Campaign News

The shocking appearance of activists at the usually quiet retreat is a sign of a growing battle over when and whether the Fed should raise interest rates. That crucial decision is making the central bank even more of a political target for populist anger. With critics like Sens. Elizabeth Warren and Rand Paul taking sharper swipes at the Fed, protesters are becoming emboldened.

Both liberal and conservative critics of the bank have organized "counter conferences" on monetary policy held at the same time and place -- the first time in more than 30 years that anyone has scheduled events competing with the symposium hosted annually by the Kansas City Fed.

“The economy has not fully recovered and interest rates should not be raised when racial disparities exist,” said Shawn Sebastian, a policy advocate for the Fed Up Coalition of the Center for Popular Democracy, pointing to continued higher-than-average unemployment rates for black Americans.

And the crowded juxtaposition of the bankers and activists in a small resort area makes for some awkward encounters.

Sebastian spotted Richmond Fed President Jeffrey Lacker at the check-in desk at the Jackson Lodge this week and went right up to him.

“I gave him our agenda and invited him, personally, to come to our conference,” Sebastian said. “He handed the agenda back to me and said he had seen it and was, ‘well prepared for this kind of thing.'”

As Fed officials hear from central bankers from Switzerland and Chile Friday, they are doing so practically next door to a workshop called “Do Black Lives Matter to the Fed?” sponsored by Sebastian's group, which wants rates to stay low until wage growth and unemployment improve, especially for minorities. Meanwhile, a conservative group, the American Principle Project, is holding a separate conference several miles away that includes speakers pushing for tighter monetary policy and higher interest rates, as well a return to the gold standard.

The atmosphere is very different than when the Kansas City Fed started holding the retreat in Jackson Hole in 1982, back when fly-fishing enthusiast Paul Volcker was in charge of the central bank. The symposium has always been held in late August and billed as an exclusive, invitation-only affair in the middle of a national park. Over the years, it's grown to be one of the more high-profile Fed events, even being called the Davos for central banks.

The head of the Fed usually attends, although Chair Janet Yellen is skipping this year. The event tends to be covered by the media because, in past years, Fed chiefs like Ben Bernanke and Alan Greenspan have used the occasion to broadcast significant monetary-policy shifts.

The event is fairly cloaked in secrecy. Its dates weren't announced until early this spring.

“When I first started asking about it, back in November, they were very secretive. I had to go and ask the lodge what weekends were available and from that, I was able to determine the right weekend,” said Steve Lonegan, policy director for the American Principle Project, which was prohibited by lodge staff from holding a conference at the same place as the Fed symposium. His group is down the road at the Hotel Terra and Diamond Cross Ranch.

“I was told by the lodge staff that the Fed had the whole building, because of security purposes," he said.

A spokesman for the Kansas City Fed acknowledged this was the first year their symposium was taking place alongside competing monetary conferences. But he declined to comment further about the other groups.

Both organizations confirmed they’ve had opportunities over the past several months to sit down and talk about their top priorities face-to-face with Yellen.

But they said holding a conference at the same time as the Jackson Hole event seemed like the ideal way to get even more attention to their cause, with the added bonus that their own conference-goers might also run into central bank policymakers at the park. Both groups had invited Fed officials to their conference and hoped to get crossover attendees.

At one point this week, a group of about 100 Fed Up conference-goers outside the Jackson Hole Lodge chanted: “Don’t raise interest rates! Don’t raise interest rates!”

Meanwhile, central bankers flying into the Jackson Hole Airport -- basically the main entry to the area for conference-goers -- may have passed the American Principle Project's table advertising its event highlighting the problems of loose monetary policy.

“The goal of our conference is to challenge the Fed’s monetary policy and educate the American people on the widening income gap driven by the failed policies of the Federal Reserve system,” said Lonegan, whose conference includes speakers like Rep. Scott Garrett, a New Jersey Republican, and the outspoken broker and Euro Pacific Capital CEO Peter Schiff. Schiff’s session is called, “Monetary Roach Motel — No Exit from the Fed’s Stimulus.” There’s a panel on international monetary reform, which includes members of British Parliament, and a few speakers who want a return to the gold standard.

The APP had originally signed on former Fed chief Alan Greenspan as their main speaker. Greenspan pulled out, Lonegan said, so now former Sen. Jim DeMint, president of the Heritage Foundation, is the keynote speaker.

“It’s not easy to put together a counter conference to the most powerful organization on the planet earth,” Lonegan said. “You have to have speakers who have the guts to put their names out there.”

Source: Politico

For the fifth year in a row, the liberal Center for Popular Democracy’s Fed Up campaign is on hand for the Jackson Hole gathering. It organized a Thursday panel on slow wage growth and market concentration.

Read the full article here.

Reuters - August 23, 2014, by Michael Flahery - Reginald Rounds was among those present at the Federal Reserve's high-flying monetary conference here, enjoying the chance to button hole two top officials of the U.S. central bank.

The St. Louis resident is neither an economist nor a central banker. He's a 57-year-old unemployed worker, who said he is trained in the green technology field and can't find a job.

He was among a group of activists who gathered on the sidelines of the Fed's annual symposium wearing green t-shirts with "What Recovery?" on the front and a chart depicting sluggish U.S. wage growth on the back.

"From the world where I reside, there is no recovery. We need a boost. We need a jump start," said Rounds. "The key is jobs creation."

The ten activists, most of whom were unemployed and seeking jobs, were sent as emissaries for a coalition of advocacy groups that has launched an unusual campaign from the left to press the U.S. central bank to keep monetary policy easy.

The coalition, consisting of more than 70 organizations, released an open letter to Fed officials earlier this week urging them to hold off on interest rate hikes until wages were rising more swiftly.

While small in number, the activists managed to get a great deal of face time with senior officials. On Thursday, they spoke with the host of the conference, Kansas City Federal Reserve Bank President Esther George, for two hours.

On Friday, Fed Vice Chairman Stanley Fischer stepped out of the conference to spend ten minutes to listen to their plight.

Source

Filed under In Real Terms

This is In Real Terms, a column analyzing the week in economic news. Comments? Criticisms? Ideas for future columns? Email me or drop a note in the comments.

U.S. manufacturing jobs, I argued a few weeks ago, are never coming back. But that doesn’t stop politicians from talking about them. Donald Trump scored his knockout blow in Indiana in part by railing against the decision by Carrier, a local air-conditioning manufacturer, to shift production to Mexico. Bernie Sanders and Hillary Clinton have sparred throughout their race over who would best protect manufacturing jobs. And the man they are all trying to replace, President Obama, pledged during his reelection campaign to create a million manufacturing jobs during his second term; he’s still about 700,000 jobs short of that goal.

Candidates talk about manufacturing because of what it represents in the popular imagination: a source of stable, well-paying jobs, especially for people without a college degree. But that image is rooted more in nostalgia than in reality. Manufacturing no longer plays its former role in the economy, and not only because there are far fewer factory jobs than in the past. The jobs being created today often pay less than those of the past — sometimes far less.

A new report this week from the Labor Center at the University of California, Berkeley, found that a third of production workers — non-managers working on factory floors and in related occupations — earn so little that their families receive some form of public assistance such as food stamps or the Earned Income Tax Credit. Many of those workers are temps, who account for a growing share of factory employment. The median wage for a manufacturing production worker, according to separate data from the Bureau of Labor Statistics, was $16.14 an hour in 2015, below the $17.40 an hour for all workers.

On average, manufacturing jobs still pay better than most jobs available to people without a college degree. The median manufacturing worker without a bachelor’s degree earned $15 an hour in 2015, a dollar more than similarly educated workers in other industries.1 But those averages obscure a great deal of variation beneath the surface. Average manufacturing wages are inflated by high-earning veterans; newly created jobs tend to pay less. And there are substantial regional variations. The average manufacturing production worker in Michigan earns $20.80 an hour, vs.$18.86 in South Carolina, according to data from the Bureau of Labor Statistics.

Why do factory workers make more in Michigan? In a word: unions. The Midwest was, at least until recently, a bastion of union strength. Southern states, by contrast, are mostly “right-to-work” states where unions never gained a strong foothold. Private-sector unions have been shrinking across the country for decades, but they are stronger in the Midwest than in most other parts of the country. In Michigan, 23 percent of manufacturing production workers were union members in 2015; in South Carolina, less than 2 percent were.2

Unions also help explain why the middle class is healthier in the Midwest than in the Southeast, where manufacturing jobs have been growing rapidly in recent decades. A new analysis from the Pew Research Center this week explored the state of the middle class in different parts of the country by looking at the share of households making between two-thirds and double the national median income, after controlling for the local cost of living. In many Midwestern cities, 60 percent or more of households are considered “middle-income” by this definition; in some Southern cities, even those with large manufacturing bases, middle-income households are now in the minority.

Even in the Midwest, however, unions are weakening and the middle class is shrinking. In the Indianapolis metro area, where the Carrier plant Trump talks about is located, the share of households in the middle tier of earners has shrunk to 54.8 percent in 2014 from 58.9 percent in 2000. And unlike in some parts of the country, the decline in the middle class there has been primarily driven by people falling into the lower tier of earners, not moving up. The Carrier plant, where workers make more than $20 an hour, is unionized.

Cause and effect here is complicated. Unions have been weakened by some of the same forces that are driving down wages overall, such as globalization and automation. And while unions benefit their members, economists disagree over whether they are good for the economy as a whole. Liberal economists note that overall wages tend to be higher in union-friendly states; conservative economists counter that unemployment tends to be higher in those states, too.

But this much is clear: For all of the glow that surrounds manufacturing jobs in political rhetoric, there is nothing inherently special about them. Some pay well; others don’t. They are not immune from the forces that have led to slow wage growth in other sectors of the economy. When politicians pledge to protect manufacturing jobs, they really mean a certain kind of job: well-paid, long-lasting, with opportunities for advancement. Those aren’t qualities associated with working on a factory floor; they’re qualities associated with being a member of a union.

#FedSoWhite

When the Federal Reserve’s policy-making Open Market Committee meets next month to decide whether to raise interest rates, every one of the 10 voting members will be white. Eleven of the 12 regional Fed bank presidents, who rotate voting responsibility, are white, and not one is black or Latino. (Minneapolis Fed President Neel Kashkari is Indian-American.) The Fed does a bit better when it comes to gender balance — Chair Janet Yellen is a woman, as are three other voting FOMC members. But overall, the people making U.S. monetary policy are disproportionately white men.

Does that matter? More than 100 members of Congress think so. In a letter to Yellen on Thursday, 11 senators and 116 members of the House of Representatives — all of them Democrats — wrote that they are “deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation.” The letter is only the latest effort to draw more attention to the Fed’s lack of diversity: A report earlier this year from the liberal Center for Popular Democracy highlighted the issue, and several members of Congress also asked Yellen about it when she testified on Capitol Hill in February. (Bernie Sanders signed the letter. Hillary Clinton, who wasn’t eligible to sign since she isn’t in Congress, said she agreed with the message.)

It isn’t clear whether policy would be any different if the Fed were more diverse. But the letter writers and their allies argue that at the very least the Fed’s lack of representation could be skewing the way policymakers view the economy. By law, the Fed must balance two competing goals: maintaining stable prices (which the Fed defines as inflation of about 2 percent per year) and promoting full employment. In recent months, Yellen and her colleagues have begun the process of raising interest rates — concluding, in effect, that with the unemployment rate down to 5 percent, the “full employment” part of their mandate is largely complete. But the unemployment rate for African-Americans was 8.8 percent in April, as high as the white unemployment rate was in the middle of the recession. For them, “full employment” remains a long way off.

The long road back

Last week I noted that Americans who graduated from college during the recession are still struggling to make up for the slow start to their careers. The Wall Street Journal this week told the even more harrowing tale of people who lost jobs during the recession, many of whom still bear deep financial and psychological scars.

That isn’t surprising. Losing a job is a significant setback in any context, but it is far worse when a bad economy makes it hard to get back to work quickly. People who are laid off in a recession are far more likely to become unemployed for more than six months, which can then make it harder to find a job even once the economy improves. One estimate cited by the Journal found that people who lose jobs during a recession continue to make 15 to 20 percent less than their peers who kept their jobs, even a decade or more after the recession ended. And that is just in the typical recession; the most recent downturn was far worse.

Number of the week

Just under 8 million Americans were looking for work in March, and employers had 5.8 million jobs available to be filled. Economists look at the ratio of those numbers as a gauge of the health of the labor market, and by that measure, the economy is looking good: There were 1.4 unemployed workers for every open position in March, the fewest since 2001.

Don’t take the workers-per-job ratio too literally, though. The official definition of “unemployment” leaves out plenty of people who want jobs, and the government count of job openings is also incomplete, counting only positions for which companies are actively recruiting. But alternative measures of both unemployment and openings show the same trend: There are more jobs and fewer workers to fill them. That’s good news for workers who want jobs, and also for those who already have them — at some point, companies that want to attract workers will have to start offering higher pay.

Elsewhere

Americans are having fewer babies. Janet Adamy looks at the causes and consequences of the U.S. “baby lull.”

Eduardo Porter argues the government should do more to create good jobs for those displaced by the transition toward a service-based economy.

Timothy O’Brien, who saw Donald Trump’s tax returns as part of a lawsuit a decade ago, provides some hints as to what voters might learn if Trump ever releases the documents publicly.

Lam Thuy Vo and Josh Zumbrun dive into the data on the jobs created since the start of the recession.

In much of the country, poor people don’t have access to broadband internet, according to a Center for Public Integrity investigation.

By Ben Casselman

Source