Good jobs for everyone
The Hill - 05-06-2015 - The strain from Modesta Toribio’s retail job weighed down her life. Despite working full-...
The Hill - 05-06-2015 - The strain from Modesta Toribio’s retail job weighed down her life. Despite working full-time as a cashier in Brooklyn, Modesta struggled to pay for rent, food, or transportation. The bills added up quickly. Taking the day off to care for a sick child meant risking losing her job. Going to school at night was not an option, and she could not arrange for steady childcare because her schedule changed every week.
Modesta’s story is not unique. It is the story of countless strivers who work to sustain their families, but collide against structural barriers that keep them from making ends meet.
In this case, Modesta and her co-workers took action, organized and won concessions from their boss. It was not easy – their boss initially retaliated by cutting their hours. But, the workers gained momentum, and eventually they won better pay and better treatment.
For millions of others, though, they still do not have the dignity of a good job.
That is why the Center for Popular Democracy is proud to have launched an ambitious campaign to win good wages, benefits and opportunity for all workers with the Center for Community Change, Jobs with Justice and Working Families Organization. Named Putting Families First, the campaign will advance the audacious idea that every American should and can have access to a good job.
It’s an effort undertaken with a sense of urgency. We know that good jobs and access to them for all cannot be achieved without confronting the deep history and continuing reality of racism and sexism in America, particularly as they play out in the labor market.
As such, we propose five straightforward and commonsense tenets:
Guaranteeing good wages and benefits. Investing resources on a large scale to restart the economy in places of concentrated poverty. Taxing concentrated wealth. Valuing our families and the work of women who care for children and elders Building a green economy.What stands between us and an economy that works for everyone are rules that unfairly favor the greedy few because they are written by politicians beholden to wealthy special interests. But workers and families who are working together for change know well that rules written by the few can be re-written by the many.
Workers around the country are launching over 100 campaigns that embody an ambitious jobs agenda that includes everyone, elevating demands that speak to the reality of people throughout our country.
One example: making high quality child care available to all working parents, raising wages and benefits for the millions of women who work in early childhood education and care fields, changing the state and federal revenue models to make childcare more accessible, and providing financial support to unpaid caregivers.
Ensuring that all working families have access to quality, affordable childcare – and that the jobs in that industry provide living wages and good benefits – is crucial to women’s economic stability, especially women of color who are the vast majority of workers in this sector.
Winning these campaigns will make a huge difference for Modesta and her family, and for millions of families in this country who are struggling to make ends meet.
The reality is that there is bold action happening in every corner of this country. Whether we are talking about fast food workers striking across the country, or immigrant workers winning policies against wage theft, or entire communities organizing to win ballot initiatives to enact paid sick days and better wages.
The American public is thirsty for a visible effort to create real, good, dignified jobs for everyone.
We are supporting important local fights that will produce very real change in the lives of workers. And we are changing the broader frame in which those fights are waged. We are not tinkering at the margins. We have our eyes set on transforming the country through campaigns in 41 states – campaigns that grow every day.
We are setting out to challenge the orthodoxies of both parties to focus on the real problem: the need to create jobs and improve wages.
Like Modesta and her co-workers, we are coming together to stand up for ourselves, for our families, for our communities and for America. We have a vision of honoring the dignity of work, and the dignity of the people who work. We believe that we can do better, but that we will have to challenge those who are stealing our wages, limiting our ability to sustain our families and destroying our planet in order to do so.
Putting Families First will change the national conversation about work and about greed, starting where it matters most: in our states. It will enable us to live up to our collective responsibility to create the country that we want our children to live in.
Archila is co-executive director of the Center for Popular Democracy.
Source: The Hill
Lessons From the Death of Seattle’s ‘Amazon’ Tax
In an act of novel cross-city solidarity, more than 50 members of the progressive political network Local Progress...
In an act of novel cross-city solidarity, more than 50 members of the progressive political network Local Progress signed an open letter to Seattle expressing “strong support” for the tax, while local officials in the Bay Area and Silicon Valley began murmuring about passing their own big-business taxes. A handful of national leaders—including Senator Bernie Sanders and Representative Pramila Jayapal—even weighed in.
Read the full article here.
Center for Popular Democracy Names Jennifer Epps-Addison Network President
Center for Popular Democracy Names Jennifer Epps-Addison Network President
The Center for Popular Democracy Tuesday announced the appointment of Jennifer Epps-Addison as the new president of its...
The Center for Popular Democracy Tuesday announced the appointment of Jennifer Epps-Addison as the new president of its network of 43 state-based partner organizations. She will also serve as the social and economic justice organization’s Co-Executive Director.
Read the full article here.
Avoiding 'Regressive Mistake,' Fed Holds Off on Rate Hike — For Now
Update 3 PM EDT: In a decision that aligns with progressive demands, the Federal Reserve ...
Update 3 PM EDT:
In a decision that aligns with progressive demands, the Federal Reserve announced on Thursday that it would keep interest rates near zero in light of "recent global economic and financial developments" and in order to "support continued progress toward maximum employment and price stability."
Presidential candidate Bernie Sanders issued the following statement today after the Federal Reserve announced that it would hold off on raising interest rates:
“It is good news that the Federal Reserve did not raise interest rates today. At a time when real unemployment is over 10 percent, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people. It is now time for the Fed to act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”
The New York Times reports that the Fed’s decision, "widely expected by investors, showed that officials still lacked confidence in the strength of the domestic economy even as the central bank has entered its eighth year of overwhelming efforts to stimulate growth."
Progressives cheered the news, with Josh Bivens of the Economic Policy Institute saying, "Today’s decision by the Federal Reserve to keep short-term rates unchanged is welcome. [...] We hope they continue their pragmatic, data-based approach and allow unemployment to keep moving lower, and only tighten after there is a significant and durable increase in inflation."
He continued: "Tightening before the economy has reached genuine full-employment is not just a mistake, it’s a regressive mistake that would hurt the most vulnerable workers—low-wage earners and workers from communities of color—the most."
However, Reuters reports that "the central bank maintained its bias toward a rate hike sometime this year, while lowering its long-term outlook for the economy."
Which means that pro-worker organizations, which have largely opposed a rate increase that they say would slow the economy and stifle wage growth, will have to keep up the fight.
"We applaud Chair Yellen and the Federal Reserve for resisting the pressure being put on them to intentionally slow down the economy," said Ady Barkan, campaign director for the Fed Up coalition, which rallied outside the Federal Reserve on Thursday.
"Weak wage growth proves that the labor market is still very far from full employment," Barkan continued. "And with inflation still below the Fed’s already low target, there is simply no reason to raise interest rates anytime soon. Across America, working families know that the economy still has not recovered. We hope that the Fed continues to look at the data and refrain from any rate hikes until we reach genuine full employment for all, particularly for the Black and Latino communities who are being left behind in this so-called recovery."
Earlier...
Progressives are cautioning the U.S. Federal Reserve against slowing the economy by raising interest rates "prematurely"—a decision the Fed will announce Thursday.
The U.S. central bank will issue its highly anticipated short-term interest rate decision following a two-day policy meeting, with a 2 pm news conference led by Fed Chair Janet Yellen.
As CBS Moneywatch notes, "[t]he decision affects everything from the returns people get on their bank deposits to how much consumers and employers pay for credit cards, mortgages, small business loans, and student debt." That's because a higher rate makes it more expensive for individuals and businesses to borrow, with rising bank lending rates shrinking the nation's money supply and pushing up rates for mortgages, credit cards, and other loans.
Just before the announcement, the advocates, economists, and workers of the Fed Up coalition will be joined by Rep. John Conyers (D-Mich.) at a rally outside the Fed, calling on the central bank to keep interest rates low to allow for more jobs and higher wages.
"The point of raising rates is to rein in an overheating economy that is threatening to push inflation outside the Fed’s comfort zone," explained Josh Bivens of the Economic Policy Institute in the Wall Street Journal on Wednesday. "But inflation has been running below the Fed’s target for years—and its recent moves have been down, not up."
Furthermore, wrote economist Joseph Stiglitz at the Guardian earlier this month: "If the Fed focuses excessively on inflation, it worsens inequality, which in turn worsens overall economic performance. Wages falter during recessions; if the Fed then raises interest rates every time there is a sign of wage growth, workers’ share will be ratcheted down—never recovering what was lost in the downturn."
Progressive activists opposed to an interest rate hike overwhelmed the Fed's public comment system on Monday in a last-minute effort to sway the central bank. Raising the rate, they said, would be catastrophic for working families, particularly in communities of color that are still struggling. The Fed Up campaign, which includes groups like the Center for Popular Democracy, Economic Policy Institute, and CREDO Action, say the central bank "privileges the voices and needs of corporate elites rather than those of America's working families."
"A higher interest rate means that fewer jobs will be created, and that the wages of workers at the bottom will remain too low to live on," wrote Rod Adams, a member of Neighborhoods Organizing for Change in Minneapolis, in an op-ed published Wednesdayat Common Dreams. "That’s because when the Fed raises rates, they are deliberately trying to slow down the economy. They’re saying that there are too many jobs and wages are too high. They’re saying that the economy is exactly where it should be, that people like me are exactly where we should be."
However, at this point, "many observers believe the Fed will not raise rates this week," analyst Richard Eskow wrote on Wednesday.
"The Fed is really the central bank of the world. If the Fed raise rates a little bit, it will have an impact all over the world, particularly in emerging markets," billionaire private equity professional David Rubenstein told CNBC's "Squawk Box" on Thursday.
"I think the Fed is sensitive to that," Rubenstein said, "and I think therefore the Fed is likely to wait for another month or two to get additional data and probably telegraph a little bit better than it has now that it's about ready to do it at a particular time."
Meanwhile, global markets are fluctuating wildly in anticipation of Yellen's announcement and subsequent news conference.
But as Eskow noted, Thursday's real surprise "is that there’s any question at all what [the Fed] will do. That suggests that our economic debate is not yet grounded in economic reality, at least as most Americans experience it."
While the Guardian is providing live updates on the Fed's decision, others are making comment under hashtags that reflect the unbalanced economic recovery:
Source: CommonDreams
Durham County judge, attorneys interested in filling seat held by Paul Luebke Read more here: http://www.newsobserver.com/news/local/community/durham-news/article118570918.html#storylink=cpy
Durham County judge, attorneys interested in filling seat held by Paul Luebke Read more here: http://www.newsobserver.com/news/local/community/durham-news/article118570918.html#storylink=cpy
Phil Lehman was officially sworn in to fill his longtime friend Paul Luebke’ seat last month, but his term as a state...
Phil Lehman was officially sworn in to fill his longtime friend Paul Luebke’ seat last month, but his term as a state representative will only last a month or so.
Lehman, a a longtime consumer advocate in the state attorney general’s office who retired three years ago, was appointed to the seat the night before the Nov. 8 election and plans to step down in January.
“I don’t think there was enough time to do all the vetting process and consulting with the political groups to find somebody younger than I was to be in this for the long haul,” said Lehman, 70.
Luebke, 70, a Democrat who represented Durham for 25 years in the state House, died in late October. He had been diagnosed with lymphoma in 2015 and received treatment, but suffered a sudden return of the cancer.
Luebke, who was running for re-election to a 14th term, remained on the ballot for the general election
According to elected officials, a subset of the Durham County Democratic Party Executive Committee that included precinct chairs and vice chairs and elected officials in House District 30, initially planned to fill the seat after the election. That changed after concerns were raised about procedure and possible future complications.
“The recommendation was made by the state Democratic Party that we didn’t want to go through the election cycle without having somebody appointed to serve in his place on the ballot,” said Sen. Floyd McKissick, a Durham Democrat who said he preferred taking that route from the beginning.
The subset of the Durham committee met Nov. 7 and voted to appoint Lehman to the seat as a place holder to fill the existing term and the start of the new term.
At least four candidates want the seat when Lehman steps down.
▪ Danielle Adams, 32, is an eight-year member of the Durham County Soil & Water Conservation District Board of Supervisors who was recently re-elected. She is the southern coordinator for Local Progress, an arm of the national nonprofit Center for Popular Democracy. It encourages progressive policy making at the local level.
Adams wants to bring a strong, pragmatic, progressive voice that represents young people, women and people of color.
“I don’t think my voice has been reflected, and I think part of my desire comes in wanting to see that change and being that change not only for myself but for the many others like me,” she said.
▪ Shelia Huggins, 49, is a private attorney who worked for the city for eight years, most recently as a senior administration manager with the Department of Economic and Workforce Development. Huggins said she has focused on supporting entrepreneurship by serving on the N.C. Central University School of Business Board of Visitors and Alamance Community College Small Business Center Board of Advisers.
Huggins wants to improve the economic vitality of the state.
“I would really like to see us build a business climate that is supportive of people who are trying to build businesses and people who already have business in the state of North Carolina,” she said.
▪ Marcia Morey, 61, Durham County’s chief district judge, has served on the bench for nearly 18 years. She was a driving force behind the county’s misdemeanor diversion program, which was the first in the state after it was established in 2014 to give 16- and 17-year-olds charged with certain misdemeanors a second chance. The program was later expanded to18- to 21-year-olds and has been a model for other counties across the state
Morey said she is up for a new challenge to help make better policies and laws.
“I think after 18 years in the courts, you see many issues that would come before the General Assembly,” Morey said. “It has given me a lot of awareness and experience to kind of know how to look at laws, and how they are interpreted, and the impact they have on people’s lives.”
▪ Sherri Zann Rosenthal, 59, is a senior assistant city of Durham attorney. She worked as a contract attorney for the city for six years before becoming an assistant city attorney in 1995. Rosenthal served as president of the Durham-Orange Women Attorneys and created a committee on child sexual trafficking in Durham. The committee’s advocacy lead to the creation of the Durham County Task Force Against Child Sexual Exploitation, which is providing prevention training in schools and promoting the gathering of information of cases that come through the Durham County Department of Social Services.
Rosenthal said public policy has always been her core interest.
“I think that at the state level we have really gotten away from fact-based public policy, and we have gotten very polarized. It is very important that we join together so that we solve real problem,” she said.
By Virginia Bridges
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Video: Grandes bancos podrían beneficiarse con el muro de la frontera
Video: Grandes bancos podrían beneficiarse con el muro de la frontera
Mira el video aquí.
Activists ‘Fed Up’ With Rate Rise Talk Offer Plosser a City Tour
Bloomberg News - November 15, 2014, by Jeff Kearns & Christopher Condon -Labor and community organizers meeting...
Bloomberg News - November 15, 2014, by Jeff Kearns & Christopher Condon -Labor and community organizers meeting with Federal Reserve Chair Janet Yellen challenged officials who are ready to raise interest rates to first come visit the poorest neighborhoods with them before saying that the economy has recovered.
Kati Sipp, one of about two dozen activists meeting Yellen, said at a press conference yesterday in front of the central bank in Washington that she would show Philadelphia Fed President Charles Plosser “what life is like in this economy” for his city’s unemployed.
“Clearly Charles Plosser hasn’t been coming out the way that I work,” said Sipp, director of Pennsylvania Working Families. “I work on 60th Street in West Philadelphia in a storefront office, and every single day someone or a couple of people come in to my office because they are looking for work.”
A spokeswoman for the Philadelphia Fed declined to comment.
Members of the group met with Yellen and Fed governors Stanley Fischer, Jerome Powell and Lael Brainard. The coalition of 20 community groups, labor unions and religious leaders from around the U.S. wants the Fed to hear the concerns of ordinary Americans as it prepares to raise rates. It’s part of wider public pressure, including from lawmakers of both parties, who want more accountability and transparency from the central bank.
The Fed has been criticized by Democratic and Republican groups over its rescue of big Wall Street banks in the 2008-2009 financial crisis, and over subsequent steps to support the economy through zero interest rates and massive bond purchases.
Yellen Meeting
The group meeting with Yellen and her colleagues yesterday included individuals struggling to find work despite the improving economic picture in the U.S., Ady Barkan, senior staff attorney at the Brooklyn-based Center for Popular Democracy, one of the organizers of the meeting, said in an interview.
“They all listened very intently and asked questions,” Barkan said of Yellen and the three governors. “They were very interested in hearing about the personal stories of the folks we brought.”
Those included Reginald Rounds, a resident of Ferguson, Missouri, near St. Louis, where protests erupted after an unarmed black teenager was shot and killed by police in August. The predominantly black town became a symbol of racial inequality and militarized policing as armored trucks and tear-gas canisters rolled through the suburban community after the shooting.
‘Sky-High’
Barkan said Rounds told the Fed officials that “sky-high unemployment” in the St. Louis area had contributed to “desperation” in the town.
Another speaker was Shemethia Butler, an unemployed woman from Washington. She recounted for Yellen how she was laid off from a job that offered no paid sick days after becoming ill and missing time at work, Barkan said.
Barkan said he had agreed with Fed officials not to recount how Yellen and the governors responded.
Eric Kollig, a Fed spokesman, declined to comment on the meeting.
The jobless rate has fallen to 5.8 percent from a 26-year high of 10 percent in October 2009. Interest rates have been held near zero since December 2008, and most Fed officials project that they will raise borrowing costs sometime in 2015.
Still, millions of Americans can find only part-time work, and average hourly wages have risen at about a 2 percent pace for the last five years, barely outpacing inflation.
Big Banks
“The economy is not working for the vast majority of people,” Barkan told reporters before the meeting in front of the central bank headquarters facing the National Mall. “It’s too important of an institution to be controlled and dominated by big banks and corporations rather than the public.”
In addition to low rates to help the unemployed, the groups are pushing for a more open and transparent search process for regional bank presidents that includes more community input. Barkan said the group asked Yellen for support in arranging meetings with each regional Fed president.
While formal changes to the process of selecting regional Fed leaders would require legislation, Barkan said the Fed board of governors held significant informal influence over the process.
“I’m sure they could change the process if they wanted to,” he said.
Plosser, Fisher
Plosser and Richard Fisher of Dallas both plan to retire next year and the “Fed Up” coalition wants more public input in naming their successors. Both banks have said they have hired executive search firms to find candidates.
Regional bank chiefs are picked by their respective boards, which are typically composed mostly of banking and business executives. Philadelphia’s nine-member board includes Comcast Corp. Chief Financial Officer Michael Angelakis.
Both presidents have cast dissenting votes this year against the Fed’s policy, and have been among officials favoring raising rates sooner to prevent inflation and financial-instability pressures from building.
“It’s important that real people are also representing the public and Federal Reserve policy making,” Sipp said. “We want publication of the names that are under consideration so that we know who they are, that it’s not just a puff of white smoke and suddenly we have a new” president.
Search Firms
The Philadelphia Fed has hired executive search firm Korn/Ferry International and said yesterday that the Los Angeles-based company has set up an e-mail address -- PhiladelphiaFedPresident@KornFerry.com -- to receive inquiries.
The Dallas Fed announced two days ago that it hired Heidrick & Struggles International Inc. to seek a replacement for Fisher.
Economist Josh Bivens, research and policy director at the Economic Policy Institute in Washington, told reporters yesterday that the Fed’s willingness to arrange the meeting was “incredibly encouraging” because the central bank “is one of the most important institutions in the world but few Americans know it.”
While the unemployment rate has declined to a six-year low, there remains “too large a gap between today and a healthy economy,” he said, adding that stakes are highest for disadvantaged groups, including African-Americans. Their unemployment rate tends to be twice as high as the broader U.S. level both “in good times and in bad,” Bivens said.
The rate was 10.9 percent in October, and rose to a 26-year high of 16.9 percent in March 2010, Labor Department data show. The rate for whites was 4.8 percent last month.
Wider Inequality
Yellen, a labor market economist for most of her three-decade career in government and academia, has shown concern for people who aren’t fully benefiting from a stronger economy. Last month, in a speech in Boston, she questioned whether widening inequality is “compatible with values rooted in our nation’s history.”
Since becoming chair in February, Yellen has focused attention on those who have been left behind after five years of economic expansion. In March, she told a community development conference in Chicago the Fed hadn’t done enough to combat unemployment and cited local residents who have struggled with joblessness.
In August, the Center for Popular Democracy brought low-wage workers to the Fed’s annual monetary policy symposium in Jackson Hole, Wyoming, where they spoke briefly with Yellen on the sidelines of the event and met with Kansas City Fed President Esther George, who also wants to raise rates sooner.
The activists arrived at the Fed wearing the same shirts that they wore when they gathered in the lobby of the Jackson Lake Lodge during the symposium: bright green T-shirts emblazoned with the question “What Recovery?”
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Not one of the regional Fed banks has ever been run by a black or Latino
Not one of the regional Fed banks has ever been run by a black or Latino
Atlanta, located in the heart of the South, was a center of the civil rights movement, became a corporate hub of the...
Atlanta, located in the heart of the South, was a center of the civil rights movement, became a corporate hub of the New South economy, and boasts a large black professional class.
Can it help break the Federal Reserve's color barrier?
Dennis Lockhart's retirement early next year as head of the Federal Reserve Bank of Atlanta has spotlighted the selection of his replacement as members of Congress and a coalition of activist groups call for an aggressive search among blacks and Latinos with finance or economics expertise.
African-Americans have served on the Federal Reserve's Washington-based Board of Governors three times in the Fed's 103-year history, and the central bank now has a female chair, Janet Yellen.
But none of the regional banks have ever been run by a black or Latino, a lack of diversity some argue is worrisome on its face and could make the system as a whole less attentive to how policy impacts less advantaged communities.
"Grave racial disparities exist across our nation in unemployment, wages and income. ... It is critical that incoming leadership ... be committed to doing more," four African-American members of the House of Representatives wrote in a letter this week to Yellen and Thomas Fanning, chair of the Atlanta Fed's private board of directors.
"Lockhart's recent retirement announcement presents an opportunity to enhance and expand the Federal Reserve's leadership," they said in the letter.
In a public webcast on Thursday, Fanning said he wants to hold "one of the most transparent processes ever," and that the search committee has already received nominations from the public at large.
As in other districts, the search will be national in scope. There is no requirement that the head of the Atlanta Fed come from the bank's southeastern region, and the 12 regional Fed banks often bring in a president from outside their own geographic area.
Executive search firm SpencerStuart has been hired to run the search. Consultant John Harpole said the firm has helped place 1,600 women, minorities and other "underrepresented groups" in corporate positions, and would cast a wide net among local institutions, national organizations and its "strong network" of sitting executives to find candidates.
The issue is sensitive for the Fed, whose policies affect every citizen but which is designed to be immune from the day-to-day politics that influence other U.S. government agencies.
Group says Fed is unaccountable
Because monetary policy focuses on influencing interest rates that apply nationwide, Fed officials say it is too blunt a tool to address issues like the persistent gap between unemployment rates for blacks and white.
Activists counter that those sorts of problems might improve if unemployment was driven as low as possible — even at the risk of higher inflation. The Fed sets policy with two goals in mind, low employment and stable inflation of around 2 percent annually.
The U.S. unemployment rate in August, the latest month for which data is available, was 4.9 percent.
A labor-affiliated coalition of civic groups, known as Fed Up, has taken the argument even further, arguing that the Fed's very structure makes it unaccountable.
The regional banks in particular have supervisory power over local financial institutions as well as a voice in national policymaking, but are set up as private entities owned by the banks they oversee. The regional bank presidents are chosen by a local board of directors, though the choice must be approved by the Fed governors in Washington.
In a meeting with civic activists in August, New York Fed President William Dudley agreed the institution had done a "pretty lousy" job of promoting diversity. But Fed officials in general argue that the current structure has worked well, and that changes would need to offer clear advantages without risking the central bank's independence.
In that environment, the Atlanta Fed appointment will be watched closely. Though many regional bank heads come from within the broader Fed system, tapped from its ready pool of economists with doctoral degrees, Lockhart had a varied career in private equity and banking before taking over the Atlanta Fed 10 years ago.
And while the search will be national, Atlanta has a deep pool of black professionals - 10 percent of African-Americans in the city have a graduate or professional degree, three percentage points higher than the national average.
"That would be a great thing," Fanning said. "We want the best person as well."
By Howard Schneider
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Confronting white supremacy: Radicalized white men are on a reign of terror
Confronting white supremacy: Radicalized white men are on a reign of terror
Radicalized white men are on a reign of terror, and I’m not just talking about the tiki-torch terrorists in...
Radicalized white men are on a reign of terror, and I’m not just talking about the tiki-torch terrorists in Charlottesville. I’m talking about the white men who are threatening our health care, our schools, our communities, our institutions, and our families through their callous and self-serving policies. Hoods have been replaced by pinstripe suits.
Read the full article here.
Does the Federal Reserve need reforming?
First, the Federal Reserve is a pretty complex place. There’s the Fed in Washington we talk about every time interest...
First, the Federal Reserve is a pretty complex place. There’s the Fed in Washington we talk about every time interest rates are changed (or not changed). Then there are 12 regional Federal Reserve Banks, each with a board of directors of nine people.
That’s where the Democratic Party, and activist groups on the left, are aiming their fire.
Currently, three of those nine directors are representatives of private banks (private banks are members of the regional Federal Reserve Banks). Another three are community representatives, but also elected by private banks. The remaining three are appointed by the Board of Governors.
Critics on the left, in addition to calling for more diversity within the Federal Reserve system, also want private banks gone from regional fed banks. “These private banks get a say on who’s on those board of directors and they get representatives on those boards of directors,” said Ady Barkan, campaign director of Fed Up, a left-leaning group that’s pushed for changes at the fed. “It’s an egregious example of regulatory capture.”
Barkan says that regional bank presidents tend to be more conservative, more hawkish on interest rates, than their counterparts in Washington D.C. He blames both a lack of diversity and the influence of private banks. “You can’t imagine for example that cable networks would get some special role in choosing people on the FCC,” said Andrew Levin, professor of economics at Dartmouth College.
But the fed has already undergone some major reforms to limit influence. Under Dodd Frank, the private-bank representatives who serve on regional boards don’t get to nominate regional presidents anymore. “The bankers themselves are not involved in the choice of that person,” explained Stephen Ceccetti, professor of economics at Brandeis International Business school. “That is the person who participates in monetary policy discussions and decisions.”
Ceccetti also argues that the conservative, hawkish leanings of some regional Fed presidents are actually at odds with bank profits. “Higher interest rates don’t help banks,” he said.
Lastly, he said, regional Fed banks aren’t responsible for actually regulating banks, “they don’t even get to see the stuff.”
Chair Janet Yellen herself has said that if the fed were redesigned from scratch, it would probably look pretty different than it did a hundred years ago, but, in her view, it works pretty well. Ceccetti agreed, saying “I don’t see that anyone’s been able to show that there’s any harm or pressure applied by the banks through their directors to the policy of the Federal Reserve.”
Changing the structure of the fed would require an act of congress.
By SABRI BEN-ACHOUR
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