CPD IN THE NEWS

“I’m judging John Williams based on the last several years of him being wrong about the levels of maximum employment and pushing for additional [interest rate hikes] prematurely because that mistake puts millions of jobs at risk,” said Shawn Sebastian, who co-leads the Fed Up coalition comprising advocacy groups and unions.

Read the full article here.

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

Liberal and conservative groups of central-bank critics plan to hold events to coincide with the Fed symposium, which runs Thursday through Saturday.

The left-leaning group, called Fed Up, will be gathering in the same Jackson Lake Lodge as the Fed attendees, arguing the central bank shouldn’t raise short-term interest rates anytime soon. The right-leaning group, the American Principles Project, is holding a separate gathering nearby to discuss the effect of Fed policies on the dollar and to urge the current crop of presidential candidates to pay more attention to Fed policy issues.

Fed officials also are getting plenty of advice from other experts on the sidelines. Harvard University’s Lawrence Summers, a former Treasury secretary and one-time candidate for Fed chairman, warned in an opinion article this week that raising rates soon would be a “dangerous mistake.” Martin Feldstein, another Harvard professor, used an opinion article to blame the stock market’s current woes on past Fed policy mistakes and urge the Fed not to delay rate increases beyond September.

The Kansas City Fed conference takes place amid considerable turmoil in global financial markets. Stocks, bonds and currencies have gyrated in recent days as investors try to make sense of China’s economic slowdown and what that could mean for the U.S., the global economy and markets. The anxiety has occluded the outlook for Fed policy: Whereas market participants were recently looking to a possible mid-September Fed rate increase, it now appears the odds have diminished.

The liberal Center for Popular Democracy’s Fed Up coalition says it is planning to bring 50 or more activists to the Jackson Lake Lodge for meetings on Fed policy, economic inequality and racial disparities. The group also went to Jackson Hole last year.

Fed Up plans to hold a news conference Thursday and panel discussions with names such as, “Do Black Lives Matter to the Fed?” and “Who’s Afraid of High Wages? A History of the Inflation Bogeyman.” The group says its events are open to all and it hopes attendees at the Kansas City Fed event stop by.

Fed Up has seen successes in gaining one-on-one meetings with regional Fed bank leaders—they recently sat down with the chiefs of the Atlanta and New York Fed banks. It will bring folks to Jackson Hole who are affected by central-bank policies, but whose voices are rarely heard in the debate.

Atlanta resident Dawn O’Neill, a 48-year-old married grandmother, plans to go to Jackson Hole with the Fed Up group. Her unemployed husband struggles to find day work in the construction industry, and she works as teacher’s assistant in a day-care facility for $8.50 an hour.

“When the Fed says the economy is in recovery, and they want to raise the interest rates, I look around and I don’t see recovery,” Ms. O’Neal said. “I see lines of black men that want work, but there is no work.”

The group says that if the Fed keeps its benchmark short-term rate near zero for longer, it will generate more economic growth that creates more jobs among low-wage earners as well as higher-paid workers. The group also believes that better job growth will help benefit minorities and make discrimination harder.

“We have leaders of the Fed who don’t think slow wages and underemployment are problems,” said Ady Barkan, who leads Fed Up’s activities. “When you have leadership like that, you get policies that don’t advance the needs of working families,” he told reporters in a conference call on Monday.

Fed chiefs for years have acknowledged the painfully slow recovery of the labor market and rising income inequality. Fed Chairwoman Janet Yellen gave a speech on inequality last October that garnered her criticism from congressional Republicans who believe such matters are beyond the Fed’s official mission.

Fed officials say their easy-money policies aimed at stimulating the economy are intended to benefit all Americans, not just the wealthy. Last year, former Fed Chairman Ben Bernanke pointed to the recovery of the housing and labor markets as evidence the Fed’s efforts were helping the middle and lower classes.

Even now, Fed officials generally say raising their benchmark short-term rate target by a quarter-percentage point from near zero won’t offer much restraint to growth. The see a small move as reducing the amount of economic stimulus they are providing, akin to lightening the pressure on the accelerator rather than tapping the brake.

They believe that while inflation remains too low, the unemployment rate has fallen enough to start the process of getting short-term interest rates back to more historically normal levels. Some worry that if the Fed sticks with ultralow rates much longer, it could create financial-market bubbles that could wound the broader economy.

The Fed also will be challenged by the American Principles Project, which is holding its event near the central-bank conference and will count participants from the Heritage Foundation and the Cato Institute, both Washington think tanks. In a news release, Steven Lonegan, the group’s monetary-policy director, said, “We will challenge prevailing wisdom and show how the Federal Reserve’s policies have negatively impacted wage growth and contributed to the rising cost of living.”

Wage growth has been tepid in recent years, despite Fed officials’ hopes their easy-money policies would spur stronger gains. Inflation has fallen well short of the Fed’s 2% target for years.

The Kansas City Fed declined to comment on the activity of outside groups around its conference.

Source: iBloomberg

Washington Post - March 3, 2015, by Anne Kaiser - I share The Post’s interest in a healthy environment for charter schools in Maryland, as expressed in the Feb. 25 editorial “ Give charter schools a chance.” However, this goal cannot be achieved unless we maintain the high standards for accountability, equity and quality required by Maryland’s charter school law.Over the past decade, I have seen troubling results in states that lowered their standards. A 2014 Center for Popular Democracy report found $100 million in fraud, waste and abuse by charter schools in 14 states and the District. The National Education Policy Center found that charter school teachers face significantly lower compensation and poorer working conditions, leading to high turnover rates and the hiring of unqualified teachers. Michigan, Ohio, Delaware and Pennsylvania have seen wasted taxpayer dollars in their race to expand charter schools.Gov. Larry Hogan’s (R) legislation follows in these flawed footsteps by granting a disproportionate share of funding to charter schools at the expense of traditional public schools, permitting uncertified teachers, allowing union-busting by charter school operators and weakening safeguards for accountability. I will work hard through the legislative process to remove these harmful provisions so that we support charters without sacrificing standards.Anne Kaiser, Annapolis  The writer, a Democrat, represents District 14 in the Maryland House, where she is majority leader.Source