Chicago Activists, Lawmakers Deliver Petitions To SEC For Action On 'Toxic' Interest Rate Swaps (VIDEO)
Chicago Activists, Lawmakers Deliver Petitions To SEC For Action On 'Toxic' Interest Rate Swaps (VIDEO)
Chicago community activists and local elected officials delivered 88,000 petition signatures to the U.S. Securities and...
Chicago community activists and local elected officials delivered 88,000 petition signatures to the U.S. Securities and Exchange Commission's (SEC) regional office Thursday morning, urging the agency to investigate complex financial agreements called interest rate swaps.
Those who delivered the petition signatures, collected online by the Grassroots Collaborative and several other organizations, say cash-strapped local and state governments are being squeezed by the "toxic swaps" they entered into with banks before the Great Recession. The complicated deals, which come with hefty penalties and termination fees, were intended to save taxpayer-backed organizations money, but they backfired when the economy crashed.
"These are the same toxic swaps that have drained millions of dollars out of our city, state and (Chicago Public Schools) budgets and are hurting cities and states across the country," Saqib Bhatti, director of the ReFund America Project, said outside the SEC's Chicago regional office, 175 W. Jackson Boulevard.
Illinois State Reps. Robert Martwick (D-Chicago), Emanuel "Chris" Welch (D-Westchester) and Chicago Ald. Carlos Ramirez-Rosa (35th Ward) joined activists at the petition delivery.
Petitioners want the SEC to "investigate the 'toxic swaps' Wall Street is using to impoverish our cities and towns -- and make bankers return all ill-gotten profits from deceptive and fraudulent sales."
The state of Illinois has already paid $684 million for interest rate swaps and could be forced to pay an additional $870 million in November if "the state does not sue or renegotiate these deals," according to the Grassroots Collaborative.
Interest rate swaps, Ramirez-Rosa said, have cost the city of Chicago and CPS over $1 billion in combined payments, plus $600 million in costs associated with terminating the agreements.
"That $600 million in ransom to the banks went to go pad their bottom line," Ramirez-Rosa said. "The banks don't need more money. Our neighborhoods desperately need these funds. ... The SEC can act now to recuperate some of that money for the city of Chicago and the Chicago Public Schools, and they can act now to defend the state of Illinois from further payments, from paying a larger ransom, to these banks."
Welch said he is "disgusted" that "big banks continue to profit at the expense of our most vulnerable." He urged Illinois Gov. Bruce Rauner, Chicago Mayor Rahm Emanuel and CPS CEO Forrest Claypool to join the push for an SEC investigation into swap agreements.
"We ask the governor and our leaders in this city to stop putting banks before books," Welch said.
Here's more from the lawmakers at the petition delivery:
Organizers and the elected officials dropped off the petition signatures at the SEC's Chicago office, where a receptionist said she would give the documents to the regional director.
In addition to the Grassroots Collaborative, the online petition was circulated nationwide by Americans for Financial Reform, the Center for Popular Democracy, CREDO Action and Rootstrikers.
Read Progress Illinois' past reporting on how interest rate swaps work and their financial impact on the state, city of Chicago and CPS.
by ELLYN FORTINO
Source
Thomas DiNapoli urged to stop investments that hurt P.R.
Activist groups are asking state Controller Thomas DiNapoli to halt investments in two private equity firms they blame...
Activist groups are asking state Controller Thomas DiNapoli to halt investments in two private equity firms they blame for worsening the foreclosure crisis in Puerto Rico.
In a letter to DiNapoli, the anti-hedge fund group Hedge Clippers and other organizations say the state Common Retirement Fund should make no new investments in the Blackstone Group and TPG Capital.
Read the full article here.
Former Toys R Us workers to get $20 million in hardship fund
Former Toys R Us workers to get $20 million in hardship fund
Since late summer, Toys R Us workers have been pressuring pension funds to in turn push a group of hedge firms that...
Since late summer, Toys R Us workers have been pressuring pension funds to in turn push a group of hedge firms that owned the retailer’s secured debt in a bid to get the remaining money they say is owed to them...The groups that organized the Toys R Us workers — Organization United for Respect, along with Private Equity Stakeholder Project and the Center for Popular Democracy — say that the hardship fund is being structured to allow the other firms to contribute, paving the way for Solus, Vornado and others to contribute. KKR and Bain said the fund was established in response to the “extraordinary set of circumstances” that led to Toys R Us being shuttered.
Read the full article here.
13 Retailers Questioned By N.Y. Attorney General About Worker Scheduling
LA Times - April 13, 2015, by Samantha Masunaga - he scheduling practices of 13 retailers, including Gap Inc., Target...
LA Times - April 13, 2015, by Samantha Masunaga - he scheduling practices of 13 retailers, including Gap Inc., Target Corp. and Abercrombie & Fitch Co., are being scrutinized by New York Atty. Gen. Eric T. Schneiderman.
In a letter sent to the retailers, the attorney general's office said it had received reports that a growing number of employers, particularly in the retail industry, were requiring hourly employees to work on-call shifts. The office said it had “reason to believe” the 13 retailers might be using this kind of scheduling.
A New York state law requires that employees who are asked to come into work must be paid for at least four hours atminimum wage or the number of hours in the regularly scheduled shift, whichever is less, even if the employee is sent home.
California has a similar law that says employees must be paid for half of their usual time — two to four hours — if they are required to come in to work but are not needed or work less than their normal schedule.
The letter was also sent to J. Crew Group Inc.; L Brands, which owns Victoria's Secret and Bath and Body Works; Burlington Stores Inc.; TJX Cos.; Urban Outfitters Inc.; Sears Holdings Corp.; Williams-Sonoma Inc.; Crocs Inc.; Ann Inc., which owns Ann Taylor; and J.C. Penney Co.
The letters ask the retailers for more information about how they schedule employees for work, including whether they use on-call shifts and computerized scheduling programs.
Rachel Deutsch, an attorney at the Center for Popular Democracy, a New York worker advocacy group, said on-call scheduling can make it difficult for workers to arrange child care or pick up a second job.
“These are folks that want to work,” she said. “They’re ready and willing to work, and some weeks they might get no pay at all even though they set aside 100% of their time to work.”
Danielle Lang, a Skadden fellow at Bet Tzedek Legal Services in Los Angeles, said the attorney general’s action could have repercussions in other states.
“The New York attorney general is a powerful force,” she said. “It’s certainly an issue that’s facing so many of our low-wage workers in California, and anything that puts a highlight on this practice and really pressures employers to think about these practices is a good thing.”
Sears, Target and Ann Inc. said in separate statements that they do not have on-call shifts for their workers. J.C. Penney said it has a policy against on-call scheduling.
TJX spokeswoman Doreen Thompson said in a statement that company management teams “work to develop schedules that serve the needs of both our associates and our company.”
Gap said in a statement that the company has been working on a project with the Center for WorkLife Law at UC Hastings College of the Law to examine workplace scheduling and productivity and will see the first set of data results in the fall.
“Gap Inc. is committed to establishing sustainable scheduling practices that will improve stability for our employees, while helping toeffectively manage our business,” spokeswoman Laura Wilkinson said.
The remaining companies did not respond immediately to requests for comment.
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Protesters On Hunger Strike For 17 Days Ask Education Department To Help
Two Chicago protesters who have been fasting for 17 days over the future of a local high school traveled to Washington...
Two Chicago protesters who have been fasting for 17 days over the future of a local high school traveled to Washington D.C. this week to take their fight to the national stage.
The protesters, joined by civil rights leaders and the presidents of the nation's two largest teachers unions, held a press conference on Wednesday and delivered a letter to Secretary of Education Arne Duncan, asking him to take action so city officials will make a decision about Chicago's Dyett High School, which closed in June due to low enrollment rates and test scores.
Twelve protesters have been participating in a hunger strike since Aug. 17 in an attempt to convince the Chicago Board of Education to reopen the school as an open-enrollment public school with a focus on science, which they say will best serve the needs of the community. The board is weighing various plans to reopen the school, but protesters say this process has been slow and inconsistent, and worry that the board will ultimately allow the school to remain closed.
Since the start of the hunger strike, four protesters have had to receive medical attention, according to the Chicago Sun-Times. Last week, a group of medical professionals asked Chicago Mayor Rahm Emanuel to intervene, calling the situation "a health emergency."
Only two of the protesters made the trip to Washington. The letter they delivered to Duncan on Wednesday asks him to "act swiftly to avert the further harm." An excerpt from the letter states:
"One of the challenges facing African American parents and students in Chicago is the lack of response and accountability from elected and appointed officials. Affluent neighborhoods receive selective enrollment and well-resourced schools. However, communities comprised of predominantly low-income and working families have to contend with under-resourced schools and privatization models that undermine the integrity of the community. We compel you to act on behalf of the residents of Bronzeville who have been rendered voiceless in this process."
At Wednesday's press conference, protesters Jitu Brown and April Stogner were joined by American Federation of Teachers President Randi Weingarten, National Education Association President Lily Eskelsen García, Advancement Project Co-Director Judith Browne Dianis, Schott Foundation President John Jackson, Coalition for Community Schools Director Martin Blank, and members of the Alliance for Educational Justice and the Center for Popular Democracy.
"Sometimes you have to put your own health on the line to get the attention of the world," said García.
The protesters want the Board of Education to choose their proposal for the school's future, which would reopen the school as the Dyett Global Leadership and Green Technology High School.
"We’re going to do whatever is necessary to keep this school and have an open enrollment school in our community,” said Stogner, a protester who has three grandchildren. “I’m hungry. But I’m not really hungry for food -- I’m hungry for justice. I’m hungry for justice for my grandbabies, for all the kids in my community."
“We live in a city where we are not valued as black and brown people,” she added.
Earlier this week, protesters met with Emanuel and officials from Chicago Public Schools to discuss the strike, but the meeting did not lead to any resolution.
"The mayor appreciates there are strong feelings about Dyett, and he understands there is a desire for a quick resolution about its future, however what's most important is the right decision," said a statement from the mayor's office. "CPS is engaged in a thorough review of Dyett, and while they are closer to a decision, they continue to weigh all the factors at play in an effort to achieve the best outcome possible -- one that will ensure a strong Bronzeville and a strong future for our children."
A spokesperson for Duncan said Department of Education leaders plan to meet with the protesters to hear their concerns.
“We respect the efforts of this group and worked to accommodate their plans to hold a press conference outside our building," said Department of Education press secretary Dorie Nolt in a statement. "Senior leaders at the Department will meet with representatives of the group today to hear more about their concerns. While this is squarely a local issue, we always welcome the opportunity to engage with concerned students, parents, educators and community members.”
Source: Huffington Post
‘We are not ready’: Arizona voters warn Election Day could be worse than primary fiasco
‘We are not ready’: Arizona voters warn Election Day could be worse than primary fiasco
PHOENIX, ARIZONA — On Arizona’s primary day this April, voters in Maricopa County waited five hours in the hot sun to...
PHOENIX, ARIZONA — On Arizona’s primary day this April, voters in Maricopa County waited five hours in the hot sun to cast a ballot, because the county slashed the number of polling places from 200 to 60. Some people gave up and left without voting; some fainted in the desert heat. Polling places ran out of ballots.
After the dust settled, angry voters, candidates, and political parties filed a slew of lawsuits against the state, leading to court settlements and a promise that no voter will have to wait longer than half an hour this fall.
“The primary fiasco was a huge wakeup call,” said Samantha Pstross with the Arizona Advocacy Network.
But elected officials and voting rights advocates fear the situation could be just as bad or worse on Tuesday.
“We are not ready for what I presume will be one of the largest turnouts in Arizona history,” Maricopa County supervisor Steve Gallardo told ThinkProgress. “Everyone is banking on a large number of vote-by-mail ballots. But this is not an ordinary election. We have a record number of new Latino voters. We see lots of excitement out there. We need to be prepared to handle this, but we’re already seeing problems.”
“We are not ready for what I presume will be one of the largest turnouts in Arizona history.”
Gallardo cited troubles that have already plagued the county during early voting, when turnout is usually much lighter than on Election Day itself.
On Friday, the final day of in-person early voting, voters in Tempe waited more than three hours to cast a ballot. Among them was Bob Davis, who arrived around 1:15 p.m. with his four-year-old daughter. Though he was told it would be a two-hour wait, he didn’t cast a ballot until nearly 5 p.m.
“I watched like 20 people leave the line who couldn’t wait,” he told ThinkProgress. “I knew the chance of them coming back and trying again was negligible. I felt really upset.”
Davis noted that there is a ballot measure before Arizona voters this year that would raise the minimum wage from just over 8 dollars an hour to 12 by the year 2020. He said he worries those the measure would impact most will not be able to have a say in its passage.
“If you make only 8.05 an hour, your ability to stand in line for four hours is minimal,” he said. “This is actual voter suppression.”
In Glendale, another Phoenix suburb, an understaffed site with insufficient equipment forced voters to wait more than two hours earlier this week.
“It’s discouraging,” Gallardo said. “No one should have to stand in long lines. It becomes a voting barrier. Some folks don’t have the opportunity to wait. Some are elderly and physically can’t stand that long, others only have a short lunch break from work when they can vote. So if you let long lines occur, you are disenfranchising voters.”
Maricopa County had 724 polling places for the 2012 general election. This year, they will have the exact same number, despite adding more than 90,000 more voters to the rolls. Many of those precincts’ polling places are located in the same building, meaning there will be only 640 separate locations.
“What is scary is what could happen on Election Day,” said Pstross. “If there are long lines, people will be disenfranchised left and right.”
Ever-changing laws fuel voter confusion
Arizona smashed its Latino voter registration record in the final weeks of the 2016 election, adding 150,000 new voters to the rolls. The state also led the nation in Latino early voting. Latino residents cast an unprecedented 13 percent of the votes, up from just 8 percent in 2008. Organizers credit Donald Trump for some of this participation spike, noting that his disparagement of immigrants and promises of mass deportations have mobilized Latinos who previously avoided electoral politics.
But as community advocacy groups like Bazta Arpaio, the Arizona Advocacy Network, LUCHA, and others hit the streets of Phoenix in the campaign’s final days, some fear an avalanche of last-minute court cases and legal changes could confuse and disenfranchise the voters they have worked so hard to engage.
This year alone, Arizona mailed out incorrect information about where to vote and mistranslated one of the ballot propositions on thousands of Spanish-language ballots. The state also allowed the final day of voter registration to fall on a federal holiday, leaving thousands of voters unable to register in time.
Then, on Friday night, a federal appeals court temporarily enjoined Arizona’s new law that made it a felony for anyone other than a relative or caretaker to pick up and mail in a voter’s absentee ballot. On Saturday morning, the U.S. Supreme Court reversed the decision and gave Arizona its blessing to enforce the ballot collection ban.
The back-and-forth left organizers scrambling.
Ben Laughlin, an organizer with the “Bazta Arpaio” campaign to unseat the controversial county sheriff Joe Arpaio, got the news of the ruling just before dispatching a small army of canvassers to knock on doors across the city.
“It causes a lot of confusion,” Laughlin told ThinkProgress. “For months we haven’t been collecting ballots because of the ban. Yesterday, we started collecting ballots. Now we’re not. It was a sweet 24 hour window.”
Bazta Arpaio blasted out this message on Friday night: “This weekend, when a volunteer comes to your door, you can have them turn in your ballot with confidence.” Less than a day later, the group had to abandon those plans.
A mother and her two sons hit the streets of West Phoenix with the Bazta Arpaio campaign. CREDIT: Alice Ollstein
Across the city, Asya Pikovsky with the Center for Popular Democracy scrambled to inform dozens of volunteers about the legal development.
“We got on the phone the second the decision came out and told every single person,” she told ThinkProgress on Saturday. “Our canvassers are following the decision to the letter.”
But other advocates expressed fears that some people could accidentally violate the newly-restored law if they did not get the news in time.
“No one should be considered a felon for helping someone else vote — especially someone who would have no other way to get to the polls,” Pstross said.
She fears even those following the law could face unlawful harassment from poll watchers, who have been instructed to follow and photograph those turning in multiple ballots.
“We’re worried that, say, someone who works at a retirement home could show up with 50 to 100 ballots,” she said. “They’re a legitimate caretaker, but even if they’re totally within the law, a crazy person could challenge and intimidate them.”
Sheriffs and vigilantes
Concerns about intimidation by poll-watchers were elevated Saturday, when a federal court declined to put a halt to plans by Trump’s campaign, the Arizona GOP, and a group run by Trump ally Roger Stone to patrol minority-heavy precincts, film those who they suspect of voter fraud, and question people exiting the polls about which candidate they supported.
“It is Plaintiff’s burden to illustrate that these activities are likely to intimidate, threaten, or coerce voters,” the court ruled. “The evidence…has failed to do so.”
But officials and voting rights advocates in Arizona are not just worried about intimidation from such volunteers — They are also sounding the alarm about the potential presence of the county sheriffs at the polls on Election Day.
The Maricopa County Recorder’s office, which administers the election, plans to call in sheriffs if there are any disputes at the polls, even though the head of the department is currently on trial for criminal contempt and racial profiling. Sheriffs have already been summoned to early voting sites, including one incident this week in which voters were upset about turned away at 4:30 p.m. because the polls were supposed to be open until 5 p.m.
“This should be an exciting time for voters — not a time of anxiety or fear.”
Voting rights advocates and elected officials said that having the same sheriffs who conducted immigration raids patrol the polls will intimidate Latino voters. Some groups have called on the Justice Department to send monitors to oversee the sheriffs’ activities, while others are demanding the County Recorder use a different law enforcement agency on Election Day.
“We have a sheriff that has divided and polarized this county and created distrust between the community and the sheriff’s office,” Gallardo said. “It’s time to distance ourselves from the sheriffs’ office and use other agencies like Phoenix Police that actually have credibility with the public. The sheriffs should not be involved in this election.”
“This should be an exciting time for voters — not a time of anxiety or fear,” added Alex Gomez, Executive Director of the Arizona Center for Empowerment. “On Election Day, the story should be about Arizonans proudly casting their ballots — not voters scared off from the polls.”
By Alice Miranda Ollstein
Source
It’s Not Just Low Pay Stressing Out Part-Time Workers
Bill Moyers - July 24, 2014, by Neha Tara Mehta - Besides struggling to make ends meet because of low wages, millions...
Bill Moyers - July 24, 2014, by Neha Tara Mehta - Besides struggling to make ends meet because of low wages, millions of part-time workers in America also face uncertainty over when they will be called in to work. Irregular schedules and last-minute notice make it hard for these workers to find other work, go to school and make arrangements for child care or caring for aging parents.
As The New York Times reported last week:
About 27.4 million Americans work part time. The number of those part-timers who would prefer to work full time has nearly doubled since 2007, to 7.5 million. According to Bureau of Labor Statistics data, 47 percent of part-time hourly workers ages 26 to 32 receive a week or less of advance notice for their schedule.
In a study of the data, two University of Chicago professors found that employers dictated the work schedules for about half of young adults, without their input. For part-time workers, schedules on average fluctuated from 17 to 28 hours a week.
“Frontline managers face pressure to keep costs down, but they really don’t have much control over wages or benefits,” said Susan J. Lambert, a University of Chicago professor who interpreted the data. “What they have control over is employee hours.”
According to the National Women’s Law Center, food service workers experience a 70 percent average variation of work hours every month. For retail workers, the variation is 50 percent and for janitors and housekeepers, it’s 40 percent.
Lawmakers across the country are beginning to notice how irregular schedules complicate the lives of part-time workers, and are taking measures to address the problem. Employees of federal agencies now have the right to request work schedule flexibilities. Workers in San Francisco and Vermont can ask for a more flexible or predictable work schedule. In a report released in June, New York City comptroller Scott M. Stringer made a case for a legislation that would give employees the chance to make such requests “without fear of reprisal.”
Congress is swinging into action on this issue as well. On Tuesday, Representatives George Miller and Rosa DeLauro introduced the Schedules That Work Act. Miller admits that the bill may meet with opposition, but thinks that it will highlight “often callous scheduling practices.”
The Guardian reports that another version of the bill is brewing in the Senate:
Senators Tom Harkin and Elizabeth Warren are co-sponsoring of the Senate’s version of the bill. Carrie Gleason, co-founder of Retail Action Project, said [that] Warren will introduce the Senate version in upcoming weeks.
A single mom working two jobs should know if her hours are being canceled before she arranges for daycare and drives halfway across town to show up at work,” said Warren. “This is about some basic fairness in work scheduling so that both employees and employers have more certainty and can get the job done.”
Although some businesses are saying the bills would represent government overreach, the clothing store Zara has already promised to start giving its part-time employees two weeks notice on their work schedules.
Source
Warren calls for diversity in Federal Reserve leadership
Warren calls for diversity in Federal Reserve leadership
WASHINGTON – The latest crusade in the name of diversity commenced on Thursday, this time aimed squarely at the makeup...
WASHINGTON – The latest crusade in the name of diversity commenced on Thursday, this time aimed squarely at the makeup of the Federal Reserve’s leadership and spearheaded in part by Elizabeth Warren, the senior U.S. senator from Massachusetts.
The Cambridge Democrat recently linked up with fellow Democrat, Michigan U.S. Rep. John Conyers, to send a letter to Janet Yellen, chair of the Federal Reserve Board of Governors, asking the former Clinton administration adviser to take action. They cited a 1977 law that requires the bank regulator to reflect the nation’s diversity.
The progressive duo began their missive by praising her work under President Barack Obama before stating that they “remain 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.” Instead, they said, the central bank’s leadership “remains overwhelmingly and disproportionately white and male,” and is drawn mainly from major banks and corporations.
The letter cites a statistic reported in February by the left-leaning Center for Popular Democracy that indicates that “83 percent of Federal Reserve head office board members are white” while “men occupy nearly three-fourths of all regional bank directorships.”
The lawmakers assert that the discussions among Fed leaders regarding labor market conditions never once mentioned the situation confronting blacks in 2010, the most recent year for which full transcripts are available. The lawmakers point out that the unemployment rate for blacks that year never fell below 15.5 percent, while the nation’s average jobless rate hovered just below 10 percent during most of that post-recession period.
Fellow Massachusetts U.S. Sen. Ed Markey put his signature on the letter, alongside those of more than 120 other Democrats in Congress
Warren and Conyers later took to social media to rally the public around the cause:
Former Secretary of State Hillary Clinton, the frontrunner for the Democratic presidential nomination, was also quick to throw her support behind the call for diversity:
“The Fed needs to be more representative of America as a whole,” Jesse Ferguson, a Clinton campaign spokesman, told the Associated Press Thursday, adding that Clinton also opposes the fact that three private-sector bankers currently sit on each regional Fed bank board.
The Fed is actively working to further diversify its ranks, bank spokesman Dave Skidmore said in a statement provided to AP.
“Minority representation on Reserve Bank and Branch boards has increased from 16 percent in 2010 to 24 percent in 2016,” Skidmore told AP. “The proportion of women directors has risen from 23 percent to 30 percent over the same period. Currently, 46 percent of all directors are diverse in terms of race and/or gender (with a director who is both female and a minority counted only one time).”
“We are striving to continue that progress.”
By BY EVAN LIPS
Source
The Federal Reserve Board's Plan to Kill Jobs
Truthout - March 2, 2015, by Dean Baker - There is an enormous amount of political debate over various pieces of...
Truthout - March 2, 2015, by Dean Baker - There is an enormous amount of political debate over various pieces of legislation that are supposed to be massive job killers. For example, Republicans lambasted President Obama’s increase in taxes on the wealthy back in 2013 as a job killer. They endlessly have condemned the Affordable Care Act as a jobs killer. The same is true of proposals to raise the minimum wage.
While there is great concern in Washington over these and other imaginary job killers, the Federal Reserve Board is openly mapping out an actual job killing strategy and drawing almost no attention at all for it. The Fed’s job killing strategy centers on its plan to start raising interest rates, which is generally expected to begin at some point this year.
The Fed’s plans to raise interest rates are rarely spoken of as hurting employment, but job-killing is really at the center of the story. The rationale for raising interest rates is that inflation could begin to pick up and start to exceed the Fed’s current 2.0 percent target, if the Fed doesn’t slow the economy with higher interest rates.
Higher interest rates slow the economy by discouraging people from borrowing to buy homes or cars. They will also have some effect in discouraging businesses from investing. With reduced demand from these sectors, businesses will hire fewer workers. This will weaken the labor market, which means workers have less bargaining power. If workers have less bargaining power, they will be less well-situated to get pay increases. And if wages are not rising there will be less inflationary pressure in the economy.
The potential impact of Fed rate hikes on jobs is large. Suppose the Fed raises interest rates enough to shave 0.2 percentage points off the growth rate, say pushing growth for the year down from 2.4 percent to 2.2 percent. If we assume employment growth drops roughly in proportion to GDP growth, this would imply a reduction in the rate of job growth of almost 10 percent. If the economy would have otherwise created 2.4 million jobs over the course of the year, the Fed’s rate hikes would have cost the economy more than 200,000 jobs in this scenario.
For comparison purposes, we are having a big fight over the Keystone pipeline. The proponents of the pipeline point to the jobs created by building a pipeline as an important justification, even if the oil being pumped through the pipeline may cause enormous damage to the environment. According to the State Department’s analysis, building the pipeline would create 21,000 for two years. This pipeline related jobs gain has been widely touted in the media and is supposed to make it difficult for many members of Congress to go along with President Obama in opposing Keystone.
Yet, the Fed can easily destroy ten times as many jobs with a set of interest rate hikes this year with its actions passing largely unnoticed. In fact, the impact of Fed interest rate hikes on jobs can easily be far larger than this 200,000 number. If the Fed decides that the unemployment rate should not fall below a certain level (5.4 percent is a number is often used), then it could be costing the economy millions of jobs if the economy could actually sustain a considerably lower level of unemployment as it did in the late 1990s.
To be clear, Federal Reserve Board Chair Janet Yellen and her colleagues on the Fed’s Open Market Committee (FOMC) that determines interest rates are not evil people sitting around figuring out how to ruin the lives of American workers. The Fed has a legal mandate to control inflation, in addition to its mandate to sustain high levels of unemployment. If they raise interest rates it will be because they fear inflationary pressures will build if they let the economy continue to grow and unemployment to fall.
But this is inevitably a judgment call. The call is based on both their assessment of the risk of inflation and also the relative harm from higher rates of inflation as opposed to higher rates of unemployment. It is likely that the members of the FOMC, who largely come from the financial industry, are much more concerned about inflation than the population as a whole. They are also likely to be less concerned about unemployment. These are people who tend to read about unemployment in the data, not to see it themselves or among their friends and family members.
This is why it is important that the public be paying attention to the Fed’s interest rate policies and let them know how they feel about raising interest rates to kill jobs. The Center for Popular Democracy has organized an impressive grassroots campaign around the Fed’s interest rate policies. Those who don’t want to see the government deliberately trying to kill jobs might want to join in.Source
Facebook Founder Gives $20mm Donation On Hillary To Defeat Trump's "Fear And Hostility" Campaign
Facebook Founder Gives $20mm Donation On Hillary To Defeat Trump's "Fear And Hostility" Campaign
A few weeks back we noted how Bullard had questioned the intentions of ex-Facebook founder Dustin Moskovitz in funding...
A few weeks back we noted how Bullard had questioned the intentions of ex-Facebook founder Dustin Moskovitz in funding the Center for Popular Democracy's Fed Up campaign (see "Why Is Facebook Funding "Anti-Fed" Activists"). The "Fed Up" group has mounted an aggressive effort to convince the Fed to keep rates ultra low noting they favor central banking policies that "are aimed at making sure lower income households and minorities share in the recovery to the same degree as the well off."
Ironically, Moskovitz, and his inflated FaceBook shares, are among the key beneficiaries of "ultra low rates" and not so much the poor and struggling people of this country. A fact that was not lost on St. Louis Fed president James Bullard. Per our previous post:
When it comes to Fed Up, "it's Facebook money," Bullard said. "I think it's kind of a funny thing for them to fund because they want low interest rates in an era where we are awash in low interest rates, so it's kind of crazy, isn't it?"
"I think that Dustin Moskovitz should be here, maybe he can helicopter in from Sun Valley or something instead of sending all these people, if he wants low interest rates. He could just come and argue about it," Mr. Bullard said.
Just a few short weeks later we now learn that the billionaire techie, and former college roommate of Mark Zuckerberg, is set to become one of the largest donors to the Democratic Party. According to CNN, Moskovitz will donate a total of $20 million to various Democratic organizations making him the 3rd most generous donor of this election cycle. But Moskovitz, at least if taken at his word, isn't really donating to elect Hillary as much as to defeat Trump saying that he wants to teach Republicans a lesson that by "supporting this kind of candidate, they compel people to act in response."
"This decision was not easy, particularly because we have reservations about anyone using large amounts of money to influence elections," Moskovitz and his wife, Cari Tuna, wrote in a post on Medium. "We hope these efforts make it a little more likely that Secretary Clinton is able to pursue the agenda she's outlined, and serve as a signal to the Republican Party that by running this kind of campaign - one built on fear and hostility?—?and supporting this kind of candidate, they compel people to act in response."
"Cari and I have dedicated our lives to figuring out how to do the most good we can with the resources we've been given. Until now, those efforts have not included making endorsements or contributions in presidential elections," Moskovitz wrote. "The Republican Party, and Donald Trump in particular, is running on a zero-sum vision, stressing a false contest between their constituency and the rest of the world."
But perhaps Moskovitz is less concerned about Trump spreading "fear and hostility" and more concerned about his recent comments suggesting that the only thing the Fed has created with "ultra low rates" is a "strong artificial stock market." Per CNN,
"They're keeping rates down because they don't want everything else to go down," the Republican presidential nominee told Reuters on Monday.
Trump said the "only thing that is strong is the artificial stock market."
"We have a very false economy," Trump told Reuters. "At some point the rates are going to have to change."
Sounds like someone is a little worried about bubbly tech markets?
By Tyler Durden
Source
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