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

Source

Surrounded by his colleagues in a cramped corridor behind the Senate Judiciary Committee, Senator Jeff Flake was in agony, getting pounded on all sides.

Read the article and watch the video here.

The Trump administration announced on Tuesday that it would stop issuing permits under the Obama era Deferred Action for Childhood Arrivals program, or DACA and renew existing permits only over the next six months to give Congress a short window to come up with a replacement program. Here is a sampling of the reaction.

Read the full article here.

Caitlin O’Reilly-Green is a member of Rise Up Georgia, a partner of Center for Popular Democracy.

Too many employees have to deal with inconsistent work schedules

Over the past 18 months, I have been working as a barista at Starbucks–and I love it here. I love making coffee, and I love chatting with customers. Despite the love I have for my work, I have to speak up on behalf of my co-workers: Something has to change in the way Starbucks is treating us.

This became clear to me when I met other Starbucks workers through Rise Up Georgia, a racial and economic justice organization based in Atlanta that is a partner of Center for Popular Democracy, the union-supported group that released a report Wednesday criticizing Starbuck’s labor practices. Through talking with my co-workers, I realized that I wasn’t the only one having a hard time planning my life around my work.

I have seen many co-workers quit on short notice because they couldn’t earn enough to make ends meet or their work schedule was too erratic to plan important things like child care. Though I faced some of the same issues, the hardest part of the job for me was without a doubt the so-called “skeleton-shifts”–severely understaffed shifts that left me stressed, exhausted, and, as a result, sick.

Earlier this year, I worked four days in a row with only my shift supervisor in the back to support me. A co-worker called in sick each day, so I was alone serving the entire store. My store has a drive-through, two registers in the front and a coffee bar–and I was the only one tending all of them.

The work was so grueling that I eventually developed a muscle spasm in my back and was forced to stop working for three months in order to recover from my injury.

When I took my struggles to Starbucks, the company listened and showed me that it cared about my problems. I was offered the opportunity to transfer to a store closer to my home so that I could have a shorter commute, and I now know how to indicate my preferred availability for shifts, so that I have a better chance of planning my life outside of work.

I’m so happy that Starbucks heard me, but I’m just one person. Unfortunately many Starbucks workers don’t speak up and voice their struggles.

My co-workers silently work “clopen” shifts, where they shut down the store at night and come back the next morning to open it. They silently deal with inconsistent work schedules. They silently cope with not knowing how much work they’re going to get each week, making it impossible for them to budget—and budgeting is already hard on $8.25 an hour.

The solution should be obvious for Starbucks. Instead of relying on every worker to bravely speak up about their struggles, Starbucks should change a system that is fundamentally broken.

I’m grateful for the improvements in my schedule, but I strongly believe that all of us deserve hours we can count on. I am speaking up and writing this op-ed in the hope that Howard Schultz, the CEO, will listen to the workers of his company and see that store-level problems don’t happen because of individual managers. It’s the company-wide structure that is failing us.

I think Starbucks is a great company, and I still believe that it wants its employees to be happy. But to get there Starbucks workers need a seat at the table.

Source: Time