Liberals turn to Fed in populist push
Left-leaning groups and lawmakers are taking their populist economic fight to the Federal Reserve, as they seek to...
Left-leaning groups and lawmakers are taking their populist economic fight to the Federal Reserve, as they seek to exert new influence over key monetary decisions and a pair of vacancies at the central bank.
The Fed has faced heavy criticism from the right for years, but the other side of the aisle is now beginning to publicly push the institution for preferred policies. With Congress and the White House seemingly set to butt heads for the next two years, left-leaning community and labor groups are turning to the Fed in an attempt to get an economic policy boost for middle- and working-class Americans.
“In the face of the fiscal side not being really a realistic option to promote an economic recovery, the most important economic policymaker in the United States is the Federal Reserve,” said Shawn Sebastian, policy advocate for the Center for Popular Democracy.
And after successfully driving President Obama to nominate Janet Yellen to lead the Fed, some Senate Democrats are again pressing the administration about openings at the central bank. Sens. Elizabeth Warren (D-Mass.) and Joe Manchin (D-W.Va.) are vocally calling on Obama to nominate tough-nosed Wall Street watchdogs to fill out two board spots that often are filled by academics or economists.
The resurgence of left-leaning interest in the Fed’s operations further complicates the bank’s efforts to remain above the political fray. The Fed has weathered years of criticism from the right, which argues its unprecedented foray into monetary stimulus after the recession was a recipe for disaster.But now, with the Fed preparing to finally dial back years’ worth of quantitative easing, it’s the other side that is airing concerns. This time, the worry is that the Fed could tighten policy too quickly, even as millions of Americans still are looking for work or grappling with stagnant paychecks.
“I have been concerned for some time that when the Federal Reserve began to tighten policy that they would be subject to considerable pressure from people who don’t want them to do that,” said Donald Kohn, a former Fed vice chairman now with the Brookings Institution.
A host of left-leaning groups, including the AFL-CIO and the Economic Policy Institute, have joined forces to take a populist message directly to the Fed. The groups have protested a central bank powwow in Jackson Hole, Wyo., and have held public protests outside the institution’s headquarters in Washington.
The leftward push on the Fed follows those groups notching a major victory at the central bank in 2013. With Obama reportedly favoring economic adviser Lawrence Summers to replace the outgoing Ben Bernanke as head of the Fed, Democrats on and off Capitol Hill embarked on a concerted campaign to get Yellen nominated for the top job instead.
Democratic lawmakers took the rare step of publicly advocating for Yellen, then the Fed’s vice chairwoman, before a nomination was made, effectively announcing opposition to Summers in the process. Though Obama defended Summers in public, he ultimately deferred to that pressure and nominated Yellen for the job.
Now, Warren and Manchin are hoping to exert more influence, calling on Obama to fill two openings at the seven-member board with tough supervisors who “have a demonstrated commitment to not backing down when they find problems.”
Fed governors are given a 14-year term, so if those two find success on that front, the end result could be a considerable shift in how the central bank operates as a financial regulator. And any new voices would likely receive an open hearing from Yellen, whose background is as an economist, not a regulator.
“My impression is that Chair Yellen is running the system by consensus in a considerable way, she consults widely,” said Kohn.
Since taking the job, Yellen has made a concerted effort to place the Fed’s deliberations within the context of the working class. One of her first acts as the Fed’s new leader was to address at a Chicago event how the central bank hoped to boost jobs, and she has agreed to meet with left-leaning protestors to hear their concerns.
But Yellen’s openness to those new voices is leaving some unsettled.
“There’s a trend here that’s pretty clear and pretty concerning,” said Steven Lonegan, director of monetary policy at American Principles in Action, which advocates for tighter Fed policy, including a return to the gold standard.
“You can’t start manipulating the value of our money because you have a specific political agenda,” he added.
But these new advocates argue the Fed has always been subject to politics. Sebastian argued that Fed officials and those that track Fed policy skew heavily from corporate and banking interests, leaving a “Main Street” voice out of the picture.
“Every person carries political baggage,” he said. “All we’re trying to do is have that conversation reflect reality.”
But even the people behind the new leftward push on the Fed acknowledge advocacy of the publicly mysterious institution is somewhat novel. Conservative criticism of the Fed has been around for years, first helmed by former Rep. Ron Paul (R-Texas), but a more liberal effort for influence has not been seen in decades.
“This is a new space for us,” said Sebastian. “We don’t know what the effect of this type of engagement will be.”
Source: The Hill
Puerto Rico was just hit by an island-wide power outage — here are the best charities to donate to for victims of Hurricane Maria
Puerto Rico was just hit by an island-wide power outage — here are the best charities to donate to for victims of Hurricane Maria
The Center for Popular Democracy – located in Brooklyn, New York – has launched the Maria Fund, which is focusing on...
The Center for Popular Democracy – located in Brooklyn, New York – has launched the Maria Fund, which is focusing on aid for low-income communities of color, women, and girls in Puerto Rico.
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Policy for a new majority
The Huffington Post - July 15, 2013, by Brittny Saunders - Two weeks ago, the U.S. Senate approved historic federal...
The Huffington Post - July 15, 2013, by Brittny Saunders - Two weeks ago, the U.S. Senate approved historic federal immigration reform legislation in a 68-32 vote. Observers have linked the bill's relatively rapid movement -- perhaps unimaginable only a few years ago -- to the growing numbers of Latino and Asian voters and their overwhelming support for President Obama in the 2012 presidential election. The progress of federal immigration reform is just one signal that as the country undergoes sweeping demographic changes that will make the U.S. a majority people of color nation within 30 years, traditional understandings of what the machinery of public policy can produce and for whom will also shift.
Changes in the racial and ethnic makeup of the nation's population demand policies that account for the needs of communities of color as well as the increasingly central role such communities will play in driving economic growth in coming years. As experts have noted, the continuing viability of entitlements like Medicare and Social Security will soon depend on the Latino, Asian and Black workers who will constitute a growing portion of American workers.
These shifts are also altering constituencies and causing some elected leaders to revisit old positions. While much attention has been focused on the implications of these demographic changes for national elections and policymaking, this is not only a national trend. In state houses and city halls across the country, a historic moment has been taking shape. People of color, immigrants and workers are fighting for and winning state and local legislation that demonstrates the growing influence of the emerging new majority. In Connecticut, for example, communities fought for and won a statewide policy that makes it clear that local governments need only comply with Immigration and Customs Enforcement (ICE) detainer requests under limited circumstances, helping to restore trust between immigrant communities and law enforcement. The legislation, called the TRUST Act, was passed only weeks after Connecticut legislators voted to grant driver's licenses to undocumented immigrants, joining a growing list of states -- including Washington, New Mexico, Utah, Maryland, Illinois and Oregon -- that have already enacted similar measures.
The demographic shifts that are underway also create increased opportunities for immigrant communities to unite with others that have long been targeted by discriminatory state and local policies and practices. Growing efforts to challenge tactics like racial and ethnic profiling and disparate enforcement are evidence of this. These tactics have grave consequences for immigrant Americans, for whom an unjustified street or vehicle stop can lead to detention, deportation and permanent separation from loved ones. And even for those for whom immigration status is not an issue, such targeting can lead to costly, long-term engagement with the criminal justice system with implications for housing and employment opportunities. But across the country, in urban, suburban and rural settings, immigrant and African-American communities are working together to win policies designed to end police targeting of their communities.
In New York, such efforts led recently to a victory that promises to set a new standard for what state and local governments can do to tackle the problem of discriminatory policing. At the end of June the New York City Council passed two historic bills that will enhance NYPD accountability. The measures -- which passed with support from a supermajority of the Council -- will establish external oversight of the Department, expand protection against profiling to a broader cross-section of New Yorkers, and give City residents new tools for challenging discriminatory practices. The bills' passage is due to tireless advocacy by Communities United for Police Reform, a coalition including groups representing not only immigrants and communities of color in the City, but also LGBTQ New Yorkers, homeless New Yorkers and others. While the Council must still override a promised mayoral veto, its leadership in this area is significant. With this legislation, New York City has an opportunity to move to the forefront of state and local public safety policy, demonstrating that there are alternatives to the discriminatory, outdated and ineffective policing strategies that have been in place in far too many communities for far too long.
Of course, success is not inevitable. And these and other attempts to change policy at the state and local levels have faced organized and passionate opposition. But each of these efforts suggests a tantalizing possibility: that in the decades to come we may actually succeed in breaking with the entrenched patterns of old and building power among communities that for much of our nation's history have been marginalized.
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Nan Goldin and P.A.I.N. Sackler Protest the Opioid Crisis at Harvard’s Sackler Museum
Nan Goldin and P.A.I.N. Sackler Protest the Opioid Crisis at Harvard’s Sackler Museum
The organization hosted over 70 protesters at a die-in demonstration last Friday. The protest operated with support...
The organization hosted over 70 protesters at a die-in demonstration last Friday. The protest operated with support from organizations like VOCAL NY, the Center for Popular Democracy, and the Harm Reduction Coalition. The group marched from Harvard Square to the atrium of the Harvard Art Museums building, which hosts the Fogg Museum, Busch-Reisinger Museum, and Arthur M. Sackler Museum. Participants threw Oxycontin and Narcan (a narcotics overdose prescription medication) containers across the floor of the atrium, chanting protests like “Sacklers lie! People die! Fund harm reduction now!” Hyperallergic reached out to the Harvard Art Museums and a representative of the institution declined to comment.
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De Blasio and Mayors of Chicago, Los Angeles Launch Initiative to Help Immigrants Become U.S. Citizens
SILive - September 18, 2014, by Anna Sanders - Mayor Bill de Blasio on Wednesday announced the launch of a new...
SILive - September 18, 2014, by Anna Sanders - Mayor Bill de Blasio on Wednesday announced the launch of a new initiative to push for eligible immigrants to become U.S. citizens in the nation's three largest cities.
"Cities for Citizenship" aims to increase naturalization programs and other efforts to help immigrants in New York City, Chicago and Los Angeles.
"This win-win effort will help us create more inclusive cities that lift up everyone," de Blasio said in a statement announcing the initiative. "From increased economic activity to larger voting and tax bases, the advantages of citizenship will not only expand opportunity to our immigrant families, but to all New Yorkers and residents nationwide."
The de Blasio administration said increasing immigrant access to citizenship will help fight poverty and estimated that naturalizing 684,000 legal permanent residents will add up to $4.1 billion to the city's economy over a decade.
In a report released Wednesday, the Center for Popular Democracy estimated that there are about 750,000 legal permanent residents eligible for naturalization.
Citigroup, a corporate partner of the initiative, will contribute $1.15 million for the new initiative.
New York City will use funds for NYCitizenship, a coordinated effort to connect low- and moderate-income New Yorkers to free legal assistance during the naturalization process. NYCitizenship works with city agencies to connect those in the city eligible to become U.S. citizens with assistance, such as legal advice, help on applications and financial counseling.
The NYCitizenship program has already helped more than 1,800 New Yorkers complete naturalization applications since 2012, according to the Center for Popular Democracy report.
In addition to the initiative, the city's Office of Immigrant Affairs will also commission a study on the economic impact of citizenship programs nationwide.
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The Fight for Paid Sick Leave Moves South
It’s not surprising that the same sort of coalition of elected officials advancing the fight against SB4 have turned to...
It’s not surprising that the same sort of coalition of elected officials advancing the fight against SB4 have turned to this issue,” said Sarah Johnson, the director of Local Progress. “Workers and immigrants are important to the foundation of cities. The work being done around SB4 has created a strong coalition that has advanced from defense to offense.
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Fed Chairwoman: African-Americans Have Not Recovered from Economic Downturn
Fed Chairwoman: African-Americans Have Not Recovered from Economic Downturn
Federal Reserve Chairwoman Janet Yellen delivered her semiannual testimony on the U.S. economy and monetary policy to...
Federal Reserve Chairwoman Janet Yellen delivered her semiannual testimony on the U.S. economy and monetary policy to the Senate Banking Committee Tuesday. In her prepared remarks, Yellen acknowledged that the country’s economic recovery has not fully extended to the African-American population.
“Jobless rates have declined for all major demographic groups, including for African-Americans and Hispanics,” Yellen said. “Despite these declines, however, it is troubling that unemployment rates for these minority groups remain higher than for the nation overall, and that the annual income of the median African-American household is still well below the median income of other U.S. households.”
An accompanying report revealed that the median Black household income in 2014 was $40,000, which means African-American households are earning just 88 percent of their pre-recession incomes.
The 2014 median white household income was $67,000. According to the report, white, Asian and Hispanic households have regained 94 percent of their pre-recession earnings.
Furthermore, unemployment rates for African-Americans continue to be lower than they were prior to the recession, compared to white unemployment rates, which have nearly returned to original levels.
The Fed has faced growing criticism from activists and lawmakers who accuse the banking system of ignoring the economic disparity faced by minorities in the U.S. Supporters say Fed-controlled interest rates have a direct impact on the economic success of Black Americans.
Tuesday’s comments were a stark contrast to the position taken by Yellen last July, when she argued there was nothing the Reserve could do “about any particular group.”
The statements fired up Connie Razza, director of strategic research at the Center for Popular Democracy, who issued a statement in response.
“With African-Americans still mired in our own Great Recession, we should be hearing a positive vision from the Fed on how to foster full employment,” Razza said on behalf of the Fed Up Coalition. “While the economy is complex and the Federal Reserve’s tools are limited, there is plenty the Fed can do to improve the labor market for Black workers and to reduce racial inequality in the job market.”
The Fed Up Coalition is a consortium of labor unions, community-based organizations and policy think tanks fronted by the Center for Popular Democracy and Action for the Common Good. The group maintains that the economic upswing is a myth for most demographics and stresses that keeping interest rates low will give the economy a chance to truly recover for everyone. Modest rates will raise wages, bringing the country closer to full employment and eliminating the need for discriminatory hiring practices, according to the campaign.
During Yellen’s February address to the House Financial Services Committee, several Democrats pressed the issue of Black unemployment rates.
“Nobody is suffering from unemployment like the African-American community,” Georgia Rep. David Scott said at the hearing, per CNN. “We have got to get the Fed to get off the dime and put the issue of African-American unemployment on the front burner. That is the core of all of the domestic issues that we’re facing.”
The unemployment rate for African-Americans in May was 8.2 percent, which was double the rate of whites at 4.1, according to the Bureau of Labor Statistics.
By Shaundra Selvaggi
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Regional Feds' head-hunting under scrutiny over insider bias, delays
Efforts to fill top positions at some U.S. Federal Reserve regional branches are casting a spotlight on a decades-old...
Efforts to fill top positions at some U.S. Federal Reserve regional branches are casting a spotlight on a decades-old process that critics say is opaque, favors insiders, and is ripe for reform.
Patrick Harker took the reins as president of the Philadelphia Fed this week, in an appointment that attracted scrutiny because he served on the committee of directors that interviewed other prospective candidates for the job he ultimately took.
The Dallas Fed has been without a permanent president for more than three months as that search process stretches well into its eighth month. And the Fed's Minneapolis branch abruptly announced the departure of its leader, Narayana Kocherlakota, more than a year before he was due to go, with no replacement named to date.
The delays and reliance on Fed employees in picking regional Fed presidents can only embolden Republican Senator Richard Shelby to push harder for a makeover of the central bank's structure, which has changed little in its 101 years.
A bill passed in May by the Senate Banking Committee that Shelby chairs would strip the New York Fed's board of its power to appoint its presidents. And it could go further, given the bill would form a committee to consider a wholesale overhaul of the Fed's structure of 12 districts, which has not changed through the decades of shifting U.S. populations and an evolving economy.
The bill is part of a broader conservative effort to expose the central bank to more oversight, and some analysts saw the Philadelphia Fed's choice as reinforcing the view that the Fed needs to open up more to outsiders.
Nine of 11 current regional presidents came from within the Fed, a proportion that has edged up over time. Twenty years ago, seven of 12 were insiders.
"The process seems to create a diverse set of candidates in which the insider is almost always accepted," said Aaron Klein, director of a financial regulatory reform effort at the Bipartisan Policy Center.
Since it was created in 1913, the central bank's decentralized structure was meant to check the power of Washington, where seven Fed governors with permanent votes on policy are appointed by the White House and approved by the Senate.
The 12 Fed presidents who are picked by their regional boards usually vote on policy every two or three years, and they tend to hold more diverse views.
Former Richmond Fed President Alfred Broaddus told Reuters the regional Fed chiefs have more freedom "to do and say things that may not be politically popular" because they are not politically appointed. "On the other hand, there is the question of legitimacy since they are appointed by local boards who are not elected."
"TONE DEAF"
Two-thirds of regional Fed directors are selected by local bankers, while the rest are appointed by the Fed's Board of Governors in Washington.
Critics question how well those regional boards - mostly made of the heads of corporations and industry groups meant to represent the public - fulfill their mission.
Last year, a non-profit group representing labor unions and community leaders organized by the Center for Popular Democracy, urged the Fed's Philadelphia and Dallas branches to make the selection of their presidents more transparent and to include a member of the public in the effort.
Philadelphia's Fed in particular proved "tone deaf" in its head-hunting effort, said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey.
Harker was a Philadelphia Fed director when the board started looking to replace president Charles Plosser, who left on March 1, and he was among the six directors who interviewed more than a dozen short-listed candidates for the job, according to the Philadelphia Fed.
But on Feb. 18, Harker floated his own name, recused himself from the process and a week later his colleagues on the board unanimously appointed him as the new president.
While the selection follows Fed guidelines and was approved by its Board of Governors, it raised questions of transparency and fairness.
"The Philadelphia Fed's search process might have made perfect sense in a corporate environment, but is obviously problematic for an official institution," said Crandall.
The board's chair and vice chair, Swathmore Group founder James Nevels and Michael Angelakis of Comcast Corp, respectively, declined to comment, as did Harker.
Peter Conti-Brown, an academic fellow at Stanford Law School's Rock Center for Corporate Governance, and an expert witness at a Senate Banking Committee hearing this year, proposed to let the Fed Board appoint and fire regional Fed presidents or at least have a say in the selection process.
In the past, reform proposals for the 12 regional Fed banks have focused on decreasing or increasing their number and their governance.
Changes to the way the regional Fed bosses are chosen could strengthen the influence of lawmakers at the expense of regional interests.
For now, delays in appointments of new chiefs force regional banks to send relatively unknown deputies to debate monetary policy at meetings in Washington, as Dallas and Philadelphia did last month when the Fed considered raising interest rates for the first time in nearly a decade.
The Minneapolis Fed still has time to find a new president before Kocherlakota steps down at year end.
"For now the Fed criticism is just noise, mostly from Republicans," said Greg Valliere, chief political strategist at Potomac Research Group. "But once the Fed begins to raise interest rates ... then the left will weigh in as well."
(Additional reporting Ann Saphir in San Francisco; Editing by Tomasz Janowski)
Source: Reuters
Minnesota’s other racial disparity: voting
Minnesota consistently ranks at the top in terms of voter turnout. It earns accolades for the quality and competence of...
Minnesota consistently ranks at the top in terms of voter turnout. It earns accolades for the quality and competence of its election administration. Recently Secretary of State Steve Simon challenged Minnesotans to register and vote so that the state can continue to be the leader when it comes to election turnout. Yet that high turnout comes with a racial gap that is among the worst in the country.
Minnesota is a land of racial disparities, such as in education. Minnesota Department of Education data point to blacks and other students of color scoring 30 points or more lower on achievement tests compared to whites. U.S. Department of Education data show Minnesota near the bottom of the list in on-time high school graduation rates for blacks, with an overall 67 percent graduation for black males (compared to 90 percent for white males), according to the 2015 Schott Foundation for Public Education report. The black/white male graduation gap is one of the highest in the country. A 2014 study found black students 10 times more likely to be suspended or expelled from Minneapolis schools than white students.
Income and employment
Second, look at income and unemployment. A 2013 Minnesota Advisory Committee to the U.S. Commission on Civil Rights report found the unemployment gap for blacks to be three times that of whites. A 2015 report by the Center for Popular Democracy found the gap to be second worst among states in the nation, only behind Wisconsin. And 2015 U.S. Census data point to Minnesota as having one of the highest black/white gaps in medium family income in the nation. WalletHub, a personal finance site, documented the financial gap between whites and minorities in Minnesota as the biggest in the nation, with median income (4th highest), home ownership (3rd), poverty rate (3rd) and education level (14th).
In criminal justice, groups such as the Sentencing Project note Minnesota among the worst when it comes to racial disparities in terms of incarceration. And the Institute for Metropolitan Opportunity 2015 report “Why Are the Twin Cities So Segregated?” confirmed what john powell and I had documented a generation ago at the Institute on Race and Poverty: that the seven-county metro region has one of the worst residential and educational segregation patterns in the country.
Now consider the racial disparities in voting. WalletHub earlier this year released a study examining political engagement among blacks, using six criteria. It found Minnesota ranked 16th. Among notable failures, Minnesota was 45th in the nation for black voter turnout in the 2014 elections. According to the U.S. Census Bureau in the 2012 elections, 80.2 percent of white non-Hispanic citizens registered to vote, compared to 66.9 percent and 56.1 prcent for blacks and Hispanics. In terms of actually voting, white non-Hispanic turnout was 74 percent, compared to 49.2 percent and 32.5 percent for blacks and Hispanics. For Asian-Americans, their registration was greater overall than for white non-Hispanics at 87.6 percent, but actual turnout was only 56.2 percent.
Why the disparity in registration and voting? It is no coincidence that the poverty, education and incarceration disparities along with the residential segregation are related to the lower voter turnout. Political scientists have long documented the correlations between income, education, and geography. High incarceration rates bring felon disenfranchisement, contributing to decreased eligibility to register and vote.
Low voter turnout compounds other disparities
Low voter turnout among people of color feeds upon itself, compounding other racial disparities and problems. People of color are unable to electorally challenge employment or housing policies. They are unable to challenge policing policies, and they are unable to challenge the voting laws and procedures that may hinder their political engagement.
Minnesota must address the racial voting disparity, especially in light of the growing diversity of the state population. It will require not just addressing problems in the voting laws including felon disenfranchisement, but also tackling the other racial disparities that contribute to the voting problems. If it does not, Minnesota risks perpetuation of a second-class citizenship for many of its people.
By David Schultz
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Bar bank executives from regional Fed boards, says Yellen's ex-advisor
Bar bank executives from regional Fed boards, says Yellen's ex-advisor
A former top Federal Reserve policy advisor said on Monday that bank executives should be barred from serving on the...
A former top Federal Reserve policy advisor said on Monday that bank executives should be barred from serving on the boards of the Fed's 12 regional outposts, Fed policymakers should serve just seven years, and monetary policy should be subject to an official annual review.
The proposals from Dartmouth College Professor Andrew Levin represent substantial change for the Federal Reserve.
Banks currently appoint six of the nine members of regional Fed bank boards, policymakers often serve a decade or more before retiring, and the details of monetary policymaking have always been a closely guarded secret, with transcripts of meetings released only after a five-year interval.
Levin, who advised Fed Chair Janet Yellen when she was Fed vice chair, released the proposals via the Fed Up Coalition, a network of community organizations and labor unions calling for change to the U.S. central bank. It is unclear how they will be received by other Fed critics who have called for even more sweeping changes, or the 101-year-old institution itself, which has largely resisted reform proposals.
The Fed has come under increasing fire in recent months from both Democrats and Republicans for what they say is a lack of accountability and transparency, with lawmakers and presidential candidates calling for a wide range of limits on the Fed's powers.
In response, some current and former Fed officials have begun to call for steps to placate the U.S. central bank's harshest critics.
Levin on Monday also called for the process of appointing Fed bank presidents to be more transparent and to involve the public. Currently Fed bank presidents are chosen in a closed-door process run by each bank's board and approved by the Washington-based Fed Board.
Reporting by Ann Saphir; Editing by Meredith Mazzilli
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