CPD IN THE NEWS

The Federal Reserve may be headed for a shakeup regardless of who wins the 2016 election, though Hillary Clinton is seen as less likely to demand radical change than Donald Trump.

Clinton, a Democrat, has called for greater diversity at the U.S. central bank, while defending the practice of recent U.S. presidents from both parties of not commenting on monetary policy. Trump has been vague on how the Fed should change, but has spurned the tradition of respecting its monetary policy independence. The Republican nominee has slammed it for keeping interest rates low, which he claims is designed to help cement President Barack Obama’s legacy.

Trump has already suggested that if he won the White House, he’d probably nominate someone else to lead the Fed once Chair Janet Yellen’s term expires in 2018. That creates “uncertainty as to who would be the nomination,” said Michelle Meyer, head of U.S. economics at Bank of America Corp. in New York. Clinton, on the other hand, would be less inclined to overhaul the 103-year-old institution. “I think she’d keep the Fed status quo.”

Lawmakers from both sides of the aisle have proposed legislation in recent years to limit the central bank’s authority, including a monetary policy audit for which Trump has voiced approval. Tweaking the Fed legislatively would require either bipartisan support in Congress or one party sweeping the election on Nov. 8 so that it commands both the House and Senate and can bulldoze through its reforms.

Obvious Change

That means the most obvious change facing the policy-setting Federal Open Market Committee will come through the traditional power of presidential appointment. Both Yellen and Fed Vice Chairman Stanley Fischer will see their terms expire in 2018, and there are two existing vacancies on the seven-member Fed Board in Washington.

 “I would think for Trump, you’re looking much more outside the box, at successful corporate raiders, successful hedge fund managers, people he may have had business relationships with,” said Aaron Klein, an economic studies fellow at the Brookings Institution in Washington and a Clinton supporter. While he declined to speculate on who Clinton would choose for Fed chair, he said that should she win “you’ll tend to see more continuity at the Federal Reserve.”

Any appointment will be subject to Senate confirmation, creating a potential check. Meyer and her colleagues at Bank of America wrote in a Sept. 29 note that “the biggest risk for change comes under a Republican sweep,” which would potentially pave a way for Trump appointments in the Senate.

There’s some speculation that changes to Fed leadership could come even earlier than 2018. Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, said Yellen could resign if Trump were elected. Morgan Stanley strategists included a Yellen resignation as a possible post-election outcome in their election briefing earlier this year, though they rated it low-probability.

An abrupt departure would set a "bad precedent" and is unlikely, said Joseph Gagnon, a senior fellow at the Peterson Institute in Washington and a former senior Fed economist.

“I don’t think she’d want to encourage that,” he said.

Annual Audit

Though legislative changes to the Fed will be harder to achieve, the 2016 Republican platform includes a plan to implement an annual audit of Fed activities and create a commission to “investigate ways to set a fixed value for the dollar.”

While Trump hasn’t explicitly endorsed the return to a system that backs the U.S. dollar with gold, his economic adviser Judy Shelton wrote in a Financial Times column on Sept. 28 that his running mate, Mike Pence, has urged a rethink of the international currency system and Trump has nodded toward the possibility.

“As Mr. Trump often urges: It is time to start thinking big once again,” Shelton wrote.

Economists agree that the gold standard is a failed and impractical system, and it would “take a Herculean effort of international coordination” to re-institute a metal-base for the currency, said Peter Conti-Brown, an assistant professor at the Wharton School of the University of Pennsylvania. It’s pretty improbable that Trump would try to reinstate it, he said.

‘More Representative’

If Clinton is elected, a different set of changes could be in store for the central bank.

The Democratic platform promises to protect Fed independence to carry out its dual mandate -- for low inflation and full employment -- against threats from new legislation. But it also said it would ensure bank executives don’t serve on regional Fed boards, and to “reform the Federal Reserve to make it more representative of America as a whole.”

The U.S. central bank consists of a Board of Governors in Washington and 12 regional branches.

“If Hillary Clinton is elected, there’s going to be widespread interest among members of the House and Senate in pursuing, at minimum, the aspects of Fed reform that are included in the Democratic Platform,” said Jordan Haedtler, one of the leaders of Fed Up, a progressive, grass-roots campaign aimed at reforming the central bank.

‘Long Overdue’

Clinton has called for greater diversity at the Fed, and a spokesman for her campaign said in May that “commonsense reforms -- like getting bankers off the boards of regional Federal Reserve banks -- are long overdue.”

There’s already a push in Congress to deal with these issues. Yellen regularly gets asked about Fed diversity when she testifies on Capitol Hill and Representative Joyce Beatty, a Democrat from Ohio, introduced legislation on Sept. 28 that would require the regional Fed banks to interview at least one diversity candidate when appointing new presidents.

Even absent congressional action, the Fed is actively working on diversity internally and that’s likely to continue under either a Clinton or a Trump administration. In fact, Clinton and her supporters may have a reason to avoid advocating for legislative reform of the Fed and let internal changes run their course.

“When you’re talking about the Federal Reserve and reforming it in any kind of way, it’s really taking the genie out of the bottle,” Conti-Brown said. Pushing structural changes to the Fed through Congress could open up the possibility of other proposals becoming law, including making it subject to a monetary policy rule, as some Republicans have advocated.

“There are lots of risks in doing wholesale governance reform, and I think the Clinton administration would be mindful of those risks,” he said.

By Jeanna Smialek

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On a sunny morning in early May, a wayward DART bus pulled to a stop in front of Paul Laurence Dunbar Learning Center in South Dallas. From the porches of tumbledown homes, neighbors glanced with mild curiosity as the school’s principal, Dionel Waters, stepped aboard. Waiting for him on the bus was an array of local dignitaries, including a city council member, a state representative, a U.S. Congressman, a Dallas County judge, and the guest of honor, Robert Kaplan, the president of the Dallas Fed. The riders had accepted an activist group's invitation to tour hardscrabble Dallas neighborhoods that remain untouched by the region’s booming economy.

Waters stood at the front of the idling bus with a microphone and described for Kaplan some of Dunbar’s challenges. The previous school year, all but two of the campus’ 594 students qualified as low-income. The median household income for the surrounding neighborhood, which borders the sprawling parking lots on Fair Park’s eastern edge, is around $10,000 per year. Broken families are the norm, as are parents with criminal records. Unemployment in the area is staggering, with only a third of working-age men and around 40 percent of working-age women with jobs, according to census data.

Then, Waters pivoted. Together with Hank Lawson, who works for the community development nonprofit Frazier Revitalization Inc., Waters described a vision for transformational change at Dunbar. With support from the Texas Organizing Project, which organized the bus tour, Dunbar would open the 2016-17 school year as Dallas ISD’s first ever “community school.”

Community schools are built on the idea that education doesn’t happen in a vacuum. Poverty levels, family structure, health and nutrition, emotional well-being, and all manner of other outside factors impact academic performance and school quality. Creating a better school, then, requires addressing not only what happens in the classroom but outside social and economic factors as well.

Exactly what a community school looks like depends on the specific needs of the individual school and the surrounding community. Generally speaking, though, the model emphasizes getting parents, community members and teachers greater input in campus decision-making; forging partnerships with local businesses and nonprofits to provide programming and services the school can’t; and finding non-punitive ways to address student behavior.

It is billed as a more humane alternative to No Child Left Behind-style school reform, which can punish poor and heavily minority schools for poor performance without doing much to address root causes.

Community schools are meant to be transformational. A report released in February by the Center for Popular Democracy profiled eight campuses and school districts across the country that have implemented the community schools model with tremendous success.

One of the more dramatic turnarounds took place in Austin. Webb Middle School, a perennially low-performing campus in a working class Hispanic neighborhood in northeast Austin, was on the brink of closure in 2007 when neighbors rallied and convinced the district to give them a final chance to save the school. They turned to the community schools model and crafted a detailed plan based on feedback from parents and neighbors.

The school restored music and art to the curriculum, adding band, orchestra and a dance troupe. The Boys and Girls Club began offering after-school programs. Another nonprofit provided college mentoring. A mobile clinic offered free immunizations and physicals. Other organizations provided parents help with employment, housing and health issues and offered them ESL classes.

Test scores climbed. So did enrollment. By 2015, Webb had gone from the worst middle school in the district to one of its best.

Waters and Lawson hoped something similar could happen at Dunbar, which had been placed on the state’s list of failing schools in the 2014-15 school year. So did Ed Turner, the Texas Organizing Project staffer who’d already spent months laying the groundwork and joined Waters and Lawson on the bus. And so, for that matter, did DISD administrators. Cynthia Wilson, Superintendent Michael Hinojosa’s chief of staff, told the Observer the following day that the district was supporting the community schools model in general and the Dunbar pilot in particular. “From our perspective, [it’s] a win-win,” she said.

On the bus, Kaplan nodded along as Waters spoke; turning Dunbar into a community school certainly seemed like a no-brainer.

But then, rather abruptly, DISD pulled the plug. Alendra Lyons, a community leader in the Dunbar neighborhood who both works at the school and serves on its site-based decision-making committee, was told at a committee meeting in June that the community schools pilot had been moved elsewhere.

Why, after months of planning and the showy presentation to the VIPs on the DART bus, the Dunbar project had been unceremoniously scrapped, Lyons couldn’t say, only that it definitely wasn’t happening.

DISD’s official explanation is, in a word, bureaucracy.

In a July 25 email, DISD spokesman Andre Riley said the community schools initiative had been moved from under Wilson and into the school leadership department.

Stephanie Elizalde, the chief of school leadership, said in a subsequent interview that she decided that John Neely Bryan Elementary in East Oak Cliff was a better fit for the pilot. Like Dunbar, John Neely Bryan is overwhelmingly low-income and has struggled academically, bouncing on and off the state’s list of failing schools. Last August, it received its second consecutive “improvement required” designation from the Texas Education Agency; a third would mean implementation of a “campus turnaround plan” and potentially drastic changes at the campus.

Unlike Dunbar, however, Bryan is part of DISD’s “Intensive Support Network,” two dozen struggling schools targeted by district administrators for special oversight. It also has a more seasoned principal. Elizalde describes Waters as “likeable, intelligent [but] also relatively inexperienced” – barely 30 with just two years as a principal under his belt. Elizalde felt that Bryan’s principal, DISD veteran Tonya Anderson, was better equipped to make the pilot a success.

For advocates of community schools, the stakes are high. A high-profile failure in the pilot could taint the model in DISD and cripple efforts to expand to other campuses. “That is what I don’t want to have happen,” Elizalde said. "I’ve got to think bigger picture."

But several people familiar with the discussions say Dunbar was the victim less of ordinary bureaucratic machinations but of DISD’s toxic internal politics. Specifically, they point to a long-simmering feud between the Texas Organizing Project and trustee Bernadette Nutall.

The rift dates back to efforts to rescue Dade Middle School, which, thanks to poor planning, sky-high turnover, and heavy-handed interventions by then-Superintendent Mike Miles, spun into chaos soon after it opened for the 2013-14 school year. The Texas Organizing Project was heavily involved in the turnaround effort, mobilizing parents and pushing DISD to make Dade the first of 20 community schools in the district. So, for that matter, was Nutall, who was famously removed from the campus following a confrontation with Miles.

By all accounts, the turnaround effort has been a success. There is much less agreement on whether Dade’s resurgence has more to do with the Texas Organizing Project’s community work, Nutall’s close oversight, or, alternately, a belatedly successful intervention by Miles, whose administration found a hyper-competent principal in Tracie Washington and offered the district’s best teachers a hefty salary bump to teach at Dade.

Nutall has bristled at the Texas Organizing Project’s credit-taking. In response to a KERA story this spring focused on the organization’s efforts to turn Dade and other campuses into community schools, Nutall sent an indignant email to trustee Miguel Solis, who was quoted in the piece broadly endorsing the community schools concept, and several DISD administrators saying Dade’s success had been “hijacked.”

Dade staff and community members had long been trying to have a meaningful role in the school, Nutall wrote, but they were consistently rebuffed by Miles and the previous campus administration.

“However, since the new administration has been in place, the staff, parents, students and community members have been able to implement the very same suggestions that were ignored before,” she wrote. “The results have been tremendous. Yet, they weren’t recognized for their efforts. Instead, they believe that their results have been hijacked in an effort to falsely attribute their success to a concept that had little to do with the results.”

In an interview, Nutall said she supports community schools but that there “has to be buy in from all parties.” That wasn’t present at Dade, and it wasn’t present at other campuses where Texas Organizing Project wanted to implement the model. “I understand them [the Texas Organizing Project] getting upset,” she said, adding that “they wanted the whole Lincoln-Madison feeder pattern.”

“I am not going to force something on principals and teachers,” Nutall said. “That is not good governance.”

At the same time, Nutall distanced herself from the decision to move the community schools pilot from Dunbar. The decision, Nutall said, was a judgment call by Elizalde and other DISD administrators.

Allison Brim, organizing director for the Texas Organizing Project, was also careful to downplay the friction between her group and Nutall.

“Essentially what happened, there had just been turnover in the administration,” Brim said.

In early 2016, former chief of school leadership Robert Bravo, with whom the Texas Organizing Project had been in discussions, was replaced by Elizalde. “She was very supportive of the community school concept but really wanted to reconsider where we were going to do the first pilot, which we were open to in some ways as well.”

John Neely Bryan, in everyone’s view, could benefit as much from the community schools model as Dunbar. Perhaps even more, given the comparative lack of outside resources directed at Bryan by churches and nonprofits.

“We were also interested in having full support from the trustee,” Brim said. She described Nutall as “supportive” of community schools but said that John Neely Bryan’s trustee, Lew Blackburn,”was pretty eager to find a school in his district” for a pilot.

In the end, for the Texas Organizing Project as well as for Elizalde, the most important thing “was really getting the opportunity to prove that this model was an effective, successful model for school turnaround,” Brim said.

All parties – Brim, Elizalde, and Nutall – were quick to say that the idea of turning Dunbar into a community school isn’t dead. Discussions are ongoing, and DISD and the Texas Organizing Project may well get around to implementing the model in the coming years.

Dunbar, after all, is still in sore need of a turnaround. State accountability ratings the Texas Education Agency will release in the coming days will show that Dunbar is on the state’s list of failing schools for the second consecutive year, which has made Elizalde rethink the decision to move the pilot.

“If I had a crystal ball and could have seen that Dunbar was going to wind up in [improvement required]-2 status," she said, "I would have left it there anyway.”

By ERIC NICHOLSON 

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Following the direct actions of June 28 and July 10, in which 140 Americans, including many with serious health conditions, were arrested in their senator’s DC offices for civil disobedience, still more constituents plan to flood Capitol Hill Wednesday to stop the repeal of the ACA. Organizers say Vermont residents will also participate in this latest oppostion to "repeal and replace" Obamacare.

People with disabilities and life-threatening chronic illnesses, cancer survivors, Medicaid recipients, Affordable Care Act (ACA) policyholders, registered nurses, doctors, and others directly impacted by the Senate healthcare bill will be traveling from all states represented by Republican senators to descend upon Capitol Hill on Wednesday, July 19, with a strong message: “Kill the bill—don’t kill us!”

Read the full article here.

Nightly Business Report - November 11, 2014

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