CPD IN THE NEWS

Bill Moyers - May 5, 2014, by Joshua Holland - Charter school operators want to have it both ways. When they’re answering critics of school privatization, they say charter schools are public — they use public funds and provide students with a tuition-free education. But when it comes to transparency, they insist they have the same rights to privacy as any other private enterprise.

But a report released Monday by Integrity in Education and the Center for Popular Democracy — two groups that oppose school privatization – presents evidence that inadequate oversight of the charter school industry hurts both kids and taxpayers.

Sabrina Joy Stevens, executive director of Integrity in Education, told BillMoyers.com, “Our report shows that over $100 million has been lost to fraud and abuse in the charter industry, because there is virtually no proactive oversight system in place to thwart unscrupulous or incompetent charter operators before they cheat the public.” The actual amount of fraud and abuse the report uncovered totaled $136 million, and that was just in the 15 states they studied.

Diane Ravitch on school privatization.

According to the study, fraud and mismanagement of charter schools fall into six categories:

Charter operators using public funds illegally — outright embezzlement

Using tax dollars to illegally support other, non-educational businesses

Mismanagement that put children in potential danger

Charters illegally taking public dollars for services they didn’t provide

Charter operators inflating their enrollment numbers to boost revenues

General mismanagement of public funds

The report looks at problems in each of the 15 states it covers, with dozens of case studies. In some instances, charter operators used tax dollars to prop up side businesses like restaurants and health food stores — even a failing apartment complex.

The report’s authors note that, “where there is little oversight, and lots of public dollars available, there are incentives for ethically challenged charter operators to charge for services that were never provided.” They cite the example of the Cato School of Reason Charter School in California, which, despite its libertarian name, collected millions of tax dollars by registering students who actually attended private schools in the area.

Perhaps the most troubling examples of mismanagement were those the report says actually put kids in danger:

Many of the cases involved charter schools neglecting to ensure a safe environment for their students. For example, Ohio’s State Superintendent of Public Instruction, Dr. Richard A. Ross, was forced to shut down two charter schools, The Talented Tenth Leadership Academy for Boys Charter School and The Talented Tenth Leadership Academy for Girls Charter School, because, according to Ross, “They did not ensure the safety of the students, they did not adequately feed the students, they did not accurately track the students and they were not educating the students well. It is unacceptable and intolerable that a sponsor and school would do such a poor job. It is an educational travesty.”

Integrity in Education and the Center for Popular Democracy aren’t the first to warn of problems plaguing an under-regulated industry fueled by billions of tax dollars. A 2010 report to Congress by the Department of Education’s Inspector General’s office warned of the agency’s “concern about vulnerabilities in the oversight of charter schools” in light of “a steady increase in the number of charter school complaints.” It blamed regulators’ failure “to provide adequate oversight needed to ensure that Federal funds [were] properly used and accounted for.”

Read the full report for the watchdogs’ recommendations for how policymakers could strengthen oversight and bring real transparency to the charter school industry.

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After nearly two months on the job, the new head of the Federal Reserve Bank of Dallas is reaching out to the community — to bunch of community, labor and consumer organizations that have repeatedly asked to be heard.

Dallas Fed president Rob Kaplan tomorrow will met with a variety of representatives of the national Fed Up Coalition for about 90 minutes, according to the regional bank.

The group was unhappy with the Dallas Fed’s “cryptic” search process to replace replaced former chief Richard Fisher, who retired in March, and with its lack of transparency. I wrote about it. Fed Up members in Texas and nationwide also have called for Federal Reserve to focus on full employment and higher wages for blacks and others in poor neighborhoods who have been left out of the economic recovery.

In August, the Dallas Fed named Kaplan, a former Harvard business professor and investment banker, as president and CEO starting Sept. 8. As one of 12 Fed regional bank presidents around the country, Kaplan helps set the nation’s economic and monetary policy, such as interest rates, that affects people everywhere.

The day after Kaplan’s announcement, the Texas Organizing Project’s Dallas County director Brianna Brown suggested that one of the first things he should do when he got to Dallas was to meet with her group and working families in the area. I wrote about that.

Earlier this year, the Texas Organizing Project and Fed Up asked to meet with Dallas Fed board members to seek more openness and participation in the search process. The Dallas Fed also has faced criticism from other corners for a lack of transparency and the lengthiness (nine months) of its search.

The coalition’s request was denied back then, and instead a meeting was arranged with the bank’s general counsel and senior vice president.

Now, there’s another chance.

“We want to represent the coalition in the same way that the coalition has met with other Fed presidents around the country to encourage them to keep interest rates low to help people in the communities,” Brown said today. “We’re trying to figure out a way that the coalition can be part of the process around Fed policy. How we can collaborate and work together.”

Brown said it’s not a “pie-in-the-sky” idea. She noted that a Fed Up meeting with Chicago Fed president Charles Evans led to him touring a low-income neighborhood in September.

Nearly a dozen people representing Fed Up will attend tomorrow’s meeting at the Dallas Fed. They include: Brown; representatives of the Dallas AFL-CIO, Texas AFL-CIO, Center for Popular Democracy and Economic Policy Institute; Dallas Faith leader Wes Helm; and a Walmart worker. Dallas County Judge Clay Jenkins also will attend as a guest of Fed Up, said Daniel Barrera, a Dallas organizer for the Texas Organizing Project.

Jenkins and John Patrick, president of the Texas AFL-CIO, did not end up attending the meeting. I wrote a follow-up story on Nov. 5 about the results of the meeting.

The Dallas Fed will have four people present: Kaplan, senior vice president Alfreda Norman, community development officer Roy Lopez and spokesman James Hoard .

“We want to obviously listen to what they have to say, provide any  information and answer any questions they have,” Hoard said today about the meeting.

Source: The Dallas Morning News

Ady Barkan, a progressive health-care activist whose videotaped pleadings with U.S. Sen. Jeff Flake, R-Arizona, last year briefly became a viral hit, has formed a group trying to raise money for Democrats, starting with Tipirneni.

Read the full article here.

The Federal Reserve announced on Wednesday that it will keep its benchmark interest rate at current levels in response to lackluster job creation in recent months and other discouraging economic data.

The decision will shield American consumers from higher borrowing costs, but it also reflects the fragility and unpredictability of the current economic recovery, some seven years after the Great Recession officially ended.

The central bank’s Federal Open Market Committee is keeping the influential target federal funds rate — the Fed-set interest rate banks charge one another for overnight lending — at a range of 0.25 to 0.5 percent. Since the rate is a benchmark for lending throughout the economy, leaving it unchanged will likely prevent higher interest rates on mortgages, car loans and other household debts.

The Fed has a dual mandate to craft monetary policy that both maximizes employment and keeps inflation in check. The FOMC lowers the federal funds rate to accelerate job growth by reducing borrowing costs. It raises the rate to limit price inflation by slowing the pace of job growth.

The FOMC’s decision not to do the latter in June was widely expected. Fed officials signaled earlier this month that disappointing job creation had undermined the case for a rate hike. The economy created just 38,000 jobs in May, and new data show that the preceding two months produced fewer jobs than previously believed, according to the Bureau of Labor Statistics.

The central bank is also responding to tepid inflation. The price of consumer goods, excluding food and energy, rose 1.6 percent in the 12 months ending in April, according to the price index favored by the Fed — well below the Fed’s 2-percent target. And a University of Michigan survey revealed on Friday that U.S. households’ expectations of long-term inflation are lower than they have been at any point since the survey began collecting data in 1979.

In a press conference following the announcement, Federal Reserve Chairwoman Janet Yellen acknowledged the role that those developments played in the central bank’s decision, noting that “recent economic indicators have been mixed.”

Yellen also said that the prospect of a “Brexit,” or British exit from the European Union, was “one of the factors” that led the central bank to hold off on an interest rate hike. The United Kingdom will vote on the country’s membership in the EU on June 23.

If the U.K. chooses to leave the EU, which functions as a single market, it could ultimately have adverse effects on the U.S. economic outlook, Yellen suggested. A higher percentage of British voters supported Brexit than opposed it in a poll released on Monday.

The Fed last raised the federal funds rate by one-quarter of a percentage point in December, the first increase since the financial crisis. The rate had been at or near zero — 0 to 0.25 percent — since December 2008.

With the December interest rate increase, the Fed seemed to express confidence that the economic recovery had entered a new phase, indicating it was time to pivot to the work of preventing inflation. Yellen predicted that the move would be the first in a series of small interest rate hikes that would gradually raise rates to levels that are more historically normal.

Since then, however, disappointing economic data have repeatedly delayed the pace of those increases. Slower global demand reduced the availability of credit, and wage growth remained sluggish, prompting the Fed not to raise the federal funds rate in March.

Fed officials suggested in May that economic conditions would finally permit them to raise the rate again in June. But the May job creation data, released on June 3, rapidly dashed those plans.

The central bank’s next opportunity to announce a rate hike will be July 27, after a meeting of the FOMC.

Wednesday’s announcement will come as welcome news to many progressive economists and activists who have long argued that the job market has much more room to grow before inflation becomes a serious problem.

While the official unemployment rate is 4.7 percent, much of its recent decline is due to people dropping out of the workforce altogether. The labor force participation rate, which measures the percentage of people actively seeking work in addition to those who are working, is significantly lower than it was in 2000.

In fact, when you exclude workers 55 or older who may have retired voluntarily, labor force participation is lower now than it was at its worst point during the past two business cycles, according to an analysis by the Economic Policy Institute.

A job market where people continue to give up on finding work is part of the reason wage growth has failed to meet expectations, since employers still have little reason to compete for workers, progressive economists argue. Average hourly pay rose 2.5 percent in the 12-month period ending in May, not enough for a significant boost in most Americans’ paychecks.

The Fed Up campaign, a coalition of progressive groups that advocates for Fed policy that is favorable to workers and communities of color, cites figures like those when pleading with the Fed to hold off on raising rates. Fed Up has called on the Fed not to raise the benchmark interest rate until “the economic recovery reaches all communities,” said Jordan Haedtler, Fed Up campaign manager.

Progressives were overjoyed when presumptive Democratic presidential nominee Hillary Clinton expressed her sympathy with these concerns last month. The campaign said in a statement that as president, Clinton would appoint Fed officials who take seriously the central bank’s mandate to maximize employment, in addition to its duty to tamp down inflation.

Clinton stands to benefit politically from Wednesday’s announcement, since voters typically judge the candidate of the incumbent party for the economy’s performance. A rate increase would have squeezed economic demand, risking even slower job growth in the months ahead of the general election.

Donald Trump, the presumptive Republican presidential nominee, has expressed a wide variety of views about the Fed. He most recently suggested that he supports low interest rates, but that he plans to replace Yellen as Fed chair.

Yellen said Wednesday that the central bank will act based on economic data in the coming months, even if its actions are perceived as affecting the general election in November. “We are very focused on assessing the economic outlook and making changes that are appropriate without taking politics into account,” she said.

This piece has been updated with Yellen’s comments.

By Daniel Marans

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