Why the People’s Climate March matters to people of color like me
Ever since taking power, the Trump administration has made clear it intends to wage war on the environment. It’s given...
Ever since taking power, the Trump administration has made clear it intends to wage war on the environment. It’s given the green light to both the Dakota Access and Keystone pipelines and geared up to wipe away long-standing protections that keep our air and water safe. Its mission is clear: Eliminate any obstacle that stands in the way of fossil fuel companies.
Read the full article here.
Capitolwire: Report, Teachers' Unions Want Legislature to Mandate Stricter Audits of “Cash Cow” Charter School Industry
Capitolwire - October 1, by Christen Smith - A report released Wednesday insists meager state oversight has allowed...
Capitolwire - October 1, by Christen Smith - A report released Wednesday insists meager state oversight has allowed charter school officials to defraud taxpayers out of $30 million over the last 17 years.
And “that's just scratching the surface of the problem,” says Ted Kirsch, president of the American Federation of Teachers' Pennsylvania chapter.
“It's only talking about what's being reported and there are other things that haven't gotten to the surface yet and they are still being investigated,” he said during an interview Wednesday. “The (fraud) problem is a lot more widespread.”
The Center for Popular Democracy, Integrity in Education and Action United authored the 15-page report last month in which it calls for a moratorium on new charters while the state Attorney General's office investigates all 174 charter schools for potential fraud. The report also pushes the General Assembly to mandate annual fraud risk assessments capable of detecting and preventing waste and abuse.
“While the state has complex, multi-layered systems of oversight in the charter system, this history of financial fraud makes it clear that these systems are not effectively detecting or preventing fraud,” the report reads. “Indeed, the vast majority of fraud was uncovered by whistle-blowers and media exposes, not by the state's oversight agencies.”
The report's index details allegations of fraud against 11 separate charter schools across the state. At least nine of the charter school officials mentioned in the report have pleaded guilty and received prison sentences.
“It’s time for lawmakers to stop providing charter industry players a blank check with little oversight and no accountability,” said Lily Eskelsen García, president of the National Education Association, the parent organization of the Pennsylvania State Education Association. “...For students in all types of schools—traditional, charter or magnet—the key is having a sound structure for oversight and accountability, while providing educators with autonomy to create great learning environments for their students. Let’s work with families, educators and community members to make sure all students can attend great schools that meet their needs.”
“What's lacking here is a process to hold the charter operators accountable,” Kirsch said. “We need some laws that govern the accounting procedures and how money is handled by charter operators. These people are making a lot of money. It's a cash cow.”
Tim Eller, spokesman for the Department of Education, criticized the report Wednesday for “failing to mention” the state uses the same accounting practices for both public schools and charter schools.
“All public schools, including charter schools, are subject to audits by the state Auditor General,” he said. “The Auditor General is charged with ensuring that public entities are using taxpayer dollars for their intended purpose.”
Auditor General Eugene DePasquale said he couldn't confirm the report's $30 million figure, but said “we have found waste in the system,” particularly related to the issues of lease reimbursement and special education funding.
The auditor general uncovered “$1.2 million in improper lease reimbursements” in an August 2013 audit of Chester Community Charter School — Pennsylvania's largest. He said Wednesday lease reimbursement fraud represents about half of the charter cases his office has uncovered.
The audit found that Chester Community Charter School's founders sold the original building to a non-profit organization for $50.7 million, then created a for-profit management company to run the charter school, all the while collecting illegal reimbursement payments from the state for the buildings.
When asked about the report’s proposals regarding more oversight, DePasquale said: “If we had more resources, certainly we could audit more schools. That's absolutely true. But we need partners at the Department of Education to respond when we do find issues.”
DePasquale also suggested the General Assembly pass charter school reform that would address fraud involving lease reimbursements.
Two separate pieces of legislation — House Bill 6188 and Senate Bill 1085 — included measures to improve transparency and accountability in charter schools, but both bills have been stalled in the opposing chambers since budget negotiations wrapped up in July.
“House Bill 618 which passed the House in September of 2013 was basically loaded with accountability measures related to governing audits and academic performance,” said Steve Miskin, spokesperson for House Majority Leader Mike Turzai, R-Allegheny. “We are hoping the Senate passes it.”
Senate leadership did not respond to requests for comment Wednesday.
“If the widespread allegations mentioned in the report prove to be true, then those guilty should be prosecuted to the full extent of the law,” said Bob Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, in a statement released Wednesday. “However, the report draws sweeping conclusions about the entire charter sector based on only 11 cited incidents in the course of almost 20 years, while ignoring numerous alleged and actual fraud and fiscal mismanagement in the districts over that same time period, which dwarf the charter school allegations in terms of alleged misuse of taxpayer dollars.”
Fayfich says the coalition supports mandating more stringent audits in the name of accountability, but doesn't think the public sector should be exempt.
“If the authors’ recommendations are to conduct a fraud audit of every charter school based on the actual and alleged misdeeds of a few, and initiate a moratorium on all charter schools until those audits are complete, then, in the name of intellectual integrity, the same recommendations should apply to traditional public school districts,” he said. “Fraud and fiscal mismanagement are wrong and cannot be tolerated, but to highlight them in one sector and ignore them in another indicates a motivation to target one type of public school for a political agenda.”
Renee Martin, acting communications director for the Attorney General Kathleen Kane, said Wednesday a copy of the report “has been shared with our attorneys.”
Prosecutors and Race Bias: Why the DOJ Needs to Act
Prosecutors are supposed to hold people accountable when they hurt other people—that’s part of the job. Yet for years...
Prosecutors are supposed to hold people accountable when they hurt other people—that’s part of the job. Yet for years prosecutors across the country have opted out of that responsibility when the perpetrator is a police officer.
Last year, police killed African Americans at a rate more than twice that of white people, according to the Guardian’s database, and African-American men between the ages of 15 and 34 at a rate five times that of white men in that age range. Our morgues were busy due to killings by police in 2015 -- 1,145 deaths among all races, according to the database.But our district attorneys’ offices were not nearly as busy: in 2015, they initiated just 18 prosecutions of police officers who killed civilians.
If local prosecutors won’t act, the federal government should find out why.
Chicago prosecutor Anita Alvarez waited almost a year before indicting the officer who killed Laquan McDonald, a young African-American man. She faced relentless pressure from organizers and communities in Chicago and brought charges only after a judge ordered the city to release the videotape of the killing that directly contradicted the officers’ versions of the shooting.
And the Chicago officer who killed Reika Boyd was acquitted after a botched prosecution by one of Alvarez’s attorneys who kept his job.
In Cleveland, Tamir Rice, a 12-year-old African-American youth, was shot and killed within two seconds of officers arriving on the scene. Prosecutor Tim McGinty oversaw a grand jury “investigation” that involved leaked “expert” reports justifying the shooting, presentation of evidence that Tamir kept a toy gun longer than he should have, and accusations that Tamir’s family protested the killing of their son because of money.
In the Bronx, New York City paid $3.9 million to the family of Ramarley Graham who was shot and killed by police while in his own home, but criminal charges against the officer were dismissed, and the officer is still on the job — with a raise.
The behavior of these prosecutors led many to believe that race bias played a role in their actions. Alvarez and McGinty were voted out of office, reflecting the community reaction against two elected prosecutors; but this does not resolve issues of potential race bias by prosecutors remaining in those offices or in offices of other local prosecutors around the country.
Judges, prosecutors, and former presidential advisors have acknowledged that race bias, deliberate or unintentional, has played a role in the incarceration of African Americans in unfairly disproportionate numbers. We know prosecutors can be drivers of racialized mass incarceration because they hold so much power in our current system of plea bargain justice.
The reality that African Americans are incarcerated at nearly six times the rate of white people is at least in part a result of the discretionary decisions of prosecutors.
Under the circumstances, shouldn’t we ask if any kind of race bias led local prosecutors to defend police who kill instead of objectively investigating them? Given the other evidence of race bias in the system, doesn’t the miniscule number of prosecutions in killings that disproportionately affect the African-American community suggests a disturbing answer?
Until now, prosecutors have been exempt from virtually any scrutiny. It is time for that exemption to expire, and the Department of Justice has the authority and responsibility to act. The Safe Streets Act of 1968 and the Violent Crime Control Act of 1994 authorize the attorney general to conduct investigations and file civil litigation to eliminate “a pattern or practice of discrimination on the ground of race, color, religion, national origin, or sex, in connection with any law enforcement agency that receives financial assistance from DOJ’s Office of Justice Programs and the Office of Community Oriented Policing Services.”
Law enforcement is defined as “all activities pertaining to crime prevention or reduction and enforcement of the criminal law.” Prosecutors, like police departments, receive millions of dollars in federal funding through Justice Assistance Grants and should be subject to the same scrutiny as the police.
Looking for the influence of race bias is not an accusation of racism. The Manhattan District Attorney’s Office investigated the possible role of race bias in its own work without any intervention by the Justice Department. District Attorney Cyrus Vance was not accusing his staff of racism. He was willing to look for any impact race bias might have on carrying out justice. The Vera Institute examined the office’s work, from charging decisions to plea offers, and discovered evidence of racial bias that could not be explained by other factors.
Does this show that Manhattan DAs are racist? No, it points to an equally serious problem — racial bias exists systemically in ways prosecutors have not or will not recognize.
The impact of unconscious bias can be reduced and even eliminated by training to recognize it and using best practices to eliminate its influence. But if you don’t look for it, you won’t find it. And we need to remember that for those injured, killed, or incarcerated—and for their families, who are forced to bear the financial and emotional costs of incarceration—the difference between conscious and unconscious bias means nothing.
The killing of Michael Brown brought no indictment, but investigating the Ferguson police revealed some of the ugliest racist attitudes in America, leading to a Department of Justice lawsuit against the department.
How did it get that bad in Ferguson? For one thing, police knew the DAs wouldn’t hold them accountable for their behavior. We need prosecutors to do their jobs when police officers are the defendants. If they are reluctant to do it, a visit from the feds may help change their thinking.
The Department of Justice must step in and use its authority and power to ensure justice.
By Marbre Stahly-Butts and Jeffery Robinson
Source
Federal Reserve keeps key interest rate at zero, citing global turmoil
The Federal Reserve on Thursday voted to maintain its unprecedented support for the U.S. recovery, leaving a key...
The Federal Reserve on Thursday voted to maintain its unprecedented support for the U.S. recovery, leaving a key interest rate unchanged amid gathering clouds over the global economy.
In an official statement, the nation’s central bank said the job market is recovering and hiring is “solid.” But it expressed concern that inflation remains too low and exports have weakened. Meanwhile, the risk is building that turmoil overseas will drag down growth in America.
"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the central bank's official statement read.
The decision to keep the Fed’s benchmark interest rate at zero amounts to a recognition that the robust recovery central bank officials had hoped for when they launched into an uncharted era of easy money during the throes of the 2008 financial crisis has yet to materialize. The Fed has repeatedly pushed back the goal line as the economy failed to deliver. Seven years after the central bank cut its target rate to zero, Fed officials believe the recovery is not yet ready to stand on its own.
At the press conference that followed the rate announcement Thursday afternoon, Fed Chair Janet Yellen said that a rate hike was still likely by the end of the year. But she reiterated that though “domestic developments have been strong, we want to see continued improvement in the labor market," and the central bank would like "to bolster our confidence that inflation will move toward" the Fed’s 2 percent target before a rate hike.
“We have very large drags from energy prices and import prices," Yellen said, adding that the central bank views those as transitory. As the labor market heals, "we will see further upward pressure on inflation," she said. “We expect to achieve our 2 percent goal over the medium term.”
Markets grew volatile immediately after news of the rate hold, going flat by the end of Yellen's press conference. The Dow Jones Industrial average closed down 0.4 percent and the Standard & Poor’s index closed down about 0.3 percent on Thursday.
Documents released by the Fed show most of the Fed's top brass now anticipate increasing rates only once this year, instead of twice. A growing minority think the central bank should not raise its benchmark rate this year at all, and one suggested it should stimulate the economy even more by taking the rate negative.
Three officials are advocating a 2016 liftoff, while one person pinned 2017 as the date -- longer than anyone has suggested so far.
“Even though the summer stresses in financial markets have abated, the impact of the intense market volatility on domestic economic activity is yet to fully play out,” Millan Mulraine, deputy chief U.S. macro strategist at TD Securities, wrote in a research note.
The Fed lowers its target rate when it wants to stimulate the economy by encouraging businesses and consumers to spend. It hikes when the economy begins to grow too quickly and inflation picks up, making saving money more attractive.
Timing, however, is crucial. If the Fed moves too soon, it risks undercutting the recovery’s momentum. Waiting too long could stock dangerous financial bubbles.
Yellen made reference to that risk at the press conference Thursday when asked whether the Fed should be moving sooner rather than later to raise the rates. "I don't think it's good policy to then have to slam on the brakes," she said.
The Fed modestly upgraded Thursday its expectation for economic growth this year from 1.9 percent to 2.1 percent, but the forecast is still lower than the robust expansion enjoyed a decade ago. The jobless rate has already fallen below the central bank's June estimate of 5.3 percent. The Fed adjusted its forecast to 5 percent. It also nudged up its estimate of core inflation from 1.3 percent to 1.4 percent.
In May, Yellen said speech that she expected the economy would be strong enough to raise the target rate by the end of the year. Other top Fed officials had signaled the long-awaited move could come during its meeting this month.
But that was before the jaw-dropping swings in financial markets over the past few weeks, including a 1,000-point plunge in the Dow Jones industrial average. Evidence is mounting that China’s breakneck economic growth is fizzling out faster than previously thought.
In the meantime, the strong U.S. dollar and low oil prices are weighing on inflation, which has run below the Fed’s target of 2 percent for years. The World Bank, the International Monetary Fund, Nobel-laureate Joseph Stiglitz and former Treasury Secretary Lawrence Summers have all called on the central bank to hold off on a rate hike, at least for now.
“Now is the time for the Fed to do what is often hardest for policymakers,” Summers wrote in The Washington Post recently. “Stand still.”
The calls for delay are also coming from a populist campaign known as Fed Up, which protested outside of the central bank’s buildings Thursday. Several lawmakers joined the demonstration, including Michigan Rep. John Conyers, who is sponsoring a bill that would require the Fed to target a 4 percent unemployment rate.
Not everyone agrees the Fed should wait, however. Richmond Fed President Jeffrey Lacker dissented from the central bank’s vote on Thursday. In aspeech earlier this month, he pointed to strong consumer spending, the sharp decline in unemployment and a pickup in inflation measured since the beginning of the year as reasons a rate hike is warranted.
“I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring,” he said. “It’s time to align our monetary policy with the significant progress we have made.”
In its official statement, the Fed attempted to assure investors and the public that after the first rate hike, it expects to make subsequent hikes only gradually. Though most officials predicted the Fed would raise its target rate several times next year, they also forecast it would remain below its historic norm of about 4 percent for several years. Fed documents released Thursday show the long-run median estimate at just 3.5 percent.
Each hike will also likely be small, analysts expect just one quarter of one percent. That would allow the central bank to assess how an economy grown accustomed to easy money operates under a new regime.
“One should never discount the importance of an interest rate change by a central bank merely because it looks small,” said Scott Sumner, an economist at the Mercatus Center at George Mason University. “Some pretty big avalanches have started from a small pebble being dislodged.”
Source: Washington Post
What are ‘community schools?’ You can find out Tuesday
In general, community schools incorporate “engaging, culturally relevant” instruction and health care services —...
In general, community schools incorporate “engaging, culturally relevant” instruction and health care services — physical, social and emotional — that are offered before, during and after school, according to the Center for Popular Democracy.
Read the full article here.
Joseph Stiglitz explains why the Fed shouldn't raise interest rates
The answer should clearly be "no." The preponderance of economic data indicates that the predictable costs of premature...
The answer should clearly be "no." The preponderance of economic data indicates that the predictable costs of premature tightening — slower job and wage growth — far outweigh the risk of accelerating inflation.
Six years into a lackluster U.S. expansion, price growth for personal consumption expenditures — excluding food and energy — has averaged less than 1.5% annually in the recovery, well below the Fed's unofficial 2% inflation target. It slowed to 1.3% so far in 2015.
Global economic forces are poised to drive inflation still lower. Last week, oil prices fell to $42, a low not seen since February 2009. Europe's growth remains anemic and is likely to remain so: The IMF forecast for 2015 is just 1.5%. And while it is difficult to piece together a precise picture of what is happening in China, most experts see growth slowing markedly, with effects in other emerging markets.
With a weaker euro and yuan, our exports will decrease and our imports increase. Together, this will put pressure on domestic businesses and the job market, which is hardly robust.
Despite a headline unemployment rate of 5.3%, the true labor market situation faced by working families in the United States remains dire. Millions remain trapped in disguised unemployment and part-time employment. As of July, the nation faced a jobs gap of 3.3 million — the number needed to reach pre-recession employment levels while also absorbing the people who entered the potential labor force. The true unemployment rate, including those working part time involuntarily and marginally attached, is more than 10.4%.
Poor labor market conditions are also reflected in wages and incomes. So far this year, wages for production non-supervisory workers, which tracks closely to the median wage, fell by 0.5%. Median household income — a better indicator of how well the economy is doing as seen by the typical American than GDP — at last measure was lower than it was a quarter-century ago.
It is hard to see why the Fed would choose slower job and wage growth for most Americans just to protect against the theoretical risk of moderately higher inflation. But, then again, it's often hard to understand the Fed's policy choices, which tend to contribute to widening inequality in the United States.
Too often, after the end of one recession, the Fed, fearing inflation, has used monetary policy to dampen the economic expansion. Its maneuvers keep inflation low but unemployment higher than it otherwise would be, negatively affecting all workers, not just those out of a job. Workers in jobs face greater stresses, downward pressure on wages and diminished opportunities for upward career mobility. The costs of higher unemployment are borne disproportionately by people in lower-income jobs, who also tend to be disproportionately people of color and women.
After the 2008 crisis, the Fed tried to stimulate the economy by buying bank debt, mortgage-backed securities and Treasury assets directly from the market — so-called quantitative easing — which disproportionately benefited the rich. Data on wealth ownership show clearly that the portfolios of the rich are weighed more toward equity, and one of the main channels through which quantitative easing helped the economy was to increase equity prices.
So quantitative easing was yet another instance of failed trickle-down economics — by giving more to the rich, the Fed hoped that everyone would benefit. But so far, these policies have enriched the few without returning the economy to full employment or broadly shared income growth.
The Fed has been forthright in pointing out the limits of monetary policy to help the economy. Fiscal policy could lead to stronger and more equitable growth, but the Republican-led Congress has demanded austerity.
Still, there is more the Fed could do. It could do more to curb excessive debit card fees and the anti-competitive charges that credit and debit cards impose on merchants. These fees lead to higher prices and lower real incomes of workers. It could also do more to encourage lending to small and medium-sized businesses.
Easiest of all, it could choose not to raise interest rates. All policy is made under uncertainty. In this case, however, the risks are one-sided: Ordinary Americans in particular will be hurt by a premature rate rise, as the economy slows, unemployment increases and there is even more downward pressure on wages.
Joseph E. Stiglitz is a Nobel laureate in economics, a professor at Columbia University and chief economist of the Roosevelt Institute.
Source: The Los Angeles Times
Twin Cities Commute Times Show Sizable Racial Gap
Next City - 05.14.2015 - Commute times for people of color in the Twin Cities are, on average, much longer than for...
Next City - 05.14.2015 - Commute times for people of color in the Twin Cities are, on average, much longer than for white commuters.
A new study found that in Minneapolis and St. Paul, African-American, Latino and Asian commuters were at least three times more likely to take public transit to work than whites, and TV news outlet KARE11 reports that researchers studied the transit time penalty for different ethnic groups in the Twin Cities, in other words how much time they lost in transit compared to making the same commutes in private vehicles. For African-Americans and Asian-Americans, it added up to three and a half weeks per year. For Latinos the time penalty was 4.5 weeks.
“… if you’re an African-American, you’re losing the equivalent of a month’s worth of your life commuting on a bus versus if you were able to take a car. If you’re a Latino it’s close to five weeks,” Anthony Newby of Neighborhoods Organizing for Change explained.
The impact of a lengthy commute goes far beyond stress or inconvenience. As a New York Times article about an ongoing Harvard study recently noted, “commuting time has emerged as the single strongest factor in the odds of escaping poverty. The longer an average commute in a given county, the worse the chances of low-income families there moving up the ladder.”
One of the problems the Twin Cities study found is that funding for public transit has been stagnant for years, while ridership increased 14 percent. According to the study:
The transportation funding plan proposed in the House Republican transportation omnibus bill relies on shifting about $1 billion of revenues from the general fund over the next four years to fund road and bridge construction. In the meantime, the House plan would result in a 25 percent cut in transit service — resulting in longer waits, more delays, longer travel times, lost service, and more crowded buses and trains. Decreased service will lead riders to look for more reliable means of transportation; with fewer riders, fare revenues will decline. This vicious cycle will result in longer waits and travel times, more delays, and fewer useful routes. These draconian cuts could endanger federal funding for future projects important to the Twin Cities region and result in legal violations under Title VI of the Civil Rights Act.
Minneapolis and St. Paul are not alone in their transit-funding woes. In New York City, which already boasts the nation’s longest commute times, the trip to work is much worse for low-wage workers.
“We’ve heard so much about the achievement gap in education in our community. There is a transportation achievement gap!” Minneapolis Rep. Frank Hornstein, the ranking Democrat on the House Transportation Committee, said at a press event on Tuesday. “We cannot achieve a quality of life for too many people in our community because of this transit disparity that exists.”
Source: Next City
Video: Grandes bancos podrían beneficiarse con el muro de la frontera
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The Fed’s “Hammer” Can Be Used to Great Effect to Improve Prospects for Minority Workers
Economic Policy Institute Blog - March 4, 2015, by Josh Bivens - Update: Binyamin Appelbaum has made a useful change to...
Economic Policy Institute Blog - March 4, 2015, by Josh Bivens - Update: Binyamin Appelbaum has made a useful change to his article that I comment on below, noting that Black workers do indeed stand to benefit disproportionately from any demand boost that keeps overall unemployment rates falling in coming years. Again, however, I think that while he makes an important point, it still doesn’t strike me as right to frame it as about the limits of monetary policy. His point (as I read it) is that the gap in unemployment rates between Black and White workers is an economic problem that policymakers should seek to end, but this end-goal of no racial unemployment gap at all cannot be achieved with any single policy lever.
But while an expansionary monetary policy is not a sufficient condition to erase the racial unemployment gap, it is a necessary condition. That is, the first step towards tearing down racial bias in hiring is to rob employers of the economic power they can use to indulge this bias. And the best way to rob them of this economic power is to have tight labor markets that force employers to compete to hire workers. So, macroeconomic policy (which is dominated by the Federal Reserve) is just crucial to meeting the long-run goal of ending racial unemployment gaps.
Finally, while the existence of a racial unemployment gap in both good and bad times is a terrible problem, it’s an even bigger problem when the respective White and Black unemployment rates are 5.3 and 11.3 percent (like they were in 2014) than when they are 3.5 and 7.6 percent (like they were in 2000). So while ending the racial unemployment gap entirely should be the long-game, we also need to be keenly aware of what can alleviate economic pain in the short run. And that short-run is just dominated by what the Fed decides to do.
Simply put, the most effective policy lever to reduce the black unemployment rate in the next few years is for the Fed to keep its foot off the economic brakes by keeping short-term interest rates low until we see real signs of healthy wage growth for American workers.
Binyamin Appelbaum gets one deeply wrong in the New York Times, riffing off a report released by the Center for Popular Democracy with (full disclosure) data assistance from EPI and concludes with a version of the old saying that the Fed’s “hammer” can’t effectively address non-nail problems like excessive unemployment.
Appelbaum notes that the report shows that Black unemployment rates are significantly higher than White (or overall) unemployment rates in both recessions and recoveries. Fair enough. And if his conclusions had simply been that because the gap persists in both booms and busts that monetary policy alone cannot completely erase these unemployment gaps, that would also have been fair enough.
But instead he pushed this idea way too far, and ended getting something completely wrong. In his words (brackets and emphasis added by me):
“The same factors [that keep unemployment rates higher for Black workers in both good times and bad] help to explain why black workers are quicker to lose jobs and slower to return to work. Any given level of economic stimulus, as a result, helps black workers less than it helps white workers.”
This is totally backwards. Because Black unemployment is almost exactly double White unemployment in both recessions and booms, this means that Black workers are indeed “quicker to lose jobs” during recoveries, but they are actually faster, not “slower” to return to work. And any given level of economic stimulus reduces Black unemployment by twice as many percentage points as it reduces White unemployment, helping Black workers more than it helps White workers. In short, as the CPD report shows, the stakes regarding at what pace the economy improves and overall unemployment falls are highest for Black workers. And this means that the stakes regarding Fed decisions are highest for Black workers.
He also notes, “And it follows that the level of stimulus necessary to reduce excessive black unemployment may well be excessive for the economy as a whole.”
Maybe, though lots depends on both instances of “excessive” in that sentence. Regarding current debates over the Fed (ie, what they do in the next 6-12 months) we know that current Black unemployment is indeed “excessive” and we also know that it will be significantly reduced (at twice the pace of the overall rate!) the longer the Fed allows the recovery to proceed without braking it by raising interest rates.
And worries about “excessive” overall aggregate demand growth and monetary stimulus are still completely theoretical. This demand growth can be labeled “excessive” with respect to the Fed’s 2 percent inflation target only when there is a sustained period of wage-growth that is about double its current pace (which really hasn’t picked up since the recession’s trough).
The late 1990s offers a good reminder on both these points. First, when overall unemployment fell far enough to average just over 4 percent for two full years in 1999 and 2000, Black unemployment fell to levels (7.0 percent for a month, and below 8 percent for a majority of months in 1999 and 2000)) far lower than the 11.3 percent it averaged during 2014. And there was no evidence from that earlier period that these levels of overall unemployment and demand-growth were excessive – inflation actually fell in the late 90s, even as wages rose across-the-board.
What CPD and EPI (and others) are calling for when they ask the Fed to keep its foot off of the economic brakes in the name of helping the lot of the most vulnerable workers is precisely to probe the limits of excessive stimulus. That is, the Fed should be much more willing to experiment with very low rates of unemployment even if it risks a period of above-average inflation. If the Fed pursued this it would do more to help the most vulnerable workers than nearly any other single policy. So in this regard, the economic health of minority communities is one problem that the Fed’s policy hammer is very well designed to help.
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The elevator moment: when to speak up, when to stay quiet, and the power of both
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The elevator moment: when to speak up, when to stay quiet, and the power of both
One of the women who confronted Arizona Sen. Jeff Flake in a Capitol elevator Friday said she hopes other Republican...
One of the women who confronted Arizona Sen. Jeff Flake in a Capitol elevator Friday said she hopes other Republican senators listen to the stories of women who have been sexually assaulted.
Ana Maria Archila and Maria Gallagher stopped Flake on Friday morning and spent nearly five minutes shouting at the Arizona lawmaker after they learned he had decided to support the US Supreme Court nomination of Judge Brett Kavanaugh. Archila said Friday night she was looking for Flake to step up.
Read the article and watch the video here.
2 days ago
2 days ago