CPD IN THE NEWS

Auditing the Federal Reserve, a financial reform long pushed by the libertarian right, just got a boost this week from an unexpected quarter: A respected Dartmouth economist who issued a new proposal to impose transparency and oversight on the nation’s powerful central bank.

Though largely dismissed by mainstream economists, “Audit the Fed” has become an applause line for central banking skeptics like Sen. Rand Paul, who believe the Federal Reserve wields too much power too secretly. In recent years the idea has spread from right-wing politicians to the conservative mainstream, and even critics on the left: A Senate vote on Paul’s “Audit the Fed” legislation in January garnered 53 votes. Sen. Bernie Sanders (I-Vt.) voted for that bill and has pushed for increased transparency at the Fed to the delight of campaign crowds suspicious that the central bank is rigged in favor of Wall Street.

This week, the Fed Up campaign, a 30-month-old group of labor and community organizations pushing for more openness at the Fed, released its own platform for reforming the Fed’s governance structure, including a new idea for an audit—or "annual review"—that could give the idea more mainstream credibility.

The author is Andrew Levin, an economist now at Dartmouth College who has decades of experience at the Fed and a reputation as a thoughtful observer of the institution. While most financial insiders have long dismissed “Audit the Fed” as an unserious political slogan from people unversed in economics, Levin’s proposal has provoked a more serious reckoning with Fed transparency. And increasingly, economists are coming to the same conclusion: More sunlight might do the central bank some good.

“The Fed is overly sensitive about reviewing its policies,” said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics who has worked at the Fed off-and-on for the past 30 years.

At issue is whether decisions made by the top officials of the Fed should be open to review by the Government Accountability Office (GAO). Technically speaking, the Fed is already audited – it’s subject to the same GAO scrutiny of its operations as any other federal agency. But its most influential decisions, deliberations on monetary policy that attract global attention and can move stock markets dramatically, are conducted in secret by a dozen top Fed officials. Seven of them, known as Fed governors and based in Washington, are nominated by the president and confirmed by the Senate. The remaining five spots are reserved for the presidents of the 12 regional Fed banks on a rotating basis. Collectively known as the Federal Open Market Committee (FOMC), the group generally meets eight times a year, with minutes released three weeks afterwards. Transcripts of those meetings are released on a five-year lag, effectively sealing its deliberations in the short-term.

Because banks ultimately own the regional Fed banks, and have a say in nominating many of their directors, critics say this structure leaves the door open for favoritism to Wall Street, and needs outside scrutiny to ensure it properly balances its dual mandate of stable inflation and full employment. Supporters say the Fed's relative independence is a virtue, and worry its monetary decisions would be worse in the long run if its officials constantly felt Congress breathing down their necks.

The more traditional right-wing “Audit the Fed” legislation would call for a GAO audit of the Fed within 12 months of passage, and thereafter enable any lawmaker or congressional committee to request an audit of the central bank, including the FOMC’s monetary policy decisions, whenever they wanted.

In his new plan, Levin proposes something slightly different: it would require the GAO to conduct a review of all aspects of the Fed, including monetary policy, but make the review annual and determined by GAO staff rather than Congress. “[Paul’s legislation] just seemed like a way to threaten the Fed,” said Levin.

His proposal would also call for seven-year term limits for Fed officials and reform the process that the regional Fed bank presidents are selected. Though he recoiled against terming the GAO review an “audit,” his proposal would give the GAO new powers to examine different aspects of the Fed, as it does with other agencies in the federal government. Instead of called by Congress, it would be annual and determined by agency staff. “From one year to the next, it might focus on some aspects of the Fed's operations. One year, maybe it would focus on monetary policy strategy and communications,” Levin said. “Another year, maybe it wouldn't spend much time on that.” The results would be publicly available.

Narayana Kocherlakota, the former president of the Minneapolis Federal Reserve, expressed support for the idea of regularly scheduled GAO audits of the Fed’s monetary policy. He didn't take a position on earlier audit proposals, but echoed Levin’s concern that allowing lawmakers to request a GAO audit “would be very bad and would lead us down a bad path where essentially Congress was running monetary policy.”

The Federal Reserve declined to comment on Levin’s plan. But Fed Chair Janet Yellen and other Fed officials have aggressively attacked prior proposals to increase oversight over the FOMC’s deliberations. In January, before the Senate voted on Paul’s legislation, Yellen sent a letter to Majority Leader Mitch McConnell and Minority Leader Harry Reid opposing the bill. “These reviews could only serve to create public doubt about the conduct and independence of monetary policy,” she wrote.

“All of that criticism does apply to my proposal,” Levin said after reading those lines from Yellen’s letter. But he argued that such oversight is necessary in a democracy. He added, “After all, the Congress is the Fed’s boss.”

Levin enters this debate with considerable experience. He spent two decades as an economist for the Fed and then was a special adviser to then-Chairman Ben Bernanke and then-Vice Chair Yellen from 2010 to 2012. He also advised many other central banks, including the European Central Bank, the Bank of Canada and the Bank of Japan. Those policy bona fides mean he’s being taken seriously even by people who have dismissed previous “Audit the Fed” proposals.

“Levin knows a lot about the internal workings [of the Fed] that I don’t,” said Jared Bernstein, the former top economist to Vice President Joe Biden and a frequent critic of “Audit the Fed” proposals. “He’s not coming at this from the perspective of some radical protester.”

The underlying question is whether an annual review by GAO—not one triggered by individual lawmakers or committees—will cause the Fed to be influenced by politics in its monetary policy decisions. To some extent, that already happens. The Fed, like every institution, faces criticism from an array of politicians, outside economists, and pundits. “Independence is not as black and white as many people make it seem,” said Kocherlakota.

Finding the right balance between giving the Fed room to make independent policy and holding it accountable is a constant challenge—one that extends beyond “Audit the Fed" proposals. Sanders, for instance, has proposed that FOMC transcripts be released within six months, instead of the current five years.

Few serious Fed watchers, however, have spent much time developing detailed ideas for increased Fed transparency. “I felt like there was a vacuum in the discourse,” Levin explained.

Levin’s reforms are unlikely to become law anytime soon: Lobbying efforts around such a change would be fierce, and groups like the Fed Up campaign are likely to be heavily out-spent by Wall Street banks skeptical of changes intended to reduce their influence over Fed decisions. The Federal Reserve would likely oppose the reforms as well.

By DANNY VINIK

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Ady Barkan, an ALS-stricken progressive activist whose “Be A Hero” initiative targets Republicans who voted for, or back the tax cuts, traveled to the district to campaign on Tipirneni’s behalf. While in Arizona, Barkan, who will need Medicare as his body deteriorates, asked Lesko to respond to the stated intentions of several Republican leaders, including House Speaker Ryan and White House budget director Mick Mulvaney, to seek major cuts to Social Security, Medicare and Medicaid.

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The Nation - December 10, 2014, by Steve Early - A century ago, working-class radicals frustrated with the pace of change often scoffed at their more patient comrades in city government, calling them “sewer socialists.” The latter, however, numbered in the hundreds, and, in their heyday, were quite influential in cities both large and small. After being elected to municipal positions on the Socialist Party ticket, they labored mightily to improve local services, from public sanitation to street repair. They even encroached on private markets by expanding public housing and experimenting with municipal ownership of utilities.

The national expansion of popular democracy sought by these left-wing reformers was, sadly, never achieved under their party banner. But several decades later, their many ideas for putting government to work for the people found traction during the New Deal. Programs to promote social equality and economic opportunity first tested at the state or local level became a Depression-era lifeline for millions of Americans nationwide.

In the twenty-first century, many on the left still yearn for economic and policy victories on the scale of the 1930s and the emergence at the federal level of a counter-force that might one again curb the influence of corporate America. While waiting for that second coming, progressive activists have, like the “sewer socialists” of old, been forced to grapple with serious problems—national and even global in nature—at the municipal level instead.

Some of the bravest (or most ambitious) among them have sought and won local elected office. So, in city halls across the country, they are now trying to deploy the limited resources of local government to fight poverty, inequality and environmental degradation at a moment when higher levels of government have failed to address such problems or made them worse. To maintain public support, these reform-minded mayors, city councilors, county commissioners and allied civil servants must be as concerned about street paving and policing as saving the planet from global warming.

Until recently, most of these “pothole progressives” have toiled largely in isolation. They chipped away at local injustice or city hall dysfunction in ad hoc fashion with little national infrastructure to sustain or support them. But as their ranks have swelled in recent years, several networks have developed to promote greater coordination of this difficult work through systematic sharing of information, ideas, and technical expertise.

From December 4 to 6, the only of these groups to focus exclusively on cities, Local Progress, hosted a lively and racially diverse “convening” in New York City to celebrate recent municipal election victories and progressive policy wins, while laying the groundwork for more. Local Progress is funded by several national unions and social-change foundations. Its individual and organizational affiliates profess a “shared commitment to a strong middle and working class, equal justice under law, sustainable and livable cities, and good government that serves the public interest effectively.” Its mission? “To drive public policy at the local level—an area of governance that is too often ignored by the progressive movement.”

Among the “electeds” gathered in New York City for the Local Progress third annual meeting, there was little moping about the Democratic Party’s now much weakened condition in various state capitols and Washington, DC, as a result of last month’s midterm elections. Instead, they and their larger supporting cast of labor and community organizers, public policy advocates and social-change funders all resolved to expand their influence at the local level, where reform is still possible. To hasten this goal, the organizers distributed a sixty-page compilation of “case studies and best practices” from around the country, co-produced with the Center for Popular Democracy. This dense, well-documented guide provides an ambitious blueprint for improving local labor standards, housing and education, policing practices, environmental sustainability, treatment of immigrants, voting rights and financing of elections.

Local Progress has recruited 400 members in forty states; about a third turned up for its latest annual meeting, with impressive representation from the city councils of San Diego, San Francisco, Seattle, Tacoma, Denver, New Orleans, New York, Baltimore and Philadelphia. Mayoral participants included everyone from the high-profile chief executive of the host city, Bill de Blasio, to his far less well-known, but equally feisty, West Coast counterpart, Meghan Sahli-Wells. She hails from Culver City, California, a Los Angeles County enclave with a population smaller than some New York City neighborhoods.

But that difference in scale hasn’t stopped Sahli-Wells from making waves of her own, as an enviro-oriented “bike mayor” who helped secure a ban on single-use plastic bags and has been working tirelessly to ban fracking as well. Now her talk about property tax reform has local realtors organizing against her and wishing she had never been chosen by her council peers to be the city’s part-time mayor. “My Chamber of Commerce hates me,” she reported, but expressed confidence that “harnessing the power of community” would enable her to overcome business opposition to some of her future plans.

De Blasio welcomed such diverse colleagues amid the ornate surroundings of the New York City Council chamber. He was joined by Council Speaker Melissa Mark-Viverito and Brooklyn councilmember Brad Lander, who both described the salutary effect of having a Progressive Caucus of nineteen in the city’s fifty-one-member leadership body.

The Big Apple’s affable, lanky mayor quickly gave what an alarmed New York Post called, the next day, “a fawning shout-out to Seattle.” And indeed, de Blasio did hail Seattle city councilmember Nick Licata, chair of Local Progress, and others from “the Left Coast,” for their leading role in the nationwide minimum-wage campaign that has now bettered the pay of seven million workers. “We all reference each other,” de Blasio noted. “We all build on each other’s work…. Every time we succeed, it builds momentum for other cities.”

The job of Local Progress members, the mayor argued, is to be organizers, not just elected officials. As a result of the group’s collective efforts, “change is coming from the grassroots and working its way up—real, sustained and lasting change.”

In the smaller strategy sessions that followed, participants shared information and ideas on a wide range of topics. These included “participatory budgeting”—an experiment now underway in New York City to solicit neighborhood input on spending priorities—and multi-state efforts to expand public financing of candidates for local and county office. According to Emmanuel Caicedo, state affairs manager for Demos who spoke at the conference, this election reform was a key factor in making progressives more competitive electorally in New York City and enabling them, once in office, to expand the reach of paid sick day legislation. “Without this matching funds system, councilmembers would not be able to do the right thing for their constituents, “ he said.

Local Progress workshop turnout and the intensity of discussion were both driven, in part, by the momentum of events unfolding outside the gathering. The latest round of national fast-food worker protests and street demonstrations in Manhattan over the grand jury decision in the Eric Garner case provided an urgent backdrop for brainstorming about workers’ rights and major reform of US police departments.

On the labor front, city officials were reminded by several speakers from the Service Employees International Union (SEIU) and the AFL-CIO that minimum wage hikes, statutory entitlement to paid sick days, and better enforcement of local labor standards still doesn’t give enough Americans the workplace voice that collective bargaining provides. More needs to be done, they argued, to help workers for government contractors or in public facilities, like airports, to win bargaining rights without management interference. “Having a union is necessary to sustain gains,” Héctor Figueroa, president of SEIU Local 32BJ, pointed out.

Few labor allies in Local Progress question the value of unionization—but some did express concern about unions being unhelpful in their own past municipal campaigns. For example, Anders Ibsen, an earnest 28-year-old city councilor from Washington State, sought advice from AFL-CIO Executive Vice President Tefere Gebre about dealing with conservative “business unionists” who’ve tried to thwart progressive initiatives in Tacoma. In the same panel discussion, San Diego councilmember David Alvarez—a recent labor-backed candidate for mayor—recalled the initial opposition he faced from a major AFL-CIO affiliate. According to Alvarez, it took much patient relationship-building to win over this union, despite his strong commitment to local labor causes like taxi-driver organizing.

Before their gathering ended, most of the city officials present endorsed a Local Progress statement criticizing the “excessive use of force” by police officers in Ferguson, Cleveland, and New York City. They urged federal officials to ensure “that cities around the country end discriminatory policing practices and replace them with programs that respect and empower residents…”

Just how to do that, at the local level, was the subject of much debate at a session on “Winning Real Police and Criminal Justice Reform.” Panelists discussed remedies like requiring police body cameras, retraining officers, recruiting more from minority communities, and offering them financial incentives for local residency. Lisa Daugaard, policy director for the Public Defender Association in Seattle, cautioned against quick fixes, including indiscriminate body camera use and training programs unaccompanied by real institutional change. “It’s easy to hold a three-day training session. It’s very difficult to have training change behavior, habits, instincts,” she said.

Daugaard reported on Seattle’s Community Police Commission (CPC), an oversight body, which she co-chairs and includes two active members of the police force. According to Daugaard, the CPC has spurred a “deeply transformative” shift in the treatment of jobless, homeless, addicted, and/or mentally ill residents previously targeted for police round-ups and jailing, with a disproportionate racial impact. By expanding relevant social services and, in effect, decriminalizing vagrancy and low-level drug dealing, Seattle has been able to “re-humanize” at least some “daily interactions between police and the community.”

And just as cities like Seattle can’t arrest their way out of petty crime spawned by poverty and unemployment, Daugaard warned against a singular focus on prosecutions of police misconduct, after the fact. Many such cases are likely to fail, she noted, and, even if successful, don’t transform the departmental culture or quality of police-community relationships. Jumaane Williams, a New York City councilmember from Brooklyn, agreed with Daugaard that community policing done right “works better than the lock-‘em-up strategy” that still prevails in most cities, even some with Local Progress ties. “The problem, “said Williams, “is when we send policemen to do the job that everyone needs to do. Public safety is an everybody kind of thing.”

Turning the overall Local Progress agenda into actual public policy in more places is also “an everybody kind of thing.” As Seattle’s Nick Licata observed, urban progressives “need both an outside and inside game” to win because neither street politics nor electoral victories alone can change the status quo sufficiently. Instead, he said, “you need people on the inside and people protesting on the outside to provide insiders with backbone.”

By bringing both catalysts for change together, in one organizational network, Local Progress is not blazing an entirely new path or one as explicitly anti-capitalist as left movement builders a century ago. But, in a modern political landscape otherwise bereft of many bright spots at the moment, contesting for power locally, in ecumenical fashion, still makes sense for any group of progressives with higher aspirations and longer-term societal goals.

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New York Daily News - February 25, 2013 - Nisha Agarwal - President Obama and Congress have not addressed the federal Secure Communities program, which has created a deportation pipeline that tears apart thousands of immigrant families.

In recent weeks, the federal fight for immigration reform kicked off in earnest, with Congress and the White House issuing their legislative principles, and the White House “leaking” specific proposals for a bill. Reform offers the bright possibility of legalization for 11 million, including more than 700,000 New Yorkers who live and work in, contribute to and sustain our richly diverse city and state. But the dark side of reform — its painful compromise — may be an increase in federal immigration enforcement efforts.

The Senate and the President’s proposals demand further fortification of the borders and better tracking of visa-holding immigrants. They also do not address the federal Secure Communities program, which has failed utterly in its objective to identify violent and dangerous criminals and, instead, creates a detention and deportation pipeline that has torn apart thousands of immigrant families.

New York City is poised to alter the terms of the national debate, however, by pushing back against Secure Communities and highlighting the destructive impact of the program for New York’s immigrant communities and the city itself. Recently, City Council Speaker Christine Quinn and Councilwoman Melissa Mark-Viverito introduced two bills that will limit the extent to which the Department of Corrections and the NYPD collaborate with federal Immigration Customs and Enforcement officials through the Secure Communities program.

These bills, which are due to pass this week, build upon a law enacted in 2011 that would prevent the Department of Corrections from turning over to federal immigration authorities certain individuals being held at Riker’s Island who posed no public safety threat. Before this law went into effect, thousands of immigrant New Yorkers were held at Riker’s Island every year in order to be turned over to ICE for eventual deportation. A large segment of those held posed no threat to public safety, including those who were long-term, legal permanent residents, juveniles, people seeking asylum and protection under the Violence Against Women Act, victims of human trafficking and many individuals who may have been arrested for minor infractions such as selling merchandise on the street or hopping a turnstile. What is more, the city was under no legal obligation to hold these individuals for federal authorities, but it continued to do so, spending nearly $20 million a year in city funds to subsidize a senseless and harmful federal deportation process.The new law ended this practice, better focusing the city’s limited resources, targeting enforcement and ensuring that immigrant families were not afraid to step forward as victims and witnesses to crime or to interact with their local government.

With the enactment of Secure Communities in New York in May 2012, ICE has been able to “flag” immigrants moving through the criminal justice system far faster and earlier in the process than had previously been possible because it allows for the sharing of fingerprint data almost instantaneously between the Federal Bureau of Investigation and ICE. A bad system of indiscriminate immigration enforcement was made much worse under Secure Communities.

Now, New York City is once again faced with the challenge of having to subsidize and support a broken and deeply flawed federal immigration enforcement system. Immigrant New Yorkers are coming into our courts and through our police precincts at risk of being siphoned into deportation proceedings, even if they have committed no crime, are themselves victims of crime or domestic violence or have committed only minor status-related crimes such as driving without a license. Perversely, many immigrant defendants now arrive at arraignments already having been identified by ICE and therefore find it in their best interest to be sent to Riker’s Island rather than released on bail because they are at risk of being turned over to immigration authorities upon release.

The new bills introduced in the City Council will put a stop to these perverse outcomes, ensuring that individuals who have no criminal record, immigrants who have committed only low-level or some status-based offenses, and immigrant youth, among others, are not ensnared by the deportation dragnet when they pose no threat to the public.

This legislation was developed in partnership with Mayor Bloomberg and the NYPD, as well as in collaboration with the immigrant community and others impacted by the harmful and inappropriate conflation of the criminal justice process with civil immigration enforcement. It is New York City speaking with one voice, reaffirming our collective values: the importance of trust between government and the people it serves; the commitment to diversity, openness and inclusion; and the enduring, stubborn passion to be a city that attracts and supports a world of talent and human potential. The proposed legislation is also New York’s call to the rest of the country, as national attention focuses on the possibility of comprehensive immigration reform.

The era of exclusion and impunity is over. We must choose a path forward that protects our families, sustains our communities and promotes the hard work and opportunity that boosts our economy.

Nisha Agarwal is deputy director of the Center for Popular Democracy (www.populardemocracy.org) and a lecturer at Columbia Law School.

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