Warren blasts Yellen for endorsing very white, very male regional Fed presidents
Warren blasts Yellen for endorsing very white, very male regional Fed presidents
Around this time last year, as another white male took the reins at the Federal Reserve Bank of Philadelphia, the Fed’s...
Around this time last year, as another white male took the reins at the Federal Reserve Bank of Philadelphia, the Fed’s archaic and opaque system of choosing its regional presidents started to come under fire. At first the criticism was over the way the system appeared to favor insiders. Patrick Harker, at the time the new Philadelphia Fed President, had sat on the regional Fed board that was tasked with filling that position. Later that summer the Dallas Fed would name Robert Kaplan, who is also white, as its president despite the fact that he was a director at the executive search firm that that regional Fed board hired to find candidates. When the Minneapolis Fed named Neel Kashkari its president later in 2015, groups like the Fed Up Coalition pointed out that while he was the only non-white regional president, he, like Harker and Kaplan, had former ties to Goldman Sachs.
Since these presidents have rotating votes on U.S. interest rate policy, many saw the selections as a critical failure to reflect the country’s diversity of gender, race and background. As it stands, 11 of the 12 regional Fed presidents are white, 10 of them are male, and none are black or Latino. Fed Up, a network of community organizations and labor unions calling for changes to the central bank, also points out that there has never been a black regional president in the Fed’s 102-year history.
To be sure, the central bank was set up in 1913 in this decentralized way to check the power of the Washington-based Fed Board, whose seven governors are nominated by the U.S. President and confirmed by the Senate in public hearings and votes. The Fed presidents scattered around the country, meanwhile, are quietly chosen by their regional directors (usually corporate, industry and civic heads) and then, again with little or no public input or transparency, approved by the Fed governors after a series of private interviews with them in Washington. All 12 presidents had their terms extended earlier this year.
So the stage was set on Tuesday for Senator Elizabeth Warren, the Massachusetts Democrat who some see as a potential running mate for U.S. presidential candidate Hillary Clinton, to make a point about diversity at the Fed while making things rather uncomfortable for Fed Chair Janet Yellen, who was testifying before the Senate Banking Committee – and who, it may be noted, is the first woman to lead the central bank:
Warren: “Does the lack of diversity among the regional Fed Presidents concern you?”
Yellen: “Yes, and I believe it is important to have a diverse group of policymakers who can bring different perspectives to bear. As you know, it’s the responsibility of the regional banks’ Class B and C directors to conduct a search and to identify candidates. The (Fed) Board reviews those candidates and we insist that the search be national and that every attempt be made to identify a diverse pool of candidates…”
Warren: “The Fed Board recently re-appointed each and every one of these presidents without any public debate or any public discussion about it. So the question I have is, if you’re concerned about this diversity issue, why didn’t you take (any) of these opportunities to say, ‘Enough is enough, let’s go back and see if we can find qualified regional Fed presidents who also contribute to the overall diversity of the Fed’s leadership’?”
Yellen: “We did undertake a thorough review of the re-appointments of the performances of the presidents. The Board of Governors has oversight of the reserve banks, there are annual meetings between the Board’s bank affairs committee and the leadership of those banks to review the performance of the presidents, and there were thorough reviews of…”
Warren: “But you’re telling me diversity is important and yet you signed off on all these folks without any public discussion about it. I appreciate your commitment to diversity and I have no doubt about it. I don’t question it. It just shows me that the selection process for regional Fed presidents is broken because the current process has not allowed you and the rest of the Board to address the persistent lack of diversity among the regional Fed presidents. I think that Congress should take a hard look at reforming the regional Fed selection process so that we can all benefit from a Fed leadership that reflects a broader array of both backgrounds and interests.”
As it happens, Clinton said last month that she, too, supports an ongoing push by Warren and other liberal members of Congress to exclude bankers from the regional Fed boards and to make the central bank more diverse.
By Jonathan Spicer
Source
One Day Before GOP Debate, New Report Highlights Ties Between Prominent New Yorkers and Anti-Immigrant Groups
One Day Before GOP Debate, New Report Highlights Ties Between Prominent New Yorkers and Anti-Immigrant Groups
Note: Photos and Video of Protest available upon request. New York, NY (10/27/15)—Today, the Center for Popular...
Note: Photos and Video of Protest available upon request.
New York, NY (10/27/15)—Today, the Center for Popular Democracy Action (CPDA) and the Make the Road Action Fund (MRAF) released a new report, “Backers of Hate in the Empire State,” highlighting the ties between several prominent New Yorkers and the nation’s largest anti-immigrant network, which has fueled the anti-immigrant rhetoric being deployed in the Republican primary contest. Immigrant New Yorkers gathered outside a midtown diamond business connected to Barbara Winston, one of the individuals identified in the report, and called for candidates and other organizations to dissociate themselves from these xenophobic New Yorkers. They then marched to Trump Tower, picketing outside both buildings with chants of "No to Hate!" and "Sí se puede!" (Yes, We Can!).
The “Backers of Hate” report (download here) finds that, while New York is home to over 4.3 million immigrants from all corners of the world, the state is also home to wealthy New Yorkers who are funding and supporting an entire network of anti-immigrant organizations. Such organizations have fed the hateful rhetoric that current GOP presidential candidates are using—and will likely deploy again in tomorrow night’s debate.
Maria Rubio, a member of Make the Road Action Fund and Brooklyn resident, said, “These New Yorkers should be ashamed of supporting groups that have promoted the anti-immigrant rhetoric and organizing across the country that has become central to the Republican debates. The money and connections of a wealthy few have strengthened these fringe groups, that say terrible things about immigrants and prevent us from being able to live in peace with our families. But make no mistake: immigrants and Latinos are watching, and there will be a heavy political price for politicians that follow the lead of the Barbara Winstons of the world.”
Ana María Archila, Co-Executive Director of the Center for Popular Democracy Action, asserted: “The type of hate that these New Yorkers are spewing should have no place in New York State. The vast majority of New Yorkers support a pathway to citizenship and policies that welcome immigrants, while Barbara Winston and the others are working to vilify immigrants, undo birthright citizenship, block immigration relief for immigrant families, and insinuate their anti-immigrant attitudes into mainstream politics. Barbara Winston, Henry Buhl, and others are using their money and connections to advance a hateful agenda that not only hurts immigrants but frays the fabric of our entire society."
Elva Meneses, member of New York Communities for Change, affirmed, “I’m here to demand that these millionaires and billionaires stop supporting hateful organizations that say terrible things about immigrants like me and try to make our lives miserable. Instead of thinking fighting for opportunities for everyone, these wealthy New Yorkers are supporting hate as they trying to block immigration reform and immigration relief for undocumented immigrants. We call on all politicians and organizations to stop taking their dirty money immediately.”
“Backers of Hate” identifies five key individuals and the Weeden Foundation as key New Yorkers who are financially backing the work of anti-immigrant groups long associated with well-known white nationalist John Tanton. These groups include the Federation of American Immigration Reform (FAIR), which provides the political infrastructure for this anti-immigrant network and has been identified as a hate group by the Southern Poverty Law Center; the Center for Immigration Studies (CIS), a so-called think tank that continuously produces faulty statistics utilized by the anti-immigrant network; NumbersUSA, which serves as the watchdog of the network, and; Keeping Identities Safe (formerly the Coalition for A Secure Driver’s License). In recent months, Donald Trump, Carly Fiorina, and other GOP candidates have sought to mainstream the hateful ideas and false “facts” about immigration promoted by the Tanton network of organizations, fueling an ugly national debate that has also led to violent attacks against immigrants in different parts of the country.
Note: Photos and Video of Protest available upon request.
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www.populardemocracy.org
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
April 15: National Protests on Tax Day Demand Trump Release His Tax Returns
April 15: National Protests on Tax Day Demand Trump Release His Tax Returns
Working Families Party, Thousands to Protest in NY, DC and Nationwide Rallies Demanding Trump Release His Tax Returns...
Working Families Party, Thousands to Protest in NY, DC and Nationwide Rallies Demanding Trump Release His Tax Returns
WASHINGTON - Today, the National Working Families Party announced their participation in the Tax Day March. President Trump’s financial ties to Russia are causing growing questions for both Democrats and Republicans. As a result, thousands of people plan to gather in Washington, D.C., on Saturday, April 15, 2017, at 11 a.m. The Tax March was an idea that started on Twitter, but has gained momentum on and offline, with over 135 marches planned in cities across the country.
Read full article here.
Protesters rip Chase for funding private prisons, immig jails
Protesters rip Chase for funding private prisons, immig jails
Over 100 protesters weathered a sudden downpour as they gathered outside JPMorgan Chase headquarters in Midtown...
Over 100 protesters weathered a sudden downpour as they gathered outside JPMorgan Chase headquarters in Midtown Manhattan Wednesday to challenge the bank's investment and funding of private prisons and for-profit immigrant detention centers.
The protesters laid out pairs of shoes in front of the bank's main office on Fifth Ave. before the rally began.
Read the full article here.
A National Solution
New York Times - June 25, 2014, by Peter Markowitz - For too many years our nation’s discourse around immigration has...
New York Times - June 25, 2014, by Peter Markowitz - For too many years our nation’s discourse around immigration has been distorted by anti-immigrant activists who have advanced bold but regressive state immigration policies. State laws in Arizona and elsewhere have powerfully, but inaccurately, framed the immigration issue through the lenses of criminality and terrorism. While these laws have not generally fared well in court, their impact on our national perception of immigration has impeded federal immigration reform. Meanwhile, states like New York continue to suffer the consequences of our broken immigration laws. Our families continue to be fractured by a torrent of deportations. Our economic growth continues to be impeded by the barriers our immigrant labor force faces. And our democracy continues to be undermined by the exclusion of a broad class of New York residents.
The New York Is Home Act, recently introduced by New York State Senator Gustavo Rivera and Assembly Member Karim Camara, with support from the Center for Popular Democracy and Make the Road New York, charts a path forward on immigration — a path that like-minded states and ultimately the federal government could follow. The legislation would grant state citizenship to noncitizens who can prove three years of residency and tax payment and who demonstrate a commitment to abiding by state laws and the state constitution.
The bill is an ambitious but sensible assertion of a state’s well-established power to define the bounds of its own political community. Unlike the Arizona law, this legislation is carefully crafted to respect the unique province of the federal government. As misguided and brutal as the federal immigration regime is, New York cannot alter federal deportation policy. However, it is absolutely within New York’s power to facilitate the full inclusion of immigrants in our state. By granting state citizenship, we would extend the full bundle of rights a state can deliver — the right to vote in state elections, to drive, to access higher education, among others — and we would define the full range of responsibilities that come along with citizenship, including tax payment, jury service and respect for state law. By reorienting our national conversation on immigration around the more accurate and productive themes of family, economic vitality and political inclusion, this legislation will move us toward a real solution to our nation’s immigration quagmire.
Source
Flexible Schedules vs. Workers’ Burdened Life
Michael Saltsman’s “A Stiff Jab at Flexible Work Schedules” (op-ed, March 30) misses the mark. Policy makers don’t want...
Michael Saltsman’s “A Stiff Jab at Flexible Work Schedules” (op-ed, March 30) misses the mark. Policy makers don’t want to “dictate how businesses schedule employees’ work”—but rather ensure employees no longer have every hour of their lives dictated by increasingly unpredictable schedules.
Today, most Americans are not working nine to five. Instead, they’re in hourly jobs that demand they be constantly available for ever-changing schedules, and require working moms, students and others to regularly cancel child care, classes and other commitments. Researchers at the University of Chicago have shown us just how little flexibility workers have, finding that fully 41% of early career hourly workers receive their schedules less than a week in advance, and half have no say in their schedule. Working should not be this hard—and until recently, it wasn’t.
Ideally, businesses would make changes on their own. When a spotlight is aimed at them, they do. In the past year, major retailers including Gap and J. Crew ended on-call shifts after an inquiry from the New York attorney general and, under continued pressure from workers, Starbucks continues to strive to deliver scheduling reforms it has promised. Forward-thinking employers are starting to recognize that scheduling improvements are good for business, reducing turnover and improving productivity.
Even so, public policy is needed to set a baseline standard that all businesses can follow and that level the playing field across the economy. It is about simply catching up with a changing workforce.
By Carrie Gleason
Source
Charters’ exorbitant fees hinder efforts to obtain public info
Public records requests made to 10 publicly funded Boston charter schools have been thwarted by demands for fees...
Public records requests made to 10 publicly funded Boston charter schools have been thwarted by demands for fees totaling $91,440 from seven of the schools, according to Russ Davis, director of Massachusetts Jobs with Justice and a spokesperson for the Massachusetts Education Justice Alliance.
The requests for information were made on behalf of the MEJA, a coalition of labor, faith and social justice organizations, and concerned whether information on parents of charter school students was provided to two pro-charter advocacy organizations.
“The demands for absurdly high fees to comply with our requests underscore an appalling lack of transparency on the part of these publicly funded Commonwealth charter schools,” said Davis.
This issue underscores problems that would be addressed in a public records access bill that Massachusetts House Speaker Robert DeLeo told the State House News Service may come to the floor for a vote next week.
Kyle Serrette, the director of education justice campaigns at the Center for Popular Democracy, who has issued similar requests to both public school districts and to charter schools in other states, said that schools typically charge very little or no money to respond to public information requests.
“Exorbitant requests for fees like this by large school companies limit transparency and reduce public trust in these schools,” Serrette said.
MATCH Charter Public Middle School demanded the most for the information: $36,015 (click here to see letter). Roxbury Preparatory Charter School quoted the second-highest fee estimate, $12,500. To date, Boston Renaissance Charter Public School and Boston Preparatory Charter Public School have failed to respond.
UP Academy Dorchester, an in-district Horace Mann charter school, was the only one to respond with the information requested, providing its student records policy free of charge and stating that it has not engaged in any of the actions for which information was requested.
“These fee estimates from seven of the eight schools that responded are exorbitant and beyond our capacity to pay,” said Davis. “These charges violate the spirit and letter of our public records law.”
The MEJA requests were made in an attempt to determine the relationship between these Boston charter schools and two charter advocacy organizations —Families for Excellent Schools and the Massachusetts Charter Public School Association. Specifically, the coalition is trying to determine whether the schools had any contracts with these groups, any policies related to providing outside groups with contact information for students’ families, and any record of providing these two outside groups with that contact information.
“We were concerned about reports that the charter schools may have been giving these corporate-backed, pro-charter organizations parent contact information so that parents could be enlisted to lobby on behalf of the charter school agenda,” said Davis. “If that has been going on, we believe the public has a right to know. Charter schools are publicly funded. We do not believe that public funds should be used to persuade parents to lobby on behalf of the private charter school industry.”
Families for Excellent Schools is a New York-based organization that supports Unify Boston and Great Schools Massachusetts, both of which are pro-charter advocacy groups. FES has received millions of dollars from corporate foundation groups, including the Broad Foundations and the Walton Family Foundation.
This chart indicates when the charter schools queried responded to the request for information, which was made in a letter dated Aug. 20, 2015. It also lists the fee estimate from each school and the name of the law firm, if any, that responded to the request.
School Response Date Records Produced Fee Estimate Firm Boston Collegiate Charter 21-Aug-15 $7,250 Krokidas & Bluestein KIPP Academy Boston Elementary and Middle 28-Aug-15 $9,560 Krokidas & Bluestein Brooke Roslindale Charter 28-Aug-15 $7,500 Krokidas & Bluestein Neighborhood House Charter 28-Aug-15 $8,615 Krokidas & Bluestein Excel Academy - East Boston 28-Aug-15 $10,000 Krokidas & Bluestein UP Academy Charter - Horace Mann 01-Sep-15 04-Sep-15 $0 None Roxbury Preparatory Charter 22-Sep-15 $12,500 None Match Charter Public Middle 25-Sep-15 $36,015 Krokidas & Bluestein Boston Renaissance Charter Public Boston Preparatory Charter Public
Excerpts from guidance from the Massachusetts Secretary of State’s office on what fees may be charged for providing public records:
“In the interest of open government, all records custodians are strongly urged to waive the fees associated with access to public records, but are not required to do so under the law.” “A records custodian may charge and recover a fee for the time he or she spends searching, redacting, photocopying and refiling a record. The hourly rate may not be greater than the prorated hourly wage of the lowest paid employee who is capable of performing the task. A records custodian may not recover fees associated with record organization.”Public Records Request made by the service Muckrock on behalf of MEJA on Aug. 20.
Dear Records Officer:
Pursuant to Massachusetts Public Records Act § 66-10 et seq., I am writing to request the following records:
Copies of all communication, including email, between your organization and Families for Excellent Schools, a/k/a Families for Excellent Schools Advocacy, or any agent thereof, inclusive of all attachments and memoranda. For purposes of manageability, you may limit this request to only those communications from the previous 24 months. Copies of all communication, including email, between your organization and Massachusetts Charter Public School Association, or any agent thereof, inclusive of all attachments and memoranda. For purposes of manageability, you may limit this request to only those communications from the previous 24 months. Copies of any contracts between your organization and Families for Excellent Schools, Inc., and/or Families for Excellent Schools Advocacy, Inc., if applicable. Copies of any contracts between your organization and Massachusetts Charter Public School Association, if applicable. Copies of any policies relating to the transmission of student records to a third party, promulgated since 2012, including revisions. Copies of any school policies relating specifically to the disclosure of student “directory information” to third parties promulgated since 2012, including revisions. Copies of any parental notifications regarding transmission of student information to Families for Excellent Schools, Inc., and/or Families for Excellent School Advocacy, Inc., if applicable. Copies of any parental notifications regarding transmission of student information to Massachusetts Charter Public School Association if applicable. Documentation of any payments made to Families for Excellent Schools, Inc. and/or Families for Excellent Schools Advocacy Inc. in the previous two years, if applicable. Documentation of any payments made to Massachusetts Charter Public School Association in the previous two years, if applicable.Source: Massachusetts Teachers Association
New Report Details Plans for Low-Wage Worker Justice
The Village Voice - February 14, 2013, by Jason Lewis - When a worker in this city has to endure a three-hour walk to...
The Village Voice - February 14, 2013, by Jason Lewis - When a worker in this city has to endure a three-hour walk to work because his minimum wage salary doesn't allow for him to afford public transportation, that's a problem.
Low-wage workers across the city have stood up in the past year to demand that such insecurity be eradicated and to pressure employers to finally begin to provide them with just compensation for their labor.
Building on the progress generated by these worker-led movements--in industries such as retail, fast-food, airline security and car washing--UnitedNY, the Center for Popular Democracy and other advocacy groups held a symposium and released a report yesterday analyzing the state of the city's low-wage worker movement.
"It's very difficult to try and make ends meet on $7.25 minimum wage in New York City," Alterique Hall, a worker in the fast-food industry, said during a news conference following the event. "Some nights you want to lay down cry because you [feel] like 'what's the point of going to work and putting all of myself into a job, [if] I'm going to be miserable when I get off work, miserable when I go home...and don't want to wake up and go to work the next day...to get disrespected, treated poorly and paid poorly.'"
Hall, who's been active in the push for fairer wages in the fast-food industry, is the worker who is often forced to embark on the three-hour treks to work. Hall said that his boss will sometimes said him home as a penalty for his tardiness--without considering the ridiculous journey he has to travel just to get to there.
"Working hard, and working as hard as you can, isn't paying off for them," mayoral hopeful and former City Comptroller Bill Thompson, said during the news conference. "They're being underemployed, They're being underpaid. They're being taken advantage of. They're being ignored. They're becoming a permanent underclass in the city of New York."
The UnitedNY and CPD report lays out four specific initiatives that workers and advocates must pressure the city to implement in order to help better the plight of low-wage workers. The reports calls on the city and employers to :
[Raise] standards for low-wage workers. [Regulate] high-violation industries where labor abuses are rampant. [Establish] a Mayor's Office of Labor Standards to ensure that employment laws are enforced. [Urge] the State to allow NYC to set a minimum wage higher than the State minimum--due to the higher cost of living in the City.The report pays close attention to the need for City Council to pass the paid sick-leave bill, and increase the minimum wage in the city to $10/hour--a salary that would net a worker with regular hours about $20,000/year in earnings.
"We can't continue to be a Tale of Two Cities, where the path to the middle class keeps fading for thousands of New Yorkers," said New York City Public Advocate Bill de Blasio. "We must break the logjam and pass paid sick leave in the City Council. We have to protect low-wage workers fighting union busting employers. We can't tolerate inaction any longer. It's time for real action to fight for working families."
During one of the symposium workshops, a panel of labor experts discussed the obstacles facing low-wage workers in their fight to obtain such rights.
"[We've] shifted from a General Motors economy to a Wal-Mart economy," Dorian Warren, a professor of public affairs at Columbia University, said during the discussion. "[The job market is filled with] part-time jobs, low wages, no benefits, no social contract, no ability to move up in the job the way 20th century workers were able to."
Warren says that the quality of jobs in the American economy will only decline if something isn't done. He noted that 24 percent of jobs were low-wage in 2009. By 2020, that number is expected to nearly double and hit 40 percent. To make matters worse, technological "advances" are expected to increase unemployment rates by 3-5 percent moving forward.
"We're looking at an economy only of low-wage work in the future, but also of high and permanent levels of unemployment," Warren said.
The panel was moderated by acclaimed labor reporter, Steven Greenhouse of the N.Y. Times and included Angelo Falcon, president of the National Institute for Latino Policy, Deborah Axt, co-executive director of Make the Road New York, M. Patricia Smith, the solicitor of labor for U.S. Department of Labor and Ana Avendano of the AFL-CIO.
Several panelists stressed the need to combat attacks from right-minded forces seeking to erode worker wage and benefit rights. Falcon says that those fighting for worker rights must correct popular narratives, many of which categorize wage and benefit increases for workers as business-killers.
"When we talk about the minimum wage, the immediate response from business is, we're going to lose jobs because, we're only going to be able to hire a few people. We have to have an answer to that objection," Falcon said. "Through raising the minimum wage, you create job growth in terms of people being able to put more money into the economy. You're [putting] less pressure on social welfare systems...the system is still subsidizing business [when the public provides] welfare and other social services."
Warren* argued a similar point.
"I think we have to be much more explicit about targeting the right the way that they've targeted us. There's a reason why the right has gone after public sector unionism," Warren* said. "They know that's where the heart of the labor movement is in terms of funding and in terms of membership. We have to get smarter about which parts of the right do we target to destroy ideologically, organizationally so that we can advance further our movements."
Source
Fed votes to keep key interest rate near 0%, stays mum on future hike
Federal Reserve policymakers Wednesday voted to keep the central bank’s benchmark interest rate near zero percent and...
Federal Reserve policymakers Wednesday voted to keep the central bank’s benchmark interest rate near zero percent and offered no new hints of when it would enact the first hike since 2006.
After a two-day policy meeting, officials released a monetary policy statement that was little changed from June in its guidance about what they would need to see before raising the interest rate.
11:40 a.m.: An earlier version of this article said the Fed's policy statement was identical in its guidance about what officials would need to see before raising the interest rate. The statement contained a small wording change.
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An increase would come when members of the policymaking Federal Open Market Committee have “seen some further improvement in the labor market” and is “reasonably confident” that the low inflation rate will move back toward the Fed’s 2% annual goal in the near future, the statement said.
The statement, approved by a 10-0 vote, left open the possibility of a rate hike after the Fed’s next meeting, in September. But it did not lock policymakers into taking that step in case upcoming economic data, including jobs reports for July and August, indicate the economy isn’t strong enough to handle higher interest rates.
The Fed said recent data suggest the economy “has been expanding moderately in recent months” and that the housing market “has shown additional improvement.” The Fed’s view of the labor market improved, with the statement saying there had been “solid job gains and declining unemployment.”
But Fed policymakers raised concerns about what they called soft business investment and exports.
And the statement noted inflation continued to run well below the Fed’s 2% annual target, attributing that partly to declines in energy prices as well as the lower cost of imports caused by the rising value of the dollar.
For the 12 months ended May 31, the price index for personal consumption expenditures, the Fed’s preferred gauge, was up just 0.2%.
The central bank has kept its benchmark federal funds rate near zero since December 2008 in an attempt to boost economic growth during and after the Great Recession.
As the economy has strengthened, pressure has built on Fed policymakers to start raising the rate.
Fed Chairwoman Janet L. Yellen has said that she expects an interest rate hike this year but that policymakers would continue to keep rates low for “quite some time” to continue providing support for the economy.
A survey last month by financial information website Bankrate.com found that a majority of Wall Street experts expected the Fed to raise its short-term interest rate in September.
Fed policymakers are closely watching economic data to determine when to hike the rate for the first time since 2006.
The economy shrank at a 0.2% annual rate from January through March, largely because of unusually bad winter weather and a labor dispute that slowed activity at West Coast ports.
The Commerce Department is expected to report Thursday that growth returned this spring. Analysts are forecasting that the economy expanded at a 2.9% annual rate in the second quarter.
The job market has shown solid gains in recent months, and the unemployment rate in June dropped to 5.3%, the lowest in more than seven years.
But wage growth has been sluggish. The Center for Popular Democracy has criticized the Fed for not focusing enough on wage improvements as a key factor in deciding when to raise rates.
And even with the overall economy performing better in the second quarter, growth this year is expected to be subpar. The Fed’s most recent projection, made in June, is for overall economic growth of just 1.8% to 2% for the year, which would be the worst since 2011.
Source: The Los Angeles Times
Ten Ways to Combat Upward Redistribution of Income
Moyers & Co - January 1, 2015, by Dean Baker - The big gainers in the last three decades (aka the one percent) like...
Moyers & Co - January 1, 2015, by Dean Baker - The big gainers in the last three decades (aka the one percent) like to pretend that their good fortune was simply the result of the natural workings of the market. This backdrop largely limits political debate in Washington. The main difference is that the conservatives want to keep all the money for themselves, while the liberals are willing to toss a few crumbs to the rest of the country in the form of food stamps, healthcare insurance, and other transfers.
While the crumbs are helpful, the serious among us have to be thinking about the unrigging of the economy so that all the money doesn’t flow upward in the first place. Here are 10 ways in which we should be looking to change the structure of the market in 2015 so that all the money doesn’t flow to the one percent.
In all these areas changes will be difficult, since the one percent will use their wealth and power to ensure that the rules not be rewritten to benefit the bulk of the country. However, this list should provide a useful set of market-friendly policies that will lead to both more equality and more growth.
1. Expanded Trade in Medical Care
The Affordable Care Act extended coverage to millions of people and, for the first time, allows people the freedom to quit jobs they don’t like and still have access to insurance. Nonetheless, we still pay close to twice as much per person for our health care as people in other wealthy countries.
If our trade policy were not dominated by protectionists, it would be directed toward making it easier for qualified foreign physicians to practice in the United States, potentially saving patients tens of billions every year. Even with the federal government committed to protectionist policies, nothing stops state governments from seeking out lower-cost care for Medicaid patients in other countries. The savings, which can run into the hundreds of thousands of dollars in some cases, can be shared with beneficiaries.
2. Prescription Drugs
This is part of the healthcare story, but a big-enough part to deserve a separate mention. Patent monopolies can allow drug companies to charge prices that are 100 times higher than the free-market price. The hepatitis-C drug Sovaldi sells in the United States for $84,000. The generic version is available in India for less than $1,000. State Medicaid programs can pay to send patients to India, along with one or more family members, and still have tens of thousands of savings that can be shared with beneficiaries.
3. Wall Street Sales Tax
The financial sector continues to rake in money at the expense of the rest of the country, courtesy of bailouts, too-big-to-fail insurance, and being largely exempt from taxes applied to other industries. Even the IMF argues that the financial sector is undertaxed.
While most members of Congress and presidential candidates are too indebted to Wall Street to push for a financial-transactions tax, states can get a foot in the door. It is possible to tax the transfer of mortgages on property within the state. A modest tax of 0.2 percentage points won’t affect normal mortgage issuance, but it will discourage the shuffling of mortgages and raise some serious revenue. This money can be used to fund needed public services and, in part, to support lower taxes in other areas.
4. Limiting CEO Pay
CEOs are able to arrange paychecks in the tens of millions of dollars in large part because corporate directors are effectively paid off to look the other way. The incentives can be radically altered if directors stood to lose their stipends if a say-on-pay vote by the shareholders was defeated.
State governments can put this into law for corporations chartered in their state. Also, any corporation can put this rule into their own bylaws. Since fewer than three percent of pay packages are voted down, any director who is confident enough that they will not be in the bottom three percent should be happy to support such a change in bylaws.
5. Limiting Pay at Nonprofits
Nonprofit organizations like universities, hospitals, and charities are hugely subsidized by taxpayers. Since most of their contributions come from people in the top income bracket, the ability to deduct charitable contributions effectively means that taxpayers are paying 40 cents of every dollar a rich person contributes.
Since taxpayers are out for much of the cost, it seems only fair to put some rules in place. (Actually, we already do.) How about a pay cap of $400,000 for any employee of a nonprofit? This is twice the pay of a cabinet officer. If a university or other nonprofit can’t find competent people who are prepared to work for twice the pay of a cabinet secretary, perhaps it is not the sort of organization that taxpayers should be supporting.
States can also get into the act on this one. Most states offer special tax treatment to nonprofits. They could apply the two-times-a-cabinet-member’s-pay rule to the nonprofits within their state.
6. Applying Sales Tax to Internet Sales
Jeff Bezos has become one of the richest men in the world because he was successful in expanding Amazon into a huge retailer that doesn’t have to collect the same sales taxes as corner grocery stores. There is no excuse for giving special exemptions to Amazon and other Internet retailers. The states that don’t yet tax Internet sales in their state should move quickly to do so. It makes no sense to subsidize giant retailers like Amazon at the expense of traditional mom-and-pop retail outfits.
7. Democratizing the Sharing Economy
Start-ups like Airbnb and Uber have quickly turned into multi-billion-dollar businesses, in large part by evading the regulations that apply to their traditional competitors. The plan here should be to modernize the rules for taxis, hotels and other outposts of the “sharing” economy and be sure they apply to everyone equally. You don’t get to operate an unsafe taxi driven by an alcoholic just because it’s ordered over the Internet.
In the case of Airbnb, local governments could quickly add some new competition by having local websites where people could list available rooms without paying fees to Airbnb. The advantage to the cities is that they could be sure that these rooms met fire safety and other requirements. Then the only people who listed on Airbnb would be people renting fire traps or other illegal units or who were too ill-informed to save themselves the Airbnb commission. (This gives “sharing” economy a whole new meaning.)
8. The Overvalued Dollar
Our economists are learning and have discovered the problem of secular stagnation. This means that many economists now recognize that the economy can suffer from a persistent problem of inadequate demand, leading the economy to run at below-potential levels of output and to have excessive unemployment.
Unfortunately, most economists still don’t feel they can talk about the most obvious cause of the lack of demand: the country’s large trade deficit. The annual deficit is currently more than $500 billion (at three percent of GDP). This has the same effect on the economy as if consumers were to massively cut back their annual consumption by $500 billion and instead put this money under their mattress. The lost demand translates into more than six million jobs.
The obvious solution is to reduce the value of the dollar against other currencies in order to make US goods and services more competitive internationally. The value of the dollar is a matter that is determined at the national policy level. In principle the United States could be negotiating for a lower-valued dollar in a big trade agreement like the Trans-Pacific Partnership. Instead it is pushing for stronger patent protection for Merck and Pfizer, stronger copyright protection for Disney and Mickey Mouse, and a system of business-friendly courts that can override laws in the United States and elsewhere.
9. Shorter Work Years and Work Weeks
If we can’t directly increase demand in the economy through lowering the value of the dollar, we can still increase the number of jobs by reducing the amount of time that people work on average. This is the secret of Germany’s economic miracle. It has had slower growth than the United States, yet it has seen a huge increase in employment in its recession recovery. The average work year in Germany has 20-percent fewer hours than in the United States.
One of the policies that has helped bring about job growth in Germany is work sharing. This policy encourages companies to cut back hours instead of laying off workers. Workers are compensated for their lost wages through the unemployment insurance system. Most states have work-sharing programs as part of their unemployment insurance system. The compensation rate is generally lower in the United States than in Germany (typically 50 percent, compared with 60 to 80 percent in Germany), but it still beats losing a job.
Other policies that go in the same direction are paid family leave and paid sick days. These policies are important in their own right but can help better divide the available work among those who want jobs. Another great feature of these policies is that we don’t have to wait for the president and Congress to take action. They can be implemented at the state and even local level.
10. The Federal Reserve Board
The last and possibly most important item on the list is the Federal Reserve Board. It will be coming under pressure from the Wall Street types to raise interest rates. The point of higher interest rates is to slow the economy and keep people from getting jobs. The Fed would do this because more jobs will mean that workers have more bargaining power and would be in a position to raise wages. In short a Fed move to raise interest rates is very directly about keeping workers from getting higher wages. (Most workers have only been able to achieve real wage gains when the unemployment rate has been low.)
Fortunately, there are efforts to apply some pressure in the opposite direction, most importantly by the Center for Popular Democracy. They aim to let the Fed governors in Washington and presidents of 12 district Fed banks know that people who care about jobs are watching the Fed’s actions. This should make it harder for the Fed to take steps to deliberately throw people out of work and reduce workers’ bargaining power.
That’s my list of the top 10 places where progressives can focus in 2015 on restructuring the economy in ways that prevent income from flowing upward. The list is hardly exhaustive, and I left out some obvious important areas, like strengthening unions, because everyone should know them. Let’s hope for a good year and some real progress in turning the economy around.
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