CPD IN THE NEWS

THE KANSAS CITY Federal Reserve’s annual symposium in Jackson Hole, Wyoming, attracts central bankers, economists and the global elite. The past two years, some new faces came to Jackson Hole: low-wage workers who object to the Fed raising interest rates when too many at the bottom rungs of the economic ladder still struggle.

This year, somebody appears to be ensuring that ordinary people won’t disrupt the party.

The Fed Up campaign, a coalition that brought the workers to Jackson Hole in 2014 and 2015, has filed a formal complaint with the departments of Justice and the Interior, along with the National Park Service, because their hotel reservations for this year’s conference were mysteriously canceled.

Despite paying in advance for spots at the 385-room Jackson Lake Lodge, the Grand Teton Lodge Company told the campaign July 26 that their reservations would not be honored, citing a “computer glitch.” Grand Teton operates the lodge, a publicly owned facility, under a contract with the National Park Service.

Thirty-nine members of the coalition planned to attend this year, but the lodge said computer glitch resulted in overbooking its rooms by 18. Instead of spacing that out among all Jackson Lake lodge guests, the company cancelled all 13 of the Fed Up campaign’s rooms. So nearly three-quarters of the cancelled reservations belonged to the Fed Up group, even though they were told when they booked that 100 rooms were still available at the lodge.

“There is no legitimate explanation for the company’s decision,” wrote Fed Up campaign chair Ady Barkan in the complaint, which alleges possible violations of the Civil Rights Act of 1964 and the First Amendment right to peaceable assembly. “This is egregious and disparate treatment.”

The coalition’s reservations were made in the names of staffers for three of its member organizations – the Center for Popular Democracy, the Economic Policy Institute, and the Center for Economic and Policy Research – using work email addresses.

In an email statement, Alex Klein, vice president and general manager of Grand Teton Lodge Company, said: “This summer we encountered an error with our booking system that resulted in our Jackson Lake Lodge property being oversold by 18 rooms for three peak nights in August. We worked proactively and diligently with guests to relocate them to our nearby Flagg Ranch property, and offered to keep them on a wait list for available rooms should there be cancellations at the Jackson Lake Lodge. We regret inconveniencing any of our guests.”

The Jackson Hole symposium takes place from August 25-27. The event typically features a highly anticipated speech by the Federal Reserve chair – Janet Yellen is expected this year.

In 2014 and 2015, Fed Up brought unemployed workers and local activists to Jackson Hole to highlight how the economy has left behind communities of color and to urge the Fed to hear their voices. Last year, they held an alternative conference in Jackson Hole lodge conference rooms, featuring economists like Nobel Prize winner Joseph Stiglitz.

This year, Fed Up planned to hold a teach-in outside of the lodge, and secured permits for a protest. They still expect 120 members, their largest contingent ever, to attend the proceedings, but they will have to stay in alternative accommodations that are a 20- to 30-minute drive away, separate from symposium guests and the press.

The majority of Fed Up members planning to attend the conference are African-American and Latino, which is why the campaign wants the Justice Department to investigate the matter as a violation of laws ensuring nondiscriminatory treatment in public accommodations. They also want to know if the Kansas City Federal Reserve was at all involved with the decision.

Kansas City Federal Reserve President Esther George has consistently drawn criticism from the Fed Up coalition for wanting to raise interest rates and slow down the economy.

The lodge’s general manager told Fed Up that their reservations were pulled because they were booked in a group of 13, making it easier to cancel them. This, the campaign believes, also violates First Amendment rights to freedom of assembly.

“I recognize that our presence is not desired by either the company or the organizers of the symposium,” Barkan wrote. “But the physical and virtual segregation of Federal Reserve decision-makers far away from the voices and opinions of working class people of color is precisely what the Fed Up coalition is trying to dismantle.”

The incident comes at a sensitive time for the Federal Reserve, which has already been criticized by 127 members of Congress for a lack of diversity among its leadership, which is disproportionately white, male, and either current or former executives of large corporations and financial institutions. Activists believe this homogeneity in race, gender, and background drives central bank decisions that cater to the wealthy and neglect communities of color.

Barkan’s letter to Justice and the Interior concludes: “Once again, the voices and faces of working class people of color have been marginalized … and an opaque, inaccessible, and incredibly powerful quasi-governmental institution has received a bit more insulation from the opinions of the people over whose lives it has so much power.”

The Intercept has reached out for comment to the Justice Department, the Interior Department, and the National Park Service, but did not immediately hear back.

Top photo: National Park Rangers stand silhouetted inside the lobby of Jackson Lake Lodge during the Jackson Hole economic symposium in August 2015.

By David Dayen

Source

Oh, what a difference a year can make.

Last July, Federal Reserve chairwoman Janet Yellen endured criticism for House testimony in which she seemed to imply that there was little the Fed could do to address the disproportionately high African-American unemployment rate.

Not so on Tuesday. In her semi-annual testimony to the Senate Banking Committee, Yellen emphasized that the failure of the economic recovery to reach communities of color influences the Fed’s decision-making, and made a strong commitment to improving diversity at the central bank.

“Jobless rates have declined for all major demographic groups, including for African Americans and Hispanics,” Yellen said, according to her prepared remarks. “Despite these declines, however, it is troubling that unemployment rates for these minority groups remain higher than for the nation overall, and that the annual income of the median African-American household is still well below the median income of other U.S. households.”

Yellen’s policy argument has not fundamentally changed. It is the Fed’s job to maximize employment in the economy as the whole, she says, and it lacks the tools to target particular communities. And the Fed chief has clarified since last summer that she takes seriously how the Fed’s adjustment of interest rates can have an especially big impact on African Americans and Latinos, who have higher jobless rates.

But Yellen’s remarks and actions on Tuesday represent the Fed’s greatest demonstration yet that it is putting the concerns of communities of color front and center on its agenda.

The Fed Up campaign, a coalition of progressive groups that has led the push to make the Federal Reserve more responsive to workers in general, and communities of color in particular, was pleased with the focus of Yellen’s testimony.

“Each time since Yellen spoke last July, when she got pushback over what she said, she has gotten a little bit better,” said Jordan Haedtler, Fed Up’s campaign manager. “Now she is proactively showing that the Fed is assessing this data and does take this data into account.”

Diversity is an extremely important goal and I will do everything I can to further advance it.

This week’s hearings, held every six months in both chambers of Congress — the House will hold its hearing on Wednesday — are an opportunity for the Fed chair to update lawmakers about the overall state of the economy. As part of the briefing, the Fed releases an accompanying monetary policy report summarizing its economic assessment and research.

For the first time, the Fed chose to devote a section of its report to whether the “gains of the economic expansion [have] been widely shared.” That section focused on how the recovery affected different races and ethnicities differently.

The results are discouraging. Despite years of job growth, the rates of full-time work for African Americans and Latinos are a few percentage points lower than they were before the recession, while the rates among white and Asian-American workers have more or less reached pre-recession levels. And the median income of black households, which took the biggest hit of any group during the recession, has also been slower to recover, reaching only 88 percent of what it was in 2007, compared with about 94 percent for the other three groups.

Responding to a question about the new section from Sen. Sherrod Brown (D-Ohio), Yellen insisted that weighing the disparate impact of economic growth on a range of different groups is a key part of the Fed’s mission.

“There are very significant differences in success in the labor market across demographic groups,” she said. “It is important for us to be aware of those differences and to focus on them as we think about monetary policy and the broader work that the Federal Reserve does in the area of community development and trying to make sure that financial services are widely available to those that need it, including low- and moderate-income [households].”

Yellen also recognized the importance of diversity — of race, gender, professional background and ideology — within the Fed’s ranks in ensuring the bank remains sensitive to a broad array of Americans’ economic experiences.

She touted her creation of a task force in the Fed to improve its gender and ethnic diversity, but acknowledged there is more to be done.

“Diversity is an extremely important goal and I will do everything I can to further advance it,” Yellen said.

Progressive groups and their allies in Congress trying to make the Fed more accountable to the public have focused on increasing diversity and reducing Wall Street’s influence at the central bank. Eleven senators, including Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), and 116 House members sent a letter to Yellen on May 12 urging her to prioritize the diversity of Fed officials, especially at the 12 regional Fed banks, which are privately owned. (Hillary Clinton expressed similar sentiments in a statement later that day.)

The makeup of the regional Fed bank boards is important because they are dominated by the big banks and have free reign to appoint their presidents. The regional Fed bank presidents hold five seats on the Federal Open Market Committee, the central bank panel that adjusts the benchmark interest rate. Currently, regional Fed presidents make up half of the FOMC’s influential votes.

As a result, the Fed officials with the power to raise interest rates and effectively increase unemployment are selected by people who are disproportionately white, male and from the finance and business sectors.

In the interests of changing that, the Fed Up campaign on Monday released a slate of 39 candidates for the regional Federal Reserve bank boards of directors. The candidates not only reflect racial and gender diversity, but also come exclusively from academic institutions, community groups and labor organizations.

“On racial and gender diversity there has been modest progress, though it has not taken place at the rate we would like to see,” Haedtler said. Haedtler added that there is even greater room for improvement when it comes to the diversity of professional backgrounds of board members and other top Fed officials, an area where he said there has been “regression” under Yellen’s watch.

By Daniel Marans

Source

A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public.

Dartmouth College economics professor Andrew Levin—special adviser to Ben Bernanke and Janet Yellen between 2010 and 2012 when they were Fed chairman and vice chairwoman—is pressing for the overhaul with Fed Up coalition activists.

Dartmouth College economics professor Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012, is pressing for the overhaul with Fed Up coalition activists. Many of the proposed changes target the 12 regional Federal Reserve Banks, which are quasi-private and technically owned by commercial banks in their respective districts.

“A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan. He described his proposals as “sensible, pragmatic and nonpartisan.”

The former central bank staffer said he sees his ideas as designed to maintain the virtues the central bank already brings to the table. They aren’t targeted at changing how policy is conducted today. “What’s important here is that reform to the Federal Reserve can last for 100 years, not just the near term,” he said.

That said, what is being sought by Mr. Levin and the activists is significant and would require congressional action. Ady Barkan, who leads the Fed Up campaign, said the Fed’s current structure “is an embarrassment to America” and Fed leaders haven’t been “willing or able” to make changes.

A Federal Reserve spokesman declined to address the proposal.

Mr. Levin wants the 12 regional Fed banks to be brought fully into the government. He also wants the process of selecting new bank presidents—they are key regulators and contributors in setting interest-rate policy—opened up more fully to public input, as well as term limits for Fed officials.

Mr. Levin’s proposal was made in conjunction with the Center for Popular Democracy’s Fed Up coalition, a group that has been pressuring the central bank for more accountability for some time. The left-leaning group has been critical of the structure of the regional banks, and has been pressing the Fed to hold off on raising rates in a bid to make sure the recovery is enjoyed not just by the wealthy, in their view.

The proposal was revealed on a conference call that also included a representative from Bernie Sanders’s presidential campaign, although all campaigns were invited to participate.

Mr. Levin says the members of the regional Fed bank boards of directors, the majority of whom are selected by the private banks with the approval of the Washington-based governors, should be chosen differently. The professor says director slots now reserved for financial professionals regulated by the Fed should be eliminated, and that directors who oversee and advise the regional banks should be selected in a public process involving the Washington governors and local elected officials. These directors also should better represent the diversity of the U.S.

Mr. Levin also wants formal public input into the selection of new bank presidents, with candidates’ names known publicly and a process that allows for public comment in a way that doesn’t now exist. The professor also wants all Fed officials to serve for single seven-year terms, which would give them the needed distance from the political process while eliminating situations where some policy makers stay at the bank for decades. Alan Greenspan, for example, was Fed chairman from 1987 to 2006.

With multiple vacancies in recent years, the selection of regional bank presidents has become a hot-button issue. Currently, the leaders of the New York, Philadelphia, Dallas and Minneapolis Fed banks are helmed by men who formerly worked for or had close connections to investment bank Goldman Sachs.

Mr. Levin called for watchdog agency the Government Accountability Office to annually review and report on Fed operations, including the regional Fed banks. He also wants the regional Fed banks to be covered under the Freedom of Information Act. A regular annual review hopefully would insulate the effort from perceptions of political interference, Mr. Levin said.

By Michael S. Derby 

Source

The Vera Institute of Justice and partner organizations today announced that detained New Yorkers in all upstate immigration courts will now be eligible to receive legal counsel during deportation proceedings. The 2018 New York State budget included a grant of $4 million to significantly expand the New York Immigrant Family Unity Project (NYIFUP), a groundbreaking public defense program for immigrants facing deportation that was launched in New York City in 2013...

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