Tuesday, August 25, 2015

Progressive Breakfast: In Troubled Times, the Federal Reserve Must Work for Everyone

MORNING MESSAGE

The Fed needs to hold off on any move to raise interest rates. But inaction is not enough. It was given a dual mandate by Congress: to stabilize prices and keep employment at reasonable levels. Activist groups like the “Fed Up” coalition, led by the Center for Popular Democracy (and including the Campaign for America’s Future), are working to move the Fed toward that second objective.

Responding to the Stock Market Crash

David Cay Johnston argues “better government” is the antidote to stock market jitters. “Monday’s sudden stock market drops from Beijing to New York simply reflect the leverage of high-speed traders, many buying shares with $30 of borrowed money for every $1 of equity. With that much leverage, panic easily sets in when stock prices become volatile. … This scenario is entirely preventable: If the government limited stock trades to ban or minimize borrowed money, there would be less speculation and less instability. In the long term, stock prices would move in greater accord with the profits and expected profits of each company.”
Paul Krugman pokes at GOP presidential candidate critique of the stock market fall. “You could, conceivably, tell a story in which America becomes dependent on Chinese loans; then, when China gets in trouble, it demands repayment, pushing us into crisis too. But any story along those lines has a corollary: we should be seeing a spike in US interest rates as our credit line gets pulled. What you actually see is falling rates.”
The long-term toll of the Great Recession on the unemployed remains severe. A new National Bureau of Economic Research report: “Of the workers who lost full-time jobs between 2007 and 2009, Farber reports, only about 50 percent were employed in January 2010 and only about 75 percent of those were re-employed in full-time jobs … [Henry S.] Farber concludes that the costs of job losses in the Great Recession were unusually severe and remain substantial years later. Most importantly, workers laid off in the Great Recession and its aftermath have been much less successful at finding new jobs, particularly full-time jobs, than those laid off in earlier periods.”
AFL-CIO Economist William Spriggs says racial disparities in employment argue against a Fed rate increase. “Economists have convinced themselves there is little to explain about the persistence of the disparity in black and white unemployment rates, the ratio of which remains stubbornly at 2-to-1. … We don’t know what would happen if the nation maintained its commitment to full employment, because just as the black unemployment rates near parity with whites, our economic policy switches all reverse to slow the economy, increase unemployment and push blacks off the path to equality. The Fed needs to see that its policies are part of that problem.”

Green Energy Push

President Obama announces green energy initiatives. “Obama announced executive actions and money from the private sector to help Americans transition to cleaner energy, including $1 billion in loan guarantees for innovative technology, improving solar panels, installing solar panels on military housing and helping low-income families become more energy-efficient.”
Hillary Clinton may take a public position on the Keystone XL pipeline. Politico: “John Podesta, the chairman of Hillary Clinton’s presidential campaign, said on Monday the former secretary of state is growing impatient over the long-awaited decision on the Keystone XL oil pipeline and she “may have more to say” on the issue if the Obama administration’s decision doesn’t come soon.”

Taking On 'The Crazies'

President Obama promises to take on “the crazies” this fall. “At a Democratic fundraiser Monday night in Nevada, Obama declared himself ready for the challenges he faces this fall … Obama said that as he’d ridden to the fundraiser with Senate Democratic leader Harry Reid, they’d done some reminiscing and spent some time ‘figuring out how we are going to deal with the crazies in terms of managing some problems.'”
Politico: House Republican leaders want to prevent a government shutdown but don’t know how. “House GOP leaders would rather use’s Congress’ broad investigative powers to build an overwhelming case against the group, which they believe would allow them to hammer Planned Parenthood for months and put Democrats under enormous pressure to turn against the women’s health organization. But conservatives … see the fight over Planned Parenthood’s money as one of the top legislative priorities of 2015 … And conservatives seem unafraid to shut down the government to achieve their objective — though they say that’s not their goal.”
“Run Warren Run” backers aren’t flocking to Joe Biden, says Politico. “[M]ost of the pro-Warren political machinery and organization in the early states has already moved over to Sanders with them, leaving Biden with little to claim. … [Charles Chamberlain, president of Democracy for America,] added, “I think it’s pretty unlikely that you’ll see a lot of switching from people who support Bernie Sanders to support Joe Biden.”
The Hill: “Republicans worry Trump will hurt Senate chances.” “The real estate mogul’s controversial comments on immigration could cause a trickle-down effect and haunt Republican Senate candidates, party strategists say.”

A #BlackLivesMatter Goal Achieved

Courts serving Ferguson, Mo., wipe out past warrants, court fees. Al Jazeera America: “A new municipal judge in Ferguson, Missouri, on Monday ordered sweeping changes to court practices in response to a scathing Justice Department report following the police shooting of unarmed black teenager Michael Brown a year ago. … The changes come five months after the U.S. Department of Justice strongly criticized city leaders in its report, saying the police force and court worked together to exploit people in order to raise revenue.”
Black Lives Matter organization releases sweeping police reform proposal. “The platform, dubbed “Campaign Zero”, is a 10-pronged plan that hopes to end police killings by limiting police interventions, improving community interactions, and ensuring accountability.”

Progressive Breakfast is a daily morning email highlighting news stories of interest to activists. Progressive Breakfast is a project of the Campaign for America's Future. more »