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Seneca: Latinos and The Federal Reserve

May 1st, 2010 · 7 Comments

The only other agency of the federal government where Latinos have not become commonly employed nor have an appointed presence on the governing boards besides the intelligence community is the Federal Reserve System and its myriad components. At the national level, the Fed’s Board of Governors has only seven members appointed by the president and confirmed by the senate for a fourteen year term. The Fed can readily be described as the ultimate or most powerful and influential regulatory body. It is the economy’s central nervous system.

Most observers in Washington and for that matter the whole country too often lack clarity in noting that the Federal Reserve truly is the ultimate policy entity to modify, adjust, and re-define key elements of the world’s richest and most powerful economy. Moreover, the Fed’s board is independent of the Executive branch and is supposed to be free of political influence. The US Congress has oversight responsibility over its actions. The Federal Reserve Board like so many of the regulatory boards in Washington is safeguarded by this independence.

The stated reason for the creation of the federal reserve in 1913 just as Woodrow Wilson took over the presidency: to provide the nation with a safer, more flexible and more stable monetary/financial system. The four duties (areas) of the federal reserve are commonly known as the following:

• conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
• supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
• providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system

The Federal Reserve System with Washington as its headquarters has twelve (12) regional banks. Interestingly enough, these regional banks are privately owned but are members of the Federal Reserve System. These include the first among equals (primus inter pares) New York, then Boston, Richmond, Cleveland, Atlanta, Philadelphia, Chicago, Kansas City, Dallas, Minneapolis, San Francisco and St. Louis. Many of these cities or regions have vast numbers of Latinos. Out west, San Francisco is the only regional Federal Reserve Bank west of the Rockies. The next three mid-western regions are Minneapolis, Kansas City and Dallas. The numbers of Latinos in these western states is most impressive and growing. Certainly Dallas, New York, Chicago, and Atlanta have also huge portions of the 46 million Hispanics nationwide. The current census being conducted and analyzed will help provide a clearer picture of the numbers and where they are living. But it can be argued that as of now out west with San Francisco as the only geographically western Federal Reserve Bank, the Hispanic congressional representation breaks down this way: the west has the majority with six in California (Roybal-Allard, Baca, Becerra, Napolitano, the two Sanchez sisters); one each in Colorado (Salazar) and New Mexico (Lujan) and two in Arizona (Grijalva and Pastor) and Dallas region has six (Ortiz, Gonzalez, Rodriguez, Cuellar, Hinojosa and Reyes) all in Texas. Chicago region has one Latino congressman (Gutierrez) and the New York region has two (Serrano and Velazquez) plus one congressman (Sires) from Northern New Jersey and the only Latino senator (Menendez) in the country (NJ). Atlanta has three from Florida (two Diaz-Balart brothers and Ros-Lehtinen). Therefore, the San Francisco and Dallas Federal Reserve Regions have over 15 Latino congressmen. Salazar in Colorado belongs to the Kansas City region; Atlanta is the third region to have Latino congressional representation. A closer look at these regional/sub-regional Federal Reserve Banks reveals few if any Latino representation on the regional bank boards.

In examining the composition of the scores of directors of these regional Federal Reserve Boards, only Dallas appears to have more than one Latino director. At the regional level, there is one (Roberto Estrada) of the main Dallas bank and at its sub-regional level San Antonio has four: Jorge Bermudez, Ricardo Romo, Ygnacio Garza and C. Treviño. Atlanta has one, Carol Tome at the regional director level. In the Atlanta region, Miami is touted as the banking center for Latin America, yet only one, Latino director is detected (Carol Tome). San Francisco has none at the regional or sub-regional level. Boston has one Luso-American (Portuguese: Cunha) on the board. Richmond, Cleveland, St. Louis, Minneapolis and Philadelphia don’t have any Latino sounding names on their boards. Interestingly enough, the leader of the regional pack, New York has one at the substantive level of director, Richard Carrion from Puerto Rico’s Banco Popular, but alas no other…More revealing is Kansas City with Lu Cordova from Boulder, Colorado as a key director, but uncertain that this board member is considered to be Hispanic. The sum of Latino representation in the Federal Reserve System’s decision-making circles is at best bleak.

As for the Fed’s board in Washington, the most powerful and key tool in the US economy, there is no Latino and never has been one. Yet, the Hispanic population is estimated now at least to be over 15% of the US overall population. The contribution by the Latino community to the US multi-trillion dollar economy is increasingly significant. It is rarely heard among the Hispanic congressional and Civic leadership on how the Fed affects the community in its operations or implementation of public economic policy. Plainly, the Fed’s actions affecting the money supply, credit, the cost of money, interest rates and how remittances are affected by supervising the flow of money transfers or exchange fluctuations have an increasingly important impact on the Latino community. Perhaps, the Obama administration will discover or find a qualified high-flyer Latino economist or financial type to serve on the Fed’s board. If we continue to wait for the nominal Hispanic leadership or self-styled Latino advocacy groups to discover the wondrous powers of the Federal Reserve, we could be in for a long wait. The growing awareness of the functions of the US economy in the context of the recent financial crisis and housing bubble along with high unemployment rates behooves the Latino community to seek greater representation and participation at the highest levels of the decision-making process.

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Tags: Barack Obama · Congressional Hispanic Caucus · Congressman Joe Baca · Economics · Government Accountability · Rep. Albio Sires · Rep. Charles A. Gonzalez · Rep. Ciro Rodriguez · Rep. Ed Pastor · Rep. Grace Napolitano · Rep. Henry Cuellar · Rep. John Salazar · Rep. Jose Serrano · Rep. Lincoln Diaz Balart · Rep. Linda Sanchez · Rep. Loretta Sanchez · Rep. Lucille Roybal-Allard · Rep. Luis Gutierrez · Rep. Mario Diaz Balart · Rep. Nydia Velazquez · Rep. Raul Grijalva · Rep. Ruben Hinojosa · Rep. Silvestre Reyes · Rep. Solomon Ortiz · Rep. Xavier Becerra · Sen. Robert Menendez · Seneca

7 responses so far ↓

  • 1 Michaelr // May 1, 2010 at 10:28 pm

    It is rather obvious there is little Congressional regard for the current Latino leadership self-serving itself at the Federal level. Outside of Raul Grijalva and Hilda Solis, the rest of the Congressional Hispanic Caucus has problems defining what public service is, what is self-service, and what is profiteering. Do not expect any of the current members of the Congressional Hispanic Caucus, with the exception of Raul Grijalva and Hilda Solis, who is currently the Secretary of Labor, to even slightly emulate the public service record of the former Congressional Representative, the late Henry B. Gonzalez of Texas. The Latino community is virtually leaderless at the Federal level, again with the exception of Raul Grijalva. Hilda Solis is restoring some of the checks and balances within the Labor Department put in place by FDR, JFK, and LBJ, and leading by example. But don’t expect the rest of the Congressional Hispanic Caucus to follow suit. Thirty years of fiscal abuse by Presidential administrations and a bordello-like mentality Congress has nearly destroyed public education, civil rights and the future economic viability of the middle class. And you expect people like Loretta Sanchez, Linda Sanchez, Joe Baca, Silvestre Reyes, Solomon Ortiz, and Grace Napolitano to oversee banking and economic policy?

  • 2 What the ... // May 1, 2010 at 10:36 pm

    There is no doubt that the Federal Reserve is the chief culprit behind the economic crisis. There is no acountabilty in its power to create unlimited amounts of money out of thin air. This has brought us the boom and bust cycle that has caused one artificial financial bubble after another. Since the Fed’s creation in 1913 the dollar has lost more than 96% of its value, and by recklessly inflating the money supply the Fed continues to distort interest rates and intentionally erode the value of the dollar. The Federal Reserve is actually unconstitutional according to article 1, section 8 of the constitution states that congress shall have the power to coin (create) money and regulate the value thereof. The Fed, which is a privately owned company, controls and profits by printing money through the Treasury, and regulating its value. It is said that Congress illegally gave the Federal Reserve the right to print money (through the Treasury) at no interest to the Fed. The Federal Reserve than creates money from nothing, and loans it back to us through banks, and charges interest on our currency. The Federal Reserve also buys Government debt with money printed on a printing press and charges U.S. taxpayers interest. Go figure…

  • 3 El Cholo // May 1, 2010 at 10:36 pm

    Good point…with those people making policy we’d surely resemble a Third World country.

  • 4 Yesterday’s May Day Marches // May 2, 2010 at 2:03 pm

    [...] Archives Select Month May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 ← Seneca: Latinos and The Federal Reserve [...]

  • 5 Hispanic Representation and the Federal Reserve System | . // May 3, 2010 at 10:54 am

    [...] May 3rd, 2010 Miguel Corona Leave a comment Go to comments An interesting perspective via LatinoPolitics blog regarding Hispanic representation in the Federal Reserve System (nationally). A great overview of [...]

  • 6 Alex Davidson // May 3, 2010 at 11:09 am

    Adriana,

    I work at the Fed and would like to talk to you about the above. Nothing bad, trust me ;) Would you shoot me an email with the best way to contact you?

    Thanks.

    Alex

  • 7 RGM! // May 7, 2010 at 9:09 pm

    Thank you for writing this. Frankly, I think part of it is that Latino students aren’t encouraged to go into economics. Sure, many of us earn MBAs or become lawyers or end up working in commercial banks, but how many make the connection to the Fed or are encouraged to study economic modeling or monetary policy, etc. We seem to be too busy with trying to sell things (the whole Hispanic marketing/PR thing) or climb the next rung in the social ladder. Combine that with the sense that we are under attack in our own country with laws like this new one in Arizona….and it’s no wonder that we aren’t clued into the fed system.

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