CPD IN THE NEWS

"Major corporations stand to profit from Trump's hateful agenda. That's why we call them Backers of Hate," the website states.

A new campaign, Corporate Backers of Hate is looking to expose the role some U.S. corporations are playing in profiting from the abuses suffered by the communities of color under the Trump administration.

Read full article here.

The Tennessean - April 14, 2015, by Stephen Henry & Erick Hutch - Teachers are joining parents and local community groups to ask the Metro Nashville Public School Board to adopt tougher accountability and transparency standards to protect students and taxpayers. Here's why.

We should all be working together to find a coordinated approach that serves all children.

Studies confirm that the proliferation of new charters is forcing existing under-funded public schools to compete for the same taxpayer dollars without proper checks and balances. There is also a growing concern among teachers and parents that we are not doing enough to ensure equal access to ALL of Nashville's public schools.

The Annenberg Institute for School Reform at Brown University recommends national standards for schools to protect students and the public. A mandate on transparency and equitable student policies ensures all students have fair access to the schools they deserve. The Institute also recommends all approved charter schools be fully funded by the state. Under our current system, Nashville taxpayers absorb the costs of state-approved charters already rejected locally.

Right now, charters cost our public school system $9,000 per student, according to a recent performance audit commissioned by the Metropolitan Government. We should require a rigorous financial review of charter expansion on our public school system – a prudent step before approving more charters.

A national study by the Center for Popular Democracy found charter school operators across the country were engaged in rampant abuses because they lacked appropriate oversight and transparency guidelines. Last month, the CPD released findings for an 11-point program for reform.

A local audit released in February, found that the unchecked expansion of new charter schools is taking a toll on existing schools. Specifically, the audit noted that when new charter schools open and compete for the same system resources, fixed costs at existing schools — such as maintenance, technology and health services —are often neglected as they cannot be reduced.

Additionally, the audit observed that existing schools cannot easily adjust staffing patterns as a result of new charters. "For these costs to be reduced significantly," the audit observed, "the school would need to close altogether." The audit also confirmed the results of a fall 2014 report that found "new charter schools will, with nearly 100 percent certainty, have a negative fiscal impact on MNPS."

As the search for the next director of MNPS begins, we need a leader who will commit the resources and support necessary for our existing schools to be successful. A single, 600-seat charter school requires $5.4 million annually from our public schools. At a time when our schools are universally considered to be under funded, now is the time to invest resources in public education instead of systematically starving it.

In 2010, the entire state of Tennessee had only 20 charter schools. In Nashville alone in the 2015-16 school year, 27 charter schools will operate at an annual cost of $75 million. Another 18 proposed charters are seeking to divert as much as $104 million annually. In fact, even if the school board approved no new charter schools, more than 5,000 charter seats will come into existence between now and the 2019-20 school year under previous charter approvals. That's the equivalent of adding five new MNPS middle schools.

It's time to protect students and taxpayers with common-sense standards that serve all of us.

Source

The Federal Reserve is usually understood as the bankers' bank. But what if it was the people's bank?

At the Fed's annual Jackson Hole conference last week, an assortment of community organizers, activists, labor organizations, and economists showed up to push America's most important financial institution towards putting the concerns of working and nonwhite Americans at the center of monetary policy. The group, called Fed Up, has met with Federal Reserve officials before, but Thursday's meeting was nonetheless unprecedented and striking — both for being on the record, and for the detailed, impassioned, occasionally heated, and remarkably pointed conversation that resulted.

Fed Up's complaints are several. The Fed is too worried about inflation, the activists say, and not worried enough about pushing the boundaries of maximum employment when it sets interest rates. They also argue the population of Fed officials is not diverse enough along racial, gender or class lines, and that the Fed itself could do with some institutional reform.

To a large extent, Fed officials agreed: "I'd be surprised if anyone in the Federal Reserve thinks we've done well on [diversity]," said New York Fed President William Dudley. "We're going to run this economy hot. Get unemployment down lower," added San Francisco Fed President John Williams. "So I don't think we disagree about that basic view."

And in Fed official's defense, some of this balancing is a judgment call. The Fed's inflation target is 2 percent, but since that is neither a ceiling nor a floor, officials must decide how far to overshoot that target and for how long in the name of spurring job growth. There is also generally a lag time between a change in interest rates and when it's felt in the economy. So Fed officials have to make educated guesses about when to drop rates to firm up a stumbling economy or raise them to get ahead of inflation.

Finally, Fed officials themselves can disagree over the full extent of their powers. That point was illustrated in Thursday's meeting when Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer disagreed over just what tools the Fed has to deal with asset bubbles. (Rosengren argued there were lots of tools while Fischer insisted there were few.)

The first complication here is that, even from a technical perspective, it's hard to see why the Fed is even contemplating another interest rate hike in December. Rod Adams, a neighborhood organizer from Minneapolis, noted in a particularly impassioned moment that there's essentially no indication that inflation is on the rise. Fed officials' own projections show inflation will just barely touch 2 percent through 2018. Josh Bivens, an economist at the Economic Policy Institute who joined Fed Up at Jackson Hole, argued that fully healing the damage from the Great Recession will require a prolonged period of overshooting the Fed's inflation target.

And in truth, none of the Fed officials at the meeting really debated any of these points. What did come up was the threat of asset bubbles and financial instability. "One of the ways that you get maximum employment is that you don't allow excesses to build up to the point that you actually have another recession, which hurts everybody in the room," Rosengren said.

This is where the unspoken moral problem of Fed policy really becomes inescapable. In very broad terms, the effects of lower interest rates and higher inflation tend to fall harder on the more fortunate members of society: retirees with savings portfolios, people with financial assets, those who work in the financial industry, and so on. Meanwhile, the effects of raising interest rates and slowing down jobs and wage growth tend to fall hardest on the least fortunate: Racial minorities, people with only a high school education, or people with prior criminal records.

At any given moment, unemployment for African-Americans is roughly double the national unemployment rate. But that gap tends to close during boom times and widen during downturns. "The economy has recovered for much of white America, but for black and Latino workers it has not," said Adams. "If you decide that we're at maximum employment now and you intentionally slow down the economy, you'll be leaving us behind, pulling up the ladder right after you've climbed it."

The brutal truth is that when the Fed slows down the economy by raising rates, it is throwing people out of work. And the people most likely to be thrown out of work first are those forced to the fringes of the labor market already by discrimination and other circumstances. So raising interest rates to fight financial instability essentially means black, Latino, and other underprivileged workers are the first to be thrown on the sacrificial alter to save us all from Wall Street's irrational exuberance.

This is partly why Fed Up is pushing for more racial and gender diversity among Fed officials, and to remove the financial industry from its privileged position among those officials. The idea is that the voices of those people the Fed will help or harm should all be equally heard in its deliberations. Fed officials may agree on running the economy hot for a while, but the lack of those voices may be hiding just how hot we need to run it.

There are practical policy changes the Fed could make as well. Bivens has released work on alternative tools the Fed could develop to pop bubbles without causing all that collateral damage: Higher capital requirements for banks, more use of its research powers and public relations to alert the markets to bubbles, and other ideas that already lie in the scope of the Fed's powers. Rosengren said the Fed should use all tools at its disposal to fight financial instability. But if Fed officials are looking for practical ways to build Fed Up's concerns more fully into its ways of doing business, it could start by developing those tools and explicitly rejecting interest rate hikes as a way to combat bubbles.

Another would be to adopt a higher inflation rate target like 3 percent or even 4 percent. If the effects of maximum employment take longer to reach marginalized communities, then the 2 percent target is driving the Fed to cut off job growth before those communities can ever heal.

It should be noted, as Fed Up activists did, that within the scope of its tools, the Fed has actually done a far better job maximizing jobs for marginalized Americans than Congress or the state governments. To some extent, the Fed is catching heat because these it's actually willing to listen to reason.

But it's long been said that societies are judged by how they treat their weakest and most vulnerable citizens — that the powerless have a uniquely powerful claim on our responsibilities. And Thursday reminded us that truism applies to the Fed too.

By Jeff Spross

Source

Executive Summary

The story of the economic recovery varies dramatically depending on where it is being told. On Wall Street, big banks look stronger, bigger, and healthier than ever. Large companies are making record profits. But, the labor market remains weak. Although the economy has added more jobs in recent months, job growth on Main Street is not nearly as robust as during previous recoveries.[i] Unemployment rates in nearly every state remain above pre-recession levels. Wages have been stagnant or falling for most workers and the quality of jobs has decreased significantly. Main Street still has no clear route to prosperity.

Dowload the report now.

Many communities are disproportionately struggling in this economy. The Latino unemployment rate is more than 2 percent higher than the rate for whites, and Latino wages and wealth are considerably lower than whites. Women continue to earn substantially less than men. This paper focuses on the economic disparities facing the African-American community in particular because the economic crisis is most acute there: African-American unemployment rates continue to exceed the national unemployment rates at the height of the recession, Black workers’ wages have dropped $0.44 over the past 15 years, though Latino and white wages have risen by $0.48 and $0.45, respectively; unemployment rates among African Americans are higher than those of other racial or ethnic groups; and, though Latino and white wealth has stabilized since the Great Recession, Black wealth continues to shrink. So, while Main Street may be stabilizing (albeit at a lower standard), the recovery has yet to reach Martin Luther King Boulevard. Creating a strong American economy must include prioritizing a genuine recovery for the African American community.

This joint report of the Center for Popular Democracy and the Economic Policy Institute examines the current state of the American economy and labor market, with particular attention to racial inequality and its contours before, during, and in aftermath of the Great Recession. It describes the role that federal monetary policy has played in exacerbating economic disparities over recent decades -- the shrinking national income share for working America and the exploding income and wealth gaps between the top 1 percent and the rest of us. The paper further explores the consequences of the major policy decision currently facing the Federal Reserve (or the Fed): whether to prioritize genuine full employment or to avoid inflation at the cost of robust employment and wage gains. Only by pursuing genuine full employment will the Fed ensure that the recovery reaches Main Street and Martin Luther King Boulevard – and communities of working people throughout the country. As the Fed makes crucial monetary policy decisions in the months and years to come, it must ensure that all communities can share in the prosperity of a functional economy.

The report also studies the decision-making processes and bodies of the Federal Reserve. Although the Board members that govern the regional Federal Reserve banks are legally required to represent the broad interests of the public, they are, in fact, predominantly representatives of the financial sector or large corporations. Without governance that represents the full diversity of the public, Fed decisions risk remaining uninformed by the full economic reality they create, as experienced in communities throughout the country. The Federal Reserve’s focus over the past 35 years has been on price stability, or tamping down inflation. While this focus is good for Wall Street, it has resulted in wage stagnation for most workers on Main Street.  The cost of this focus has been slow recoveries in labor markets after each downturn. America needs the Federal Reserve to concentrate on labor market stability and insure that wages are rising with productivity, so that workers reap the benefits from their efficiencies and hard work; that means prioritizing a wage growth target, rather than inflation. A Federal Reserve dominated by banks and major corporations will produce an economy that works for them, at the risk of leaving tens of millions of working families – particularly Black working families – with little hope of a better life.

The report recommends that the Fed:

Create a Strong & Fair Economy

Stimulate Good Jobs for All: The Federal Reserve should commit to building a full employment economy. It should keep interest rates low so that the numbers job openings and job seekers are balanced and everybody who wants to can find a good job.

Invest in the Real Economy: The Fed should use its existing legal authority to provide low- and zero-interest loans so that cities and states can invest in public works projects like renewable energy generation, public transit, and affordable housing that will create good new jobs.

Research for the Public Good: The Fed should study the harmful effects of inequality and examine how policies like raising the minimum wage and guaranteeing a fair workweek can strengthen the economy and expand the middle class.

Create a More Transparent & Democratic Federal Reserve

Ensure That Working Families’ Voices Are Heard: Fed officials should regularly meet with working families and community leaders, not just business executives, in order to get a more accurate picture of how the economy is working.

Represent the Public: In regional banks around the country, Fed leaders come overwhelmingly from financial institutions and major corporations. The Fed should appoint genuine representatives of the public interest to these governance positions.

Create a Legitimate Process for Selecting Fed Presidents: In late 2015 and early 2016, the regional Fed banks will select their next presidents, who will serve five year terms. Currently, the process for selecting those presidents is completely opaque and involves no public input. That needs to change, so that the public has a real role in the selection process.

Dowload the report now.

[i] Dean Baker, “257,000 Jobs Are Great, but Those Wall Street Boys Are Really Smart” (blog post), Center for Economic and Policy Research, February 6, 2015, http://www.cepr.net/index.php/blogs/beat-the-press/257000-jobs-are-great....

Last Updated April 21, 2015.