Trump Isn’t Alone. These Millennials on the Left Want Low Interest Rates, Too.


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As President Trump rails against the Federal Reserve and urges it to lower interest rates, a similar push is coming from a group founded this year by three left-leaning millennials — albeit for very different reasons.

Mr. Trump regularly points out that inflation is low and says that the Fed should slash rates, which would weaken the dollar and help with his continuing trade wars. The new group, Employ America, wants central bankers to place a higher priority on fostering job growth and sees looser monetary policy as a way to protect workers as the economy shows early signs of slowing. It is using research, and Twitter, to make its case.

The campaign may seem oddly timed: Unemployment in the United States is at a nearly 50-year low, and there are more job openings than applicants. The Fed’s key benchmark interest is also low, relative to past business cycles.

But Employ America is embracing an unusual moment in the politics of central banking. Democrats have long favored lowering interest rates to fuel stronger growth even if doing so risked raising prices, while Republicans have traditionally criticized such moves as potentially inflationary.

Now that a Republican president is in the White House and price gains have proven surprisingly subdued, members of both parties have coalesced around a preference for low borrowing costs.

The Fed itself is engaged in a yearlong review of its monetary policy practices and communications, creating an opportunity to question what the central bank’s goal of maximum sustainable employment means in the modern era, and, potentially, a chance to push monetary policymakers toward a more expansive definition.

“It’s a good time to broaden the conversation,” said Alexander Berger of the Open Philanthropy Project, who helped to approve a short-term, $300,000 grant for Employ America that could be increased and extended if the group gains traction. The philanthropy project relies on funding from Dustin Moskovitz, a founder of Facebook, and his wife, Cari Tuna.

Sam Bell, Employ America’s founder, is an unlikely monetary-policy crusader. He has a degree in philosophy and political science from Swarthmore College, but no formal training in economics. He spent his early career focused on genocide intervention, but became interested in the job market following the financial crisis. His nights and weekends soon dedicated economic textbook-reading time.

As Mr. Bell watched a slow jobs recovery unfold, he became convinced that the Fed was placing too much weight on guarding against inflation, and too little on fostering a strong and rapid labor market recovery.

A vintage Federal Reserve money bag, a gift from Mr. Bell’s wife, is pinned on the bulletin board in the family’s house. Mr. Bell and his Employ America want the Fed to focus less on inflation and more on expanding the labor market.CreditTing Shen for The New York Times

Employ America wants to change that. Mr. Bell, together with his colleagues Skanda Amarnath and Kim Stiens, hopes to convince the Fed to tweak its policy-setting approach, in part by channeling a conversation that is already happening on social media into targeted research and advocacy.

“There’s a wonky tribe on Twitter that we’re trying to be a home for, to some extent,” Mr. Bell, 35, said. “I want to harness some of that conversation.”

The Fed’s job is to sustain the highest level of employment that is consistent with low and stable inflation. Policymakers have operated for decades under the assumption that very low unemployment eventually leads to higher prices, but that relationship is either muted or broken. Unemployment is at 3.6 percent, but inflation has been stubbornly low and wages are growing only moderately.

After years of saying employment was at, near or even past its sustainable level — and lifting rates nine times to avert a spike in prices that never arrived — officials are now less sure.

“There is no destination point for full employment, there’s no one number that you could pick and say: we’re there,” Lael Brainard, a member of the Fed’s Board of Governors, said in a recent television interview.

John C. Williams, the president of the Federal Reserve Bank of New York, has said that if the economy could achieve a 3.5 percent unemployment rate with stable inflation, that would be “terrific” news.

The shift in mind-set has created an opening for Employ America. In addition to publishing articles and policy papers directed at Fed officials and their congressional overseers, the group wants to prevent inflation-focused policymakers from landing Fed leadership jobs.

Mr. Bell, who calls himself Employ America’s “chief tweeting officer,” recently helped to derail Stephen Moore’s chances of joining the Fed’s Board of Governors. When news broke that Mr. Trump was considering nominating Mr. Moore, a campaign adviser and early advocate for higher interest rates after the recession, Mr. Bell dug up and tweeted out the conservative commentator’s quotes on everything from monetary policy to his opinions about certain Midwest cities.

Mr. Moore’s past comments about women, which Mr. Bell mostly steered clear of, ultimately cost him support in the Senate. But key lawmakers said it was a drip of information about his past positions that ruined his chances. Mr. Bell uncovered many of those, listening to hours of Mr. Moore’s past television and radio interviews and then using Twitter to highlight the conservative commentator’s support for the gold standard and his characterization of Cincinnati and Cleveland as “armpits of America.”

“The soundtrack to our children’ short lives has been `Wheels on the Bus’ and Stephen Moore interviews,” said Kate Kelly, Mr. Bell’s wife. “I say that with an eye-roll mixed with admiration.”

For all of Mr. Bell’s efforts, Mr. Moore said he had never heard of him or Employ America. He also said Mr. Bell was incorrect to think that he would have been an inflation-focused Fed governor.

Mr. Bell, an unlikely monetary-policy crusader, was inspired to create Employ America after watching the slow job recovery after the financial crisis.CreditTing Shen for The New York Times

“I’ve been saying for six months that the Fed is too tight,” he said, meaning he thinks the central bank should start to cut interest rates.

Employ America won’t oppose every pick Mr. Trump makes for the Fed: Mr. Bell often praises Richard H. Clarida, the Fed’s vice chair, who was nominated by Mr. Trump. Nor is the group anti-Fed. Mr. Amarnath worked at the New York branch after college and has either participated in or coached Fed Challenge, in which team members role-play real life policymakers, since he was 15. He is something of an organizational enthusiast.

But Mr. Amarnath, 27, left his job as a hedge fund economist to help start the group because he thinks the Fed could use a push toward deeper self-reflection. Policymakers started saying the economy was near full employment in 2016, for instance, but businesses have continued to hire steadily since then.

“There are always priors to challenge,” said Mr. Amarnath, a Columbia graduate who studied economics. “These are costly errors. You say, ‘We’re at maximum employment,’ and then eight million jobs show up.”

He recently published an article on Medium suggesting that the Fed should set policy with an eye toward overall labor income, rather than inflation, when the economy is shaky. Such an approach would result in lower policy rates for longer and, in theory, faster labor market healing. More recently, he has published a “quick and dirty case” for a .50 percentage point rate cut at the Fed’s June meeting, which would be a more aggressive and earlier move than most economists and investors expect.

Ms. Stiens, 33, manages Employ America’s operations and will help with hiring if the organization’s funding is extended.

If it is a little brazen for three people with a trial grant to try to influence a 105-year-old central bank that employs hundreds of Ph.D. economists, at least there is some precedent. Fed Up, started in 2014 and also funded by Open Philanthropy, brought protesters in green shirts emblazoned with the words “What Recovery?” to high-profile events like the Fed’s annual meeting in Jackson Hole, Wyo., to pressure policymakers to maintain low rates.

At a time when groups on the right were calling loudly for rate increases, the Fed Up organizers landed meetings with Fed officials and drew media attention. Mr. Bell consulted with Fed Up and admired the group’s work, but wanted to create a wonkier complement to its grass-roots outreach.

The climate in Washington is friendlier to Employ America’s message, but political winds and Fed leadership can change. Beyond making a case for lower rates now, Mr. Bell and his colleagues want to make sure that policymakers’ comfort with low unemployment lasts into the next recession and expansion.

Now is the time to wage that campaign, as the Fed holds conferences, including a recent one in Chicago, to consider possible changes to its policy-setting framework. The review is expected to wrap up later this year, and Fed officials will make their conclusions public in early 2020.

“The Fed is showing itself to be much more open to reconsidering its policy regime,” said Peter Conti-Brown, a Fed historian at the University of Pennsylvania’s Wharton School. “Employ America is likely to have, potentially, a big effect.”


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