CPD IN THE NEWS

Efforts to fill top positions at some U.S. Federal Reserve regional branches are casting a spotlight on a decades-old process that critics say is opaque, favors insiders, and is ripe for reform.

Patrick Harker took the reins as president of the Philadelphia Fed this week, in an appointment that attracted scrutiny because he served on the committee of directors that interviewed other prospective candidates for the job he ultimately took.

The Dallas Fed has been without a permanent president for more than three months as that search process stretches well into its eighth month. And the Fed's Minneapolis branch abruptly announced the departure of its leader, Narayana Kocherlakota, more than a year before he was due to go, with no replacement named to date.

The delays and reliance on Fed employees in picking regional Fed presidents can only embolden Republican Senator Richard Shelby to push harder for a makeover of the central bank's structure, which has changed little in its 101 years.

A bill passed in May by the Senate Banking Committee that Shelby chairs would strip the New York Fed's board of its power to appoint its presidents. And it could go further, given the bill would form a committee to consider a wholesale overhaul of the Fed's structure of 12 districts, which has not changed through the decades of shifting U.S. populations and an evolving economy.

The bill is part of a broader conservative effort to expose the central bank to more oversight, and some analysts saw the Philadelphia Fed's choice as reinforcing the view that the Fed needs to open up more to outsiders.

Nine of 11 current regional presidents came from within the Fed, a proportion that has edged up over time. Twenty years ago, seven of 12 were insiders.

"The process seems to create a diverse set of candidates in which the insider is almost always accepted," said Aaron Klein, director of a financial regulatory reform effort at the Bipartisan Policy Center.

Since it was created in 1913, the central bank's decentralized structure was meant to check the power of Washington, where seven Fed governors with permanent votes on policy are appointed by the White House and approved by the Senate.

The 12 Fed presidents who are picked by their regional boards usually vote on policy every two or three years, and they tend to hold more diverse views.

Former Richmond Fed President Alfred Broaddus told Reuters the regional Fed chiefs have more freedom "to do and say things that may not be politically popular" because they are not politically appointed. "On the other hand, there is the question of legitimacy since they are appointed by local boards who are not elected."

"TONE DEAF"

Two-thirds of regional Fed directors are selected by local bankers, while the rest are appointed by the Fed's Board of Governors in Washington.

Critics question how well those regional boards - mostly made of the heads of corporations and industry groups meant to represent the public - fulfill their mission.

Last year, a non-profit group representing labor unions and community leaders organized by the Center for Popular Democracy, urged the Fed's Philadelphia and Dallas branches to make the selection of their presidents more transparent and to include a member of the public in the effort.

Philadelphia's Fed in particular proved "tone deaf" in its head-hunting effort, said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey.

Harker was a Philadelphia Fed director when the board started looking to replace president Charles Plosser, who left on March 1, and he was among the six directors who interviewed more than a dozen short-listed candidates for the job, according to the Philadelphia Fed.

But on Feb. 18, Harker floated his own name, recused himself from the process and a week later his colleagues on the board unanimously appointed him as the new president.

While the selection follows Fed guidelines and was approved by its Board of Governors, it raised questions of transparency and fairness.

"The Philadelphia Fed's search process might have made perfect sense in a corporate environment, but is obviously problematic for an official institution," said Crandall.

The board's chair and vice chair, Swathmore Group founder James Nevels and Michael Angelakis of Comcast Corp, respectively, declined to comment, as did Harker.

Peter Conti-Brown, an academic fellow at Stanford Law School's Rock Center for Corporate Governance, and an expert witness at a Senate Banking Committee hearing this year, proposed to let the Fed Board appoint and fire regional Fed presidents or at least have a say in the selection process.

In the past, reform proposals for the 12 regional Fed banks have focused on decreasing or increasing their number and their governance.

Changes to the way the regional Fed bosses are chosen could strengthen the influence of lawmakers at the expense of regional interests.

For now, delays in appointments of new chiefs force regional banks to send relatively unknown deputies to debate monetary policy at meetings in Washington, as Dallas and Philadelphia did last month when the Fed considered raising interest rates for the first time in nearly a decade.

The Minneapolis Fed still has time to find a new president before Kocherlakota steps down at year end.

"For now the Fed criticism is just noise, mostly from Republicans," said Greg Valliere, chief political strategist at Potomac Research Group. "But once the Fed begins to raise interest rates ... then the left will weigh in as well."

(Additional reporting Ann Saphir in San Francisco; Editing by Tomasz Janowski)

Source: Reuters

(Interview with Ana Maria Archila at 1:09:10)

Watch the full video here.

SCTimes - March 13, 2013, by Annette Meeks - Late last month, the Minnesota Department of Education released new data regarding Minnesota's high school graduation rate. The good news from the department, according to the Star Tribune, is that the "graduation rate for Minnesota students is the highest it's been in a decade, even though many minority students continue to lag behind their white peers when it comes to getting a diploma on time."

The new data showed that in 2013, "85 percent of white students, 56 percent of black students and 58 percent of Hispanic students graduated." Minnesota is not alone — many other states show an increase in the number of students leaving high school with a diploma. In 2014, according to the Star Tribune, the U.S. graduation rate was the highest it has been in 40 years when nearly "78 percent of high school students nationwide graduated on time."

What happens to a Minnesotan who doesn't earn a high school diploma? Those students face daunting challenges in life because the public education system has failed them. Instead of a celebratory front page news story, these students become a statistic in a report issued by the Center for Popular Democracy. Hardly part of the "vast right-wing conspiracy." The Center for Popular Democracy's "partners" include the National Education Association, the American Federation of Teachers and the AFL-CIO, to name just a few.

According to a recently released report by the center, "Minnesota has the third-highest unemployment gap between white and black people in the country — with the jobless rate among blacks almost four times higher than among whites."

Minnesota's astonishing statewide high rate of unemployment among African-Americans "fell" to 11.9 percent in 2014, down from a previous high of 15.4 percent seven years earlier. In 2014, the white unemployment rate in the state was 3.2 percent.

In 2013, the Star Tribune reported that, according to the Bureau of Labor Statistics, "Minnesota was second only to Wyoming [where the] black unemployment rate was triple the white rate." There was virtually no change in the Minnesota's Hispanic unemployment rate (7 percent), which remains at nearly twice the rate of white unemployment.

Furthermore, according to a report on BringMetheNews.com and WalletHub, "Minnesota has the second-worst wealth gap between white people and people of color in the United States."

So while officials at the Minnesota Department of Education continue celebrating the improving graduation rate, we'll postpone any celebrations. We'll wait until there is no achievement gap for minority students that attend (and graduate on time from) Minnesota's public schools. That will be worth celebrating.

This is the opinion of Annette Meeks, founder and CEO of Freedom Foundation Of Minnesota.

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Times Union - September 17, 2014, by Andrew Friedman & Javier Valdes - With President Barack Obama once again delaying immigration reform with a path to citizenship, immigrants aren't waiting any longer for Washington to act on their behalf.

Instead, they are uniting around a new strategy for progress: the extension of state citizenship to millions of noncitizen residents.

New York is at the forefront of this national effort.

Legislation called the New York is Home Act, recently introduced by state Sen. Gustavo Rivera and Assembly Member Karim Camara, would extend the full rights and responsibilities of state citizenship to nearly 3 million non-citizens who meet very specific criteria and apply through New York's Office for New Americans.

Earlier this week, Senate Republicans, aware of their political vulnerabilities this election season, launched a thinly-veiled fear-mongering campaign over the legislation. They are trying to turn a commonsense legislative proposal into a wedge issue and divide Democrats in the process.

Gov. Andrew Cuomo, Senate Democrats, and progressive leaders like New York City Mayor Bill de Blasio should not take the bait. Instead, they should rally around this legislation, and recognize how sensible and pragmatic it is.

Today, as in the past, New York is home to many immigrants who make valuable contributions to the communities where they live and work.

From Buffalo to the Bronx, non-citizen residents overwhelmingly want the same things as native-born New York residents: good schools, decent jobs, safe neighborhoods, economic security, and real opportunities for inclusion and advancement.

According to the New York is Home Act, non-citizen residents who can show proof of identity, three years of residency, tax payments, and a commitment to follow the law and serve on juries would be eligible to become state citizens.

To non-citizen residents who meet those specific criteria, access to the following benefits would be granted: financial aid for higher education, health care, drivers' licenses, professional licenses, the right to vote, the right to run for office, and complete protection against racial profiling.

The argument for full equality and inclusion of immigrant residents is that state citizenship should recognize and reward the efforts of noncitizens who make our communities stronger.

We all stand to gain when everyone who calls New York home is treated as a real contributor to the greatness of our state. By the same token, viewing immigrants as expendable, exploitable and deportable hurts us all and undermines our shared values.

What happens in New York with this legislation is being closely watched around the country, especially in states like Oregon, California, Illinois, and New Jersey, where efforts to introduce and pass similar legislation are gaining traction because of Washington's failure on immigration.

The New York is Home Act would enable the full and equal participation of immigrants in all activities that define our democracy and economy.

It respects the federal government's authority over federal immigration, while asserting New York's authority to define its state citizenry and the beneficiaries of state citizenship.

State laws around the country have long excluded non-citizens from voting rights, higher education, health care, drivers' licenses, and professional licenses. This exclusion is a loss for all of us, because it limits the ability of immigrants to participate fully in activities that strengthen the social and economic fabric of our country and advance our common interests as Americans.

It's time to promote full inclusion and equality for all.

Taking all the necessary political steps to get this done in New York will be a challenge, but with a reunified Democratic state Senate and leadership from Cuomo, it can happen.

We should set a clear example for the nation and create a model for other states to follow.

Through the expansion of state citizenship, non-citizens can exercise greater economic and political power on behalf of everyone, and do more to help our entire state and country grow, thrive, and prosper. New York is the only home many noncitizen residents have ever known.

Now is the moment to start counting and respecting these New Yorkers as real citizens.

Andrew Friedman is co-executive director of the Center for Popular Democracy. Javier Valdes is co-executive director of Make the Road New York.

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