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O’Neal is one of dozens of activists and policy experts traveling to Jackson Hole this week to urge the Fed against raising rates. The campaign, called Fed Up, includes some two-dozen unions, community groups, and think tanks, from the AFL-CIO to the Working Families Party. In Jackson Hole, organizers will deliver a petitiondemanding that the Fed rethink its plan to raise interest rates until the recovery can reach more Americans. Fed Up also plans to hold a series of teach-ins exploring questions like “How Do We Build a Fed that Works for Us?” and “Do Black Lives Matter to the Federal Reserve?”

While there’s only so much the Fed can do when spending on public investments and social programs is well below where it should be, the absence of fiscal support makes monetary policy that much more critical to promote a broadly shared recovery. At its core, the Fed Up campaign is about answering two questions, said Ady Barkan of the Center for Popular Democracy during a press call previewing the upcoming meeting: “Whose recovery is this?” and “Whose Federal Reserve is this?”

“I don’t think that those at the Fed know how life is here in south DeKalb County when they say that the economy is recovering,” O’Neal said during the call. O’Neal makes $8.50 an hour at the daycare center she works at in Atlanta. That’s not enough, she says, to cover rent, food, and utilities for her household, let alone the medication she needs to treat asthma and high blood pressure. “Our life is a constant struggle,” she says. “We have to decide whether, you know, are we going to buy meat, or are we going to buy medicine, or are we going to pinch off the electric bill this month?”

But, she emphasized, she’s hardly alone. “It’s also my neighbor. It’s also the person down the hall, my neighbor next door, around the corner. The whole community is suffering.”

The Atlanta area has been particularly hard hit by the financial crisis and weak economic recovery. In 2009, the Pew Hispanic Center named Metro Atlanta one of a handful of “distinct epicenters” of the nationwide foreclosure crisis. According to their report, less than 300 U.S. counties had foreclosure rates of more than 1.8 percent, and 19 of those counties, including DeKalb, are in Metro Atlanta. As elsewhere, the crisis had a particularly severe impact on black communities: All of the 19 counties Pew singled out as centers of the crisis are majority-black.

Since then, the weak recovery has in some ways only worsened inequities like this. In 2011, the unemployment rate for blacks in the Atlanta area stood at 14.4 percent, or twice the rate of their white neighbors. Three years later, black unemployment had dropped to 13.7 percent, but because joblessness among whites in Atlanta had fallen much faster, blacks were now nearly three times as likely to be jobless as whites. Today, DeKalb County has a poverty rate of 19 percent, well above the average for Georgia and the nation as a whole. And most of that poverty has been concentrated on the county’s majority-black south side.

But among black communities nationwide, DeKalb has actually fared relatively well. The area was hit hard by the downturn, but it remains the second-most affluent black-majority county in the country. By contrast, in Washington, D.C., a majority-minority city, black unemployment is a staggering 15.8 percent, more than five times the rate for whites, according to the Economic Policy Institute. Nationwide, after hitting its highest levels since the 1980s, black unemployment remains about double the rate for whites. The mortgage crisis and subsequent downturn destroyed a full 47 percent of black families’ wealth, and that wealth is far from recovered.

Despite that, the Federal Reserve seems perilously close to raising interest rates, possibly as soon as next month—a change that could have a disastrous effect on the already-weak recovery.

“We shouldn’t mince words,” said Barkan. “When the Federal Reserve raises interest rates, it is doing so in order to slow the economy down in order to prevent the economy from creating more jobs.” A slowdown like that would not only make it harder for the labor market to recover, but it also has a good chance of widening the gap in unemployment between blacks and whites. Historically, the joblessness gap between black and white workers tends to grow when the economy slows down.

But Fed officials remain stubbornly committed to a rate hike, even as instability grips the stock market this week. In a speech on Monday, following another day of market volatility, Atlanta Fed President Dennis Lockhart sought to allay suspicionthat the Fed’s plans to raise rates this year had changed. In June, 15 out of 17 senior Fed officials indicated that they’d like to see a rate hike this year, echoing a similar statement from March. As Lockhart put it in another speech on August 10, “The economy has made great gains and is approaching an acceptable normal.” Nowhere in his speech did Lockhart mention the poverty and racial inequality gripping communities just a few miles from the Atlanta Federal Reserve Bank he chairs.

For O’Neal, places like south DeKalb are very far from an acceptable normal. “When the Fed says that the economy is recovering and they want to raise the interest rates,” she said, “I look around and I don’t see recovery in my community.” 

Unfortunately, plenty of Fed leaders don’t seem to think an unequal recovery is their responsibility to address. In testimony before Congress last month, Fed Chair Janet Yellen said that while black unemployment remains very high, “there really isn’t anything directly the Federal Reserve can do to affect the structure of unemployment across groups.”

But Barkan begs to differ. “We think that’s really a mistake,” he said. “A strong economy—more job growth and more wage growth—has a disproportionately positive effect on African Americans because of the racial disparities that exist in our labor market.” Keeping interest rates low is far from the only solution to racial inequality in the job market (and not even the only thing the Fed can do by itself), but it’s a good start.

Josh Bivens of the Economic Policy Institute, another Fed Up signatory, agrees.Because low-wage workers and workers of color tend to feel changes in unemployment much more dramatically, he said, keeping unemployment low should be the Fed’s first priority. “A policy that lets the unemployment rate get as low as it can possibly go without sparking inflation is one that’s going to have disproportionate benefits to workers of color,” he added.

Unfortunately, Barkan said, Fed officials have a long history of overlooking issues like racial gaps in unemployment and wealth. A big part of the problem is the central bank’s leadership, which is heavily skewed toward the banking sector. By law, 72 out of 108 directors of the Fed’s 12 regional banks must represent workers. But currently, just two officially do, compared with 91 who come directly from banks and financial institutions. “Of course when you have leadership like that you get policies that don’t advance the needs of American working families,” Barkan said.

Which is exactly why Fed Up plans to confront the central bank’s leadership today in Jackson Hole. In doing so, the coalition will help connect monetary policy and policymakers to the people and communities it most impacts.

And demanding that interest rates stay low is just a first step. During the conference, Fed Up will also present a report from PolicyLink on what a more equitable recovery would look like. The report explores how genuinely full employment—which has long been a core policy mandate for the Federal Reserve—would reshape our economy. The report defines full employment as no more than 4 percent unemployment for all groups and a labor-force participation rate no lower than 75 percent for men and 60 percent for women. (Currently, labor-force participation remains stuck at 69 percent for men and 56.7 percent for women, the lowest levels in decades.)

As Barkan and Bivens emphasized, a change like that would have a particularly dramatic impact on communities of color. In Atlanta, black unemployment would drop 10 percent while average household income would increase by 11 percent for black families. A full 175,000 people would be lifted out of poverty and the local economy would grow by $24 billion. Nationwide, the change would be just as dramatic. Genuine full employment would cut black unemployment by two-thirds and lift more than nine million people out of poverty.

It’s this kind of recovery that the Fed needs to begin thinking seriously about, said Barkan. The first step, he added, is to rethink how monetary policy is formulated and who gets a seat at the table. 

Correction: In a previous version of this article, Dawn O'Neal's name was mispelled as O'Neil. 

Source: The American Prospect

JACKSON HOLE, Wyo.—The liberal Center for Popular Democracy’s Fed Up campaign has criticized Janet Yellen’s Federal Reserve in recent years for raising interest rates, lacking diversity in its senior ranks and retaining a quasi-private legal structure for its regional reserve banks.

Green-shirted Fed Up activists again have set up shop outside the central bank’s annual retreat in Grand Teton National Park. But this year, their critique of the Fed is paired with praise for Ms. Yellen and a demand that she remain the central bank’s chairwoman for another four-year term.

Read the full article here.

The Times-Picayune - 05-08-2015 - Louisiana understaffs its charter schools oversight offices and, instead of proactively investigating these schools, relies on charters' own reports and whistleblowers to uncover problems, according to a report released Tuesday (May 12) by the Center for Popular Democracy and the Coalition for Community Schools. That allows theft, cheating and mismanagement to happen, such as the $26,000 stolen from Lake Area New Tech High and the years of special education violations alleged at Lagniappe Academies. 

The report also casts a skeptical eye on the veracity of the data that Louisiana uses to calculate the performance scores that keep charters open and determine their renewal terms. And it faults the state for closing struggling charters instead of intervening to improve them.

The Center for Popular Democracy's partners include the American Federation of Teachers, which has an uneasy relationship with charters, and the Annenberg Institute for School Reform, which studies charter school oversight. Kyle Serrette, the center's director of educational justice campaigns, said its parent members had children in charter and conventional public schools.

That said, one of the report's recommendations is to "impose a moratorium on new charter schools until the state oversight system is adequately reformed."

The Louisiana-based Coalition for Community Schools opposes charter schools outright and filed a civil rights complaint against the state Education Department in 2014. That complaint also included a demand to freeze chartering in New Orleans.

The two groups' report said Louisiana charters could suffer from "tens of millions of fraud in the 2013-14 school year alone," based on the methodology of the Association of Certified Fraud Examiners. In that time, employees of three New Orleans charter schools stole about $110,000, and two charter operators were accused of meddling with retirement payments.

Oversight agencies play almost no role in helping charter schools improve academic outcomes."  

"The state has invested heavily in increasing the number of charter schools while failing to create a solid regulatory framework that truly protects students, families and taxpayers," the authors write. Furthermore, "oversight agencies play almost no role in helping charter schools improve academic outcomes. ... The state has no system in place to provide a path to high-quality academics for all struggling charter schools."

Charter schools are publicly funded but run by independent non-profit boards. They control their own curriculum and hiring but must meet academic and operational standards to stay open. The state Education Department oversees most of Louisiana's 130-plus charters; local school systems oversee the rest.

Read the report

However, as of December, the Education Department's charter audit team consisted of only three people, according to a critical December report from the Louisiana legislative auditor's office. Education Superintendent John White defended his team at the time, saying they reviewed charter schools' audits, among other activities.

Tuesday's paper says that isn't enough. Not only do charters hire their own accountants to conduct annual audits, but the audits are not designed to prevent or detect fraud. Indeed, reports typically contain a disclaimer saying they are not expressing an opinion on fraud controls. The legislative auditor's office might dig deeper but rarely does so, the report states.

"The only audits Louisiana charter schools routinely undergo are the ones they pay for themselves," the authors write.

The report faults the Education Department for not spending enough time on-site at charters. Charters receive regular visits and reviews from state inspectors, and Louisiana Recovery School District officials said their own findings of wrongdoing at Lagniappe Academies in New Orleans showed that their oversight procedures worked.

The authors of Tuesday's report disagreed. The state's 2013-14 review of Lagniappe Academies gave full points for special education, the two organizations said, and it was only later that state inspectors uncovered extensive reports of violations during that time period.

"The situation at Lagniappe shows exactly the problems with the state's oversight structure for charter schools," the report says. "The state relies on a
largely self-reporting oversight structure that is easily manipulated by the schools themselves."

The authors doubt the accuracy of the test scores that are used to measure charters' academic performance, writing that the data "is vulnerable to manipulation."

Finally, the authors disagree with the state's readiness to close charters, including Lagniappe.

"Clearly there are times when problems are significant enough that a school must be closed. Yet, the current intervention (process) is designed to make school closure a normal and common part of the state's accountability system," the authors write. "The system needs to be updated to produce more stability for Louisiana children." In six years, more than 1,700 New Orleans students have seen their charter schools close, according to the report.

Louisiana's laws are "designed to set a high standard but not to help," Serrette said.

The state does at times intervene instead of closing schools, although this is not mentioned in the report. The Recovery School District has chosen successful charter operators to take over failing schools, for example, and White directed Lycée Français to find a new chief executive and assigned it a consultant team. Lycée has gone on to make a B grade, and its charter contract has been extended.

The report's recommendations include:

Require fraud audits every three years, to be conducted by the state legislative auditor's office

Train charter staff and boards on preventing fraud

Hire more staff for the legislative auditor's office and charter school oversight teams

Require "mandatory, hands-on, long-term, strategic support" for charters in trouble

Go beyond test scores when calculating school letter grades

Create local committees, including neighbors and parents, to design schools that serve the needs of a community

Coordinate social services at and around schools

Release raw testing data to the public.

Some of these issues are not unique to charters. Louisiana's conventional public schools also face pressure to keep test scores high: If they don't, they may be taken over by the state. There have been numerous examples of corruption and fraud in school boards and systems. Serrette said it was likely Louisiana's regular school systems needed stronger oversight as well.

Source: Nola.com

 

More than a hundred Democratic party lawmakers have written to Federal Reserve chair Janet Yellen complaining of a lack of diversity within the central bank system and a leadership that is “overwhelmingly and disproportionately white and male”.

The letter, signed by 11 senators and 116 representatives, calls on the Fed to do more to ensure its senior ranks reflect the country’s make-up in terms of gender, race and ethnicity, economic background and occupation. It also demands that the Fed place greater priority on securing full employment for minorities as it pursues its economic goals.

“When the voices of women, African-Americans, Latinos, and representatives of consumers and labour are excluded from key discussions, their interests are too often neglected,” the letter says. “By fostering genuine full employment, the Federal Reserve can help combat discrimination and dramatically reduce the disproportionate unemployment faced by minority populations.”

The signatories include senators Elizabeth Warren of Massachusetts, Bernie Sanders from Vermont and Kirsten Gillibrand from New York; and representatives including Maxine Waters, the ranking member of the Financial Services Committee and John Conyers from Michigan. All Democratic members of the Congressional Black Caucus put their names to the letter. It was not signed by Republican lawmakers.

The letter is the latest sign of political pressure on the Fed from both sides of the party divide. Republicans have been calling for greater Congressional scrutiny over the Fed amid persistent concerns about the ultra-loose monetary policy stance it has pursued since the financial crisis. Democrats, on the other hand, have urged Ms Yellen to maintain low interest rates in pursuit of higher employment, and in her most recent hearings before Congress Ms Yellen faced a barrage of complaints about the uneven economic progress seen between different races and ethnicities.

Eleven of the 12 regional Federal Reserve Bank presidents are white and 10 of the 12 are men. All of the 10 current voting members of the Federal Open Market Committee, which sets monetary policy, are white, while four of them are women. Members of the Fed’s Board of Governors, who rank among the top rate-setters, are selected by the president and confirmed by the Senate, but the Board of Governors has a key role in selecting the Fed’s regional bank presidents.

A spokesperson for the Federal Reserve Board said: “The Federal Reserve is committed to fostering diversity — by race, ethnicity, gender, and professional background — within its leadership ranks. To bring a variety of perspectives to Federal Reserve Bank and Branch boards, we have focused considerable attention in recent years on recruiting directors with diverse backgrounds and experiences.”

The Fed said that minority representation on its reserve bank and branch boards had increased from 16 per cent in 2010 to 24 per cent in 2016, while the proportion of women directors has risen from 23 per cent to 30 per cent over the same period. Some 46 per cent of all directors are “diverse in terms of race and/or gender”, the Fed added.

The Fed in December lifted interest rates for the first time in nearly a decade. It has since kept them on hold as it weighs up conflicting evidence about the strength of the recovery. Referring to monetary policy, the letter from the lawmakers urges Ms Yellen to “give due consideration to the interests and priorities of the millions of people around the country who still have not benefited from this recovery”.

Jesse Ferguson, a Clinton campaign spokesman, said: “The American people should have no doubt that the Fed is serving the public interest. That’s why Secretary Clinton believes that the Fed needs to be more representative of America as a whole as well as that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue.”

By Sam Fleming

Source