CPD IN THE NEWS

 A coalition of community and labor groups known as “Fed Up” said 39 members planning to stay at the hotel hosting the Federal Reserve’s prestigious annual retreat in Jackson Hole, Wyoming, were unfairly singled out when their 13 room reservations were canceled.

The group, which is pressing the U.S. central bank to appoint more minorities and women to its leadership, said most of its attendees would have been black and Latino. It has filed a complaint with the U.S. Department of Justice and other government officials. The group believes it lost the rooms because of “specific targeting of the Fed Up coalition.”

Fed Chair Janet Yellen is the first woman to lead the U.S. central bank and it remains under pressure to become more diverse. Democratic presidential nominee Hillary Clinton joined calls for reform in May and the central bank has taken fire from Republicans, who warn its low interest rate policies risk inflating another asset bubble.

The Fed Up coalition, which wants rates to stay low to boost hiring and lift wages, has discussed its concerns with Fed officials, including Esther George, president of the Kansas City Fed, which hosts the annual Jackson Hole monetary-policy conference in late August.

Faced with criticism that it doesn’t look out for the interests of poorer Americans, the Fed has been making efforts to change. The Kansas City Fed said on Thursday that it will hold a conference on the challenges low- to moderate-income communities face on Sept. 7-8 at its headquarters.

Booking Error

Alex Klein, vice president and general manager of Grand Teton Lodge Company and Flagg Ranch, said the reservations were canceled because “an error in the booking system” resulted in the Jackson Lake Lodge being oversold by 18 rooms. “We worked proactively and diligently with guests to relocate them to our nearby Flagg Ranch property,” he said in a statement.

The Kansas City Fed has a contract to provide rooms for guests at the symposium and “has no input regarding any decisions that the Lodge makes outside of its contract with us,” said bank spokesman Bill Medley.

The symposium, which gathers policy makers and economic-thought leaders for a three-day retreat in the heart of the Grand Teton mountains, is probably the most important event of its kind on the central-banking calendar. Yellen will attend and plans to address the conference on Aug. 26. This year’s meeting, which is invitation only, is focused on the topic “Designing Resilient Monetary Policy Frameworks for the Future.”

The hotel, while remote, is open to the public and Fed Up representatives have made the trip for the past two years. In 2015, Fed Up held an alternative conference at the Lodge which was addressed by Nobel-prize winning economist Joseph Stiglitz.

By Steve Matthews & Jeanna Smialek

Source

More than workers at Albuquerque’s T-Mobile call center began working under new workplace rules this week.  The company has been under increasing pressure to modify work rules to give workers greater flexibility to balance family and work requirements.

The company operates a nationwide call center near Jefferson and Menaul in Albuquerque and recently announced plans to add more employees top the more than 1,500 local workers already employed at the site.

News of the new workplace rules came from the Communications Workers of America which has been leading efforts with local organizations for these changes:

For Immediate Release July 2, 2015

Public Pressure Pushes T-Mobile US to Provide Fairer Paid Parental Leave Policy

WASHINGTON, D.C. – Responding to growing public pressure and local government initiatives, T-Mobile US announced this week that it would be adopt a paid parental leave program. The company also said it would end an oppressive policy that required call center workers to be on the phone 96.5% of their work time, leaving them with virtually no time for follow up on customer issues or to make changes in customers’ accounts as needed.

This is great news for workers who often must struggle to balance family and career. It comes as workers at T-Mobile US and a coalition of community supporters in cities like Albuquerque, N.M., step up efforts to restore a fair workweek and achieve other improvements for workers.

Members of TU, the union of T-Mobile workers, the Communications Workers of America and many organizations, including the Center for Popular Democracy, OLÉ and other coalition partners, have been raising concerns about unfair scheduling and other issues for workers at T-Mobile US and other employers.  Workers want a voice in the decisions that affect them in their workplace — not just the ones that the company selectively picks and chooses. That’s why T-Mobile US workers are joining TU.

T-Mobile US’s initial scheduling changes were made just as the Albuquerque City Council was moving forward to consider a proposal to implement paid sick leave and scheduling improvements. The Albuquerque coalition hosted a town hall meeting on irregular scheduling, where Albuquerque City Council members pledged to support their fight for a fair workweek including the right to take sick leave without retaliation.

A recent National Labor Relations Board (NLRB) decision found T-Mobile guilty of engaging in illegal employment policies that prevented workers from even talking to each other about problems on the job. The judge ordered the company to rescind those policies and inform all 46,000 employees about the verdict.

Parental leave is a good first step toward helping workers balance their career and family responsibilities. But workers want real bargaining rights and the right to fairly choose union representation. That’s what T-Mobile must realize.

Source: The New Mexico Political Report

Some of the hedge funds that are speculating on Puerto Rico debt also forced Toys R Us to shut down, according to a report released by Hedge Clippers, which advocates for income equality by targeting hedge and private equity funds, in partnership with the Center for Popular Democracy, a nonprofit that advocates for workers rights.

Read the full article here.

The Federal Reserve is a hot topic in the news these days. Usually, the stories revolve around the merits of its decisions: Was quantitative easing a good idea? Should it raise interest rates again in April? But Andrew Levin, a Dartmouth economist and former aide to Federal Reserve Chair Janet Yellen, thinks our questions need to go much deeper.

On Monday, Levin and the activist campaign Fed Up proposed four major reforms that would radically alter the structure of the Federal Reserve. The reason they cite is compellingly simple: How the Fed works is basically out of whack with what it does today.

The Federal Reserve began around a century ago as a decentralized and private institution aimed at avoiding financial panics and making sure the interactions between the nation's for-profit banks remained stable. Since then, it's basically become a kind of government agency, with a fundamental role in shaping the American economy and the supply of wages and jobs for everyday workers. But the design and governance of the Fed has not kept up with that shift in responsibilities.

To understand why, let's start at the very beginning. Western economies began creating central banks several centuries ago as modern capitalism was first coming into focus, to serve as a "lender of last resort." Private banks could go and borrow from the central bank when times were tight — even if was just for a few days — and that would quell potential financial panics and bank runs. As a result, central banks were generally created by government charters, but as private corporations whose shares were owned by the banks that borrowed from them. "When the Bank of England and some other major central banks were founded, they were viewed as mostly providing services to commercial banks," as Levin explained to The Week.

America's Federal Reserve was created in 1913 under very similar circumstances. A potential financial crisis in 1907 was averted only when J.P. Morgan stepped in to backstop the country's private banks with his own personal fortune. No one wanted a repeat of that, so the Fed was created. It's actually a system of 12 regions, each overseen by a Fed branch bank — there's one in Dallas, in Richmond, in New York City, and so forth — with the private banks owning the shares of whatever Fed bank oversees their region.

More importantly, each regional Fed bank is run by a board of nine directors, six of whom are appointed by the private banking industry. The other three are appointed by the Federal Reserve system's national Board of Governors — a seven-member group appointed by the U.S. president and confirmed by the Senate. Together, the directors appoint a president to run their particular regional bank, rather like a CEO and a corporate board: They set the president's salary, review his or her performance, etc. All nine used to do that, but Dodd-Frank reformed the system in 2010 so that three of the six governors appointed by the private banks no longer play a role in selecting the president.

Over the course of the 20th Century, various developments like the end of the gold standard and the creation of federal deposit insurance diluted the importance of the regional banks as lenders of last resort. At the same time, however, the regional banks found themselves owning large amounts of financial instruments as a result of serving that role. So they created a joint national group to manage all those holdings called the Federal Open Market Committee (FOMC), and over time it grew in importance. Its decisions are determined by 12 votes: the seven members of the Board of Governors, plus five of the 12 regional presidents. (The 12 presidents rotate through the voting positions, while the other seven sit in on the FOMC but don't vote.)

Today, when we talk about the Fed setting interest rates or meeting to decide monetary policy — which in turn decides the rate of wage growth and the supply of jobs throughout the entire national economy — we're talking about the FOMC. "For all practical purposes, the Federal Reserve today is a public enterprise," Levin said. "It's serving the public. It's making nationally critical decisions."

The problem is the Federal Reserve system was originally conceived of and designed as an add-on to the private banking industry, and that design has remained even as the nature and responsibilities of the Fed have change enormously: "This whole rationale that made perfect sense in 1913 doesn't make sense anymore," Levin said. The result is an institution that, while of enormous import to the public good, is incredibly complex, opaque, and governed with comparatively little input from everyday Americans.

"The Fed, in order to be effective, has to have the confidence of the public," Levin said. But allowing the banks to hold such enormous sway over the decision-making of the institution tasked with both setting national interest rates and regulating the financial system undermines that confidence. Economist Dean Baker analogized it to "reserving seats on the Federal Communications Commission’s board for the cable television industry." Levin himself likened it to allowing criminal attorneys or defense lawyers to select the director of the FBI and set his or her salary and performance review.

So Levin has put forward four major reforms. They're broad, and the details for how they could play out are negotiable, but they're aimed at starting a conversation around the topic.

One is to eliminate private ownership of shares in the Federal Reserve system and make it fully public, but more importantly to completely reform how the nine directors of each regional bank are appointed. This could involve reducing the number of directors, but mostly it would involve selecting them all via the same process, one that brings in all aspects of the community — small businesses, community groups, unions, non-profits, etc. In particular, directors should not come from institutions — i.e. private banks and financial entities — that the Fed system is tasked with overseeing.

The next step would be to make the process by which the nine directors for each region select their president public and transparent. As Ady Barkan, the campaign director for Fed Up, pointed out in a press call, when all 12 regional president slots were up for replacement in February, all 12 were quietly and opaquely re-appointed — even after the Fed Up campaign pressed Fed officials to lay out a system by which the public could participate. The ones for Dallas, Minneapolis, and Philadelphia were all previously associated with Goldman Sachs. St. Louis Federal Reserve President James Bullard once told Barkan that, "To call the reappointment process pro forma would be an understatement."

Third would be to set term limits for Fed officials. Make them long enough to insulate those officials from political pressure. But don't allow them to serve multiple terms one after the other as they can now.

And finally, apply the same transparency standards to the Fed that are applied to other government agencies: Allow the Government Accountability Office to publish an annual review of all the Fed's operations and policies, and make sure both the Fed's Inspector General and the Freedom of Information Act apply to the 12 regional banks as well as the national Board of Governors.

"What I've proposed is something that seems incremental, workable, and helpful," Levin concluded. And despite arguments over whether the Fed is making the right choices in the here and now about things like interest rates, Levin's goal is much bigger: to make the Fed a healthy functioning member of our democracy long after the current economic situation — and whatever particular monetary policy stance it calls for — has passed.

"These reforms are to improve governance, accountability and transparency," Levin said. "We live in a democracy — and the government is supposed to serve the public."

By Jeff Spross

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