WASHINGTON Unions and left-leaning public interest groups will meet personally with Federal Reserve Board Chair Janet Yellen on Friday to ask for greater transparency at the agency, including in its selection of new regional bank heads.
A coalition of 34 union locals, policy organizations and social justice groups will meet with Yellen and simultaneously launch a campaign to push the central bank to focus on reducing unemployment and for greater public participation in the Fed's decision-making process.
Coalition members including the AFL-CIO, the Economic Policy Institute, Demos and the Center for Popular Democracy say the agency is too close to large banks and corporations and should instead serve the public interest.
"We continue to hear reports that the economy is recovering," said Ady Barkan, a staff attorney for the Center for Popular Democracy. "But millions of workers and their families are still struggling, whether from involuntarily part-time hours, poverty wages, or a lack of earned sick time. Meeting with the Chair is a step towards elevating workers' voices in the Federal Reserve System."
The campaign called "Fed Up" seeks an expanded central bank focus on improving not only overall employment but on real wage growth, specifically aiming for wage growth to outpace overall economic growth. The group is also asking for the Fed to look into purchasing state and local bonds a kind of quantitative easing for local governments -- in order to spur public infrastructure spending and "create good jobs and strengthen our communities."
The groups are also calling for greater transparency in the nomination and selection of replacements for two regional Fed bank presidents slated to retire next year. The groups sent letters on November 5 to Charles Plosser, President of the Philadelphia Fed, and Richard Fisher, President of the Dallas Fed, asking for an expanded public role in the selection process of their replacements. Fisher is required by Fed rules to step down at the end of April, and Plosser announced in September that he would leave his post in March 2015.
"Those most affected by the Federal Reserve's decisions have not been given the opportunity to participate in the process of choosing President Fisher's successor," said the letter to Fisher, which is nearly identical to that sent to Plosser. "Given the importance of the position, and the continued economic struggles for families across the district, we believe that the selection of the next President of the Dallas Federal Reserve is too important to happen in secrecy."
The groups are asking the banks to publish a schedule of steps for considering the presidents' replacements, as well as a list of candidates being considered "significantly prior to the final selection." The public should also have representatives serve on the selection committees and have an opportunity to ask questions of potential candidates, the groups say.
President of the Fed banks are chosen by the individual bank's board of directors and affirmed by the Fed board. Terms last five years and may be renewed, but Fed rules require that presidents appointed after the age of 50 may only serve 10 years, which is why Fisher who was appointed in 2005 must step down next year.
A Fed spokesman declined to comment on the groups' demands but confirmed that Yellen would meet with its representatives.
The left-leaning campaign in many ways resembles right-wing "audit the Fed" efforts to scrutinize the agency's workings and limit its power. Yellen has vigorously opposed any Congressional interference in the Fed's authority to set monetary policy, saying the central bank is supposed to be independent of short-term political wrangling.
But the coalition's demand that the Fed direct more of its power toward economic equality may resonate with the Fed chair. In a October 17 speech at the Federal Reserve Bank of Boston, Yellen said that the "extent of and continuing increase in inequality in the United States greatly concern me" and identified specific economic trends including access to higher education and difficulties in establishing and growing small businesses that she said deserve greater attention.