Hurricane Maria vigil on track in Hartford
Hurricane Maria vigil on track in Hartford
Despite confusion over permits, police and city officials say they’re working with two local community groups to help...
Despite confusion over permits, police and city officials say they’re working with two local community groups to help them hold a march and vigil Thursday to commemorate the one-year anniversary of Hurricane Maria.
Read the full article here.
The Minimum Wage Needs An Upgrade
The Minimum Wage Needs An Upgrade
Seventy-eight years ago today, the Fair Labor Standards Act made a groundbreaking promise to Americans: the promise of...
Seventy-eight years ago today, the Fair Labor Standards Act made a groundbreaking promise to Americans: the promise of a fair minimum wage for an honest day’s work.
That promise, however, has eroded badly over time. In recent decades, the federal benchmark has grown increasingly obsolete, guaranteeing a bare minimum that is nowhere near enough to keep up with the growing costs of rent, food, and other essentials.
As calls for higher wages grow louder nationwide, it is imperative that federal officials take action to raise the federal minimum wage and renew the promise to American workers made nearly a century ago.
If the federal rate had merely kept up with inflation since its peak in the late 1960s, it would be nearly $11, one-and-a-half times today’s rate of $7.25. That rate has stayed stagnant since Congress last raised it in 2009. It is a remarkable number of years to go without an increase in wages, and workers have suffered for it.
In the absence of Congressional movement, states and cities have increasingly moved to give workers the raises they need. Yet entrenched forces at the federal level continue to stonewall, putting forth arguments that grow increasingly irrelevant by the day.
Many, for example, raise the specter of job losses. Yet cities that have raised their minimum wage in the past two years, from Los Angeles to Seattle to Chicago, simply have not seen the kinds of cataclysm that many warned about.
In fact, in Seattle, dozens of new restaurants have opened since higher wages kicked in – including many run by one of the fiercest critics of the increase. By the end of 2015, new permits for restaurants, coffee shops, and other food service establishments were on track to keep pace with or even surpass those issued in years past.
Another myth: higher wages would lead to higher prices - a bigger bill for a Big Mac, a pricier trip to Target. Yet here too, the apocalyptic predictions that precede wage increases fail to come true. In Seattle, the costs of groceries, gas, and retail have stayed stable over the past year - even though businesses warned they would need to hike prices if wages were to rise.
In recent weeks, some fast-food chains have made headlines by declaring they would replace employees with automated kiosks. Looking at the bigger picture, though, the overall risks of automation are low. Research just last year found that, while minimum wage increases can reduce some routinized jobs like cashiers, they also swell the number of more complex jobs like food preparation, resulting in an overall zero-sum change.
The fact is, raising the minimum wage gives local economies a boost by putting more money in the pockets of consumers. Higher wages also let businesses hold on to workers and improve customer satisfaction, all of which improve employers’ bottom line.
That’s why the majority of businesses actually support a higher minimum wage, despite the noise coming from groups like the Chamber of Commerce and the National Restaurant Association. A leaked memo earlier this year showed that 80 percent of business executives around the country support higher wages and paid sick days - and that they are coached to oppose those policies in public.
While powerful interests keep trying to muddle the debate, it’s clear that even a growing economy is simply not reaching millions of hardworking Americans. And it’s not just fast-food workers. A variety of workers receive less than $15: teachers, paramedics, home health-care workers, and many others. A recent study showed that even many manufacturing jobs – the foundation of the middle-class – pay less than $15, forcing the government to cover the gap with public assistance programs like food stamps and Medicaid.
As minimum wages affect more and more workers, it is no wonder that more Americans are starting to get on board. This year, dozens of cities and states – including some that lean deeply Republican – are considering increases. Colorado, Maine, Arizona and Washington State are all running ballot measures that would raise wages for close to two million workers in those states alone.
Rather than focusing on a fantasy Armageddon that never comes, lawmakers in Congress would do well to embrace the need for better pay. In the meantime, states and cities will continue the fight to fulfill the pledge that the FLSA made so many years ago.
By JoEllen Chernow
Source
Rivera and Camara Put Up Immigration Bill They Admit Won’t Pass This Session
New York Observer - June 16, 2014, by Will Bredderman - Four days before the legislative session in Albany ends for the...
New York Observer - June 16, 2014, by Will Bredderman - Four days before the legislative session in Albany ends for the summer, Bronx State Senator Gustavo Rivera and Brooklyn Assemblyman Karim Camara have proposed sweeping legislation granting full citizenship rights to undocumented immigrants living in New York state–legislation which even they admit will not get passed this session.
The bill that Mr. Rivera and Mr. Camara have sponsored will grant the right to vote in state and local elections, college financial aid, access to Medicare, drivers’ licenses, medical and chiropractic licenses and full civil rights protections to the three million-odd foreign nationals currently living in New York State without proper paperwork. The immigrants would be required to show proof of identity, proof they have lived in the state for three years, proof they have paid state taxes for three years, proof they have and will continue to obey state laws and a willingness to do jury duty.
“This is a bold idea. And we do not expect anything to pass quickly. But this sets things in motion,” Mr. Rivera, comparing the legislation to the push to legalize same-sex marriage, said at a press conference in Battery Park.
“The defeat of Cantor has made it clear we have to act quickly to protect the rights and privileges of all people living in this state,” Mr. Rivera said.
The bill would only pertain to the undocumented immigrants’ interactions in New York State, and would do nothing to alter federal recognition of citizenship, federal border security, or federal deportation policies.
Source
New York charter school audits reveal $28 million in questionable expenses
New York State charter schools have made more than $28 million in questionable expenditures since 2002, according to a...
New York State charter schools have made more than $28 million in questionable expenditures since 2002, according to a new review of previous audits of the publicly funded, privately run schools.
The Center for Popular Democracy’s analysis charter school audits found investigators uncovered probable financial mismanagement in 95% of the schools they examined.
Kyle Serrette, education director for the progressive group, said the review of previously published audits showed the schools need greater oversight.
“We can’t afford to have a system that fails to cull the fraudulent charter operators from the honest ones,” said Serrette, whose group compiled the report with the non-profit Alliance for Quality Education. “Establishing a charter school oversight system that prevents fraud, waste and mismanagement will attack the root cause of the problem.”
The state controller’s office and state Education Department have audited 62 of New York’s 248 charter schools, according to Serrette’s report. All told, Serrette’s group estimates wasteful spending at charters could cost taxpayers more than $50 million per year.
Eighteen audits targeted charters in New York City, representing about 9% of the 197 charters in the five boroughs. Each audit found issues.
A 2012 audit found Brooklyn Excelsior Charter School was paying $800,000 in excess annual fees to the management company that holds its building’s lease. A 2012 audit of Williamsburg Charter High School revealed school officials overbilled the city for operations and paid contractors for $200,800 in services that should have been provided by the school’s network. A 2007 audit of the Carl C. Icahn Charter School determined the Bronx school spent more than $1,288 on alcohol for staff parties and failed to account for another $102,857 in expenses.The city spends more than $1.29 billion on charters annually.
State Education Department officials and a spokesman for the state controller’s office declined to comment on Serrette’s report.
Northeast Charter School Network CEO Kyle Rosenkrans said the schools already get plenty of oversight because they are subject to audits and must have their charters renewed at least every five years.
“Charter schools are the most accountable public schools there are,” the charter advocate said. “If we don’t perform or we mismanage our finances, we get shut down.
Source: New York Daily News
For Many Americans, the Great Recession Never Ended. Is the Fed About to Make It Worse?
When the Federal Reserve considers raising interest rates on July 28—and then again every six weeks after—MyAsia Reid,...
When the Federal Reserve considers raising interest rates on July 28—and then again every six weeks after—MyAsia Reid, of Philadelphia, will be paying close attention. Despite holding a bachelor’s degree in computer science, completing a series of related internships, and presenting original research across the country, Reid could not find a job in her field and, instead, pieces together a nine-hour-per-week tutoring job and a 20-hour-per-week cosmetology gig. The 25-year-old knows that an interest-rate hike will hurt her chances of finding the kinds of jobs for which she has trained, and earning the wage increase she so desperately needs.
A Fed decision to raise interest rates, expected sometime this year, amounts to a vote of confidence in the economy—a declaration that we have achieved the robust recovery we need. “We are close to where we want to be, and we now think that the economy cannot only tolerate but needs higher interest rates,” the chairwoman of the Federal Reserve, Janet Yellen, told Congress during a July 15 policy briefing.
But for many millions of Americans, the recovery has yet to arrive, and for them, a rate hike will be disastrous. It will put the brakes on an economy still trudging toward stability; stall progress on unemployment, especially for African-Americans; and slow wage growth even more for the vast majority of American workers.
The general argument for raising interest rates is that it will prevent wage costs from pushing up inflation. However, there is no data suggesting price instability; nor is there any indication that wages have risen enough to spur such inflation. For the overwhelming majority of American workers, wages have stagnated or even dropped over the past 35 years, even as CEOs have seen their compensation grow 937 percent. During the same period, wage gaps between white workers and workers of color have increased, and black unemployment is at the level of white unemployment at the height of the Great Recession. Meanwhile, the labor-force participation rate is less than 63 percent, the lowest in nearly four decades, suggesting that many Americans have simply given up looking for work.
Yellen has herself often urged the Fed to look at the broadest possible employment picture. Yet, during her recent congressional testimony, shedownplayed the Fed’s ability to address racial disparities, saying that the central bank does not “have the tools to be able to address the structure of unemployment across groups” and that “there isn’t anything directly that the Federal Reserve can do” about it. She cited, rightly, a range of other factors, including disparate educational attainment and skill levels, that contribute to economic and social disparities between racial groups. But she also glossed over the importance of the economic environment in shaping workers’ unequal chances.
One defining metric in shaping workers’ chances is the unemployment rate. A high unemployment rate facilitates racial discrimination. When there are too many qualified job candidates for every job, employers can arbitrarily limit their labor pool based on unnecessary educational requirements, irrelevant credit or background checks, or straightforward bias. A tight labor market, by contrast, makes it much harder for employers to succumb to prejudices and overlook qualified workers simply because of bias. When the number of job seekers matches the number of job vacancies, African-Americans, Latinos, women, gays and lesbians, injured veterans, and formerly incarcerated workers finally get their due in the workforce.
The late 1990s, when unemployment was at about 4 percent, bear out this thesis. During that rosier era, black unemployment was 7.6 percent, and the ratio of black family income to white family income rose substantially.
As the guardian of monetary policy, the Federal Reserve has a number of tools for encouraging a tight labor market, and one of those tools is to keep interest rates low. By keeping rates low, the Fed creates a hospitable environment for job growth by lowering the borrowing costs for consumer and business spending—including hiring new workers. By contrast, raising rates deliberately suppresses spending by consumers and businesses. In the process, it slows job growth, holds down wages, and unnecessarily maintains racial disparities.
With so many workers still struggling, there is no need to cut off this recovery prematurely. Inflation remains below the Fed’s already-low 2 percent target, unemployment and underemployment are too high, and wage growth and labor-force participation are too low. In fact, the Fed should be doing everything within its power to keep nudging the recovery forward for the workers still caught in the slipstream of the Great Recession.
The Federal Reserve should not raise interest rates this week, nor when it meets again six weeks after that. It should not raise rates at all in 2015. Doing so would cause tremendous harm to the aspirations and lives of tens of millions of working families, and would disproportionately hurt African-Americans.
MyAsia Reid knows the difference that a full-employment economy can make. She is ready to participate in the economic recovery. And she will be watching as the Fed decides whether to hold to a strategy of strengthening the recovery or pursue a new strategy that jeopardizes her chances and her community.
Source: The Nation
Three honored by Jefferson Awards for public service
Three honored by Jefferson Awards for public service
Barkan, who was diagnosed with amyotrophic lateral sclerosis in 2016, started two programs at the Center for Popular...
Barkan, who was diagnosed with amyotrophic lateral sclerosis in 2016, started two programs at the Center for Popular Democracy, a national advocacy group that promotes progressive political groups. The programs include “Fed Up,” a pro-worker policy group, and “Local Progress,” a network of progressive politicians. For one of his projects, “Be a Hero,” Barkan traveled across a country in a wheelchair-accessible RV to campaign for political candidates who will “stand for” families so that “health care benefits [families have] paid for [will be] there for them when they most need it,” according to the campaign’s website.
Read the full article here.
Activists: US Justice Department Response to Baltimore Police Racism Falls Short
Activists: US Justice Department Response to Baltimore Police Racism Falls Short
The response by the US Department of Justice to exposing Baltimore Police Department (BPD) violations of citizens’...
The response by the US Department of Justice to exposing Baltimore Police Department (BPD) violations of citizens’ constitutional rights falls short of addressing the systemic problem of racism in US policing, activists said.
Read the full article here.
Puerto Rican Families Displaced in Florida by Hurricane María Recruited as Potential Voters
Puerto Rican Families Displaced in Florida by Hurricane María Recruited as Potential Voters
The Summer for Puerto Rico campaign is spearheaded by Julio López Varona, the Director of Puerto Rico Diaspora...
The Summer for Puerto Rico campaign is spearheaded by Julio López Varona, the Director of Puerto Rico Diaspora Campaigns at the Center for Popular Democracy. He emphasized that the focus of the campaign is on promoting political empowerment and literacy, by providing context on who are the lawmakers, and teaching communities about the effects of colonialism.
Read the full article here.
Overnight Finance: Obama huddles with Yellen; Puerto Rico bill markup Wednesday
Overnight Finance: Obama huddles with Yellen; Puerto Rico bill markup Wednesday
TRADING NOTES: President Obama met with Federal Reserve Board Chairwoman Janet Yellen, but interest rates were...
TRADING NOTES: President Obama met with Federal Reserve Board Chairwoman Janet Yellen, but interest rates were apparently not on the agenda.
Obama did not plan to discuss interest rates with Yellen, according to White House press secretary Josh Earnest. He argued such a conversation could undercut the chair's independence in setting monetary policy.
"I would not anticipate that, even in the confidential setting, that the president would have a conversation with the chair of the Fed that would undermine her ability to make these kinds of critical monetary policy decisions independently," Earnest told reporters ahead of the meeting.
The closed-door discussion is instead an opportunity to "trade notes" on broader economic trends in the U.S. and abroad, as well as on a new set of regulations on Wall Street financial firms.
Obama and Yellen talked about the growth outlook, "the state of the labor market, inequality and potential risks to the economy," the White House said after the meeting. The Hill's Jordan Fabian has more: http://bit.ly/25VuzIZ.
HOUSE TO MARKUP PUERTO RICO DEBT BILL: The House Natural Resources Committee will begin on Wednesday to mark up legislation aimed at saving Puerto Rico from a massive debt crisis.
Lawmakers have been working to make significant changes to the measure, which is expected to unveiled as early as Monday night, since the panel released a discussion draft on March 29.
The Puerto Rico measure, which put the island's finances under federal oversight and authorize a restructuring of some of its debt, will need to strike a balance and attract bipartisan support and the backing of the White House to move forward.
LEW MAKES CASE FOR GLOBAL ECONOMIC LEADERSHIP: Treasury Secretary Jack Lew on Monday made the case for the United States to continue its global economic leadership as the administration faces criticism from Donald Trump and other presidential candidates.
"We know that the global landscape of the next century will be very different than that of the post-war era," Lew said in a speech at the Council on Foreign Relations. "And if we want it to work for the American people, we need to embrace new players on the global economic stage and make sure they meet the standards of the system we created, and that we have a strong say in any new standards."
"The worst possible outcome would be to step away from our leadership role and let others fill in behind us," he added. The Hill's Naomi Jagoda fills us in: http://bit.ly/1qjTIwe.
GOLDMAN SACHS SETTLES MORTGAGE PROBE FOR $5 BILLION: Goldman Sachs will pay more than $5 billion to settle charges that it engaged in "serious misconduct" when selling risky mortgages leading up to the 2008 financial collapse.
The $5.06 billion civil settlement also saw the Wall Street giant admit it failed to properly inform investors of the risks in the subprime mortgage securities the bank was selling.
"This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail," acting associate attorney general Stuart Delery said in a statement.
One of the government charges, which Goldman has now acknowledged, was that the bank kept internal concerns about the strength of the mortgage market hidden from potential investors. Here's more from The Hill's Peter Schroeder: http://bit.ly/1qjTJQQ.
SANDERS SAYS GOLDMAN'S BUSINESS 'RIGGED': Bernie Sanders charged Monday that the settlement proves Goldman Sachs's business is "based on fraud."
The Justice Department announced Monday that the Wall Street giant would pay over $5 billion to settle charges it sold risky mortgage investments in the lead up to the financial crisis, and didn't tell investors enough about it.
Sanders, who has built his presidential campaign in large part on big bank bashing, said the settlement proves his point.
"What they have just acknowledged to the whole world is that their system ... is based on fraud," he told supporters in New York.
Sanders also complained that the civil settlement did not include any criminal charges, proving the "corruption of our criminal justice system." http://bit.ly/1TNk2Lm
HAPPY MONDAY and welcome to Overnight Finance, where we're wondering why Herbert Hoover gets to join the racing presidents. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.
Tonight's highlights include securities fraud charges for Texas's attorney general, a trillion-dollar national pension gap and a Tax Day delay.
See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://www.thehill.com/signup/48.
ON TAP TOMORROW:
Senate Finance Committee: Hearing on examining cybersecurity and protecting taxpayer information, 10 a.m
Senate Appropriations Subcommittee on Financial Services: Hearings to examine proposed budget estimates and justification for fiscal year 2017 for the Securities and Exchange Commission and Commodity Futures Trading Commission., 10:30 a.m.
House Rules Committee: Business Meeting: H.R. 2666: No Rate Regulation of Broadband Internet Access Act; H.R. 3340: Financial Stability Oversight Council Reform Act; H.R. 3791: To raise the consolidated assets threshold under the small bank holding company policy statement and for other purposes.
Puerto Rico Oversight, Management, and Economic Stability Act expected to be released.
"Getting Her Money's Worth: What Will It Take to Achieve Equal Pay?" discussion featuring Sens. Kirsten Gillibrand (D-NY) and Heidi Heitkamp (D-ND), 11:45 am.
BERNIE FANS LEFT'S FLAMES AGAINST FED: Liberal activists are putting a target on the Federal Reserve for the 2016 elections, much to the delight of the Bernie Sanders campaign.
Denouncing an agenda that they say tilts toward Wall Street, members of the "Fed Up" coalition on Monday unveiled a set of reforms that would alter how the central bank does business.
"No longer are we focused only on fixing the Fed's monetary policy and internal governance positions," said Ady Barkan, the group's campaign director. "We are now beginning an effort to reform the Federal Reserve itself. Peter Schroeder breaks down the fight: http://bit.ly/23yMSBH.
YOU HAVE THREE MORE DAYS TO PROCRASTINATE: For most people, tax returns are due one week from today.
This year's due date for filing federal individual income tax returns is April 18, not April 15. This is because the District of Columbia is observing Emancipation Day on April 15, which falls on a Friday, according to the Internal Revenue Service (IRS).
People living in Massachusetts and Maine have until April 19 to file their tax returns because those states observe Patriots' Day on April 18.
Those who are serving in combat zones or contingency operations or become hospitalized due to injuries from their service can have additional time to pay their taxes. Those affected by federally declared disasters might also have more time, the IRS said: http://bit.ly/1Q3tzHk.
AG GROUPS PUSH FOR PACIFIC TRADE DEAL: The nation's farmers and ranchers are putting their weight behind efforts urging Congress to pass a sweeping Asia-Pacific deal this year.
In a letter to congressional leaders on Monday, 225 food and agricultural groups called on lawmakers to move forward on the 12-nation Trans-Pacific Partnership before President Obama leaves office.
"The TPP presents a valuable opportunity for U.S. agriculture; one that we cannot afford to miss," the groups wrote. The Hill's Vicki Needham explains why: http://bit.ly/1S5QCFD.
SEC CHARGES TEXAS ATTORNEY GENERAL: The Securities and Exchange Commission on Monday charged Texas's top law enforcement official with civil securities fraud for allegedly deceiving investors in a computer company.
Texas Attorney General Ken Paxton (R) received 100,000 shares of Servergy, a Nevada-based technology company, to pitch investors on a server it was selling between 2011 and 2013, according to the SEC complaint. Servergy officials allegedly marketed the server with incorrect information, and Paxton allegedly did not disclose to investors that he would be paid a commission: http://bit.ly/1RPHyG0.
US PUBLIC PENSIONS FACE $3 TRILLION HOLE: The nation's public pension system is facing a $3.4 trillion funding hole that may force cities and states to either cut spending or raise taxes to cover future shortfalls.
The deficit in pension funds is three times more than official figures and is growing, and without an overhaul could weigh on state and local budgets and lead to Detroit-like bankruptcies, according to research reported by the Financial Times.
Joshua Rauh, a senior fellow at the Hoover Institution who put together the report, told the FT that "the pension problems are threatening to consume state and local budgets in the absence of some major changes."
"It is quite likely that over a 5- to 10-year horizon we are going to see more bankruptcies of cities where the unfunded pension liabilities will play a large role." Here's more from Vicki Needham: http://bit.ly/1Su85op.
CONSERVATIVES FIGHT ENERGY TAX BREAKS IN FAA BILL: Conservative groups that oppose a proposal to include energy tax breaks in the long-term reauthorization of the Federal Aviation Administration are vowing to take their fight to the House if the Senate moves ahead.
Americans for Prosperity and Freedom Partners said Monday that if the Senate ends up attaching energy tax provisions to the FAA bill, the organizations will ratchet up pressure on lawmakers across the Capitol to oppose the language or pass a clean-extension of FAA.
"If the Senate isn't going to do anything to stop this, we're going to put pressure on the House," Andy Koenig, senior policy advisor at Freedom Partners, said on a press call. "The House is under no obligation to take up a bunch of energy subsidies if they don't want to." The Hill's Melanie Zanona walks us through the battle: http://bit.ly/1RPHrKH.
DEMS CALL FOR GREATER NONBANK MORTGAGE OVERSIGHT: Two Democratic lawmakers are calling on the nation's top consumer protection agency to ramp up its oversight of nonbank mortgage servicers.
Sen. Elizabeth Warren (Mass.) and Rep. Elijah Cummings (Md.) asked the Consumer Financial Protection Bureau (CFPB) on Monday to identify all of and collect more data on the growing number of financial institutions other than banks that service mortgages.
Warren and Cummings pointed to recommendations from a non-partisan government watchdog report published Monday. Warren, a long-time financial industry watchdog, and Cummings, the top Democrat on the House Oversight Committee, requested the Government Accountability Office (GAO) study. I'll fill you in on the rest here: http://bit.ly/1Sc3ldc.
Did you know 67% of all job growth comes from small businesses? Read More
NIGHTCAP: Five Starbucks locations in DC will start serving alcohol and "small plates," which is millennial for paying more money for less food: https://www.washingtonian.com/2016/04/08/5-dc-starbucks-will-sell-beer-wine-small-plates-next-week/.
By Sylvan Lane
Source
Lael Brainard, a Fed governor in the political glare
Lael Brainard, a Fed governor in the political glare
In the middle of meetings of the world’s central banking elite in Wyoming’s Jackson Lake Lodge in August 2015, Lael...
In the middle of meetings of the world’s central banking elite in Wyoming’s Jackson Lake Lodge in August 2015, Lael Brainard sat down with activists who were denouncing calls for tighter monetary policy amid America’s sluggish wage growth.
As the Federal Reserve Board member listened intently over the course of about an hour, protesters from New York ranging from fast-food employees to a worker on film sets talked about the difficulties of making ends meet on rock-bottom wages in a high-cost metropolis, recalls Shawn Sebastian, field director of the Fed Up coalition that arranged the meeting.
Ms Brainard’s decision to drop by carried a message. A fairly new member of the Board of Governors who had said relatively little about monetary policy, Ms Brainard was about to set out her stall as a vocal advocate of low interest rates at the Fed — based in part on the absence of wage growth.
Her steadfast calls for continued economic stimulus have burnished her credentials among pro-worker groups including Fed Up, which met a broader range of Fed officials at this year’s Jackson Hole gathering. They come amid speculation that she could be in line for a cabinet role if the Democrats hold the White House in November.
“When it comes to monetary policy, Lael Brainard is one of the strongest and loudest voices advocating for policies that working families across the US need,” says Mr Sebastian.
In Washington, Ms Brainard is being spoken of as one of the candidates for Treasury secretary in a Hillary Clinton administration — a move that would make her the first woman to head the department. At the same time she has become the target of Republican attacks because of her public support for the Clinton campaign and fury within the party over easy-money policies.
Early this year Ms Brainard donated $2,700 to the Clinton campaign, a decision described by former officials as a blunder for a sitting Fed governor during an election year — even if it is permissible under Fed rules. It increased the Fed’s political vulnerability at a time when it is a prime target for vituperative assaults on its independence by Donald Trump, the Republican presidential candidate.
The donation was the subject of sharp exchanges in Congress last month as Fed chair Janet Yellen was forced to reject claims by Republican representative Scott Garrett that the central bank is excessively cosy with the Democrats.
There are people who blather on and she is not one of them
Jared Bernstein, a former economic adviser to Joe Biden
Ted Truman, a former Fed official who is a non-resident senior fellow at the Peterson Institute for International Economics, says Ms Brainard’s donation was a personal mistake that “didn’t help the Fed at all”. He also argues that the issue pales in comparison with politically charged episodes in the past, such as the Nixon years when the Fed was leaned on heavily to keep rates low.
Ms Brainard’s forceful drive for easy monetary policy began two months after the 2015 Jackson Hole meetings, when she delivered a blunt speech that left some with the impression that she was at loggerheads with Ms Yellen. Ms Brainard warned against prematurely lifting rates amid slack in the labour market and subdued inflation — even as the chair was steering markets to expect a move by the end of the year.
Ms Brainard did not go on to formally dissent when Ms Yellen presided over a rate increase that December. Since then the two policymakers have appeared more closely aligned, with both recently arguing that the US recovery has further room to run before the central bank needs to increase rates again.
Ms Brainard has urged caution in part because of the risk that overseas shocks ricochet back to the US via highly integrated financial markets. This global focus builds on her work as the US’s top financial diplomat under former Treasury secretary Tim Geithner between 2010 and 2013, where in the gruelling post of undersecretary for international affairs she was a key US figure in discussions over the euro area debt crisis, as well as the broader global fallout from the financial crash.
Fed should not rush to raise rates, says Brainard
Already low expectations of a September increase fall further after policymaker’s cautious comments
One official who spoke with her regularly was George Papaconstantinou, Greece’s finance minister from 2009 to 2011. He recalls hearing from Ms Brainard two or three times a week during the febrile days of early 2010, as Europe dragged its feet over how to handle the Greek crisis and the US pushed for action. The calls were partly “therapy” for him and partly information-gathering by Ms Brainard so she had “a better sense of how close we were to the edge”. He says: “She clearly knew her stuff.”
Ms Brainard, who declined to comment for this article, developed her interest for global affairs in part on the back of her upbringing as a diplomat’s daughter, spending some of her childhood behind the iron curtain in Poland and East Germany. A former MIT economics professor, she has three children and is married to Kurt Campbell, a former top state department official.
A reserved individual, Ms Brainard left the Treasury with a mixed reputation among officials, some of whom found her unsupportive and distant. Others, including Jared Bernstein, a former economic adviser to vice-president Joe Biden, praise her straight-talking manner and clarity of thought. “There are people who blather on and she is not one of them,” he says.
When Washington observers size up potential Treasury secretaries, Ms Brainard’s name comes up alongside Gary Gensler, the former head of the Commodity Futures Trading Commission, and Sheryl Sandberg, chief operating officer of Facebook.
What gives Ms Brainard’s claim potency is not only her international and domestic economic experience, but also the helpful absence of a stint on Wall Street in her curriculum vitae. For many Democrats, her very public campaign for low rates has only strengthened her qualifications for the post.
By Lael Brainard
Source
1 month ago
1 month ago