

But Sanders has pitched his own Fed reforms, and Gunnels said the Vermont senator is “very passionate” about overhauling how the Fed does business. Gunnels said the central bank should delay raising rates any time soon.

“The Fed should not raise interest rates until unemployment is lower than 4 percent,” he said. “Raising rates must be done as a last resort, not to fight phantom inflation.”

The “Fed Up” coalition said it had reached out to every remaining presidential campaign with its reform proposal. None of the Republican campaigns responded, but the group has had “very substantive conversations” with staffers to Hillary Clinton, according to Barkan.

“We urge Secretary Clinton to show leadership on this issue and hope that she will soon be coming out with her plan to reform the Federal Reserve,” he told The Hill.

Clinton’s campaign did not respond to a request for comment.

The leftward pressure on the Fed is coming at a critical time.

The bank is trying to step back from intense stimulus it injected into the economy after the financial crisis. It raised rates for the first time in nearly a decade in December, but so far has opted not to raise them any further at subsequent meetings.

Looming over its deliberations is the presidential election. The central bank prides itself on its political independence, and any major decisions in the months to come could expose it to charges it is working to benefit one party or the other.

While many economic indicators are improving, many community groups like Fed Up argue that many middle-class and working-class Americans are feeling none of those gains. They point to stagnant wage growth and a low labor participation rate as evidence that the Fed has ample reason to continue boosting the economy.

The coalition’s reform proposal was written by Andrew Levin, a Dartmouth economist who spent two decades at the Fed, including time as a special adviser to Fed chiefs Ben Bernanke and Janet Yellen.

While most conservative critiques of the Fed center on how it conducts monetary policy, Levin focuses most of his fire on the dozen regional Fed banks scattered across the country.

Levin argues that the regional institutions are undemocratic entities that hand bank executives huge influence at the Fed. The regional banks are directly backed by commercial banks, which occupy most of the seats on each regional bank’s board. In turn, those boards pick each regional Fed president, who at some point will hold a rotating spot on the Fed’s board, which handles the nation’s interest rates.

Under Levin’s plan, regional Fed banks would have to solicit public input when selecting their presidents. Regional banks would be required to put together a list of candidates through input from both the public and public officials from their specific region. The plan calls for Fed banks to emphasize diversity, considering candidates across a range of racial, gender and educational backgrounds.

Levin highlighted that in the 100-year history of the Federal Reserve system, there has never been a black head of a Fed regional bank.

The unveiling of the reform plan came on the same day that Fed Chairwoman Janet Yellen met privately with President Obama to discuss the central bank’s work and the state of the economy.

High-ranking Republicans have been critical of the Fed, particularly for the unprecedented stimulus program it carried out under Bernanke. Top GOP candidates like Donald Trump and Ted Cruz have accused the Fed of harming the economy with its efforts, and Speaker Paul Ryan (R-Wis.) has also been a frequent critic of the bank.

Sanders occupies a fairly unique political position when it comes to the Fed. He was one of just two Democrats to back a vote earlier this year on a Republican bill that would subject the central bank to a full outside review.

Did you know 67% of all job growth comes from small businesses? Read More

Separately, Sanders has also pushed to “Audit the Fed,” and the Levin plan also includes a comprehensive annual review of the Fed’s operations.

The Vermont senator has floated his own Fed reform proposal, arguing in a December piece in The New York Times that the institution has been “hijacked” by bankers. His plan would limit the influence of the financial sector on selecting Fed officials and require the Fed to prioritize unemployment when considering interest rates.

Fed officials have repeatedly resisted any efforts to change how it does business, frequently arguing that changes could render the central bank ineffective or subject it to improper political pressure.

By Peter Schroeder

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By Ben McLannahan

Jamie Dimon endured a rough ride at the annual meeting of America’s biggest bank on Tuesday morning, as shareholders repeatedly attacked the JPMorgan Chase chief over his ties to the administration of Donald Trump.

In December Mr Dimon was named chairman of the Business Roundtable, a group of almost 200 CEOs which is among the most prominent lobbying groups in Washington. Mr Dimon, chief executive of JPMorgan for the past 11 years and chairman for 10, is also a member of Mr Trump’s strategic and policy forum, which meets regularly to shape the economic agenda.

At the meeting in Wilmington, Delaware, a succession of shareholders challenged Mr Dimon to publicly disavow some of Mr Trump’s policies, such as his curbs on immigration from predominantly Muslim countries and his building a wall on the border with Mexico. One shareholder noted that users had sent more than 4000 messages to a website, backersofhate.org, urging Mr Dimon to “distance himself from hateful policies of human suffering”.

After staying silent throughout several speeches from the floor, Mr Dimon defended the bank’s record on Mexico, its support for lesbian, gay, bisexual and transgender people, and its funding of private prisons.

Finally, he said of Mr Trump: “He is the president of the United States, he is the pilot flying the aeroplane. I’d try to help any president of the US because I’m a patriot. That does not mean I agree with every policy he is trying to implement.”

Mr Dimon has long been the most outspoken of the big-bank chiefs in the US, often using his shareholder letter as a platform for taking positions on matters of public policy, and for challenging the regulatory framework put in place since the 2008 crisis.

In the weeks after the presidential election, the 61 year old was approached by members of Mr Trump’s transition team to serve as Treasury secretary but declined, saying he was unsuited to the role, according to people familiar with the discussions.

As hostile questioning resumed after his remarks at the Tuesday meeting, Mr Dimon tried to lighten the mood, saying “you’re starting to hurt my feelings”. The shareholder admonished him by saying that just by hearing him out, the chief executive would earn more than $100.

“I hope it’s worth it!” said Mr Dimon, who was paid $28m last year.

“This is not a laughing matter,” the shareholder replied.

The meeting stood in contrast to the peaceful gathering at the Goldman Sachs building in Jersey City at the end of last month, when chief executive Lloyd Blankfein faced just two questions from the floor, both of them friendly. Mr Blankfein, who is also chairman of the board, closed the meeting within just 24 minutes.

Mr Dimon wrapped up Tuesday’s proceedings by saying the entire board “takes this feedback seriously”.

Ana Maria Archila, co-executive director of the Center for Popular Democracy, said after the meeting that until Mr Dimon takes a stronger stand her organisation would continue to associate JPMorgan Chase with Mr Trump’s “anti-immigration” agenda.

Ms Archila arrived in America 20 years ago to reunite with her father, who had fled political violence in Colombia.

“I don’t think we have a plan to really inflict economic damages on the bank just yet,” she said. “But what we do have a plan for, is to force them to clarify whose side they’re on.”

Like many new organizations, Local Progress sprang from the ashes of a crisis.

In 2012, New York City Councilmember Brad Lander, who represents Brooklyn’s Park Slope neighborhood, and Nick Licata, then Seattle council chair, had a phone call about how to deal with the tidal wave of foreclosed homes that had swept the country. A few loosely organized collectives had emerged around the challenge of blight, with some cities trying innovative and legally risky strategies like using the power of eminent domain to seize the foreclosed mortgages. But there wasn’t a place to convene like-minded local officials around that issue — or any other. “It really grew into 'hey, there should be something like this,'” Lander says.

Rather than creating a new organization, Lander reached out to the Center for Popular Democracy, another young outfit that secured grants to support a few staff members for the project. They first gathered in 2012, at the left-leaning Center for American Progress in Washington. The group has grown — with annual convenings and ones that are more ad hoc, like a forum in support of Seattle’s first-in-the-nation vote to raise its minimum wage to $15 in 2014. The show of solidarity helped. “One thing they said was, 'make it look like we’re not crazy,’” Lander says, of Seattle’s council.

Many cities have a klatch of liberal legislators who push for higher minimum wages, paid leave mandates, taxes on plastic bags and the like. By putting them in contact with one another and other community groups, Local Progress has in recent years created a policy feedback loop that’s accelerated the spread of new laws in municipalities across the country. In the absence of federal action on many issues, it’s trying to make local government into something that doesn’t just pick up the trash — but solves some of society’s biggest problems as well.

City-level cooperation, of course, isn’t a new idea.

Its first iteration came about a century ago, during the Progressive era, when urban leaders fought for home rule for cities in order to establish construction codes, health and safety standards, and the architecture of good government through state-based alliances called Municipal Leagues. Later, President Franklin D. Roosevelt’s New Deal created programs that bypassed the more conservative governors and state legislatures, filtering aid for infrastructure projects through local Democratic machines.

That relationship started to weaken through the 1970s and ‘80s, when some Democrats migrated to the suburbs, urban politics became more racialized, and the flow of money slowed to a trickle.

“What’s new in the last 30 years is that federal role has been eroding, and by now it’s really difficult to get anything done,” says Margaret Weir, a professor at UC Berkeley who specializes in urban politics. "The Reagan administration signaled to cities that 'you’re pretty much on your own.’"

Meanwhile, the old Municipal Leagues had evolved into bodies like the National League of Cities and the National Council of State Legislators, which serve as convening entities — but don’t tend to push the policy envelope that much, so as to remain all-inclusive. Licata, in particular, was frustrated that there seemed to be more focus on issues of greater concern to small towns, rather than those of large cities; he also wanted to see more emphasis on issues of social justice and racial equity than the existing organizations were willing to take on.

"The old ones got defined in more nonpartisan terms,” says Theda Skocpol, a professor of government and sociology at Harvard. “Today’s progressives want a harder edge."

Creating an organization of self-described progressive elected leaders serves another purpose: It creates an easy and fast way for liberal activists to access the people most likely to take action.

"There wasn’t a place where you could find progressive elected officials in the aggregate. You’d find one here and you’d find one there,” says Angela Glover Blackwell, president of Policylink, which focuses on equity for communities of color. Local Progress “was a gold mine.”

So far, Local Progress has appealed to reform-oriented elected officials like D.C. City Councilmember Elissa Silverman, whom the organization recruited last year. In October, she made a quick trip to Los Angeles for the group’s first large convening, where she found about 100 people like her trying to think creatively about what local officials can do within the law — like require predictable schedules for retail employees, for example, or crack down on non-payment of freelancers.

"I was not totally sold on the value of going out there, but I said ‘what the hell,’ and I’m really glad I did,” Silverman says. Now, when she wants to workshop a new policy idea or learn what others had experienced with proposals that crop up in D.C. — like funding a new arena that will be used by a professional sports team, which Silverman opposes — she can tap into the network with one email to a listserv, or look up a policy toolkit that Local Progress’ small staff has put together on the issue.

A few months later, while introducing a proposal for public financing of municipal elections, she mentioned the experiences of three young council members she met at the conference: Antonio Reynoso, Ritchie Torres, and Carlos Menchaca of New York, all of whom had triumphed in unlikely campaigns against powerful opponents.

"Antonio in particular said 'Hey Elissa, if it wasn’t for public financing, I wouldn’t have been able to win,’ and that was very important for me to hear,” Silverman recalls. ”I was already convinced, but to have all three of them say that made a big impact.”

In trying to push a progressive agenda in cities, Local Progress hasn’t escaped opposition.

Some of the most formidable comes from the American Legislative Exchange Council, a conservative membership organization that helps Republican state senators and representatives pass laws confining the size of government,often to tremendous effect. In 2014, liberals formed the State Innovation Exchange to try to serve as a counterweight, but its influence is so far fairly limited.

ALEC doesn’t have to fight Local Progress’ members directly. Instead, the group has favored “pre-emption” laws that enforce uniform rules across a state -- preventing a city on its own from passing stricter gun laws, or higher minimum wages. Pittsburgh’s new paid sick days ordinance, for example, was just thrown out by a court on the grounds that the city didn’t have the authority under state law to enact it.

“As cities step out and move the ball forward, states have come in to take away their power to do just that,” says Andrew Friedman, co-director of the Center for Popular Democracy, where Local Progress is housed.

About a year after Local Progress had its first meeting, ALEC formed the American City and Council Exchange, also focused on local jurisdictions. The group’s director, Jon Russell, met with LocalProgress co-founder Nick Licata, who had joined as a member to learn more about the group. Russell thinks they could find common ground on some issues, like openness and transparency in local government. But that doesn’t usually include the question of what cities should control, and what should be left to the state.

“There’s some situations where the state does a better job, and wants to have consistency,” Russell says. “What we tend to tell our members is to focus on what we do best — making sure our budgets are effective and efficient. Don’t get tied up in these political issues that more recently have crept into local government.” He thinks that local officials shouldn’t listen to environmental groups, for example, trying to ban fracking or keep coal trains from coming through town.

“If they want to work on state issues, they should run for state government,” Russell said, of the policy entrepreneurs. "People want their trash picked up. They want their police to respond to calls.  They want their fires put out.”

The central idea of Local Progress, however, is that no issue is out of bounds for city government. Besides environmental groups, it has heavy involvement from the labor movement; an AFL-CIO vice president sits on the organization’s board, and the conference in October had a session on the Service Employees International Union’s Fight for $15 minimum wage campaign, along with numerous appearances by union officials. Those outside groups are essential to getting new policy ideas into practice.

In time, Lander sees the direction of policy innovation starting to flow in reverse: From pioneering cities up to state and federal lawmakers, who might take cues from what appears to be a groundswell of support. He recently wonthe passage of a bill banning credit checks for employment, for example.

“Eventually that should be a national law or a CFPB regulation. That’s not going to happen until a lot of cities and states do it,” Lander says. “And if there’s a competition for who can do the strongest law, eventually it’ll make sense for businesses to say 'we should have a national law.'"

But right now not all cities are able to adopt the kinds of path-breaking new laws that councils can pull off in liberal enclaves on either coast. Take something like allowing Uber drivers to unionize, which could entail years of litigation while courts decide whether it’s kosher — as the mayor of Seattlepointed out in a letter to council members after they voted unanimously in favor of it. Being the first takes both political will and financial resources to enforce new mandates and weather the inevitable legal hiccups or unforeseen consequences that might require adjustments down the road.

That’s also where the leaders of Local Progress think a central clearinghouse of information could come in handy: It might help a city councilperson in Terre Haute, Ind., or Tempe, Ariz., avoid having to design an inclusionary zoning ordinance from scratch. Moreover, it makes members feel connected to a larger movement, rather than just slogging away in the trenches.

“It’s a question of looking at a progressive issue, and understanding that progressive issues do reflect the interests of everyone,” Licata says. “As an additive to the gas, we’re able to get more mileage and oomph on this issues.”

Source: Washington Post

Truthout - February 19, 2015, by Isaiah J. Poole - Progressives need to step up their opposition to any moves by the Federal Reserve to increase interest rates in the near future, economist Dean Baker of the Center for Economic and Policy Research told a group of progressive leaders convened by the Campaign for America’s Future.

That message comes amid a grassroots effort this week designed to line up organizations behind a call on the Fed to not increase interest rates before the economy reaches full employment.

There is a widespread expectation that the Fed will raise interest rates sometime in 2015, ostensibly to keep the economy from “overheating” and driving up the rate of inflation. The problem is, as Baker pointed out in his presentation, there is no inflation threat on the horizon, but there is a very real threat of choking the economic recovery and driving up unemployment if interest rates rise.

“This is a huge, huge issue and it is largely ignored by much of the progressive movement, largely because people don’t understand it,” Baker said. “And I would say to a large extent that’s how they” – the bankers and the corporate class that has the ear of the Federal Reserve’s members – “want it.”

Baker has been working closely with the Center for Popular Democracy’s “Fed Up” campaign, which has been pushing the Fed to focus on moving the economy toward full employment as a top priority.

The campaign has emphasized that after more than five years of supposed economic “recovery,” labor participation rates remain at historic lows, wages are only now beginning to increase slowly, and unemployment rates among African Americans and in a number of low-income communities remain well into double digits.

Citing the push in Congress to get the Keystone XL pipeline built, which some estimates say would produce about 36,000 jobs during its construction, Baker said, “if the Fed raises interest rates we’re talking about kicking millions of people out of jobs.” If instead the Fed worked to get the unemployment rate down to about 4 percent, “that’s about 4.5 million people … that’s more than 100 XL pipelines.”

The Fed Up Campaign is seeking organizations willing to sign a petition calling on the Federal Reserve to not increase interest rates while there are segments of the economy with high unemployment and stagnant wages. “Raising interest rates in 2015 would be a catastrophic mistake. The American economy needs to see significantly more wage growth, not less,” the petition says.

The full petition is posted on our website. Progressive organization leaders who want to sign the petition can do so via this link.

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