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The Morning Call - April 6, 2013 - Whitehall Township resident Belkys Luvon doesn't expect all of America's undocumented immigrants to be granted U.S. citizenship overnight. That's not what she and other advocates of comprehensive reform of the country's immigration laws are lobbying for — or even what they'd want.

But Luvon, who said she came to the United States legally from the Dominican Republic 29 years ago, feels it only fair that undocumented immigrants be offered legal means of gaining citizenship.

Basically, what proponents call "a path to citizenship" should be for those who have lived here, abided by the law, worked hard, raised families and otherwise contributed to the well-being of countless communities, Luvon said.

She and other Lehigh Valley residents, as well as organizers from other areas, staged a public rally for immigration reform Saturday at Allentown's Cedar Creek Park. Only a few dozen people were on hand in the early going — the event got off to a late start — but support for the cause regionally, as well as nationally, is strong, according to Tony Perlstein of the Center for Popular Democracy inWashington, D.C., which supports reform.

In addition to the event in Allentown, "speak outs" for reform were scheduled in Norristown and other parts of Pennsylvania, and across the country, Perlstein said.

Luzon — who operates a consulting business helping immigrants attain citizenship, as well as with preparing income tax returns and starting businesses of their own — said she wants more people, regardless of status, to have the kind of opportunity granted to her.

"I consider myself lucky, thank God," she said, having followed her mother to America. "I believe it is fair, after living here and working hard" — and staying out of trouble with the law, she stressed — for people to have a path to citizenship as envisioned by PresidentBarack Obama, Luzon said.

Luzon objects to the term "illegal immigrants."

"No human being is illegal," she said.

Reform supporter Erika Sutherland, a Muhlenberg Collegeprofessor, said she hopes for a comprehensive package of reforms that streamlines existing programs for attaining citizenship and gives people a way to get on the path toward citizenship.

Among the goals, she said, is "an equitable comprehensive citizenship" for the estimated 11 million undocumented immigrants, the vast majority of whom are "people contributing to our community and [who] want nothing more than the ability to stay and work."

"We are a nation of immigrants," Sutherland concluded. "We can do better."

With a group of Republican and Democratic senators working on comprehensive reform, the Center for Popular Democracy expects tens of thousands of supporters at a demonstration Wednesday in Washington in favor of reform, Perlstein said.

 Source

The Federal Reserve Bank of Dallas is taking its time picking a new president, leaving the position vacant for more than four months and leaving the institution without a strong public voice at a time of intense debate over when the central bank should start raising interest rates.

Former president Richard Fisher stepped down March 19, leaving the bank’s first vice president Helen Holcomb to serve as interim president. His exit was long anticipated: he faced mandatory retirement due to his age. The bank formally announced Mr. Fisher’s impending exit in November. Executive search firm Heidrick & Struggles was tapped to find a successor.

Other regional Fed banks, in contrast, have filled their top vacancies more briskly in recent years. For instance, Philadelphia Fed President Charles Plosser retired March 1 and his replacement, Patrick Harker, was announced the next day.

The duration of the Dallas vacancy has surprised many central bank watchers. Some of them say the bank’s board of directors appears to want a clone of Mr. Fisher—a strong voice on major issues with deep ties to the Lone Star state.

“It’s beyond bizarre” a new president hasn’t been named yet, said Danielle DiMartino Booth, who served as a close adviser to Mr. Fisher when they were both at the bank. Ms. Booth, who left the Dallas Fed in June and is now a strategist with the Liscio Report, said what the bank appears to want is a rare commodity.

“Richard Fisher rose to the status of being a deity in Texas,” Ms. Booth said. “People associate the success of the state” with him, and it is “very difficult” to find a new leader who can maintain that sort of profile, she said.

The Dallas Fed responded to questions about the search process by producing a description of what the bank seeks in a new leader. It said candidates should have “recognized stature” in economics and finance and preferably hold a Ph.D. The “ideal candidate will exhibit a strong combination of economic/market/policy expertise, integrity (and willingness to satisfy financial interest and disclosure requirements), leadership, communication skills, interpersonal skills, and community involvement,” it said.

Before joining the Dallas Fed, Mr. Fisher was a wealthy hedge-fund operator and diplomat. He was known for a brash public style as president. He made his case against the Fed’s easy money policies in speeches invoking high and pop culture, warning repeatedly about frothy financial markets and arguing in vain for higher interest rates.

His predecessor Robert McTeer, operating under the nickname of the “Lonesome Dove,” was known for opposing rate rises—sometimes via haiku.

The Dallas Fed has “a tradition of having an outspoken leader,” said Ethan Harris, chief economist at Bank of American Merrill Lynch.

Those with knowledge of the process say the Dallas Fed is seeking a replacement who will carry on that tradition.

Heidrick & Struggles didn’t respond to questions about the search process.

The Dallas Fed president is chosen by the bank’s board of directors, subject to approval by the Federal Reserve’s Washington-based board of governors. The Dallas board members drawn from the financial industry are prohibited by law from participating in the search. The other Dallas board members who are involved declined to comment.

In recent years, regional Fed bank presidents have tended to be insiders. For example, San Francisco Fed President John Williams was previously the bank’s research director. Cleveland Fed President Loretta Mester was previously research director at the Philadelphia Fed. Mr. Harker served on the Philadelphia Fed’s board before taking the top job. Now, only current Atlanta Fed chief Dennis Lockhart had no formal connection to the central bank before joining. Mr. Fisher was the rare bird who came in cold.

“Recent history has shown that the regional banks conduct a thorough and broad review of candidates that almost exclusively ends with the insider being selected,” said Aaron Klein, director of the financial regulatory reform initiative with the Bipartisan Policy Center in Washington.

Mr. Harris said central bank insiders, shaped by a Fed culture that often rewards a gray public persona, tend to lack the dramatic flair of the past two Dallas Fed chiefs.

Some critics from labor unions and local community groups say they are disappointed by the lack of openness surrounding the selection process given that the regional Fed bank presidents are government officials who participate in important central bank policy decisions.

“We are very disappointed in what we’ve run into” trying to have a voice in the process, said Mark York, secretary-treasurer of the Dallas AFL-CIO. He said a letter from the union and other local groups asked for names under consideration to be made public in a bid to allow the public to weigh in, among other requests.

That said, not all think the bright light of transparency is a cure all. Lou Crandall, chief economist for Wrightson ICAP, said wanting to know more about the process is a “fair point.” But he warned “you don’t want a lot of public jockeying over this.”

Source: The Wall Street Journal

KIM BROWN, TRNN: Welcome to the Real News Network. I’m Kim Brown in Baltimore.

Interests rates will remain unchanged. That coming out of this week’s meeting of the Federal Reserve in DC. The official word from the feds, per their own statement, was that job gains have been “solid”, that household spending has been growing strongly, and inflation is running below expectations. But does this mean that the economy is actually doing well or are we still in a recession dressed up to appear better than what it actually is?

Joining us today from New York City is Jerald Epstein. Jerald is the co-director of the Political Economy Research Institute. He’s also professor of economics at the University of Massachusetts at Amherst. Jerald welcome back.

JERALD EPSTEIN: Thanks a lot Kim.

BROWN: Jerald let’s start with the basics and then we can delve a little bit deeper. If the economy is showing the signs of strength as the Fed has indicated, then why didn’t they raise interest rates now and do you think that they are likely to do so at all this year?

EPSTEIN: Well I think Janet Yellen who’s the chair of the Fed, is aware that even though it’s been showing strength and the economy has been growing moderately for several years now, that there’s still much more room to go. That is that wage growth has gone up a tiny bit more than inflation recently, it’s still pretty stagnant, pretty flat line and she knows there’s still a number of workers out that who are so discouraged that they haven’t joined the labor force. So Janet Yellen is concerned about the labor force and the growth of wages but the problem is twofold. First of all, it’s always dangerous to raise interest rates around election time. So traditionally the federal reserve, they’ll try not to do that, move interest rates right around an election. So that’s one factor leading them not to do anything.

The second factor leading them not to do anything is that keeping inflation under control is one of their main mandates. They have two. Maintaining inflation at a low rate and they have a 2% target, and reaching high employment. Inflation is still below 2%. There’s really no signs of inflation going up. So there’s no compelling reason from the point of view of the macro economy to raise interest rates.

BROWN: It’s funny that you mention that the Fed is less likely to raise interest rates or even mess with the interest rate around election time because the Republican nominee for president, Donald Trump has already accused Chairwoman Yellen of keeping the interest rates unchanged in order to appease the Obama administration. She of course has denied this. What are your thoughts?

EPSTEIN: Well I don’t think she did it for Clinton or Obama. But it is I think a tradition and it’s common for Federal Reserves not to raise and certainly change interest rates right before an election. So she is in sort of a tradition of what the Federal Reserve typically does. And it’s also typical especially recently for politicians to make the Federal Reserve the whipping boy or girl for political reasons. Sometimes there’s good reasons. For that.

But there was something kind of unusual for this meeting. In the recent meetings it’s been unanimous to keep interest rates the same or to mostly do what the Federal Reserve has done. But this time it was quite contentious. There were actually 3 people on the federal open market committee, the ones who make this decision who voted to raise interest rates.

This is kind of challenge to Janet Yellen’s leadership in this regard and it also shows what kind of pressure the Federal Reserve is under, particularly from the banks and the mutual fund industry, the insurance industry because with interest rates being so low, it’s very difficult for them to eek out much of a profit. And is typically the case when interest rates are very low for a very long period of time. Some sectors and very powerful important sectors of the financial industry push very hard for interest rates to be raised and they usually get a pretty good hearing at the Federal Reserve [be]cause the Federal Reserve has traditionally done pretty much what the banks have wanted them to do.

BROWN: Jerald it seems as if there’s not enough agreement between the Federal Reserve and among every day Americans on how well this economic recovery is going. So let’s unpack some of the elements of this. Starting with Chairwoman Janet Yellen’s comments on labor markets.

JANET YELLEN: We’re generally pleased with the progress of the economy and the decision not to raise rates today and to wait for some further evidence that we’re continuing on this course is largely based on the judgement that we’re not seeing evidence that the economy is overheating and that we are seeing evidence that people are being drawn in in larger numbers than what I would’ve expected into the labor market and that that’s healthy to continue.

BROWN: So the unemployment rate was under 5% in August and the caveat to that is more Americans are working part-time jobs. Plus, the gig economy is one way that people are surviving and supplementing their income. So is unemployment published monthly by the Bureau of Labor statistics, giving us an accurate figure on the number of Americans who are out of the labor force?

EPSTEIN: They don’t have an accurate number. They have estimates and I think it’s true that there’s still quite a few so called discouraged workers who are out of the labor force. It’s also the case like we said in the beginning that wage growth has been stagnant. Look, the Federal Reserve has a real dilemma here. On the one hand and this is typically the case with Janet Yellen who I think does want to indicate that their policies have had some effect, otherwise nobody will want them to continue these policies. And she thinks that they have had some positive effect on employment and I think they have.

But on the other hand their policies cannot turn around the long run decline of our economy. We need much different kinds, much bigger, much more radical policies in terms of public investment to generate jobs, hiking the minimum wage to a living wage, providing much more in a way of a safety net for workers, protecting pensions and other investments. So the list is very, very broad and very deep. And the Federal Reserve has been pretty reluctant to go further down that list.

The Federal Reserve could do more. They could use different tools to invest directly in the economy. There’s a group called Fed Up which has proposed that they do this. But Janet Yellen and her committee want to stay pretty close to their broader toolkit that they’ve developed and are really afraid to, I think take more radical action which they plausibly could take.

But in the end it really raises questions of the Federal Reserve’s legitimacy. Can they take some kind of really radical action without the broader government saying go ahead and do it? And until the political stalemate we have is resolved, I’m afraid the Federal Reserve can’t do much more and that means this kind of stagnation in wages and so forth is going to continue.

BROWN: Jerald you raise an excellent point about wage stagnation and how wages have largely remained flat going back 20, 30, and even 40 years depending on who you ask. But new census data this month says that household income jumped over 5% which is the largest such gain in decades but that top 1% of Americans saw an increase of around 7% rise in their income. If most of the economic recovery gained since the great recession of 2007, 2008--if most of these gains have gone to the top1%, does it still count as a recovery if it’s not being felt by the majority of Americans?

EPSTEIN: No it does and this has been a very lopsided so called recovery and yes there have been some modest gains for the middle class and some working class people. So the Federal Reserve actions have had some positive effect. But until you really change the structure, change the tax policies so that the wealthy have to pay more of their taxes so the multinational corporations can’t park their earnings overseas and not pay any taxes like Apple and other corporations have been doing until you have much more aggressive jobs programs to bring about a Green transition and many other things. We’re not going to have a real recovery. These kind of very small sorts of gains which are gains but aren’t enough are going to be the best we’re going to see.

BROWN: Jerald what’s keeping inflation in check right now? Is it cheap oil prices?

EPSTEIN: It’s several things. First of all, cheap oil prices and other commodity prices are one thing. But they’re also partially related to the headwinds in the global economy against economic growth. China’s not growing as much so they’re not demanding as much oil and other commodities. Many other developing countries aren’t growing so fast. Europe isn’t growing hardly at all.

So this really dampens the demand for all of these commodities and with these prices going down that does keep inflation in check. The other thing is, all of the forces that are keeping wages in check. That is, imports from China, the union busting that’s been going on, the threat of multinational corporations to move abroad. All of these factors plus more are making it very difficult for workers to have their wages go up. Wages are a cost so that to some extent keep inflation in check as well.

And finally you have the retail industry that’s subject to loss of competition that just keeps squeezing and squeezing and squeezing workers more and more. Until we get big increase in the minimum wage, until we get policies to put workers back to work at well-paying jobs, we’re not going to see real wages go up and we’re also not going to see prices go up very much at all.

BROWN: And lastly Jerald, the wealthiest Americans, the top 1% of Americans are fairing very well and we are experiencing income inequality probably at the largest gap since the Gilded Age. We have seen so many sickle economic bubble burst over the past 20 years with the tech bubble bursting in the late 90’s and the housing bubble bursting in the mid 00’s. Are we at risk of another such economic bubble burst on the horizon any time soon.

EPSTEIN: Yes, we’re always at that kind of risk. It’s hard to see where exactly the bubble would come from. There are little bubblets going on all over the place that don’t seem so broad and connected up with debt and the financial system that it seems as so we’re going to have a kind of bubble burst the way we saw in 2007, 2008 but we might have bubblets burst in the high tech industry and so forth. What’s more likely is this slow burn of stagnation and increases in distress effecting so many people in the United States except for the wealthy who will continue to do very well. Not only income inequality at all-time highs, wealth inequality, how much assets people own has grown and grow and grow and grown. If you look for example, if the net wealth, that is assets minus liabilities, minus debt of African Americans in this country. A report recently came out that said, the median net wealth of African Americans is zero. There’s no net wealth. So this system cannot continue to go in this form. It helps to explain a lot of the political disorder that we’re seeing. The political fighting up we’re seeing and it’s just going to keep going unless we have some fundamental changes in the economy.

BROWN: Indeed. We’ve been speaking with Jerald Epstein. Jerald is a co-director of the Political Economy Research Institute. He’s also professor of economics at the University of Massachusetts at Amherst. Jerald as always, we appreciate you joining us here on the Real News.

EPSTEIN: Thank you very much Kim.

BROWN: And thank you for tuning in to the Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a

recording of the program. TRNN cannot guarantee their complete accuracy.

Source

Philadelphia Inquirer - October 1, 2014, by Martha Woodall - A new report from a trio of activist groups says Pennsylvania charter schools have defrauded taxpayers of more than $30 million because oversight is so lax.

The researchers call for a temporary moratorium on new charter schools, contending agencies are not able to adequately monitor the 186 charters that already exist.

The study by the Center for Popular Democracy; Integrity in Education; and Action United of Philadelphia and Pittsburgh was to be released Wednesday.

The report urges the state Attorney General's Office to review all Pennsylvania charters for potential fraud. It asks the legislature to require charters to undergo regular fraud-risk assessments and fraud audits. And it suggests that until the law is changed to require such actions, charters should voluntarily undergo them and make the findings public.

Researchers said most of the $30 million in fraud that has been detected since the state's charter law was passed in 1997 was not uncovered by charter-oversight offices but by whistle-blowers and the media, including The Inquirer. They said the total amount of misspent funds was likely far larger.

"The current oversight system in Pennsylvania falls miserably short when it comes to detecting, preventing, and eliminating fraud," said Kyle Serrette, education director at the Center for Popular Democracy in Washington.

The center receives funding from foundations, including $990,000 this year from the Ford Foundation. It also receives a small amount of support from teachers' unions, and Randi Weingarten, president of the American Federation of Teachers, is on the organization's board.

Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said that while his group supports accountability, the report makes "sweeping conclusions about the entire charter sector based on only 11 cited incidents in the course of almost 20 years."

". . . Fraud and fiscal mismanagement are wrong and cannot be tolerated, but to highlight them in one sector and ignore them in another indicates a motivation to target one type of public school for a political agenda," he said in a statement.

Pennsylvania school districts paid $1.5 million to charters that enrolled 128,712 students in 2012-13. More than 67,000 Philadelphia students attend 86 city charters.

Sabrina Stevens, executive director of Washington-based Integrity in Education, said: "With over $1 billion going to charter schools in Pennsylvania, it's time for charter schools to be held to the same standards of transparency and oversight that public schools are held to."

State Auditor General Eugene DePasquale said it's "good that they put this together," adding that Serrette's group had testified at a charter-oversight hearing his office held in March. "To me, the more voices on this, the better. I think in the next term in the legislature, there is going to be a charter-reform bill move forward."

City Controller Alan Butkovitz said the report echoed concerns he raised in 2010, when his office released its own oversight study that highlighted several problems his office found at city charters.

"We certainly agree with the need for greater oversight and auditing," Butkovitz said. "That's been one of our constant themes."

The instances of fraud cited in the new report include cases where charter officials were indicted or pleaded guilty and instances uncovered in state audits.

Examples include Nicholas Trombetta, founder and former CEO of the Pennsylvania Cyber Charter School in Midland, who is awaiting federal trial in Pittsburgh on charges that he diverted $8 million in school funds for personal use.

The tally also includes $6.3 million that federal prosecutors allege Dorothy June Brown defrauded from the four Philadelphia-area charters she founded.

But the authors give special attention to another recent case involving a city charter: New Media Technology Charter School in the city's Stenton section. The former CEO and founding board president went to federal prison in 2012 after admitting they stole $522,000 in taxpayer money to prop up a restaurant, a health-food store, and a private school they controlled, and for defrauding a bank.

From 2005 to 2009, when the crimes were occurring, third-party auditors hired by New Media failed to spot the fraudulent payments.

"Fraud detection in Pennsylvania charter schools should not be dependent upon parent complaints, media exposés, and whistle-blowers," the authors wrote. Rather, they urged, the system should be proactive and use forensic accounting methods.

According to the report, Pennsylvania's charters are vulnerable to fraud and financial mismanagement because school districts and state offices charged with overseeing them lack resources and staff.

For example, although the cash-strapped Philadelphia district has about half of the state's charters, it has only two auditors and a small office to monitor 86 schools, the report said.

"We agree in the need of greater oversight and a deeper look into the health of charter schools," district spokesman Fernando Gallard said, "and we have taken steps to do so."

Although the district's charter office at times had only two or three staffers, Gallard said, it now has six and is seeking an executive director.

Researchers also said that charters lack strong internal fiscal controls and that their boards have not adopted strict management policies.

And even though the charters are required to have annual audits performed by outside firms, researchers said, those audits rely on general accounting techniques and are not designed to detect fraud.

"The current system of oversight relies heavily on information provided by charter schools themselves and traditional audits that are designed to check accuracy rather than detect and prevent fraud," the report said.

The report said taxpayers cannot afford to lose another $30 million in misspent charter funds. "While the reforms proposed will require additional resources," the authors said, "they represent a smart investment in our communities and in our future."

Researchers said the study was the first in what would be a state-by-state investigation of oversight of charters in the 42 states that have them.

Serrette said researchers decided to begin with Pennsylvania because the timing seemed right. He pointed out that both DePasquale in Harrisburg and Butkovitz in Philadelphia have highlighted the fraud risks in charter schools. And State Rep. James R. Roebuck Jr. (D., Phila.), minority chairman of the House Education Committee, introduced a bill last year to tighten charter controls.

Said Serrette: "The stars are aligning."

Source