Activists Protest Universities Over Investments In Puerto Rico Bondholders
Activists Protest Universities Over Investments In Puerto Rico Bondholders
A coalition of social and economic justice groups has launched a one-week campaign to end what they view as problematic...
A coalition of social and economic justice groups has launched a one-week campaign to end what they view as problematic university investments. The New York-based Center for Popular Democracy (CPD) and partner organizations including three Make the Road branches will hold six protests along the East Coast, calling on Columbia, Harvard and Yale to pull their investments out of hedge funds that hold Puerto Rican debt and have advocated austerity measures in the U.S. territory, leading to mass school closings and higher tuition costs.
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Ten Ways to Combat Upward Redistribution of Income
Moyers & Co - January 1, 2015, by Dean Baker - The big gainers in the last three decades (aka the one percent) like...
Moyers & Co - January 1, 2015, by Dean Baker - The big gainers in the last three decades (aka the one percent) like to pretend that their good fortune was simply the result of the natural workings of the market. This backdrop largely limits political debate in Washington. The main difference is that the conservatives want to keep all the money for themselves, while the liberals are willing to toss a few crumbs to the rest of the country in the form of food stamps, healthcare insurance, and other transfers.
While the crumbs are helpful, the serious among us have to be thinking about the unrigging of the economy so that all the money doesn’t flow upward in the first place. Here are 10 ways in which we should be looking to change the structure of the market in 2015 so that all the money doesn’t flow to the one percent.
In all these areas changes will be difficult, since the one percent will use their wealth and power to ensure that the rules not be rewritten to benefit the bulk of the country. However, this list should provide a useful set of market-friendly policies that will lead to both more equality and more growth.
1. Expanded Trade in Medical Care
The Affordable Care Act extended coverage to millions of people and, for the first time, allows people the freedom to quit jobs they don’t like and still have access to insurance. Nonetheless, we still pay close to twice as much per person for our health care as people in other wealthy countries.
If our trade policy were not dominated by protectionists, it would be directed toward making it easier for qualified foreign physicians to practice in the United States, potentially saving patients tens of billions every year. Even with the federal government committed to protectionist policies, nothing stops state governments from seeking out lower-cost care for Medicaid patients in other countries. The savings, which can run into the hundreds of thousands of dollars in some cases, can be shared with beneficiaries.
2. Prescription Drugs
This is part of the healthcare story, but a big-enough part to deserve a separate mention. Patent monopolies can allow drug companies to charge prices that are 100 times higher than the free-market price. The hepatitis-C drug Sovaldi sells in the United States for $84,000. The generic version is available in India for less than $1,000. State Medicaid programs can pay to send patients to India, along with one or more family members, and still have tens of thousands of savings that can be shared with beneficiaries.
3. Wall Street Sales Tax
The financial sector continues to rake in money at the expense of the rest of the country, courtesy of bailouts, too-big-to-fail insurance, and being largely exempt from taxes applied to other industries. Even the IMF argues that the financial sector is undertaxed.
While most members of Congress and presidential candidates are too indebted to Wall Street to push for a financial-transactions tax, states can get a foot in the door. It is possible to tax the transfer of mortgages on property within the state. A modest tax of 0.2 percentage points won’t affect normal mortgage issuance, but it will discourage the shuffling of mortgages and raise some serious revenue. This money can be used to fund needed public services and, in part, to support lower taxes in other areas.
4. Limiting CEO Pay
CEOs are able to arrange paychecks in the tens of millions of dollars in large part because corporate directors are effectively paid off to look the other way. The incentives can be radically altered if directors stood to lose their stipends if a say-on-pay vote by the shareholders was defeated.
State governments can put this into law for corporations chartered in their state. Also, any corporation can put this rule into their own bylaws. Since fewer than three percent of pay packages are voted down, any director who is confident enough that they will not be in the bottom three percent should be happy to support such a change in bylaws.
5. Limiting Pay at Nonprofits
Nonprofit organizations like universities, hospitals, and charities are hugely subsidized by taxpayers. Since most of their contributions come from people in the top income bracket, the ability to deduct charitable contributions effectively means that taxpayers are paying 40 cents of every dollar a rich person contributes.
Since taxpayers are out for much of the cost, it seems only fair to put some rules in place. (Actually, we already do.) How about a pay cap of $400,000 for any employee of a nonprofit? This is twice the pay of a cabinet officer. If a university or other nonprofit can’t find competent people who are prepared to work for twice the pay of a cabinet secretary, perhaps it is not the sort of organization that taxpayers should be supporting.
States can also get into the act on this one. Most states offer special tax treatment to nonprofits. They could apply the two-times-a-cabinet-member’s-pay rule to the nonprofits within their state.
6. Applying Sales Tax to Internet Sales
Jeff Bezos has become one of the richest men in the world because he was successful in expanding Amazon into a huge retailer that doesn’t have to collect the same sales taxes as corner grocery stores. There is no excuse for giving special exemptions to Amazon and other Internet retailers. The states that don’t yet tax Internet sales in their state should move quickly to do so. It makes no sense to subsidize giant retailers like Amazon at the expense of traditional mom-and-pop retail outfits.
7. Democratizing the Sharing Economy
Start-ups like Airbnb and Uber have quickly turned into multi-billion-dollar businesses, in large part by evading the regulations that apply to their traditional competitors. The plan here should be to modernize the rules for taxis, hotels and other outposts of the “sharing” economy and be sure they apply to everyone equally. You don’t get to operate an unsafe taxi driven by an alcoholic just because it’s ordered over the Internet.
In the case of Airbnb, local governments could quickly add some new competition by having local websites where people could list available rooms without paying fees to Airbnb. The advantage to the cities is that they could be sure that these rooms met fire safety and other requirements. Then the only people who listed on Airbnb would be people renting fire traps or other illegal units or who were too ill-informed to save themselves the Airbnb commission. (This gives “sharing” economy a whole new meaning.)
8. The Overvalued Dollar
Our economists are learning and have discovered the problem of secular stagnation. This means that many economists now recognize that the economy can suffer from a persistent problem of inadequate demand, leading the economy to run at below-potential levels of output and to have excessive unemployment.
Unfortunately, most economists still don’t feel they can talk about the most obvious cause of the lack of demand: the country’s large trade deficit. The annual deficit is currently more than $500 billion (at three percent of GDP). This has the same effect on the economy as if consumers were to massively cut back their annual consumption by $500 billion and instead put this money under their mattress. The lost demand translates into more than six million jobs.
The obvious solution is to reduce the value of the dollar against other currencies in order to make US goods and services more competitive internationally. The value of the dollar is a matter that is determined at the national policy level. In principle the United States could be negotiating for a lower-valued dollar in a big trade agreement like the Trans-Pacific Partnership. Instead it is pushing for stronger patent protection for Merck and Pfizer, stronger copyright protection for Disney and Mickey Mouse, and a system of business-friendly courts that can override laws in the United States and elsewhere.
9. Shorter Work Years and Work Weeks
If we can’t directly increase demand in the economy through lowering the value of the dollar, we can still increase the number of jobs by reducing the amount of time that people work on average. This is the secret of Germany’s economic miracle. It has had slower growth than the United States, yet it has seen a huge increase in employment in its recession recovery. The average work year in Germany has 20-percent fewer hours than in the United States.
One of the policies that has helped bring about job growth in Germany is work sharing. This policy encourages companies to cut back hours instead of laying off workers. Workers are compensated for their lost wages through the unemployment insurance system. Most states have work-sharing programs as part of their unemployment insurance system. The compensation rate is generally lower in the United States than in Germany (typically 50 percent, compared with 60 to 80 percent in Germany), but it still beats losing a job.
Other policies that go in the same direction are paid family leave and paid sick days. These policies are important in their own right but can help better divide the available work among those who want jobs. Another great feature of these policies is that we don’t have to wait for the president and Congress to take action. They can be implemented at the state and even local level.
10. The Federal Reserve Board
The last and possibly most important item on the list is the Federal Reserve Board. It will be coming under pressure from the Wall Street types to raise interest rates. The point of higher interest rates is to slow the economy and keep people from getting jobs. The Fed would do this because more jobs will mean that workers have more bargaining power and would be in a position to raise wages. In short a Fed move to raise interest rates is very directly about keeping workers from getting higher wages. (Most workers have only been able to achieve real wage gains when the unemployment rate has been low.)
Fortunately, there are efforts to apply some pressure in the opposite direction, most importantly by the Center for Popular Democracy. They aim to let the Fed governors in Washington and presidents of 12 district Fed banks know that people who care about jobs are watching the Fed’s actions. This should make it harder for the Fed to take steps to deliberately throw people out of work and reduce workers’ bargaining power.
That’s my list of the top 10 places where progressives can focus in 2015 on restructuring the economy in ways that prevent income from flowing upward. The list is hardly exhaustive, and I left out some obvious important areas, like strengthening unions, because everyone should know them. Let’s hope for a good year and some real progress in turning the economy around.
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“Llevaron a cabo vigilia contra Trump por el huracán María”
“Llevaron a cabo vigilia contra Trump por el huracán María”
Los oradores incluyeron a Jaime Contreras , vicepresidente del sindicato 32BJ , Mary Cathryn Ricker , vicepresidenta...
Los oradores incluyeron a Jaime Contreras , vicepresidente del sindicato 32BJ , Mary Cathryn Ricker , vicepresidenta ejecutiva de la Federación de Maestros de EE.UU. , Jordan Haedtler , director de campaña del Centro para la Democracia Popular, y Tatiana Matta , puertorriqueña que aspira al Congreso por el distrito 23 de California.
Lea el artículo completo aquí.
Dem lawmakers hear demands for ‘reparations’; but let’s call it THIS so nobody gets ‘uncomfortable’
Leaders of the Black Lives Matter group received widespread applause from a crowd of Democratic state legislators,...
Leaders of the Black Lives Matter group received widespread applause from a crowd of Democratic state legislators, Friday, for suggesting the government award the black community reparations for “systematic discrimination in law enforcement.”
“Thinking about decriminalization with reparations—the idea is we that have extracted literally millions of dollars from communities, we have destroyed families,” said Marbre Shahly-Butts, deputy director of racial justice at the Center for Popular Democracy, during her address at the State Innovation Exchange in Washington, D.C. “Mass incarceration has led to the destruction of communities across the country. We can track which communities, like we have that data.”
“And so if we’re going to be decriminalizing things like marijuana, all of the profit from that should go back to the folks we’ve extracted it from,” she continued.
The focus of state legislators should be “state budgets and then reparations,” Shahly-Butts said.
“‘Reparations’ makes people kind of uncomfortable, so we can call it ‘reinvestment’ if you want to. Use whatever language makes you happy inside,” she said.
Fellow panelist Dante Barry, executive director of the Million Hoodies Movement for Justice, also recommended some type of “reinvestment” to help black youth and said New York City would be better off investing $100 million in the black community rather than hiring more police.
“In terms of response around black youth unemployment, it gets back to this whole piece around reinvestment,” Barry said. “What would you do with $100 million? How would we better use that money to provide jobs for unemployed youth, to provide housing, to have mental health access. … It’s really about how do we rethink some of our budgetary needs and how we’re putting power behind the way that we can really incorporate reinvestment in communities.”
If there were one policy he would want state legislators to prioritize, Barry said it would be a ban on all guns on campus.
Source: Biz Pac Review
Gary Cohn publicly criticizes Trump's Charlottesville response and reportedly came close to resigning over it
Gary Cohn publicly criticizes Trump's Charlottesville response and reportedly came close to resigning over it
Top White House economic advisor Gary Cohn publicly criticized President Trump’s response to the violence in...
Top White House economic advisor Gary Cohn publicly criticized President Trump’s response to the violence in Charlottesville, Va., and reportedly came close to resigning over it.
In his first public comments on the matter, Cohn told the Financial Times in an interview published Friday that the Trump administration “can and must do better in consistently and unequivocally condemning” white supremacists, neo-Nazis and the Ku Klux Klan.
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Communities Lose When HUD Sells Loans to Wall Street
The Hill - October 2, 2014, Rachel Laforest & Keven Whelan -James Cheeseman and his mother, Constance, have lived...
The Hill - October 2, 2014, Rachel Laforest & Keven Whelan -James Cheeseman and his mother, Constance, have lived in their Rosedale, New York home for the past five years. Like many Americans, they struggled during the recent economic downturn and have been trying to get a modification on their mortgage.
The bank that held their mortgage JPMorgan Chase, agreed to provide borrowers like them relief under a multi-billion dollar settlement with the Justice Department last year. But the Cheesemans' mortgage was insured by the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD). And before they could work out a deal with Chase, the bank had the FHA sell their loan to a new investor as part of a program, called the Distressed Asset Stabilization Program or DASP.
The program is supposed to have a dual purpose. First, the federal agency hopes to be able to use the funds received by DASP to right the balance sheet of the Federal Housing Authority’s mortgage insurance program. Second, the program is intended to “encourage public/private partnership to stabilize neighborhoods and home values in critical markets.”
According to HUD’s own data and reports, DASP is meeting the first objective and failing miserably at the second. Almost all loans sold through the DASP program went to for-profit firms and only a tiny handful (around 3 percent) of families whose loans were sold ended up with deals that kept them in their homes.
For homeowners like the Cheesemans, that failure has real-life consequences. When HUD, through DASP, sold their mortgage to another servicer, the Cheesemans lost their protections under the FHA program mandating an effort to modify the mortgage. Their new servicer, BSI Financial, was under no requirement to consider a mortgage modification. BSI doesn’t even participate in HAMP, a post-bailout program for major banks that facilitates loan modifications to keep families in their homes. The result? The Cheesemans and thousands of other homeowners throughout the country are at serious risk of losing their home.
A recent report, Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities, published by the Right to the City Alliance and Center for Popular Democracy cited serious problems with DASP. First, the current structure of most DASP auctions considers only the highest bid without weighting the bidder’s track record of good outcomes for homeowners and communities. Secondly, the groups found that the current outcome requirements and reporting structure fail to hold purchasers accountable. Third, the current pre-sale certification phase does not ensure that the FHA modification process has been followed.
Organizations called “Community Development Financial Institutions” with a track record of helping consumers stay in their homes stand ready to be a part of an improved version of this program. If a reformed DASP program incentivized it, investors with a social purpose could also make money by negotiating win-win, sustainable mortgage modifications with homeowners.
But community-friendly organizations can’t even get to the table with the auction overheated by well-heeled Wall Street firms and private equity “vulture capital” firms.
When the highest bidder places profits first, homeowners and neighborhoods come last. The result: more and more American homeowners losing their homes to unnecessary foreclosures and more and more corporate landlords leasing homes at rates few of these former homeowners, let alone anyone else, can afford.
All of this is the consequence of a program developed and managed by HUD, a federal agency with a stated mission to advance affordable housing and sustainable communities.
This week, HUD plans to sell off another 15,000 American homes to Wall Street investors. These are 15,000 families, 15,000 neighbors and 15,000 futures. Many if not all of these homeowners will lose their share of the American dream as a result of these auctions.
HUD can and should halt this week’s sale and must implement the necessary reforms that have been proposed by a range of community and advocacy groups.
As we consider the results of the economic collapse and what has been called by some a recovery, it is important to note once again that many neighborhoods, especially in communities of color, haven’t bounced back.
Too often our government has put the interests of Wall Street above the needs of struggling families. HUD can do better by fixing the “Distressed Assets” program now.
Laforest is executive director of the Right To The City Alliance, based in New York City. Whelan is National Campaign director of the Home Defenders League. He lives in Minneapolis.
Source
Battleground Texas: Progressive Cities Fight Back Against Anti-Immigrant, Right-Wing Forces
Battleground Texas: Progressive Cities Fight Back Against Anti-Immigrant, Right-Wing Forces
Sarah Johnson, the executive director of Local Progress, a group that works with Casar and other local politicians on...
Sarah Johnson, the executive director of Local Progress, a group that works with Casar and other local politicians on passing progressive legislation, told Salon that the initiative "brings together the way that policing impacts both immigrant communities and more broadly communities of color that are overcriminalized."
Read the full article here.
Hearing on charter schools brings out varied opinions
State Pennsylvania Auditor General Eugene DePasquale got an earful during a daylong meeting in Philadelphia on Friday...
State Pennsylvania Auditor General Eugene DePasquale got an earful during a daylong meeting in Philadelphia on Friday on ways to improve the accountability and effectiveness of charter schools.
Paul Kihn, deputy superintendent of the Philadelphia School District, warned that if Harrisburg passed pending legislation that would permit the unlimited growth of charters, the cost to the district would be so devastating that it might not be able to manage its own schools.
Lawrence Jones Jr., head of Richard Allen Preparatory Charter School in Southwest Philadelphia, said the state needs to provide equitable funding for both district and charter schools.
"This grand experiment is one that is about to collapse under its own weight, because we are doing such a poor job in oversight," said Donna Cooper, executive director of Public Citizens for Children and Youth.
Kyle Serrette, education director for the Washington-based Center for Popular Democracy, said his organization was stunned by the number of federal fraud cases involving charter officials that have occurred in Pennsylvania in recent years.
His group, which works with community groups and unions, called for "a comprehensive investigation that allows the public, regulators, and legislators to better understand the depth of the problem" to improve oversight.
And Philadelphia City Controller Alan Butkovitz told the auditor general that his office is taking another look at the district's charter school office and a group of city charter schools.
The review, which he expects to be completed in a few months, is a follow-up to a study his office completed in 2010 which found that the charter office "was not doing its job" overseeing the schools and that questionable practices were rampant at 13 charters it reviewed.
It was the fifth and final meeting that DePasquale has held across the state to gather input on improving the state's 174 taxpayer-funded charters, which enroll 120,000 students.
Philadelphia is home to 86 charters with 67,000 students.
Source
Low-Income Tenants Fight for Affordable Housing, Protest Proposed Trump Cuts
Low-Income Tenants Fight for Affordable Housing, Protest Proposed Trump Cuts
WASHINGTON – More than 700 people from 16 states rallied Wednesday at a Capitol Hill church to oppose the Trump...
WASHINGTON – More than 700 people from 16 states rallied Wednesday at a Capitol Hill church to oppose the Trump administration’s proposed $6.2 billion cut to federal housing programs.
Protesters held signs while shouting, “Housing is our right,” “Stop selling our neighborhoods to Wall Street,” and “No cuts to housing.”
Read the full article here.
Progressive Groups Go On The Offensive Against A Fed Interest Rate Hike
Progressive groups are launching a national campaign this week to pressure the Federal Reserve not to raise interest...
Progressive groups are launching a national campaign this week to pressure the Federal Reserve not to raise interest rates until wages begin growing more significantly. And they are getting some help from popular liberal economist Robert Reich.
The groups, led by the Center for Popular Democracy’s Fed Up campaign -- a foundation-funded nonprofit committed to a more "pro-worker" Federal Reserve -- inaugurated the effort in earnest over the weekend with mass email blasts and solicitation on other digital platforms of a petition, “Tell the Fed: Don’t Raise Interest Rates!”
Participating organizations, which include online progressive heavyweights CREDO Action, Daily Kos and the Working Families Party, will send the petition to an increasing number of activists over the course of the week. The groups, a complete list of which you can find in the petition, have a combined email list and website visitor reach in the millions.
Activists will deliver the petition signatures they amass in the coming weeks to Fed officials at the Kansas City Federal Reserve Bank’s annual symposium in Jackson Hole, Wyoming, onAug. 27-29. Fed Up is sending a delegation of low-income workers and representatives from communities of color to the symposium with the goal of raising awareness of working families’ concerns about Fed monetary policy. The Fed Up campaign formally began with a similar visit to Jackson Hole last year.
Some of the emails to activists will include a video from Robert Reich, an economist at the University of California, Berkeley and former secretary of labor, that is likely to give the effort a high-profile boost. Reich posted the video, along with a link to the petition, on his Facebook page on Friday. As of Monday afternoon it already had been viewed over 142,000 times -- and shared by more than 3,600 people. Reich relies on a production team to make his videos, but does the illustrations featured in them himself.
The new online campaign aims to influence the Fed at a pivotal moment: The central bank is indicating that it will raise interest rates as soon as September. Atlanta Fed President Dennis Lockhart, who sits on the FOMC, confirmed on Monday that the Fed would soon raise rates, saying the "the point of 'liftoff' is close." Lockhart's remarks come after July jobs numbers Friday showed relatively steady job gains.
Robert Reich’s Federal Reserve 101
The progressive groups pushing back against a rate hike are betting that if the public knew how much they stood to lose if rates go up, they would be willing to speak out against a hike. They could then generate pressure to change the Fed’s calculus.
For that to happen, though, people need to understand what the Federal Reserve is -- which activists acknowledge is rare.
So Reich’s five-minute video starts at square one, explaining how the Federal Reserve works and why it affects Americans’ lives -- before articulating the case against a rate hike. The Fed cuts interest rates, or keeps them low, he explains, in order to stimulate the economy. “The lower the [Fed’s] rates, the easier it is to borrow,” Reich says in the video. “The easier it is to borrow, the more active the economy becomes.”
Reich then elaborates on the virtuous cycle that takes hold when low rates leave people with more disposable income, as graphics illustrating his points whiz by onscreen. Consumers spend more, Reich explains, growing businesses and increasing demand for labor. And if there is enough demand for workers, he continues, employers raise wages to compete for those workers.
Why Do Progressives Think A September Rate Hike Is Premature?
Reich, like the campaign he is backing, makes the case that the Fed should wait until demand for workers is high enough to increase wages substantially before raising interest rates. Although the official unemployment rate of 5.3 percent is low by historical standards, it has yet to translate into substantial wage growth. Average wages have risen 2.1 percent in the past 12 months -- not much higher than the rate of price inflation, which, as of June, was 1.8 percent (not including energy and food).
Economists like Jared Bernstein of the Center on Budget and Policy Priorities argue that wage growth has yet to take off because there are still too many job seekers for the number of jobs available. The official unemployment rate does not account for the 6.3 million underemployed workers, who have part-time work but want to work full time, or the 668,000 jobless workers, who have given up seeking work altogether.
Although the progressive groups’ petition does not explicitly demand that the Fed wait for a specific wage growth figure before raising interest rates, the Fed Up campaign and its partners have largely coalesced around a wage growth target of 3.5 to 4 percent. The liberal-leaningEconomic Policy Institute, which is participating in the new petition campaign, estimates that with that type of wage growth, price inflation will not “significantly exceed” the Fed’s 2 percent inflation target.
These progressives warn that a Fed interest rate hike that occurs before significant wage growth takes hold would disproportionately hurt people of color and women. Both groups face routine discrimination in the job market that they are more likely to overcome in a high-demand economy buttressed by low rates. And people of color are much more likely to be workers on the lower side of the earnings spectrum, who have the least leverage vis-à-vis employers. That means they are often the last people to get hired or get a raise when the job market heats up, and the first to lose their jobs when it cools down. For evidence of this, they say, look no further than the shockingly high African-American unemployment rate of 9.1 percent.
What About Inflation?
The Fed balances its mandate to maximize employment with an obligation to prevent excessive inflation. That is why it raises interest rates when it believes prices are at or near its target inflation rate of 2 percent. Some economists also believe that even when consumer prices are below the target rate, the Fed should raise rates if housing and stock prices are getting unreasonably high.
Reich -- and the many economists and activists with whom he finds common cause -- appreciate the Fed’s obligation to prevent runaway inflation. But they note that inflation has remained consistently below the Fed’s target rate of 2 percent. And they believe that for the sake of job creation and wage growth, the economy can tolerate slightly higher inflation than the current Fed target.
“More jobs and better wages are more important than theoretical worries about accelerating inflation,” Reich concludes.
Reich and allies point to the late 1990s as a model for Fed monetary policy. They credit then-Fed Chair Alan Greenspan for refusing to raise interest rates even as the official unemployment rate dipped, against the wishes of other Fed officials concerned about inflation. As a result, wage growth was widespread enough to produce significant gains for workers at the bottom of the earnings spectrum.
A New Progressive Priority?
The petition campaign against a Fed rate hike is something of a coup for advocates who, asHuffPost reported at length in June, have long argued that Fed monetary policy should be a higher priority for the political left. Although the foundation-funded Fed Up campaign has been agitating for a more “pro-worker” Fed for nearly a year now, this is the first time it is collaborating with major progressive players like CREDO Action, Daily Kos and the Working Families Party. The Economic Policy Institute, which is a member of the Fed Up campaign’s founding coalition, is also activating its email list for a Fed Up petition effort for the first time.
A broad array of liberal-leaning organizations joined forces in the summer and fall of 2013 to torpedo President Barack Obama’s nomination of Lawrence Summers as chair of the Federal Reserve Board of Governors. Summers united economic progressives concerned about his Wall Street ties and women’s advocates angered by his remarks about women. Their efforts succeeded in winning the appointment of Janet Yellen as chair instead of Summers.
But since that time, the Fed has largely faded from the progressive foreground. Higher-profile fights like the movements for the $15 minimum wage and against the Trans-Pacific Partnership trade deal have taken up the lion’s share of progressive energy and attention, dwarfing more esoteric causes. To the extent progressives have publicly pressured the Fed, it has been to police Wall Street more carefully, not maintain a dovish monetary policy.
“In general it’s clear that the Federal Reserve gets far less attention from progressives than it should in light of the tremendous influence it has over the economy and Americans’ quality of life,” said Josh Nelson, communications director for CREDO Action.
This relative inattention is evident in how little Federal Reserve monetary policy has come up in the 2016 Democratic presidential primary. The topic has not been discussed widely on the campaign trail. Of the major Democratic presidential candidates, only former Maryland Gov. Martin O’Malley responded to a request for comment last week on a possible Fed rate hike. O’Malley agreed with progressive activists that the Fed should wait for more robust wage growth before raising rates.
By contrast, the right wing has relentlessly trained its fire on the Fed for “debasing” the dollar with its quantitative easing program -- its now-defunct multitrillion-dollar asset purchasing program -- and low interest rates. Republican members of Congress regularly grill Yellen for printing too much money.
To the extent that Republican presidential candidates have broached the subject, they have weighed in in support of raising rates. Donald Trump, a real estate mogul and ersatz Republican presidential candidate, warned last week that the Fed’s low interest rates are causing an asset bubble. New Jersey Gov. Chris Christie has also slammed the Fed’s “easy money” policies for endangering the economy.
But the petition effort raises advocates’ hopes that a progressive movement with the power to match the right's Fed lobby is finally taking shape.
Haedtler said that CREDO Action, Daily Kos and the Working Families Party were eager to get involved.
“They were very enthusiastic about targeting a new institution that was not accustomed to outside pressure by working families,” Haedtler said, adding that he thought soliciting these groups’ involvement “would be more challenging than it was.”
They were receptive to the argument, Haedtler said, that the Federal Reserve can “wipe out a lot of progress” on more visible issues like the minimum wage, if the Fed “does not recognize that the economic recovery has not benefitted everybody.”
CREDO Action did not specify how many activists it would target, but said that the petition would reach “many of the economic justice activists” on the group’s 3.8 million-person email list.
“The traditional obscurity [of the Fed] is why we must organize around it,” CREDO Action’s Nelson said. “People assume they can't influence the Fed. But that's wrong. These are people and they are open to both pressure and input. Pointing out that many communities still suffer is an essential role for advocates.” Nelson added that progressive input is a “necessary counterweight” to Wall Street influence on the central bank.
Chris Bowers, the Daily Kos’ executive campaign director, is confident that the Fed rate hike is not too esoteric for Daily Kos members. “One thing we've learned over the years is that Daily Kos readers tend to be very sophisticated, highly engaged activists who know a great deal about all manner of political issues,” Bowers said in an email. “In fact, some of our best-performing campaigns have focused on topics that might seem surprisingly obscure, such as net neutrality and filibuster reform. So we expect that our readers will readily grasp what's at stake here.”
Daily Kos is soliciting signatures for the petition through a splash screen some people see when they visit the site. Bowers estimates that 20,000 people a day will see the splash over the course of a campaign that will last at least two weeks. He said Daily Kos is gauging the “intensity” of their members’ interest in the Fed based on their engagement with the petition. If enthusiasm is high, it will send the petition to its much larger email activism list.
Beyond Stopping A Rate Hike
Ultimately, the Fed Up campaign and its allies are on a larger mission to make the Federal Reserve more accountable to working people. That means not only preventing an interest rate hike before greater wage growth takes hold, but also pushing the Fed to rebalance its dual mandate toward genuine full employment and higher wages, and away from what they believe is excessive concern about inflation. The theme of this year’s Jackson Hole symposium is“Inflation Dynamics and Monetary Policy,” which Fed Up points to as a typical sign of the Fed’s inflation bias.
“We want to reframe the narrative” at the symposium, Haedtler said. Inflation, he explains, “is not what is on the minds of low-wage workers who have been suffering through a very slow economic recovery.”
“We think of our campaign less as a left/right divide, and more as an effort to bring the voices of working families to the Federal Reserve for the first time,” Haedtler noted. “Ultimately our members are fighting for a broader recovery, better wages and better working conditions.”
Fed Up can point to concrete progress toward this goal since its inaugural action at the Jackson Hole symposium last August. Their protests there led to a meeting between Fed Up activists and Kansas City Fed President Esther George. That in turn opened the door to meetings with four other regional Federal Reserve bank presidents. Fed Up has also met with Yellen and several members of the Fed Board of Governors in their Washington offices.
The meetings have enabled working people organized by Fed Up to share their economic experiences with Fed officials, who make decisions that will affect these people’s lives.
Haedtler believes these meetings are already bearing fruit. The Fed created a Community Advisory Council in January to solicit more diverse views on the state of the economy.
“Even very hawkish regional presidents -- like James Bullard, the St. Louis Fed president -- really seem to take to heart some of the stories we convey to them,” he said.
The Fed Up campaign also wants to reform the selection process for regional Federal Reserve bank presidents, which it says reflects the narrow interests of the bankers that dominate their boards of directors. They are asking regional Fed presidents that they meet with for a timeline of their selection process and a list of candidates being considered.
Fed Up claims credit for the Minneapolis regional Federal Reserve Bank’s decision to disclose the process through which it would select its next president.
“We know something about congressionally confirmed Fed board governors, but very little about regional fed presidents, other than that they are overwhelmingly white, male and have close ties to the financial sector,” Haedtler said.
Source: Huffington Post
1 month ago
1 month ago