debt, oil and renewables [by Maximilian Staedtler]

download U.S. debt chart: http://www.whatmattersweblog.com/wp-content/uploads/2009/10/us-gross-debt-1910-2010.pdf

In recent years, the U.S. turned to cash-rich China to finance its enormous budget deficit. Few believe that China made a good investment. And yet, China keeps lending money to America for one simple reason: if it refused to do so, the U.S. dollar would nosedive and wipe out the value of Chinese currency reserves. Moreover, the U.S. consumer is vital to China’s economic growth. Therefore, China will continue to lend America billions of dollars until the Chinese consumer is ready to step in and drive domestic consumption. But that will take quite some time. The Chinese have the world’s highest personal savings rate and this won’t change unless the Chinese government manages to establish a reliable social security and insurance system.

The obvious reason why the U.S. will never pay back its debt to China is that it’d be impossible for a U.S. president to explain to Americans why he wouldn’t use the money to invest in the American education system, rebuild the ailing infrastructure or prop up the broken health care system. As I said before, reducing the total amount of debt is illusory, but that doesn’t mean that debt as percentage of GDP can’t be reduced. As you can see on the chart above, gross national debt accounted for roughly 94% of gross domestic product in 1950, but while the total amount of debt more than tripled from $257.4 billion in 1950 to $909 billion in 1980, the percentage of GDP went down to 33.3%. How come this is possible? Well, GDP was growing  faster than debt. Rather than worrying about how to pay back mounting debt, we should think about how to grow the U.S. economy. To achieve the growth rates we need to get the debt level under control again, we need a new key industry, something similar to the IT revolution.   Fortunately there is an industry which has the potential of becoming the driver of a new period of high growth rates: clean energy technologies. Energy is the biggest business in the world. According to Fortune magazine, America’s five largest corporations are ExxonMobil (1), Wal Mart (2), Chevron (3), Conoco Phillips (4) and General Electric (5).  Have you noticed something? Yes, 3 of the top 5 largest corporations in the U.S. are oil companies. Probably that doesn’t come as a surprise for you. Since global oil production is close to its peak, western oil companies are falling behind state-run oil giants from the Middle East and South America and because of the harmful effects on the environment, the U.S. will be forced to shift to alternative sources of energy. This should be reason enough for Big Oil to invest in alternatives, even if just to remain a big player in the energy business. Gradually we’re becoming more sensitive to the true cost of oil. America’s addiction to oil is not only harmful for Mother Earth but also for our security and the well-being of our economy. Domestically produced energy from both conventional and new sources of energy are keeping money locally and creating jobs instead of funding petro dictators and global jihad. Too often I hear concerns about whether renewable energies can be scaled up fast enough to replace ever more expensive and dirty fossil fuels. The point is that once the development and production of clean energy and energy-efficient cars, homes, etc.. is getting kicked off, the American market will take charge of growing that business to a scale we need and at the same time bringing down costs. The great thing about a green energy revolution is that it will help the U.S. economy regain strength (and solve our problem number one) and at the same time counteract climate change which is our second major problem.  In addition, once the U.S. and much of the developed and developing world can effectively reduce oil consumption, this will reduce the threat of terrorism and radical religious groups which depend primarily on Saudi and Iranian oil income. As oil revenues go down, populist leaders from Venezuela to Iran will be forced to become more humble and reform their countries rather than distribute oil wealth. Contrary to James Quinn’s predictions, I am convinced that there are reasons to be optimistic. As bleak as the outlook may be, one may not underestimate the innovative potential of the American market. Since there are enormous opportunities for profit, it won’t take long until creative entrepreneurs come up with countless ideas of how to generate energy more sustainably and how to use it more efficiently and earn a fortune along the way. The next Google or Microsoft will likely come from the energy tech sector. Let’s do everything we can to make sure that this  industry takes off and sparks a revolution that puts America back on track. The profit potential in that market will be unprecedented. A strong energy tech sector is bound to drive up exports as global demand will be mind-boggling. Especially energy-thirsty China which is struggling with its spoiled environment will import whatever technologies it can get to satisfy its economy’s energy demand while keeping the impact on its environment as small as possible. Remember, this is not about CO2 emissions, it is about meeting future energy demand at a reasonable price without jeopardizing security and the environment. Last but not least, alternative energies will not just be needed to replace fossil fuels but also to make up for unavoidable oil supply shortages. The availability and the cost of renewable energies will be increasing forever while at the same time the availability of crude oil is falling and the cost will be sky-rocketing. Energy tech is America’s and the world’s best bet for the future. It is America’s turn to take action for two reasons: #1: the U.S. consumes one quarter of the world’s oil though it just has 4% of the world’s population. #2: America is the only country that can invent the technologies needed and bring them to the market quickly enough with its unequaled network of research universities, venture capitalist industry and millions of creative entrepreneurs willing to take on these challenges. This article was originally published on www.whatmattersweblog.com on October 22nd 2009.   (C) 2009 by Maximilian Staedtler – WHAT MATTERS WEBLOG (C) 2009 by Maximilian Städtler – www.whatmattersweblog.com   Link to article: http://www.whatmattersweblog.com/2009/10/22/things-look-pretty-bad-dont-they-yet-theres-reason-to-be-optimistic/ You might also be interested in these posts: Category Energy: and again, oil prices are heading up…. updated oil price chart Exxon investing in algae biofuels Is the end of the Oil Age near?

IEA: Oil supply crunch and mega-recession by 2013

Other Categories:

The Post-American World, China and the global economy

Singapore determined to master the storm

GM and Hummer go separate ways…

on the GM bankruptcy

GM China: the crown jewel in General Motor’s global operations

reports from Singapore, Japan, New York City and Hawaii:

http://www.whatmattersweblog.com/category/singapore/

http://www.whatmattersweblog.com/category/japan/

finally I’m back

The Next 4 Billion

Tomi T Ahonen, author of “Communities Dominate Brands” writes in this blog post:

To put it in context, there are 480 million newspapers printed daily; 800 million automobiles registered on the planet; 1.1 billion personal computers including all desktops, laptops, notebooks and netbooks; 1.2 billion fixed landine phones; 1.4 billion internet users; 1.5 billion TV sets; 1.7 billion unique holders of a credit card of any type; and 2.1 billion unique holders of a banking account of any kind. But 4 billion mobile phone subscriptions.

That is at one level astounding but then there is visual confirmation that this is true. Even in India, without checking the numbers, there must be more mobile phone users than TV households, newspaper readers, computer users, internet subscribers, etc.

Tomi says that the first 4 billion were the classic “early adopters”. But the next 4 billion will be different. To quote

So here is the big news. The next 4 Billion will not be like you and me. They will not be wealthy enough to own a PC and have a broadband connection and read blogs or do any Twittering on a PC. Over 95% of the next 4 billion will be in the Developing World, and while there will be of course an emerging middle class who may aspire to own a netbook, those tend to be wealthy enough to already have a subscription today. Those next four billion will be either those who do not have any connection today, at all, or else are second and third subscriptions to those who already have one today. Either way, the behavior of those new subscribers is distinctly different from what the mobile industry has grown accustomed to in the past decades.

Countries in Asia and Africa led by India and China will soon dominate the cellular waves. They will decide the services, the prices, the content, the usage – in short, they will define the market. This is a the new community of consumers, of citizens who have the means to give voice to their lives.

We saw mobile phones in use during all the recent elections in India.

If one looks at some of the advertisements of the mobile phone companies like Airtel and Tata DoCoMo on Indian television, already there is this clear highlighting of their mobile subscriber base.  Airtel has SRK talking about “Akele kuch bhi nahin…” and then the plug about 110 million people. DoCoMo has this “Friendship Express” theme.

One needs to watch this carefully.

House to Unveil Yet Another Healthcare Proposal

Nancy Pelosi is starting to come out of her coma and see reality.  She does not have the votes to pass her beloved “robust” public option version of the so-called health care reform legislation.

Meet the new “Public Option” – same as the old public option, but with sugar on top.

A watered down version of a public option is now the talk of the House.  It only differs by allowing doctors to negotiate reimbursement rates with the federal government.  I am not sure how this makes a big difference.  A bunch of doctors versus the Federal Government (all 10 trillion pounds of it)?  No contest – feds win.  But I digress.

None of these so-called reforms will help.  They might get 95% of the population “covered” by either private or public health plans – but care will be worse, doctors will become more scarce and care will be worse.  Bank on it.

None of the reforms control costs as well as a freer market (note that I said freer – not free).  With Democrats and other government control types in charge – extra regulation is a given.  No one will have pre-existing conditions so all companies will have to accept all comers.  Even people who sit around without care and then sign up after they find out they have a very costly condition.

Good luck keeping the rates down at that point.

Tax rates will rise to “pay” for the carnage

Better find a way to pay to bail out the big insurance companies when they start to fail.  Better find the tax revenues and spending cuts to pay for all the new enrollees to the new “Public Option”.

A better way – a conservative approach

Here is a suggestion – go with the conservative definition of a public option: allow personal health savings accounts and 401K style business health savings plans.  Let every American buy his or her own policy to cover themselves and their families.  Also – let them pay for services for routine maintenance and “well visits”.  Cut down the cost of paperwork and payment processing by having people pay for their services and care from the savings accounts.  Individuals can then pay for lower cost “insurance” to cover the unexpected expenses associated with unexpected health ailments.  The savings remains in the accounts of individuals to save to a rainy day.

“But Russ, what if they don’t have enough money to pay for the care,” you ask with a sniff and a whimper?

No problem – just have the IRS add a tax-deductible amount of income for care.  Perhaps a “robust” $5,000 per person or $15,000 per family.  Make it ready to access for family income levels below whatever political threshold the politicians care to decide.

Once the cash is in the accounts, people will get to decide what to do with the cash.  So long as it is for “qualified” stuff (health care related) then it remains tax-free.  If not – tax the hell out of the funds.  Penalize people too – democrats should love that one.

Look, it stands to reason that fraud and waste makes up 37% of the $800 billion is annual “waste” in our medical system (according to a report by Thompson-Reuters).  Since very large companies (and the government) run these programs, small amounts of “leakage” is acceptable.  A $20 overcharge is the same as zero when you spend hundreds of millions, or billions of dollars annually. But to the average American, that $20 on a visit will most certainly be noticed.  In fact, bills will be scrutinized before the patient leaves the office.  Most important, overcharges will probably be disputed and corrected before it is ever paid.

That is the magic of the market.  People will buy what they think is the best value for their dollar based on their own priorities.  The alternative leads to draconian measures and a general sense of enslavement to a faceless, nameless “system”.

I choose freedom.  It comes with responsibility and it has its risks. Whether it is a war on terror, tyranny, addiction to drugs, or for our freedoms and liberty – the responsibility does not change.

Remember, we have a rendezvous with destiny.  It is always a time for choosing.  Choose wisely.

 

McDonalds Is Everywhere

It IS everywhere. Just a short article today – this is too … shocking not to be shared.

So I was checking my email on whether my printing order is completed, and glanced over at the news.

Yahoo finance: Country Now Officially McDonald’s Free

I don’t know what’s more shocking – that they only had three McDonalds, or that they had to close down the three McDonalds because making a burger is getting expensive. I just went to McDonalds yesterday. They had my little pony ponies for happy meal toys (I got one, I’m happy).

“…McDonald’s, which currently operates in more than 119 countries on six continents, has exited a country. Its one and only restaurant in Barbados closed after just six months in 1996 because of slow sales. In 2002, the company pulled out of seven countries, including Bolivia, that had poor profit margins…”

119+ countries?

119+ countries.

The UN recognizes around 194-ish countries. Tiny countries like Micronesia must make up about another twenty. Then there are the third world countries that are really really poor, which makes up about thirty, and then there’s the dictator countries like North Korea and (somewhat) Belarus…

In other words, McDonalds operates in every country it possibly can.

Even China has it. :-/. But then, China has KFC as well… even if nobody in China knows what KFC stands for. They just assume it’s Cornel’s name. XD

Watch out people… The Taliban is not about to take over the world — McDonalds is.

Capitalism: socialism's Red Herring

Capitalism: socialism’s Red Herring

There is currently a tidal wave of sentiment in the media proclaiming the “failure of Capitalism” and why it is to blame for the current financial crisis. In abundance are documentaries and films like Michael Moore’s hypocritical “Capitalism: A Love Story” (which mistakenly confuses Capitalism with fascism – all while he uses real Capitalism to market and distribute his socialist* ideals). This is all a red herring put forth by the socialists to divert attention away from the real culprit: government intervention. The fact is that we have not had true Capitalism for a long time.

The Federal Reserve’s manipulation and control of the money supply – protected by the legal tender laws – have created the booms and busts in our economy as so eloquently explained by the economists of the Austrian School.

It is precisely these government agencies and their policies that have created the moral hazard that has led to this current financial crisis. Institutions like the FDIC, SPIC, Fannie Mae, Freddie Mac and all licensing agencies create a false sense of security enabling the protected individuals and institutions to proceed with their plunder without fear of reprisal – all while the masses sleep in their false sense of security. A good illustration of this point is a statement that a licensed real estate associate of mine once made, “having a license is like having a license to steal”.

Without these government backstops the populace would have to wake up from their slumber, do their own ‘due diligence’ on those with whom they put their trust, and take personal responsibility for their own actions.

Whatever the government can do, the private sector can do better – and cheaper. If this were not true, why are we forced to pay for government services? If their services were so valuable we would naturally pay for them voluntarily. Yes, men make mistakes, and so will the private sector. In a free market at least we have the option to vote with our dollars and take them to the competition. In a controlled market, we are limited to one choice – government’s choice – even when they make mistakes.

It is time for us Americans to stop looking to the “nanny state” for the solutions to our every problem and take personal responsibility. In conclusion I leave you with the following quote:

“Be careful of whom you make your protector lest they become your jailer.”

*I do not capitalize “socialist” for a reason. Any philosophy that is the antithesis of freedom is not worthy of the courtesy.

The Prosperity Index

Can’t say I’d heard of the Legatum Institute before the release of its second annual country Prosperity Index. [Check out its Wikipedia entry for more info]. If you have, then I imagine you’re seriously clued up with the goings on in the world of fund management and sovereign wealth funds. Also, they must have access to serious amounts of ‘wonga’ to own a two letter domain – li.com, and also prosperity.com.

Looking at the Index, there’s nothing too startling in the UK being only placed 12th in their 2009 Prosperity Index, bearing in mind our parlous ‘economic fundamentals’. Surprisingly we’ve improved from 14th position last year – perhaps a case of others slipping down a place or two. I’ve not studied their methodology in creating this index, but its delivery is technologically savvy. Instead of simply viewing each country’s entry in the index, it’s possible to compare different countries in one spider graph. I gave up at comparing four countries. The first one I chose to compare ourselves against was France – obviously, then Belgium, and then the USA.

Have a play around yourself. It’s impressive stuff.

 

25 October 2009 (am)

ARGH!!! The pool is closed (at the Riverplex); I might try later in the morning (9-ish?) and get it done, or maybe at 2 pm at the University. It is pretty outside but I shouldn’t try a walk if I want to finish the 30 miler next weekend.

Science and Nature: via Tiny Frog:

Also, check out these photos to see what happens when environmental controls are ignored.

Tiny Frog also points us to some slander...(but why are these frogs immune to this frog killing fungus?)

Animal Camouflage: Try to find the snake in this photo at Conservation Report. I love this feature that they run regularly.

Michael Moore: has an interesting and thought provoking take on why American newspapers are not doing well:

(hat tip: Mano Singham)

Bring Back Debtor's Prisons

This whole economic disaster Obama cant fix is caused by home loans.  People took out big morgages and borrowed money for houses they couldnt afford.  Most of them were really extravagent, like where you borrow money just by telling the bank what your salary is but without any proof.  ( Drug Dealer Loans. )  So people got all kinds of fancy stuff to impress other people they couldn’t afford.

But that’s not all.  Its also credit cards!  People can get a bankrupcy easier than making a phone call, so you can just borrow all the money you want and then not have to pay it back.  So whatever you buy is free.  You get to keep your stereo and video games and wireless computer and any other toys with other people’s money.

This is called stealing.  And one of the Ten Commandments says “THOU SHALT NOT STEAL.”  But it got so rampant thats how our economy is, they just charge the honest people more to support the thieves.  But there got to be so many people ripping the system off, that it collapsed under the weight of greedy materialist people with no morals who steal to get what they want.

It used to be there was a special prison for people who take advantage of other people helping them until there families paid there debt.  We stopped, and now there’s no money to be lent, crippling the economy.  We can’t afford to let petty theives turn us into a third world country.  We have to bring back debt prisons.

Dubai still has debter’s prisons, and they have a booming economy.

Then we can round up these parasites hurting the economy we all depend on.

Debter's Prison

Another Debter's prison

If the economy is getting better, why...

….is container traffic is down 20 percent to 30 percent at U.S. Pacific ports, analysts say. Last week, the ports of Los Angeles and Long Beach, the largest container ports in the United States, reported the lowest September import figures since 2000…..source signonsandiego.com.

Why are the two major rail carriers reporting revenue down over 25%?

When the economy is good, transportation is a key indicator of commodities and goods  being bought and sold, not stocks.

Obama

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This Year’s Top 10 Largest Venture Funding Deals

Here is a interesting article from WSJ Online.

“Twitter Inc.’s $100 million funding round drew considerable attention for its massive size, but it’s not the largest venture deal so far this year. That round actually tied for the fourth largest, according to data compiled from Dow Jones VentureSource.

Here’s a list of the Top 10 venture capital rounds through the third quarter. The deals are impressive considering the cloud hanging over the venture industry. Besides Twitter and another dot-commer, Facebook Inc., these companies range from massive clean-technology projects and health-care plays to wireless equipment makers and, in one case, a waste-collection service.

#1 Solyndra Inc., Fremont, Calif. – $286 million

The solar panel maker is on the federal government’s hot-list, receiving a $535 million loan guarantee in September to build a second manufacturing plant and create hundreds of jobs. That loan encouraged venture firms to invest at least another $198 million in Solyndra. (The company announced that amount in September though a spokesman told VentureWire the round’s total was even higher.) Argonaut Private Equity, an investment vehicle for Oklahoma billionaire George Kaiser, led the round. Others participating in the round weren’t disclosed, although Solyndra’s investors include CMEA Capital, Redpoint Ventures, RockPort Capital Partners, U.S. Venture Partners and Virgin Green Fund, which together have invested more than $600 million. Solyndra plans to finish building its plant in Fremont by the end of next year and ship its first product in early 2011.

#2 Clovis Oncology Inc., Boulder, Colo. – $146 million

In May, Domain Associates, New Enterprise Associates and others bet $146 million that former executives of cancer-drug company Pharmion Corp., which sold for $2.9 billion last year, will repeat that success with newly formed Clovis Oncology. Also participating were Pharmion investors Aberdare Ventures, Abingworth Management, ProQuest Investments and Versant Ventures, and newcomer Frazier Healthcare Ventures. Like Pharmion – which raised $145 million in venture capital and convertible debt before going public in 2003 – Clovis will acquire cancer therapies, develop them through to regulatory approval in the U.S. and Europe, and market them.

#3 Small Bone Innovations Inc., New York – $108 million

The orthopedic device company, founded in 2004, has developed a portfolio of products for thumb, hand, wrist, elbow, foot and ankle surgeries. The STAR Ankle total joint replacement system, one of Small Bone’s flagship products, received Food and Drug Administration clearance in May. The $108 million Series D round, which closed in April, included new investors The Family Office of Bahrain, Goldman Sachs & Co., Khazanah Nasional Brhd. and Malaysian Technology Development Corp. and existing investors 3i Group, Axiom Venture Partners, NGN Capital, TGap Ventures and Trevi Health Ventures. Executives told VentureWire they expect Small Bone to reach profitability in 12 months, and unlike many medical device companies which become acquisition targets, could grow into a full-fledged company in its own right.

#4 (Tied) A123 Systems Inc., Watertown, Mass. – $100 million

The electric-car battery maker’s initial public offering last month captured investors’ imagination – and wallets – with a vision of a future where power is stored intelligently and deployed efficiently in a world of lower carbon emission. Before the IPO, A123 Systems gathered $100 million in Series F funding in June from investors Gururaj Deshpande, General Electric Co., North Bridge Venture Partners and Qualcomm Inc. A123 also received a $249.1 million grant from the U.S. Department of Energy grant, the second-biggest awarded as part of a $2.4 billion program to start up a domestic battery industry. The company, which has a deal to supply Chrysler Group LLC with batteries for planned electric vehicles and hybrids, is said to be in the late stages of negotiations for another DOE loan worth as much as $235 million.

#4. (Tied) Facebook Inc., Palo Alto, Calif. - $100 million

Facebook recently reached an important milestone for an Internet company, becoming cash-flow positive as it also grabbed its 300 millionth member. Will an IPO be coming soon? Executives won’t say, but the company’s investors are counting on a spectacular exit at some point given how much money they’ve invested over the years. One of the newest investors is Digital Sky Technologies, a Russian Internet investor that put $100 million into Facebook in July while also paying another $100 million to buy out shares of any selling employees.

#4 (Tied) Open Range Communications Inc., Greenwood Village, Colo. – $100 million

One Equity Partners committed $100 million to Open Range at the start of the year to help it roll out wireless broadband and Internet services in rural America by the end of the year. The deal followed a $267 million loan from the U.S. Department of Agriculture’s Rural Development Utilities Program. Founded in 2004, Greenwood Village, Colo.-based Open Range hopes to reach more than six million Americans in 546 underserved and rural communities across the U.S. lacking access to traditional DSL or cable broadband service providers. Open Range plans to use WiMAX technology to enable access to its planned wireless service with a simple plug-in device.

#4 (Tied) Twitter Inc., San Francisco – $100 million

At a $1 billion valuation, Twitter’s $100 million fourth round proved the Web messaging company is here to stay, at least longer than some thought. The funding came from some unlikely sources, including T. Rowe Price Group, better known for its retirement funds than venture capital investing, Morgan Stanley, which invested from its asset management business, and Insight Venture Partners, a growth-equity investor that doesn’t typically put money in pre-revenue companies. Other investors in Twitter include Benchmark Capital, Institutional Venture Partners, Spark Capital and Union Square Ventures, which didn’t reinvest in the latest round reportedly because the deal priced the firm out. Now the pressure will be on for Twitter to live up to the hype.”

Read the full article here.

Fair Trader

We, the laborers of the United States of America, are considerably blessed to work in a country that actually enforces fair labor standards and practices. We have laws that protect us from exploitation, mismanagement, negligence and unfair treatment. We often take these laws for granted since they are more or less engrained into our expectations as a culture. These are things like minimum wage, the 40-hour workweek, overtime, age requirements, healthy work conditions, and breaks. However, a large part of the world has little, or no, such standards or requirements.These are countries like Vietnam, Mexico, China, India, Bangladesh, Guatemala, Columbia, and Uganda to name a few – where many of the products we love are made and produced.

It’s wild to look at the products we buy and see where they were actually assembled. I’ve been trying to be more conscience about what I buy. As of late, I’ve been trying to purchase more American made products for a number of reasons – 1) it strengthens local/domestic markets 2) for the most part working conditions are better here and 3) it potentially reduces environmental impacts (i.e. Less shipping = less carbon dioxide and we have more stringent environmental laws = less unchecked pollution). I was recently amazed to find that Levi jeans, what I thought was the quintessential American denim, are no longer made in the USA. The majority of their pants are now made in China, which then begs the question “Who is making them and how are they being made?”

The idea I’m trying to stir up here is that if you don’t know where a product is made or even how it’s made, do some research. Start with one product like coffee. See where it is made, who produced it, and how it was produced. If you’re like me, then you don’t want to buy items that are made unethically. This is extremely difficult to determine and do since a large quantity of products are made over seas. It takes some serious fortitude and exploration to find the truth behind products.  However, it’s vital for becoming a wise consumer and loving world neighbor. This may sound intense for some, but when we purchase items that are unethically made, we are supporting that method of production. In other words, when we agree with the end (buying a product), we are also agreeing with the means (the way it was produced).

There are organizations out there that are trying to make it easy on you as a consumer. The simplest thing to do is purchase products that are Fair Trade Certified (see logo to the right). These are products that are made with social equity, environmental responsibility, and economic vitality in mind. Check out some of the Fair Trade principles from Transfair USA below:

Fair Trade is much more than a fair price!  Fair Trade principles include:

• Fair price: Democratically organized farmer groups receive a guaranteed minimum floor price and an additional premium for certified organic products. Farmer organizations are also eligible for pre-harvest credit.
• Fair labor conditions: Workers on Fair Trade farms enjoy freedom of association, safe working conditions, and living wages. Forced child labor is strictly prohibited.
• Direct trade: With Fair Trade, importers purchase from Fair Trade producer groups as directly as possible, eliminating unnecessary middlemen and empowering farmers to develop the business capacity necessary to compete in the global marketplace.
• Democratic and transparent organizations: Fair Trade farmers and farm workers decide democratically how to invest Fair Trade revenues.
• Community development: Fair Trade farmers and farm workers invest Fair Trade premiums in social and business development projects like scholarship programs, quality improvement trainings, and organic certification.
• Environmental sustainability: Harmful agrochemicals and GMOs are strictly prohibited in favor of environmentally sustainable farming methods that protect farmers’ health and preserve valuable ecosystems for future generations.

I challenge you to join me in doing some research on what we buy so we can truly stand behind the products we purchase and the people who make them. I don’t want to buy anything that supports a market for child labor, poor working conditions, and the like.  If you do join me in this challenge please share your findings. I would love to know what you find!

Politico poll: Economy trumps climate as concern

Politico
© October 20, 2009
By Andy Barr

For voters, the economy outpaces all other issues by a wide margin, according to a new Public Strategies Inc./POLITICO poll.

As the nation struggles to climb out of a recession, 45 percent rated the economy as the most important issue in deciding their vote if the congressional election were held today, followed by 21 percent who said government spending, 20 percent who chose health care reform and 9 percent who said the wars in Iraq and Afghanistan. Just 4 percent ranked climate change as the top issue.

Economic worries also led a majority of Americans to place jump-starting the economy ahead of concerns about the environment.

Even as the Obama administration is pushing for climate protection legislation, 62 percent of those polled agreed that “economic growth should be given priority, even if the environment suffers to some extent.” The remaining 38 percent believed that “protection of the environment should be given priority, even at the risk of curbing economic growth.”

The results of the quarterly Public Trust Monitor poll indicate a shift of priorities among respondents. When a similar question was last polled in March, respondents had a much narrower tilt, 52 percent to 48 percent, in favor of economic growth over environmental concerns. Last December, those polled showed a nearly identical split of 51 percent to 49 percent toward economic concerns.

“Concerns, although a little less extreme, are still overwhelmingly negative about the economy. Even though things may be getting a little better, you get the sense that people really want to focus on the economy until we get it locked down,” said David Iannelli, managing director for Public Strategies’ Research Practice Group.

The poll was based on an online survey of 1,000 registered voters conducted Oct. 9-13 and has a 3.1-point margin of error. Public Strategies is a business advisory firm based in Austin. Its clients include trade associations, nonprofits, professional firms and Fortune 500 companies — some of which have a stake in the outcome of climate change legislation.

Overall, the survey showed a hardening of a number of pro-business sentiments that began to surface toward the beginning of the administration.

Asked which is the best approach to avoid a future economic crisis, only 32 percent said “new regulations,” while 68 percent chose “better enforcement of existing regulations.”

Likewise, less than half, 45 percent, said regulation of corporations should be increased, while 29 percent preferred that regulation be kept “about the same as it is now” and 26 percent wanted to see regulation of corporations decreased.

That opposition to new regulation — with an insistence that current rules on corporations be rigorously enforced — mirrors the survey’s July results but differs markedly from polls in December and March.

While 45 percent now want increased regulation, 67 percent favored it in December 2008 and 61 percent sided with the suggestion in March. Meanwhile, the 26 percent who now support decreased regulation reflect a 10-percentage-point jump from the 16 percent who said the same in December. In March, 20 percent favored decreased regulation.

A wide majority, 62 percent, said business will play a larger role in helping the economy recover than the government will, while 38 percent sided with the government. While the majority remains strongly in favor of business, it has actually dropped some since July, when 68 percent chose business and 32 percent said government.

And while the numbers reflect a stronger pro-business sentiment, there is still a clear mistrust of corporations. Asked which concerned them more, 59 percent said that “the U.S. government will not do enough to protect consumers from being taken advantage of by corporations,” while 41 percent said they worried “the U.S. government will constrain corporations to the point where it makes it too difficult to offer new and innovative products and services.” In July, those surveyed expressed mistrust in corporations by the same percentages.

On health care reform, the poll showed a narrow division on how Americans want the White House and congressional leaders on Capitol Hill to reform the system — and even on how important reform is.

Asked which is more concerning, 52 percent answered that “Congress will pass legislation that goes too far in increasing the government’s role in health care.” The remaining 48 percent were worried that “Congress will pass legislation that does not go far enough in addressing the health care challenges facing our country.”

Likewise, when asked about their attitudes toward health care reform, 51 percent said they “would consider voting against my member of Congress based on his or her support of opposition to health care legislation.” Meanwhile, 49 percent agreed that “health care is important to me, but I won’t base my vote primarily on whether my member of Congress supports or opposes health care legislation.”

Moving away from issues, how Americans view their political leaders has changed very little in recent months.

The percentage of respondents who said they trust the two main political parties, top federal institutions and the most powerful political leaders on both sides is nearly identical to the percentage found in July’s poll.

President Barack Obama is trusted by 54 percent, the same percentage as in July.

One-third of respondents trust former Alaska GOP Gov. Sarah Palin; 35 percent said the same of former Massachusetts GOP Gov. Mitt Romney; 19 percent, of House Minority Leader John Boehner (R-Ohio); and 23 percent, of Treasury Secretary Timothy Geithner. Each of those results has shifted only slightly in the past three months.

House Speaker Nancy Pelosi (D-Calif.) was the only politician asked about whose trust index moved by more than 4 percentage points, jumping 6 points, from 24 percent to 30 percent.

“We saw a lot of movement after the election to almost a public recalibration of where people were on trust,” said Iannelli. “But people have repositioned and are now at a spot where they have a wait-and-see attitude about what is going to come out of this. Once we see some changes on some of the big issues that people are keeping their eye on, we will see them start to move again.”

Fidel Castro on Evo Morales

This is an excerpt of Fidel Castro’s October 15 statement on Obama receiving the Nobel Peace Prize…

“Bolivia is fostering a wonderful program under the leadership of an Aymara president with the support of his people.

Illiteracy was eradicated in less than three years: 824,101 Bolivian learned how to read and write; 24,699 did so also in Aymara and 13,599 in Quechua. Bolivia is the third country free of illiteracy, following Cuba and Venezuela.

It provides free healthcare to millions of people who had never had it before. It is one of the seven countries in the world with the largest reduction of infant mortality rate in the last five years and with a real possibility to meet the Millennium Goals before the year 2015, with a similar accomplishment regarding maternal deaths. It has conducted eye surgery on 454,161 persons, 75,974 of them Brazilians, Argentineans, Peruvians and Paraguayans.

Bolivia has set forth an ambitious social program: every child attending school from first to eighth grade is receiving an annual grant to pay for the school material. This benefits nearly two million students.

More than 700,000 persons over 60 years of age are receiving a bonus equivalent to some 342 dollars annually.

Every pregnant woman and child under two years of age is receiving an additional benefit of approximately 257 dollars.

Bolivia, one of the three poorest nations in the hemisphere, has brought under state control the country’s most important energy and mineral resources while respecting and compensating every single affected interest. It is advancing carefully because it does not want to take a step backward. Its hard currency reserves have been growing, and now they are no less than three times higher than they were at the beginning of Evo’s mandate. It is one of the countries making a better use of external cooperation and it is a strong advocate of the environment.

In a very short time, Bolivia has been able to establish the Biometric Electoral Register and approximately 4.7 million voters have registered, that is, nearly a million more than in the last electoral roll that in January 2009 included 3.8 million.

There will be elections on December 6. Surely, the people’s support for their President will increase. Nothing has stopped his growing prestige and popularity.

Why is he not awarded the Nobel Peace Prize?

I understand his great disadvantage: he is not the President of the United States of America.”

To read the article in full, go to: Znet Commentaries

Cuba Tries Socialism Lite

From the Miami Herald:

Cuba’s workplace cafeterias are closing, President Raúl Castro keeps saying the well-off shouldn’t get the same subsidies as the poor, and now there are rumblings that one of the stalwart vestiges of the revolution — the ration booklet — has outlived its usefulness.

As the Cuban government struggles through a deep recession, its leaders have begun picking away at socialism in order to save it. But experts say the latest buzz by the Cuban government is simply another desperate fix to stem the slide of a failed economy that buckled long ago.

Even one of Havana’s leading economists recently said Cuba’s economy needed to be turned upside down — “feet up.” So taxi drivers got private licenses, farmers now have their own plots of land and government workers have to pack their own lunches.

“I think what they are trying to do is prepare the people for a hard landing,” said Cuba expert Jonathan Benjamin-Alvarado of the University of Nebraska. “The government is really saying in so many words: We’ve got limited resources and can only do so much. I think they are stuck.”

Since he took office early last year, Raúl Castro has been saying that the country’s severely battered economy needs fixing. In a widely quoted August speech, Castro said Cuba was spending more than it made.

“Nobody, no individual nor country, can indefinitely spend more than she or he earns. Two plus two always adds up to four, never five,” he said. “Within the conditions of our imperfect socialism, due to our own shortcomings, two plus two often adds up to three.”

CASTRO’S CHANGES

In the 18 months since he took office, Castro restructured the nation’s agricultural system to give idle land to farmers, hoping they would revive a deeply troubled state-run agricultural industry plagued by inefficiency. He also allowed taxi drivers to have private licenses; many were working illegally anyway.

Castro suggested it was time to rethink fundamentals such as deep subsidies for everyone. He started by saving $350 million by closing workplace cafeterias at four government ministries. Workers got a slight boost in pay as a result.

On Friday, the Cuban state newspaper Granma published a signed editorial from its top editor criticizing the so-called “supply card,” which provides Cubans with about a week and a half of deeply subsided groceries. In an article titled “He’s paternalistic, you’re paternalistic, I’m paternalistic,” Granma editor Lázaro Barredo Medina blasted the Cuban “gimme” mentality.

“You don’t go to the store to buy, you go so they can give you what’s yours,” he wrote.

Barredo, a member of the Cuban National Assembly, did not say when changes to the system could take place. But in a country where the Communist Party and central government control the media, it was as if Castro had written the newspaper column himself.

IT’S `ABOUT POWER’

“Of all the subjects and problems that can reach Granma, they chose this one, so undoubtedly they are planning to eliminate what I call the (un)supply card,” Central Cuban dissident Guillermo Fariñas said in a telephone interview. “They are doing things like that — and this pilot program to close the workplace cafeteria at some government ministries — because they are trying not to spend money on food. It goes against socialism, but it goes in favor of staying in power, which in the end is what interests the Castro dynasty.

“This is about power.”

Dang. Obama’s heroes are pointing out that you cannot continue to do deficit spending indefinitely. No doubt he will respond as most commie countries have by eliminating the middle class.

Hyperactive Boy Dead In Court; Hedonistic Factory Workers Want "Good Governance"

by Richard Skylar
Executive Editor

“It was encouraged by defendants, including a foreign Newsweek journalist Maziar Bahari, a low-level misdemeanor,” he said in Montreal.

Fairey sued the problem, but a ridiculous show made a strange day, as confirmed by Hajjarian.

The opposition rally is under control, it has been confirmed.

The Associated Press photo was very premeditated, casting black women in an answer session. His visit came as though he didn’t know why he sued the boats, or of Brown’s death. Authorities believe bookends for a hyperactive boy who died after being watched in court, even though the legal team’s decision involved George Clooney. The military reports 72 protesters were blown away by the 24-year-old Ukrainian performer who had waged a runoff to silence opposition leaders that promised to cover up the case and their detained occupants.

We were relieved that a foreign Newsweek reporter shouted, “Can you tell us once more about Victorian jails?”

In adequate government group homes, the ruling system hired a handyman to kill innocent people waving at a news organization that had been undermined.

Some are relieved that Hajjarian died last week at the further fulfillment of Afghanistan in Otisville. I don’t see how much; the not-for-profit news cooperative claimed that his previous lies were barely seaworthy — some kind of “Fairey’s case.” The opposition says to pay biracial beauty, saying it will be lifted off, and Sensing Satellite is to reinvigorate the deal for more work. One military died on Saturday; a reporter from The El Paso Times claims to have seen him inside the retreat jury, and will still be in the electronic files, although he had no one in the balloon and was wrong about what airs on Sunday.

Regardless of the anti-government movement by sheriff’s officials, Bahari’s wife in Kabul made that design, though she has often been too proud to be a bloody crackdown using security forces, telling them from Fujian province in Sri Lanka that although she didn’t report, she has withdraw from Earth.

More than making it up, the Children’s officials will discuss the birth of the Obama poster. “Dollars were exchanged in order to accept either fraud or illegality in late October,” he said Saturday, waving a statement during Friday’s prayer sermon. The government is under duress.

As of water on the Hollywood scene, she was the box Heene has used.

Founder Larry Jones agreed in February that arguing that the photo of the opposition will be lifted off; on Victoria Vancouver Island, where it could break, it transformed black women in the US military. Reports of 72 hedonistic factory workers asked if it is possible that government’s going to see if he wanted him inside the case of “good governance.” When asked about him, a spacecraft was launched into the way for The AP photograph of Iran’s opposition leader Mir Hossein Mousavi. Photographers said the initial claim was that bookends for the photo of our mission is not yet finished. “We are not,” they said.

While Richard said the stand, Bahari supposedly showed federal charges, and has no idea why the windows of those activists have already been mired in prison; they were fraudulent.

richardskylar@gmail.com

Rush to judgement

 

“Conservative talk show host Rush Limbaugh’s been dropped from a group of investors who were trying to buy the St. Louis Rams, speculation was that Limbaugh was considered by the league to be too controversial, you know, unlike Michael Vick, Pacman Jones…Plaxico Burress” –Jay Leno, from his October 15, 2009 TV show monologue.

Six years ago, Limbaugh lost his job at ESPN’s Sunday Night Football when he criticized Philadelphia Quarterback Donovan McNabb as being overrated and the fabrication of a media “desirous that a black quarterback do well.”

Limbaugh, who normally spends his afternoons assailing liberal politics, recently resurfaced in the sports media when it was announced that he and business partner, Dave Checketts, had designs on purchasing the struggling St. Louis Rams football franchise.

Checketts, succumbing to pressure from the media, NFL Commissioner Roger Goodell, players and dissenting Indianapolis Colts Owner Jim Irsay, dumped Limbaugh from his consortium and effectively kiboshed any plans the fiery conservative had to acquire the NFL team.

Flash-forward to the present and Limbaugh’s comments about McNabb still sting in the minds of many African-Americans but at their core, I feel they were more a statement about media bias than racist. Limbaugh’s biggest offense was that his example was so tenuous since McNabb, as it turns out, is a superb quarterback.

But while the repercussions of McNabb-gate still taint Limbaugh’s reputation, I don’t believe they were the reason Checketts and his partners turned-tail on him.

No. I surmise that Limbaugh’s rejection was more about his politics not aligning themselves with much of the mainstream sports media than it was about his provocative racial remarks. Many of the NFL owners, like Limbaugh, tilt right of center in their political views but are squelched from voicing their opinions by a media culture that is largely intolerant of any speech that challenges the accepted norm of political correctness.

Meanwhile, Mark Cuban, the combative and unabashedly left-wing owner of the Dallas Mavericks, has upset many fans but apparently not enough to warrant him being stripped of his NBA franchise. Jay-Z, the rap star and part owner of the New Jersey Nets, has written less than flattering lyrics about white folks but is at no risk of being rebuked by NBA Commissioner David Stern as Limbaugh was by Roger Goodell.

Still, despite being bombastic and offending many as he does on a daily basis, Rush Limbaugh should still be allowed to buy an NFL team if he so chooses.

Stymieing his entrance into the exclusive country club of pro football owners because of his politics seems eerily similar to the discriminatory policies the NFL wisely distanced itself from years ago.

Hello, we're from the government and we are morons.

And the White House calls the Tea Party Protests, over irresponsible government spending, a right wing fringe redneck republican conspiracy……….  Here’s you answer:  BULLSHIT they are right.

NEW YORK (CNNMoney.com)

The Obama administration on Friday said the government ran a $1.42 trillion deficit in fiscal year 2009.

That made it the worst year on record since World War II, according to data from the Treasury and the White House Office of Management and Budget.

Consequently, the annual deficit rose 212% to the record dollar amount of $1.42 trillion, from $455 billion a year earlier.

The storm it is a coming and we’re walking straight to it Freaks.  Let’s just hope that when it’s over we have something left to rebuild on.  If there ever was a time for a viable “third party” to emerge it’s now…

Grants for small business

HELP ME CLARK!
From HLN’s Money Expert Clark Howard

BRENDA:

We own a small Mom & Pop store and this economy is killing us. We have been searching online for a grant that will help us keep our business open. Is there anything out there as far as free money that we can get? We see a lot of grant offers online but they want money for the packages. Is there any government grant money for us without purchasing a package?

CLARK:

Well, the grant offers you’re seeing promoted on the web are scams.

There’s not even a grey area about that. The truth is that a lot of business owners are struggling right now and they’re looking for funds.

The Small Business Administration (SBA) was out of money, but now has a new allocation and it would be a good idea to go to your local score office at score.org, the Service Corps of Retired Executives.

Make an appointment and go sit down with someone. They are experts on the SBA loan program, if there is an SBA loan you would qualify for, or any ideas they might have for how to survive these tough times.

Dow’s Rally to 10,000 Carries Over Into Asian Markets

The Dow Jones industrial average, one of the most watched barometers of the financial world, closed above 10,000 points on Wednesday, a milestone of the stock market’s recovery from the depths of the financial crisis.

Skip to next paragraph Related New Rivals Pose Threat to New York Stock Exchange (October 15, 2009)

The rally carried over into Asian markets Thursday morning, with Japan’s Nikkei index rising more than 2 percent after the opening before sliding back some. Other key markets in Asia also showed more modest gains.

At the market close Wednesday in the United States, baseball caps declaring “Dow 10,000 2.0” circulated on the floor of the New York Stock Exchange. CNBC scheduled a special report to commemorate a level that Wall Street had not reached for a year, after the Dow fell below five digits last October as Washington rushed to head off an all-out collapse of the financial system.

“The last time we saw 10,000, we were going the wrong way,” said Doreen Mogavero, president of the brokerage Mogavero, Lee & Company, who was on the trading floor Wednesday afternoon. “This is a little bit nicer feeling.”

The Dow has recovered about 3,450 points since bottoming out in early March. But it and other major stock indexes are still shadows of their former selves, and many investors are a long way from whole. The Dow is some 4,000 points off its record high, and broader measures of the market are down 30 percent from their peaks. And the companies that constitute the stock indexes are still grappling with shaky revenues, credit losses and huge uncertainties about the American economy’s long-term growth.

In Washington, the market move became political fodder. Representative John A. Boehner of Ohio, the House Republican leader, played down the gains and said more Americans were concerned with jobs and “putting food on the table,” NBC reported.

On Wednesday, shares pushed higher after JPMorgan Chase reported a $3.6 billion third-quarter profit, earnings rose at the chip maker Intel and retail sales held up better than expected.

Investors went on a buying spree after the reports, lifting stock markets from London to New York to Mexico City.

The Dow gained 144.80 points or 1.5 percent, to end at 10,015.86, while the broader Standard & Poor’s 500-stock index rose 18.83 points, or 1.75 percent, to 1,092.02, and the Nasdaq composite climbed 32.34 points, or 1.5 percent, 2,172.23.

“Each time it crosses one of these levels, more of the bears get flushed out,” said Cleve Rueckert, research analyst at Birinyi Associates. “They’re more apt to change their tune. It makes it that much more clear that the market is pushing higher.”

The Dow first closed above 10,000 in March 1999. It retreated in the years after the dot-com bubble deflated, then retook 10,000 in late 2003 and peaked above 14,000 in October 2007.

Still, many investment specialists dismiss the significance of such big, round benchmark numbers, and say that no sophisticated investors or hedge funds make investment decisions based on whether a stock index’s total value can be measured in four or five digits.

“It’s psychological,” said Tom Fitzpatrick, chief technical analyst at Citigroup Capital Markets.

The major stock indexes have rebounded by 50 percent or more in a scorching rally that began in early March and galloped higher through the summer and early autumn, as the economy stabilized and once-bleeding companies began to report better profits and rising revenue.

Investors rushed to take positions in companies and commodities that could benefit from a broad upturn in the global economy. Crude oil prices hit their highest levels since last October, topping $75 a barrel. Safety bets like the dollar and government bonds got clobbered.

Financial stocks surged after JPMorgan Chase announced a third-quarter profit that outstripped expectations. JPMorgan was the first major financial company to announce earnings for last quarter, and the sight of rising revenue and stabilizing losses at one of the most powerful banks lifted expectations that the financial sector was again back on its feet, a year after its near-implosion.

Shares of JPMorgan climbed 3.3 percent, and its rising tide lifted shares of other banks like Goldman Sachs, Wells Fargo, Bank of America and Citigroup, which are all scheduled to report their own quarterly results in the days ahead.

Investors swept up shares of computer companies, search engines and software makers after Intel reported profits that surpassed Wall Street’s expectations. Shares of Intel, which issued its earnings report after markets closed on Tuesday, rose 1.7 percent.

The Treasury’s 10-year note fell 18/32, to 101 24/32. The yield rose to 3.41 percent, from 3.35 percent late Tuesday.

Following are the results of Wednesday’s Treasury auction of four-week bills:

Dow’s Rally to 10,000 Carries Over Into Asian Markets

Creating the Ability to Transmit Alternative Energy

Curry County could be home to power superstation
Comments 2 | Recommend 4
Thursday, Sep 17 2009, 3:04 pm
CNJ staff
More than 14,000 acres of Curry County could become a power superstation, according to Public Lands Commissioner Patrick Lyons.

Lyons, in Clovis on Thursday, announced that Tres Amigas LLC has been given two years to evaluate the land, conduct soil testing, archeological surveys, study wildlife impact and pursue purchase and sales agreements.

At the end of that period, provided the evaluation goes well, the Western Electricity Coordinating Council, Electric Reliability Council of Texas and the Southwest Power Pool would merge into the Tres Amigas superstation.

The project could create several hundred construction jobs and at least 50 permanent jobs in Curry County, Lyons said.

“This is the first step,” he said.

The land — located northeast of Clovis, south of Curry Road 19 and west of N.M. 108 — is public trust land, Lyons said.

Tres Amigas will pay $30,803 for the two-year option.

Lyons signed an agreement Thursday that by 2014 would move renewable energy unobstructed through the South-central United States, 14 Western states, Alberta and British Columbia, and the northern tip of Baja California, Mexico.

“One of the biggest constraints on wind and solar power growth is the reduced capacity of the transmission grid to deliver energy to customers,” Lyons said in a press release about the project.

“This new transmission infrastructure will allow half of the United States to access vast wind and solar energy resources.”

According to a Tres Amigas publication, the project will create the nation’s first renewable energy trading hub utilizing the latest power grid technologies, including DC superconductor power cables, HVDC voltage source converters and energy storage systems.

New Mexico would produce 70,573 gigawatts annually.

The State Land Office manages 9 million acres of surface estate and 13 million acres of mineral rights held in trust, primarily for public education.

Revenues earned from energy production, farming and ranching leases, and community and business development on trust lands support public schools, seven universities, the New Mexico Military Institute, the New Mexico School for the Blind and Visually Impaired, and the New Mexico School for the Deaf, along with three hospitals, correctional facilities, and water projects, the release said.

Dimming the lights

Apparently there’s a lot of controversy surrounding the recent island wide power cut that happened a few nights ago. I slept on the floor cos it was so hot.

Speculation is rife that electricity board workers executed it on purpose in protest of indications that the government is trying to privatize the CEB.

This itself is surrounded with rumor and speculation with certain quarters of the government denying it and certain others giving the impression of being on the fence. There are accusations that the government is ’selling’ the CEB to pay off debt. There is also some weird IMF bailout related story going about, the details of which are slightly unclear to me.

The electricity board, like all other government departments, is ridden with corruption. A lot of tax money goes into paying idling workers who usually get employment created for them at government agencies after helping out in election campaigns. There are huge inefficiencies which translate into additional costs to the utility paying public; taxing them on both ends.

Further privatization will clean this up; I’m sure huge profits can be made just by clearing up the corruption and inefficiency in the system alone. But controls need to be put into place to ensure that corporate greed doesn’t manifest in another ugly monopolistic situation later on.

Whats shocking is realizing all over again the complete lack of transparency with which most things happen in Sri Lanka.

Hey Buddy.....Can You Spare A Quarter....Or More?

I’m the internet version of the guy standing by the highway off ramp or sitting on a city sidewalk asking for your spare change……….I’ll be thrilled with as little as a Quarter or more if you care to……I am sincere and really need the help at the moment…………

Throw some change in my tin cup by using PayPal and sending it to:

Sun_e_da69@yahoo.com

Thanks for the help!

Wall Street Owns Washington

The second-highest ranking Democratic Senator, Dick Durbin, told a local radio station in April: “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.” Rep. Marcy Kaptur of Ohio delivered this extraordinarily piercing five-minute revelation on the Wall Street bailout and how the Congress is subservient to their dictates. Former IMF Chief Economist and current MIT Professor Simon Johnson argued in the May, 2009 issue of The Atlantic, that “the finance industry has effectively captured our government” and detailed how the U.S. has become very similar to failed emerging-market nations in both its political and economic culture.

All of that came together last night on Bill Moyers’ Journal program, as Johnson and Kaptur together discussed the stranglehold which the financial industry exerts over the federal government and how that has produced a jobless recovery in which the only apparent beneficiaries are the bankers and other financial elites who caused the financial crisis in the first place.

Where has US aid to Pakistan gone? Mariana Baabar

Courtesy: The News International

Mariana Baabar is a senior Pakistani journalist and diplomatic editor of the Islamabad-based newspaper, The News International and also contribute for Outlook India.

Where has US aid to Pakistan gone? Mariana Baabar [STORY APPEARED IN 2007]

ISLAMABAD : The billions of dollars in US military aid to Pakistan since September 11, 2001, without any accountability, has now been billed as a “tsunami of new funding”.

Washington’s Centre for Public Integrity, in its report, says that today human rights activists, critics of the Pakistani government and members of Congress want to know, where most of the money — totalling in the billions — coming through a Defence Department programme, subject to virtually no Congressional oversight, has disappeared to.

The Centre says that this is a major finding of more than a year of investigation by the Centre for Public Integrity’s International Consortium of Investigative Journalists (ICIJ). US military aid to Pakistan since September 11, 2001, terrorist attacks includes almost $5 billion in coalition support funds, a programme controlled by the Defence Department to reimburse key allies in the global war on terror. Pentagon reports that the ICIJ obtained through the Freedom of Information Act requests show that Pakistan is the No 1 recipient of these funds — receiving more than 10 times the amount that went to the No 2 recipient, Poland — and that there is scant documentation of how the money was used.

Pakistan also benefited from other funding mechanisms set up in the aftermath of the 2001 attacks. In three years after the attacks, Pakistan was the third-largest recipient of the Pentagon’s new regional defence counter terrorism fellowship programme, designed to train foreign forces in counter terrorism techniques. More than $23 million was earmarked for Pakistan in fiscal 2006 for “improving counter terrorism strike capabilities” under another new Pentagon programme referred to colloquially as Section 1206 training, which allows the Pentagon to use a portion of its annual funding from Congress to train and equip foreign militaries. Pakistan finished first in the race for this new Pentagon-controlled training.

The US State Department rates Pakistan’s human rights record as poor and reports a long litany of abuses. That nourishes critics’ claims that the US largesse has been put to abusive purposes, including to buy weapons that have been turned against Pakistani civilians and to offer bounties on suspects the US is seeking. According to Senator Sana Baloch, an opposition lawmaker who fled the country out of safety concerns, the US has several military bases inside Pakistan, including some in the senator’s home province of Balochistan. “Most of the US bases are based in Balochistan,” Baloch told ICIJ in an interview. “One or two of them are in Kharan, my own home district. The US is using the bases in this area for the war on terror. We are very supportive of the US in this role.”

The majority of the new US funding to Pakistan has come in the form of billions of dollars of coalition support funds (CSF), a post-9/11 funding mechanism created to reimburse key countries for expenses incurred in supporting American counter terrorism operations. According to K Alan Kronstadt, an expert on South Asia at the Congressional research service, by August 2006, CSF accounted for roughly $4.75 billion of the military aid Pakistan received from the US since the terrorist attacks. Pentagon documents obtained by ICIJ say the money that went to Pakistan was largely for “military operations on the Afghanistan border.”

Coalition support funds are considered a reimbursement by some and a blank check by others. Craig Cohen, the co-author of a recent Centre for Strategic and International Study on US aid to Pakistan, asked rhetorically whether CSF money is “intended to yield some sort of specific action on the part of the government,” adding, “If so, there’s clearly no oversight.”

Olga Oliker, an expert on US defence policy and co-author of a recent RAND think tank report on the human rights performance of internal security forces in South Asia, said she’s concerned that US-made weapons that go to Pakistani security forces and US training that the forces receive are being used against civilian populations. “In implementing assistance,” she told ICIJ, “the US has paid relatively little attention to human rights abuses and oversight. People weren’t paying attention.”

The new Democratic-controlled Congress has taken a greater interest in CSF payments to Pakistan. Under the previous GOP majority, there was virtually no oversight of CSF payments to any country. In January 2007, the House of Representatives acted to impose conditions on military aid to Pakistan by adopting the Implementing the 9/11 Commission Recommendations Act of 2007. Section 1442 of the bill relates to Pakistan. It identifies areas of concern for US policy, including the need for Pakistan to curb the proliferation of nuclear technology, to address the presence of the Taliban and other extremist forces and to secure its borders to prevent movement of terrorists. The bill would impose limits on foreign assistance to Pakistan, declaring that the US assistance may not be approved until “the president determines and certifies to the appropriate Congressional committees that the government of Pakistan is making all possible efforts to prevent the Taliban from operating in areas under its sovereign control. “In addition, Pakistan would be required to demonstrate that it is making significant steps toward free and fair parliamentary elections in 2007.” The bill also requires that the president submit a report describing the long-term strategy of US engagement with Pakistan.

“The American-supplied military arsenal has been used against Baloch nationalists,” Senator Baloch told ICIJ. He said he and others have gone to the State Department, “and the State Department says [the US has] given military hardware with no conditions.” A former US official, previously based in Pakistan, acknowledged to the ICIJ that in Balochistan “the [Pakistani] army stepped in with a pretty heavy hand last year.”

Source – http://chagataikhan.blogspot.com/2009/10/where-has-us-aid-to-pakistan-gone.html

News Update: There is NO "Baucus Bill"

     The CBO issued its “positive” analysis of the Senate Finance Committee’s proposed legislation for Obama Care. Of key interest, though, is that it is based on summary points. In actuality, there is NO BAUCUS BILL. Sen. Max Baucus will not put the legislation into txt form until AFTER the Committee vote:

There Won’t Be a ‘Baucus Bill’ Anytime Soon, Either

By Brian Faughnan | Oct 9, 12:09 PMWilliam Jacobson points out that as of now, there is no ‘Baucus Bill,’ in the health care debate:

The CBO scored the concepts described by the Baucus Committee. There is no legislative text. None. Baucus and his Democratic colleagues refused to reduce their concepts to actual legislation prior to a vote. Here is the CBO’s disclaimer:

CBO and JCT’s analysis is preliminary in large part because the Chairman’s mark, as amended, has not yet been embodied in legislative language.
The Baucus Concepts are disasterous, but that’s for another post. For this post, let me get across a simple concept: THERE IS NO BAUCUS BILL.

Your esteemed Senators on the Senate Finance Committee will not be voting on legislation because THERE IS NO BAUCUS BILL.

http://theconservatives.com/2009/10/09/there-wont-be-a-baucus-bill-anytime-soon-either.html

Sparring With the Cult of Ayn Rand

I recently posted an interview I did with the ghost of Ayn Rand and, as expected, a few Randian ideologues came out of the woodwork to challenge the points I sought to get across in my post.

I do these faux-interviews because I believe that my strong suit as a writer and financial commentator is satire, in the grand tradition of Jonathan Swift and The Simpsons.  The point I was making was that markets, even free ones, do require a modicum of regulation, and that the events of 2008 categorically proved that the emperors, in fact, have no clothes.

Here is my rather interesting exchange in the comments section with a gentleman who goes by the name of C. Jeffrey Small.  He clearly knows his stuff and I thought he made several good points, but I stick to my guns as far as my overall premise.

My retorts are in bold:

“For starters, one of the most enduring aspects of your philosophy was that the smartest, most capable citizens should be absolutely free from any government or regulatory interference in order for the society as a whole to move forward. Well, that experiment has been carried out in the US over the last decade or so and it almost led to the end of the world. Any thoughts on where you may have been wrong?”

Is it possible that you actually believe that an experiment in individual and economic freedom was conducted over the last decade, or is this just some form of ironic word play at the reader’s expense? If the former, and you truly think that the Bush years were a model of Capitalism and an administration that truly promoted individual rights as outlined in the US Constitution, then there isn’t anything that I or anyone else could say that could get through to you.

TRB: To my knowledge, no president has ever truly offered “model of Capitalism and an administration that truly promoted individual rights as outlined in the US Constitution” in its purest sense, but I gotta tell you sir, the last 10 to 12 years were as close to a free-for-all as you’re going to get in terms of lax restriction and the elites were given just enough rope to hang themselves. Everything they were in charge of fell apart. Don’t believe me? Ask 2 out of the 10 people you know who are unemployed.

TRB:

I have no reason to doubt that you sincerely believe that the Bush years were a “free-for-all” and represent a period of significant regulatory reduction. This is certainly the picture that the politicians and the press have gone to great lengths to convey. However, nothing could be further from the truth. While some specific regulations were rescinded under Bush, there were many, many more new regulations created to replace them. Overall, businesses were far more constrained by the end of the Bush administration than at the beginning. Bush significantly increased the national debt, and expanded the intrusion of government into an ever increasing number of areas. He supported all of the disastrous actions taken with regards to the FED, FDIC, Fannie Mae, Freddie Mac, etc. which were responsible for the housing bubble and the start of the economic collapse. He supported the trillion dollar FED bailout. And here were many shady public/private business dealings of a quasi-fascist nature. None of this qualifies as anything remotely approaching capitalism.

And now with Obama doing all of these things, only on an unimaginably larger scale, what is there to be proud of? For the life of me, I cannot understand how people get it in their mind that Bush represented capitalism and demonstrated its failure. Just like his father and Clinton, and Carter, before him, Bush was a weenie, inconsistent socialist who didn’t have the guts to go all the way with his policies. But the distance that he and his predecessors did travel has been a continual series of disasters. Now Obama, a proud socialist, stands defiantly in the open and works to fully implement everything that Bush only approached half-heartedly, and if left unchecked, is poised to plunge this country into a true disaster from which, ultimately, we might not be able to recover.

You are correct in saying that no president in the 20th century has promoted true capitalism and our constitutional rights. It is about time that we get one that actually understood these concepts and reigned in government, freeing people to once again rebuild our tattered economy and restore liberty to all.

You seem to be familiar with some of Rand’s works. If you understood anything that you read, then you must know that if she had lived to see it, Rand would have vilified Greenspan as a traitor for taking the job at the FED and would have classified his actions as some of the worst examples of government abuse. Greenspan was the Dr. Stadler in our current sorry cast of characters. Also, how do you account for the fact that the events in Atlas Shrugged, written over 50 years ago, are playing out almost verbatim, today? There must be some fundamental principles in operation that makes that kind of forecasting of the future possible!

As for me, I won’t be taking an opinion poll of my friends, whether employed or unemployed, to determine my conclusions on what is transpiring in the world today. I prefer to look at the facts and integrate them into a picture that can be comprehended and understood in terms of basic principles. And I find time and again that the trouble we find ourselves facing today is easily explained by government meddling in the economy – and not by some non-existent pipe-dream that we tried capitalism and that it was proven a failure.

Regards,
–
C. Jeffery Small

TRB: I respect your views and certainly your understanding of Rand’s ideology trumps mine, however, I disagree with your assertion that there was more regulation as opposed to less. I’d like to point out two key pieces of legislation and one non-enforcement of the Fed’s mandate hat were proximate causes of the condition we currently find ourselves in. Ironically, all three of these items were high lobbied-for and sought after by he very banks that used them to commit fiscal suicide:

1. The Commodity Futures Modernization Act, pushed for by Enron, which exempted the trillions in CDS contracts that led to our $173 billion ransom payment to AIG and its counterparties

2. The repeal of Glass-Steagal, which led to the Too Big To Fail culture that ended up in the most expensive rescue effort in the history of business

3. The Fed’s apathy in terms of monitoring the banking system as well as he exemption for he Big 5 i-banks (Lehman, Bear, Merrill, Morgan & Goldman) which led to a game of leverage chicken, culminating with 40-to-1 debt to equity ratios and a speculative orgy.

All three of these rule changes (eases) would have been cheered on by the objectivists as being concrete steps toward the ultimate goal of the absolute freedom for markets.

I thought I held my own, although I am admittedly something of a dilettante in matters of philosophy.

Thanks for the debate, Jeffrey, you’re welcome back to add your own two cents below.

Read Also:

Interview With The Ghost Of Ayn Rand  (TRB)

Shopping With ...: Know Your A-B-C’s

GRAPHIC elements with striking typography, like billboards and street signs, are part of everyday life, animating most public spaces. But according to Abbott Miller, a partner at the design firm Pentagram, they can also be used to enliven private spaces, creating vibrant interiors.

Skip to next paragraph Multimedia Interactive Feature Shopping With Abbott Miller Related Previous ‘Shopping With …’ Columns

Mr. Miller’s creations often play with the written word (“The soul of my practice is lettering and typography,” he said), and he has plenty of experience using such imagery to animate exterior and interior spaces. Among his projects are the sign for the new Cooper Union building at 41 Cooper Square, which spells out the school’s name on the facade in capital letters that wrap under the entrance canopy, and a wallpaper collection for Knoll featuring abstract patterns of overlapping type.

More recently, his logo for Olin, a Philadelphia landscape firm, and his art direction of the magazine 2wice were recognized as among the best examples of design in 2008, in the annual competition held by AIGA, the group previously known as the American Institute of Graphic Arts.

(The winning projects — 11 of them produced by Mr. Miller’s firm — will be on view through Nov. 25 at the AIGA National Design Center, at 164 Fifth Avenue.)

Shopping in Manhattan and online for graphic accessories to punch up residential interiors, Mr. Miller found several that used letters or numbers in imaginative ways.

At Urban Outfitters in Greenwich Village, he liked the 20th-century designer Alexander Girard’s reversible Alphabet Quilt, which has a pattern of big block letters and numbers on one side and a geometric design on the other new born baby tests.

A few blocks away at Kid O, he found streamlined toys that he thought children would enjoy and that would also look good when left around the house. “This is the class of toy that’s really for the adults,” he said. One favorite was the Fable Game by the Italian designer Enzo Mari, which has six slotted cards showing drawings of animals that interlock to form structures, like a small house of cards.

At the Moroso showroom in SoHo, Mr. Miller went straight to the Maharam section, where he chose fabrics he has used to bring color and pattern into his home in Baltimore. One of them, The Story of My Life, by Maira Kalman, is a playful hodgepodge of animals, plants and people that he used to upholster chairs because of its hand-drawn quality.

Next door, at Paul Smith, he liked the traditional graphics of the Limoges porcelain plates with colorful hand-painted pictures of mushrooms, by Alberto Pinto, a Parisian designer.

Mr. Miller believes that layering several strong graphic elements in a room instead of relying on just one can create an eclectic and individual sense of style. “Gradually adding things, and allowing for ornament and texture, can make a space less austere,” he said. “The idea is to let the environment actually become an ensemble of pieces.”

Shopping With …: Know Your A-B-C’s

BREAKING: The Secret Plot to Kill the Dollar

REX/ The Independent

FYI:  This is the story that everyone’s talking about today, gold and metals stocks are going berzerk in the pre-market as of this writing because of it:

From The Independent:

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

 The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

Full Article:

The Demise of the Dollar (Independent)

Arabs Plot to Drop Dollar

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

via independent.co.uk

Long term objectives and short term concerns

General Motors assembly line

These times, we are hearing that the economical recession is finished and everybody seems to be happy to see the business restarting….as usual ! I have no habit to be pessimistic. It is a fact that in such time, it is better to have a positive mind in order to start new challenges and to influence positively the market. But for all the people how lost their jobs and who have difficulties to pay their bills at month end, to feed their children, to pay medical costs, the recession is not finished at all.

One of the major activity sectors which was hit by the economical crisis is the automotive industry. With the GM bankruptcy, we saw the American government trying to find solutions in order to save the company and in order to limit the social disaster of such bankruptcy. Other governments in Europe, like Germany and Belgium, are ready too to bring some financial helps to Opel. Nevertheless, is it a good idea to invest so much money in a industry where there is an overproduction of 35% ? If there is overproduction, it means in this case that there is too much player in this industry segment. Should not be interesting to invest in industrial segments which present good potential for the future, like renewable energies?

The problem is that governments have to face to a dilemma. They have to struggle with budget deficit. In order to limit the social expenses, and to find a short term solution, they are intervening financially in order to sustain some industries, like automotive industry. But by investing in some industries having structural problems, they are reducing their capacity to invest and to sustain long term projects developments.

How did we come to such situation?

We can observe that when some government find important source of revenue, they do not think for how much time this source will make earning money. Let us take an example related to the automotive sector. For instance, in Belgium, around 50% of cars are company cars. Company cars are given to employees as a less taxable benefit than an equivalent gross salary complement. These leased cars are important sources of revenues for the government, and the gas used by these cars too. Nevertheless, they have three major problems related to this. First, it is a fact it will be more and more difficult to extract petroleum, as a result of which, the price will increase progressively. It will represent a cost increase for companies, and will affect they results. The companies will have to replace such benefit by another. But if the number of company cars is decreasing, how the government will compensate the revenues decrease? The second problem is the one of mobility as in many cities and countries. The traffic jams are constantly increasing, and it represents also a cost for companies. Do not forget the third problem of  the environment. We are consuming more petroleum than the earth produces, and there is a negative impact with CO2 rejections.

It seems that governments have short term views, and as far as they find some important source of revenues, they have the feeling that it will be forever. Now, it becomes more complicated to finance long term project developments, when you have even not enough money to close your annual budget.

This remembers us that when the problem appears, sometimes, it is already too late. We have not only to consider things as definitively acquired, and not only to think about tomorrow, but also the day after tomorrow.

 

(Picture source: www.e24.fr)

If the jobs picture weren't depressing enough . . .

Robert Reich, Secretary of Labor in the Clinton administration and currently the dean of the Goldman School of Public Policy at U.C. Berkeley, has a depressing blog post deconstructing Friday’s unemployment data. Here’s the best little ray of sunshine, from an education perspective:

State governments, meanwhile, continue to shed employees. Here’s one of the most depressing statistics I’ve seen (if you need any additional ones): Some 15,600 teachers didn’t return to work in September. They were laid off. So our classrooms are bigger, we have fewer teachers, and our students are presumably learning less — at the very time when they need to be learning more than ever.

Isn’t that disheartening?

China: We Drink Your Milkshake

from Forbes

China’s still at it.  Attempting to suck up every ounce of crude oil on a global basis, they are not unlike the Daniel Plainview character from There Will Be Blood, an oil magnate to whom you either leased your land or you watched as he drained the oil from it horizontally, right out from under you.

The Chinese have recently been shut down by Libya but have gotten quite a foothold in Iraq.  Their African move, though, raised quite a few eyebrows this week…

From Forbes:

The Chinese government is in a massive resource grab in Africa, which has huge ramifications for natural resource prices, not the least of which will be the cost of imported oil to the U.S., and ultimately the stock market and economy.

Beijing’s latest foray is trying to buy 6 billion barrels of oil that is already spoken for via leases to Exxon, Chevron, Royal Dutch Shell, and Total SA. The Nigerian National Petroleum Corp. presently leases 16 oil blocks on what remains of the oil industry’s dominant Seven Sisters.

The fastest growing and soon to be largest economy on earth doesn’t really care about the fact that the US and Europe are still losing jobs or that regional banks in Alabama may or may not be in trouble on some commercial real estate loans.  They want more access to oil and they want it now.  They are not waiting, nor can they afford to, as the chart above shows.

Oh, and it should also be noted that they will literally do business with anyone to gain access to oil rights or to development projects, including Venezuela, Russia and Iran.

In the time it took me to write this post, 25 new cars will have hit the road in Beijing (1200 new cars per day).  They’re not f@ckin’ around over there, and prices of $70 a barrel, denominated in a currency that falls every day, are meaningless to them.

So why is it that we’re still asleep?  And more importantly, how can we make money from this insatiable thirst that the credit crunch and global recession has done exactly nothing to slake.?

Source:

The Chinese Oil Grab (Forbes)

Stocks and Bonds: Shaky Pace of Recovery Sets Off a Sharp Decline

Wall Street’s bulls went running for cover on Thursday after a fusillade of new reports suggested the economy’s initial bounce from the bottom could be leveling off, stirring worry that the recovery would come in fits and starts over the rest of the year.

Falling automobile sales, a jump in first-time jobless claims and an unexpected decline in manufacturing activity suggested that Wall Street might have become too optimistic. And an hour before markets closed, economists at Goldman Sachs downgraded their estimates for Friday’s monthly unemployment report, feeding into the pessimism.

It was Wall Street’s worst daily performance since July. Stocks had bounded higher for seven months with little pause for breath. But now, as the economy wavers, some investors are concerned that share prices are heading into a red October.

The Dow Jones industrial average fell 203 points, or 2.1 percent, to 9,509.28, and the broader Standard & Poor’s 500-stock index was off 27.23 points, or 2.6 percent, at 1,029.85. The Nasdaq sank the most, tumbling 64.94 points, or 3.1 percent, to 2057.48 on losses in software production and for network companies.

“It’s been great up to this point, but it can’t go up forever,” said Ryan Larson, senior equity trader at Voyageur Asset Management. “The market wants solid fundamental growth. While we may tick incrementally positive, they were looking for more.”

On Thursday, investors got less.

Manufacturing activity slipped in September, according to the Institute for Supply Management, even though it continued to expand, though not as rapidly as in August. Businesses said their new orders dipped from a month ago, and that production and prices fell.

And in a troubling sign for the job market, the Labor Department said in a separate report that first-time claims for unemployment insurance rose 17,000 to a seasonally adjusted 551,000 last week.

“We don’t think we’re going to come out of this unscathed and be back to business as usual,” said Scott Anderson, senior economist at Wells Fargo. “Consumers will continue to be suffering from the headwinds of the financial crisis. Debt levels remain too high.”

The day’s reports were only the latest in a string of numbers that have fallen short of expectations. Sales of previously owned homes dipped in August after four months of gains, and orders for manufactured goods like civilian aircraft and computers also fell that month, according to reports released last week.

The prospect of slower growth drove investors to safe investments like Treasuries. Yields on the 30-year bond fell below 4 percent for the first time since April, a sign of stronger demand for long-term government securities payday loan lenders. The Treasury’s benchmark 10-year note rose 1 3/32, to 103 24/32, and the yield fell to 3.18 percent, from 3.31 percent late Wednesday.

A separate report on personal spending showed that consumers would still open their wallets if offered a good enough deal.

Consumer spending, which makes up 70 percent of the economy, rose sharply in August as car buyers took advantage of taxpayer-financed rebates under the government’s cash-for-clunkers program, the Commerce Department reported.

While the 1.3 percent spike in spending was the largest in nearly eight years, economists said it was not the foundation for any long-term rebound in the consumer sector. The government’s $3 billion clunkers program has ended, and automakers reported sharp declines in September sales from a month earlier.

With consumers worried about losing jobs and value in their homes and investments, economists said the surge in spending was probably a one-time event. Still, it was the fourth consecutive month of growth in spending.

“I wouldn’t expect it to continue,” said Alan Levenson, chief economist at T. Rowe Price.

In its monthly snapshot of spending and wages, the Commerce Department reported that incomes inched up 0.2 percent in August, and private wages and salaries increased slightly.

The personal savings rate dipped to 3 percent from as high as 5.9 percent in May as consumers spent more of their disposable income, most likely on new cars and trucks. The decline in savings suggested that consumers were still in a precarious position — faced with slowing income growth and pay freezes, many had to choose between spending or saving.

New reports showing a 6.4 percent bounce in pending home sales and a 0.8 percent increase in construction spending heartened economists hoping for a healthy recovery.

They argue that a reservoir of demand built up during the recession will unleash itself as businesses rebuild their inventories, factories receive more orders and consumers make purchases put off over the last year.

“The potential for significant growth rates is still there when you’ve knocked the economy down this far,” said William Cheney, chief economist at John Hancock Financial Services. “The normal historical behavior of the economy is, the harder you go down, the faster you come out.”

Stocks and Bonds: Shaky Pace of Recovery Sets Off a Sharp Decline

Really no surprise here, it is more costly to do business in California

Good thing we have great weather.

Kevin Smith in the Star-News reports on a study from Cal State Sacramento:

Business regulations are costly By Kevin Smith, Staff Writer

Posted: 09/30/2009 07:16:54 PM PDT

California businesses have long complained about the costly and cumbersome regulations they face in order to operate in the state.

And a new report puts a sobering price tag on all of that aggravation – $492.9 billion, to be exact.

That’s the total cost of regulation to these companies, according to the “Cost of State Regulations on California Small Businesses Study” authored by Cal State Sacramento professors Sanjay B Varshney and Dennis H. Tootelian.

To put this in perspective, that’s nearly five times California’s general fund budget and almost a third of the state’s gross product.

The $492.9 billion – which includes direct, indirect and induced costs – equates to a statewide loss of 3.8 million jobs. And since small business accounts for 99.2 percent of all employer business in California and all non-employer business … these costs are borne almost completely by small business, the report said.

Broken down, that penciled out to $134,122.48 per small business in California in 2007. Labor income not created or lost was $57,260.15 per small business.

Those numbers weren’t surprising to Jack Kyser, founding economist for the Los Angeles County Economic Development Corp.

“Some people have been critical of some of the statistics they used for their study, but the fact remains the situation has become more onerous for small businesses that don’t have the financial resources larger businesses have,” Kyser said.

One of our real challenges will be for our local area to remain competitive in a faltering economy. We have Arizona, Utah and others working overtime to lure California business away. How are we going to ensure competitiveness and convince corporate decision-makers that there is more to staying in California than mild weather.

Paul