When Kendra Brooks left her low-income neighborhood in north Philadelphia last month and flew to the Federal Reserve’s annual symposium in Jackson Hole, Wyoming, she did so on the dime of a Facebook Inc. co-founder.
Brooks made the 2,100-mile trek to argue for big changes at the U.S. central bank. She was speaking as a member of Fed Up, a collection of community groups organized by the progressive, New York-based Center for Popular Democracy. About $1.35 million of the coalition’s $1.7 million 2016 budget comes from Open Philanthropy Project, one of the organizations through which billionaire Dustin Moskovitz and his wife Cari Tuna distribute their Facebook fortune.
The money behind the movement is aimed at influencing the Fed, which is tasked with promoting both maximum employment and stable inflation. Open Philanthropy Project hopes Fed Up will push policy makers to make the jobs side of that mandate their priority -- especially when the next downturn strikes, said Alexander Berger, its program officer for U.S. policy. The effort is well-timed, as Fed officials themselves debate whether rates should rise to head off inflation or stay low to pull more Americans back into the labor market.
“Fed Up is never going to be in a position to dictate the next monetary policy move -- and they shouldn’t be -- but they could provide the visible public support central bankers need to respond more effectively to the next recession,” Berger said.
Former Fed Chairman Ben Bernanke’s memoir showed how constrained he was during the financial crisis. He “got a lot of push-back from folks who were worried about inflation risks, but very little support from the progressive side,” Berger said.
As Fed Up sets out to reform the Fed’s century-old structure and institutional mindset, the group’s funding has raised eyebrows. St. Louis Fed President James Bullard said it’s backed by Moskovitz’s “Facebook money,” and that “it’s kind of a funny thing for them to fund because they want low interest rates in an era where we are awash in low interest rates.”
The Fed has only lifted rates once since the Great Recession.
Bullard was right that Moskovitz’s money has driven Fed Up from the start. His fortune amounts to about $12.4 billion, and he and Tuna give money to recipients identified by the Open Philanthropy Project. The project is a joint initiative between Good Ventures, their philanthropy, and Give Well, a nonprofit that does research for potential donors.
Moskovitz, who left Facebook in 2008 and has also committed $20 million to help Democrats including presidential candidate Hillary Clinton in the 2016 elections, is working on a start-up and is listed only as Good Ventures’s co-founder. Tuna is president at Good Ventures and at the Open Philanthropy Project, where she helps to oversee the work and set strategy, according to the organizations’ web pages.