Yellen and Draghi Speeches to Highlight Jackson Hole Conference
Yellen and Draghi Speeches to Highlight Jackson Hole Conference
Central bankers and economists from around the world will gather in the mountain resort of Jackson Hole, Wyo.,...
Central bankers and economists from around the world will gather in the mountain resort of Jackson Hole, Wyo., beginning Thursday for the Federal Reserve Bank of Kansas City's annual economic symposium.
The theme of this year's conference, "Fostering a Dynamic Global Economy, " highlights the challenges of boosting economic growth during an expansion that has been marked by poor productivity gains, rising protectionism and demands for greater fiscal austerity.
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Multiple Arrests In Midtown During May Day Protests Outside Banks
Multiple Arrests In Midtown During May Day Protests Outside Banks
Hundreds of labor and immigrant advocates marched through east midtown early Monday in a demonstration against...
Hundreds of labor and immigrant advocates marched through east midtown early Monday in a demonstration against corporations which they say are profiting from President Trump's agenda—one of a series of May Day protests scheduled to take place throughout the city (and beyond) on Monday.
The specific targets of this action, according to organizers from Make The Road New York, are the Wall Street banks that help finance private prisons and immigrant detention centers. To that end, organizers said twelve protesters were arrested for peaceful civil disobedience while blocking the entrances outside of JPMorgan Chase, which is one of the companies named in Make The Road's and the Center for Popular Democracy's Backers Of Hate campaign.
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Why It's a Big Deal Hillary Clinton Plans to Shake Up the Fed
Why It's a Big Deal Hillary Clinton Plans to Shake Up the Fed
Hillary Clinton is taking on the United States Federal Reserve System, but in a wonky, bottom's-up way that shows her...
Hillary Clinton is taking on the United States Federal Reserve System, but in a wonky, bottom's-up way that shows her understanding of a complex and widely misunderstood organization. This is not "End the Fed" or even "audit the Fed" — she wants to rebuild it from its fundamentals at the regional level.
To paraphrase Mitt Romney, the Federal Reserve is people, my friend. Hillary Clinton's recent proposal to change the roster of Fed officials who ultimately make monetary policy and regulatory decisions might be the most effective Fed-reform idea since the financial crisis. Generally, the public pays attention to little more than the face of the organization — the Fed's chairperson, currently Janet Yellen — who announces and explains the Fed's decisions. But beneath Yellen functions an intricate and influential bureaucracy that's dominated by interests from the financial sector, the vast majority of them white men, and may well be blind to the reality of a vast majority of Americans.
The Federal Reserve was set up in 1917, in the wake of a financial crisis, as a private national bank that could serve as lender of last resort to other banks. If a bank needed money to make good on deposits, it could go to the Fed for a short-term loan. It was, since its inception, a bankers' institution, run for banks, by banks. But its role has clearly evolved as credit markets have developed and as the Fed's mandate was changed to pursue price stability (low inflation) and full employment at the same time, while helping to regulate the sector for which it also serves as lender.
As the Fed's mission has expanded, its governance has not. The Fed is run by a seven-member board in Washington, D.C., and a dozen regional bank presidents based in financial centers throughout the country (New York, St. Louis, Kansas City and Cleveland, among others). While the crew in D.C. is selected by the president and vetted by Congress, the regional bank presidents are chosen by the financial industry and tend to be either bankers or career Fed employees. Of the 12 bank presidents, two are women and only one is not white.
New York's regional president is Willian C. Dudley, previously a Goldman Sachs managing director. Robert S. Kaplan of Dallas was a former vice chairman at Goldman. Neel Kashkari, a known financial reformer, is nonetheless a former employee of PIMCO, one of the world's largest asset managers and a subsidiary of German financial behemoth Allianz. Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta is a former Citigroup executive.
Clinton's proposal would remove bankers from the regional boards of directors. Those boards choose the regional presidents and generate most of the information and perspective that the Federal Reserve governors use to set monetary policy. Clinton clearly understands how the Fed functions. Donald Trump has said he would not reappoint Janet Yellen as chair. Fine. But appointing the Fed chair is merely the most high-profile action a president can take in this regard. It doesn't change the system, and the Fed is known as the Federal Reserve System for a reason.
This is Clinton at her best – she knows how the government works. The region Federal Reserve boards do not get a lot of press. Most people do not know that they are staffed with chief executives from Morgan Stanley, Comerica, KeyCorp and private-equity firms like Silver Lake, and if they do know it, they do not understand its importance.
The Fed is generally a topic of political bluster. "I appointed him and he disappointed me," complained George H.W. Bush about Alan Greenspan, when the Fed chair refused to cut interest rates in the face of a recession that probably cost Bush his re-election in 1992. Before that, Ronald Reagan had to endure Chairman Paul Volcker raising interest rates so high in an effort to combat inflation that out-of-work construction workers were mailing bricks and wooden beams to the Fed in protest.
The idea that the Fed often acts contrary to the interests of working people is not new, but aside from requiring the Fed to pursue full employment in addition to price stability in 1977, presidents who are unhappy with the Fed have done little more than complain. Even after Greenspan disappointed Bush, Bill Clinton reappointed him to the post. When Greenspan retired, Ben Bernanke, an intellectual heir, took the helm. When he retired, Yellen, also an intellectual heir, took over. The power to appoint the Fed chair and governors is not, clearly, the power to change things.
Clinton is digging deeper. Changing the roster of the regional boards will hopefully help more accurate economic information trickle up to the chairperson and the federal governors. Perhaps, even, a labor representative or somebody with closer ties to the common American experience could become a regional bank president.
In her quiet way, tinkering with the inner workings of a near-century old quasi-government institution that is arcane to most, Clinton has a chance to achieve radical, lasting financial reform.
BY MICHAEL MAIELLO
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Groups Across NYC Hold a Protest against Amazon’s HQ2
Groups Across NYC Hold a Protest against Amazon’s HQ2
Other participants include: Make the Road New York, New York Communities for Change, The Retail, Wholesale and...
Other participants include: Make the Road New York, New York Communities for Change, The Retail, Wholesale and Department Store Union (RWDSU), UFCW, Laundry, Distribution and Food Service Joint Board of Workers United, SEIU, VOCAL New York, The People for Bernie Sanders, Warehouse Workers Stand Up, Color of Change, Citizen Action NYC, Center for Popular Democracy, Jews for Racial and Economic Justice, The Graduate Center PSC, MPower, Progressive HackNight, Caaav, Drum, Hand in Hand, NYC-Democratic Socialist of America, Tech Action, Human-scale NYC, PrimedOutNYC.
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Aeropostale, Disney and other retailers pledge to stop on-call shift scheduling
Aeropostale, Disney and other retailers pledge to stop on-call shift scheduling
Imagine waking up and not knowing whether you were scheduled to work. Add on to that the chaotic burden of finding a...
Imagine waking up and not knowing whether you were scheduled to work. Add on to that the chaotic burden of finding a babysitter last minute.
These six companies — Aeropostale, Carter’s, David’s Tea, Disney, PacSun and Zumiez — all required their employees to call an hour or two before a scheduled shift to find out if they would be assigned to work that day.
But no more.
A coalition that included New York Attorney General Eric Schneiderman announced today that on-call shift scheduling has come to an end for those companies.
“Today, we are seeing retailers across America take steps to curb unnecessary and unfair on-call scheduling," said Carrie Gleason, director of the Fair Workweek Initiative at the Center for Popular Democracy. "We are especially glad that employers like Disney and Carter's, whose brands promote putting families first, will stop using on-call shifts that are notorious for wreaking havoc on families' balance and puts undue stress on children."
The announcement follows an inquiry by Schneiderman and eight other attorneys general to make sure that more than 50,000 workers nationwide will no longer be subject to such a "burdensome scheduling practice." The agreements with these six companies are the latest in a series of groundbreaking national agreements secured by the New York Attorney General’s office to end on-call scheduling at a number of major retailers.
Fifteen large retailers received a joint inquiry letter in April seeking information and documents related to their use of on-call shifts. Other than the six mentioned, the list included American Eagle, Payless, Coach, Forever 21, Vans, Justice Just for Girls, BCBG Maxazria, Tilly’s, Inc. and Uniqlo. The letter stated that unpredictable work schedules "take a toll on employees."
"Without the security of a definite work schedule, workers who must be 'on call' have difficulty making reliable childcare and elder-care arrangements, encounter obstacles in pursuing an education, and in general experience higher incidences of adverse health effects, overall stress, and strain on family life than workers who enjoy the stability of knowing their schedules reasonably in advance," the letter continued.
After discussions with the Schneiderman and his fellow AGs, none of the retailers will be using on-call shifts. Also, Disney and others have agreed to provide employees with their work schedules at least one week in advance of the start of the work week as a way to plan child care and other obligations ahead of time.
“People should not have to keep the day open, arrange for child care, and give up other opportunities without being compensated for their time,” said Schneiderman. “I am pleased that these companies have stepped up to the plate and agreed to stop using this unfair method of scheduling.”
The announcement marks a continuation of Schneiderman's mission, which began last year when Abercrombie & Fitch, Gap, J.Crew, Urban Outfitters, Pier 1 Imports, and L Brands — the parent company of Bath & Body Works and Victoria’s Secret — all agreed to end the practice of assigning on-call shifts.
New York State has a “call-in-pay” regulation that provides, “An employee who by request or permission of the employer reports for work on any day shall be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage.” (12 NYCRR 142-2.3).
By Anthony Noto
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Warren leads crusade for diversity at Fed
Warren leads crusade for diversity at Fed
“I’m judging John Williams based on the last several years of him being wrong about the levels of maximum employment...
“I’m judging John Williams based on the last several years of him being wrong about the levels of maximum employment and pushing for additional [interest rate hikes] prematurely because that mistake puts millions of jobs at risk,” said Shawn Sebastian, who co-leads the Fed Up coalition comprising advocacy groups and unions.
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One Word Could Be Worth a Million Jobs
One Word Could Be Worth a Million Jobs
Supporting a strong job market is a big part of the U.S. Federal Reserve's mandate. Fed officials, though, interpret...
Supporting a strong job market is a big part of the U.S. Federal Reserve's mandate. Fed officials, though, interpret that goal differently than most observers do. For the economy's sake, Congress should step in to resolve the discrepancy.
Specifically, the Federal Reserve Act instructs the central bank to promote "maximum employment" and "stable prices." Most people understand these instructions as meaning the Fed should seek to generate as much demand for workers as possible without causing an unduly large increase in prices.
The website of the Fed's Board of Governors, however, makes a slight modification to the jobs mandate: "maximum sustainable employment." Innocuous as it may seem, that one word can make a big difference.
How? Well, suppose inflation is running below the Fed's 2 percent target and the unemployment rate is at 5 percent, which officials consider to be its long-run level (pretty much the current situation). They can choose between two monetary policies, which are expected to result in the following paths for the unemployment rate:
Most observers would opt for the second policy. It's more aggressive, so it will get inflation back to target sooner. Even better, the unemployment rate is the same or lower every year, and by a significant amount: One percentage point is worth more than a million jobs.
The word "sustainable," however, means that the Fed views any deviation from the long-run unemployment rate -- up or down -- as undesirable. When officials speak of the economy “overheating” or “running hot” in the absence of inflationary pressures, this is what I think they have in mind. So they would see unemployment as running too low under policy 2.
Some Fed officials worry that “overheating” could trigger a recession. (I don’t understand the precise economic mechanism, but let’s leave that aside.) They think policy 2 might generate the following path for the unemployment rate:
Policy 2: Possible Recession Outcome
In 2019 and 2020, the economy falls into recession. From the Fed’s perspective, this unemployment path is terrible, because the rate is either too low or too high for the next four years.
It's easy to imagine, though, that many people would be willing to trade the risk of recessionary pain in 2019 and 2020 for the near-term gain of 2017 and 2018. They might even believe there's some chance that policy 2 will generate an outstanding outcome -- if, for example, the long-run unemployment rate is actually lower than the Fed thinks it is. Here's how that would look:
This interpretational divide was on full display last month, when Fed officials met with representatives of the pro-employment activist group Fed Up. The activists largely assumed that the central bank was contemplating near-term interest-rate increases to keep inflation in check. But most of the officials downplayed inflation, invoking instead the need to keep the economy from running too hot (which some said could lead to a recession).
I find it hard to believe that the Fed's approach is consistent with Congress's intent as expressed in the Federal Reserve Act. That said, it's really up to legislators to provide an unequivocal answer, which could matter a lot for the economy over the next few years.
By Narayana Kocherlakota
Source
A National Solution
New York Times - June 25, 2014, by Peter Markowitz - For too many years our nation’s discourse around immigration has...
New York Times - June 25, 2014, by Peter Markowitz - For too many years our nation’s discourse around immigration has been distorted by anti-immigrant activists who have advanced bold but regressive state immigration policies. State laws in Arizona and elsewhere have powerfully, but inaccurately, framed the immigration issue through the lenses of criminality and terrorism. While these laws have not generally fared well in court, their impact on our national perception of immigration has impeded federal immigration reform. Meanwhile, states like New York continue to suffer the consequences of our broken immigration laws. Our families continue to be fractured by a torrent of deportations. Our economic growth continues to be impeded by the barriers our immigrant labor force faces. And our democracy continues to be undermined by the exclusion of a broad class of New York residents.
The New York Is Home Act, recently introduced by New York State Senator Gustavo Rivera and Assembly Member Karim Camara, with support from the Center for Popular Democracy and Make the Road New York, charts a path forward on immigration — a path that like-minded states and ultimately the federal government could follow. The legislation would grant state citizenship to noncitizens who can prove three years of residency and tax payment and who demonstrate a commitment to abiding by state laws and the state constitution.
The bill is an ambitious but sensible assertion of a state’s well-established power to define the bounds of its own political community. Unlike the Arizona law, this legislation is carefully crafted to respect the unique province of the federal government. As misguided and brutal as the federal immigration regime is, New York cannot alter federal deportation policy. However, it is absolutely within New York’s power to facilitate the full inclusion of immigrants in our state. By granting state citizenship, we would extend the full bundle of rights a state can deliver — the right to vote in state elections, to drive, to access higher education, among others — and we would define the full range of responsibilities that come along with citizenship, including tax payment, jury service and respect for state law. By reorienting our national conversation on immigration around the more accurate and productive themes of family, economic vitality and political inclusion, this legislation will move us toward a real solution to our nation’s immigration quagmire.
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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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Activists Descend on Fed’s Jackson Hole Meeting, Amid Anxiety About Rate Rises
Liberal and conservative groups of central-bank critics plan to hold events to coincide with the Fed symposium, which...
Liberal and conservative groups of central-bank critics plan to hold events to coincide with the Fed symposium, which runs Thursday through Saturday.
The left-leaning group, called Fed Up, will be gathering in the same Jackson Lake Lodge as the Fed attendees, arguing the central bank shouldn’t raise short-term interest rates anytime soon. The right-leaning group, the American Principles Project, is holding a separate gathering nearby to discuss the effect of Fed policies on the dollar and to urge the current crop of presidential candidates to pay more attention to Fed policy issues.
Fed officials also are getting plenty of advice from other experts on the sidelines. Harvard University’s Lawrence Summers, a former Treasury secretary and one-time candidate for Fed chairman, warned in an opinion article this week that raising rates soon would be a “dangerous mistake.” Martin Feldstein, another Harvard professor, used an opinion article to blame the stock market’s current woes on past Fed policy mistakes and urge the Fed not to delay rate increases beyond September.
The Kansas City Fed conference takes place amid considerable turmoil in global financial markets. Stocks, bonds and currencies have gyrated in recent days as investors try to make sense of China’s economic slowdown and what that could mean for the U.S., the global economy and markets. The anxiety has occluded the outlook for Fed policy: Whereas market participants were recently looking to a possible mid-September Fed rate increase, it now appears the odds have diminished.
The liberal Center for Popular Democracy’s Fed Up coalition says it is planning to bring 50 or more activists to the Jackson Lake Lodge for meetings on Fed policy, economic inequality and racial disparities. The group also went to Jackson Hole last year.
Fed Up plans to hold a news conference Thursday and panel discussions with names such as, “Do Black Lives Matter to the Fed?” and “Who’s Afraid of High Wages? A History of the Inflation Bogeyman.” The group says its events are open to all and it hopes attendees at the Kansas City Fed event stop by.
Fed Up has seen successes in gaining one-on-one meetings with regional Fed bank leaders—they recently sat down with the chiefs of the Atlanta and New York Fed banks. It will bring folks to Jackson Hole who are affected by central-bank policies, but whose voices are rarely heard in the debate.
Atlanta resident Dawn O’Neill, a 48-year-old married grandmother, plans to go to Jackson Hole with the Fed Up group. Her unemployed husband struggles to find day work in the construction industry, and she works as teacher’s assistant in a day-care facility for $8.50 an hour.
“When the Fed says the economy is in recovery, and they want to raise the interest rates, I look around and I don’t see recovery,” Ms. O’Neal said. “I see lines of black men that want work, but there is no work.”
The group says that if the Fed keeps its benchmark short-term rate near zero for longer, it will generate more economic growth that creates more jobs among low-wage earners as well as higher-paid workers. The group also believes that better job growth will help benefit minorities and make discrimination harder.
“We have leaders of the Fed who don’t think slow wages and underemployment are problems,” said Ady Barkan, who leads Fed Up’s activities. “When you have leadership like that, you get policies that don’t advance the needs of working families,” he told reporters in a conference call on Monday.
Fed chiefs for years have acknowledged the painfully slow recovery of the labor market and rising income inequality. Fed Chairwoman Janet Yellen gave a speech on inequality last October that garnered her criticism from congressional Republicans who believe such matters are beyond the Fed’s official mission.
Fed officials say their easy-money policies aimed at stimulating the economy are intended to benefit all Americans, not just the wealthy. Last year, former Fed Chairman Ben Bernanke pointed to the recovery of the housing and labor markets as evidence the Fed’s efforts were helping the middle and lower classes.
Even now, Fed officials generally say raising their benchmark short-term rate target by a quarter-percentage point from near zero won’t offer much restraint to growth. The see a small move as reducing the amount of economic stimulus they are providing, akin to lightening the pressure on the accelerator rather than tapping the brake.
They believe that while inflation remains too low, the unemployment rate has fallen enough to start the process of getting short-term interest rates back to more historically normal levels. Some worry that if the Fed sticks with ultralow rates much longer, it could create financial-market bubbles that could wound the broader economy.
The Fed also will be challenged by the American Principles Project, which is holding its event near the central-bank conference and will count participants from the Heritage Foundation and the Cato Institute, both Washington think tanks. In a news release, Steven Lonegan, the group’s monetary-policy director, said, “We will challenge prevailing wisdom and show how the Federal Reserve’s policies have negatively impacted wage growth and contributed to the rising cost of living.”
Wage growth has been tepid in recent years, despite Fed officials’ hopes their easy-money policies would spur stronger gains. Inflation has fallen well short of the Fed’s 2% target for years.
The Kansas City Fed declined to comment on the activity of outside groups around its conference.
Source: iBloomberg
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