CPD IN THE NEWS

The New York Times - December 5, 2013, by Kirk Semple - For years, New York City correction officials routinely provided federal immigration authorities with information about foreign-born detainees in their custody. The city, in response to federal requests, would transfer many of those detainees into federal custody, often leading to their deportation.

But a series of laws passed by the City Council over the past two years sought to restrict this cooperative agreement.

And according to new city statistics, the laws appear to be achieving their goal, prompting celebration — albeit guarded — among immigrants’ advocates.

From July, when the most recent of the restrictive laws went into effect, to September, city officials responded to 904 federal hold requests, known as detainers, according to the statistics. Of those detainers, the city declined to honor 331, or 37 percent.

In contrast, until the laws were passed, the city customarily honored every detainer, according to city officials.

“We feel good about the impact that this legislation has had because it has stopped the deportation of a lot of New Yorkers,” Javier H. Valdes, co-executive director of Make the Road New York, an advocacy group, said on Thursday.

“Our hope,” he said, “is that with the new administration we can increase the number of New Yorkers who will not be turned over to immigration.”

Even with the new city laws, New York’s restrictions are still not as tight as those of other major cities, like Chicago and Washington, advocates said.

Cooperation between local governments and federal immigration authorities has been a deeply contentious issue around the United States.

Some jurisdictions, convinced that the federal government has not done enough to enforce immigration laws, have increased their role in immigration enforcement. But others, concerned about the impact of deportations on their communities, have tried to put distance between themselves and the immigration machinery of the federal government.

Much of the recent debate has surrounded the federal Secure Communities program. The initiative allows Homeland Security officials to more easily compare the fingerprints of every suspect booked at a local jail with those in its files. If they find that a suspect is a noncitizen who is in the country illegally or has a criminal record, they may issue a detainer.

The Secure Communities program, a cornerstone of the Obama administration’s immigration enforcement strategy, has been vehemently opposed by some elected officials around the country, who have sought to limit their jurisdictions’ participation.

In November 2011, the City Council passed a law that narrowed the range of detainers the city would honor. Among other terms, the law prevented correction officers from transferring immigrants to federal custody if the inmates had no convictions or outstanding warrants, had not previously been deported, were not suspected gang members or did not appear on a terrorist watch list.

The effect on the detainer system was immediate: Correction officials went from routinely honoring all detainers to, according to the recently released statistics, about 75 percent of them.

In February, the Council imposed additional restrictions, including blocking detainers for immigrants facing all but the most serious misdemeanor charges, like sexual abuse, assault and gun possession.

Under these new guidelines, the percentage of detainers the city rebuffed rose to about 37 percent from about 25 percent. The rates may have even been higher had the federal government not concurrently altered its own detainer policy, limiting the range of immigrants it would seek custody of.

Still, immigrant advocates said they would press for more restrictions and have reoriented their lobby toward Mayor-elect Bill de Blasio, who has vowed to end the city’s cooperation with federal immigration detainers except for detainees convicted of “violent or serious felonies.”

Newark, San Francisco and Santa Clara, Calif., are also among the cities that have more restrictive detainer policies than New York, according to Emily Tucker, staff attorney at the Center for Popular Democracy, an advocacy group in New York.

“New York City can do much better than these numbers show we are doing at the moment,” she said.

Source

JACKSON HOLE, WYO. -- The world's economic elite gathered here for an annual symposium sponsored by the Federal Reserve Bank of Kansas City last week to debate the strategies central banks should employ to safeguard the global economy. We sat down with St. Louis Fed President James Bullard to chat about when he might be ready for a rate hike, the limits of his powers and why predicting the future is futile.

The transcript below has been edited for length and clarity.

Wonkblog: Let’s start with the question of the day: Which month looks good to you for a rate hike?

Bullard: Actually, I’m agnostic on this. Our new framework calls for one, and only one, and then we go on pause for a bit. It’s not critical to me exactly when we make that move, so we wouldn’t have to go at any particular meeting.

I do like to move on good news, so if we have good information, and we’re at a meeting, it might be a good opportunity to go ahead and make that move. But what’s different about what I’m saying is I’ve got a real flat interest rate path — much closer to the markets’ interest rate path. I don’t have this march upward of 200 or 250 basis points.

If only one more rate hike is really needed to get to the Fed’s neutral stance, why does it matter if you move in September, December or next year? You would be willing to wait until 2017?

Certainly, I just don’t feel that there’s any urgency when you’ve got the framework I’m talking about.

[The Federal Reserve is debating how to fight the next recession]

So explain your framework for us.

What we wanted to do is break down this idea that we’re really certain about where the economy is going in the medium- and long-run. What most models do is they have something called a steady state, which is really an average of all the variables in the past: You look at the unemployment rate, and you take the average unemployment rate. You look at interest rates and take the average past interest rate. You look at inflation, growth — you take averages of the past, and you call those your normal values.

As you go along, you expect all your variables to go back to their normal values. That’s what we’ve been doing. That’s the old framework. And what we’re saying is we don’t like that framework anymore because it suggests we have a lot more certainty about where the economy is going than we really do.

These averages of these variables from the past — they can sometimes be high and sometime be low. You can be in a configuration where these things are low, and then you can switch to another configuration when they’re high. Then they’re high for a while, and you switch back to low. What you have to do is make policy given whatever regime you’re in.

We think that the regime that is dominant right now is a slow-growth regime that is characterized by low productivity growth and very low real returns on short-term government debt around the world. We think these regimes are persistent. These things aren’t changing any time soon. And because of that, we just have to take them as given, for now anyway.

Given that in this framework, it’s difficult to tell when the regime is shifted, how do you know that you’re not setting monetary policy for a regime that’s already expired?

You’re gonna know when the regime switches. These very low real rates of return on government debt, if you look at the ex-post return on one-year Treasurys, it’s about -135 basis points right now. If that starts to go up rapidly, we’re gonna know and we’re going to take note of it. We’re gonna say, “Aha! Our regime has changed, and we’re going to have to change monetary policy accordingly.”

But for forecasting purposes, I wouldn’t say that I’m expecting that to happen all of a sudden. It’s been that way for at least the last three years, and if you look at real rates of return, they’ve declined for the last 30 years. It’s also very clear that we’re in a very low productivity environment.

It’s not that you go to sleep. You stay alert to the possibility that the regime can change in the future, and probably will change at some point in the future. It’s just not good to be predicting that it’s going to change.

Federal Reserve Chair Janet Yellen's speech here laid out the argument that the Fed is not out of ammunition to fight the next recession. Do you agree with that?

I loved the speech. She made the case that we still have quite a bit of bandwidth to handle problems if they arise in the next couple of years, and I very much agree with that. But at the same time, it’s always good to be studying other possibilities. I actually have papers on nominal GDP targeting, so I think that’s an interesting topic. It's probably not ready for prime time, but I’m a believer in research.

What led you to the support for this regime-based framework. Can you talk about the evolution of your thinking?

Maybe some frustration with the dot plot. We were saying we were going to have to raise rates fairly aggressively over the forecast horizon in order to keep the economy on track, and that wasn’t materializing. We had that forecast for several years, and it wasn’t really working. For that reason, I wanted to get a different way to think about what we were doing.

We’ve only moved once on the policy rate, and markets are saying maybe one more move this year. That would only be one move per year — that’s really not normalization. If you’re going to say it’s going to take 10 years to get back to a normal value, you’re really saying we’re not going back there. That’s way longer than any sort of business cycle than you can reasonably talk about.

How do you feel about the division between monetary and fiscal policy currently? Do you feel it’s time to pass the baton here?

I do think that. And I think the regime framework is good for laying that out for people. Part of the story is that the recession has been over for seven years. The unemployment rate has gone down below 5 percent. Inflation is low, but we don’t think it’s that low, and it’s kind of coming up to target.

So the cyclical dynamics are all done. The dust has settled, I guess is the way I would put it.

You might say the dust has settled, and I don’t like what I see. But for that, you can’t solve that with monetary policy. You’ve got to have things that are going to increase productivity in the economy. You’ve got to make the economy more efficient. New ideas, better technology, better diffusion of technology, better human capital, better skills match — I think it’s a lot of small things that you have to do right to get an economy humming. The story of let’s keep interest rates low and that will help us, that’s kind of over for now.

Related to that are the demonstrations by Fed Up and the Center for Popular Democracy that were held Thursday. Any additional thoughts on their point of view, that there’s still more that the Fed can do?

I love the people that come here. I think they’re a really great slice of the American workforce. It’s really nice that they’re willing to take time out of their lives to come out here and talk to us boring central bankers.

They want to talk about low nominal interest rates as solving difficult problems of how our labor markets operate and how our labor markets are unfair to many people. I would like them to think about the German labor market reforms that were done over the last decade. Germany had very high unemployment for a long time. It was an endemic problem, and then they did these reforms and got their unemployment rate cut in half — even though Europe went through a double-dip recession during that period.

It showed to me that there are ways to attack these problems, and I think we could do that in the U.S. I think they should refocus their efforts on the labor secretary, so we could get those kinds of reforms going. People aren’t even talking about that.

By Ylan Q. Mui

Source

Democratic hopeful Hillary Clinton came out in favor of changes to the Federal Reserve that would reduce the number of bankers in key central bank positions on Thursday, marking a major coup for national progressive groups championing reform.

“The Federal Reserve is a vital institution for our economy and the wellbeing of our middle class, and the American people should have no doubt that the Fed is serving the public interest,” Jesse Ferguson, a Clinton campaign spokesman, said in a statement. “That’s why Secretary Clinton believes that the Fed needs to be more representative of America as a whole as well as that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue.”

The campaign also provided insight into the type of Federal Reserve governors that Clinton would appoint.

“Secretary Clinton will also defend the Fed’s so-called dual mandate — the legal requirement that it focus on full employment as well as inflation — and will appoint Fed governors who share this commitment and who will carry out unwavering oversight of the financial industry,” Ferguson said.

The announcement brings the Democratic presidential front-runner closer to the position of her rival, Sen. Bernie Sanders (I-Vt.). Sanders proposed barring financial executives from sitting on the boards of the 12 regional Federal Reserve banks in an op-ed in The New York Times in December.

The Clinton campaign statement came in response to a letter to Fed chair Janet Yellen from 11 Democratic senators and 116 House Democrats. The letter, spearheaded by Rep. John Conyers (D-Mich.) and by Sen. Elizabeth Warren (D-Mass.), urged the Fed to appoint more women and people of different racial and ethnic backgrounds while expanding the representation of consumer and labor groups on regional Fed bank boards.

Currently, the vast majority of Fed bank board directors are white men. People representing either the financial industry or other major business sectors also occupy most of the seats.

It appears there is now widespread agreement among top Democrats that the Fed has to redouble its commitment to full employment and to be more attentive to how its policies affect African Americans, Hispanics, and other minorities.

Dean Baker, Center for Economic and Policy Research

The Fed’s control over monetary policy allows it to raise borrowing costs to head off inflation and reduce them to maximize employment. The members of Congress who wrote to Yellen argue that the disproportionate influence of financial officials and the lack of diversity at the Fed hamper its sensitivity to groups with a more precarious position in the job market.

Clinton had said virtually nothing about her agenda for the powerful central bank until now.

The Fed Up campaign, a coalition of progressive groups headed by the Center for Popular Democracy that has been at the forefront of recent efforts to make Federal Reserve reform a key part of the liberal agenda, confirmed that it has been in talks with the Clinton campaign for months.

“Secretary Clinton did the right thing today by coming out in favor of reforming the Federal Reserve,” said Ady Barkan, director of Fed Up. “We’re very excited that she listened to the voices of community leaders from around the country who have said that we need a Federal Reserve that reflects and represents the American people and that creates a strong economy for all.” 

Some liberal economists previously noted that Clinton’s reticence about the Fed was inconsistent with her stated plans to return the country to the prosperity of the late 1990s, which enabled widespread wage growth. They argue that the era’s well-distributed economic gains were due in no small part to the permissive monetary policies of the Federal Reserve.

Dean Baker, one such economist and a co-director of the Center for Economic and Policy Research, was elated to hear about Clinton’s remarks.

“Holy shit — that’s great news,” Baker said in an email upon receiving the news.

“While Senators Sanders, Warren, and others on the left side of the party took the lead, it appears there is now widespread agreement among top Democrats that the Fed has to redouble its commitment to full employment and to be more attentive to how its policies affect African Americans, Hispanics, and other minorities,” Baker continued. “There is also agreement that the Fed’s current archaic structure needs to be changed.”

By Daniel Marans

Source

At least two groups—one on the right and one from the left—are expected to show up in some fashion to press the Fed to change its policies.

The conference, Aug. 27-29, will draw Fed officials, foreign central bankers, academic economists, reporters and others to talk about inflation and monetary policy in view of Grand Teton mountain range.

Just a short-drive away from the conference, the conservative American Principles Project has scheduled another conference to discuss how the group believes the Fed has failed to defend the dollar and promote prosperity. This gathering is titled, “Central Banks: The Problem or the Solution?”

Liberal-leaning activists from the Fed Up Coalition–representing unions, community activists and policy advocates–are also expected to gather in Jackson Hole, much as they did last year, to urge the Fed to change its structure to become more open and democratic.

The group opposes raising short-term interest rates from near zero now. The members want the Fed to maintain its ultra-easy policy to spur the economy and lift more of the nation’s workers out of troubled economic conditions. Members of the group have been meeting with Fed officials lately to voice their concerns.

The Kansas City Fed conference in Jackson Hole gives central bank officials a chance to socialize, hike, debate major issues facing the global economy and occasionally make major policy speeches. Attendance is strictly by invitation-only.

APP monetary-policy director Steven Lonegan said the aim of his event is to refocus the Fed on defending the dollar. “We are really challenging the Fed toe to toe on their own turf” by coming to Jackson Hole, he said.

The broader mission of the conference, Mr. Lonegan said, was to engage the nation’s political candidates to speak about the Fed. He said all known candidates have been asked to appear at the event, although none have so far accepted.

The APP event includes representatives from the Heritage Foundation, economists, Fox Business Network personality John Stossel, and a member of the British Parliament, according to the conference program.

Source: Wall Street Journal