Impending Destruction of the US Economy | By Paul Craig Roberts
11/28/07 "ICH" -- --- Hubris and arrogance are too ensconced in Washington for policymakers to be aware of the economic policy trap in which they have placed the US economy. If the subprime mortgage meltdown is half as bad as predicted, low US interest rates will be required in order to contain the crisis. But if the dollar’s plight is half as bad as predicted, high US interest rates will be required if foreigners are to continue to hold dollars and to finance US budget and trade deficits.
Which will Washington sacrifice, the domestic financial system and over-extended homeowners or its ability to finance deficits?
The answer seems obvious. Everything will be sacrificed in order to protect Washington’s ability to borrow abroad. Without the ability to borrow abroad, Washington cannot conduct its wars of aggression, and Americans cannot continue to consume $800 billion dollars more each year than the economy produces.
A few years ago the euro was worth 85 cents. Today it is worth $1.48. This is an enormous decline in the exchange value of the US dollar. Foreigners who finance the US budget and trade deficits have experienced a huge drop in the value of their dollar holdings. The interest rate on US Treasury bonds does not come close to compensating foreigners for the decline in the value of the dollar against other traded currencies. Investment returns from real estate and equities do not offset the losses from the decline in the dollar’s value.
China holds over one trillion dollars, and Japan almost one trillion, in dollar-denominated assets. Other countries have lesser but still substantial amounts. As the US dollar is the reserve currency, the entire world’s investment portfolio is over-weighted in dollars.
No country wants to hold a depreciating asset, and no country wants to acquire more depreciating assets. In order to reassure itself, Wall Street claims that foreign countries are locked into accumulating dollars in order to protect the value of their existing dollar holdings. But this is utter nonsense. The US dollar has lost 60% of its value during the current administration. Obviously, countries are not locked into accumulating dollars. ...
Wednesday, November 28, 2007
Monday, November 26, 2007
Energy prices are at all time highs. The US is deeply in debt and dependent on foreign creditors.
November 26, 2007 | America's Days of Reckoning | Good-Bye to All That | By PAUL CRAIG ROBERTS
Pat Buchanan is too patriotic to come right out and say it, but the message of his new book, Day of Reckoning, is that America as we have known her is finished. Moreover, Naomi Wolf agrees with him. These two writers of different political persuasions arrive at America's demise from different directions.
Buchanan explains how hubris, ideology, and greed have torn America apart. A neoconservative cabal with an alien agenda captured the Bush administration and committed American blood, energy, and money to aggression against Muslim countries in the Middle East, while permitting America's domestic borders to be overrun by immigrants and exporting the jobs that had made the US an opportunity society. War and offshoring have taken a savage economic toll while open borders and diversity have created social and political division.
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The Bush administration has been a catastrophe. Its failures are unprecedented. Energy prices are at all time highs. The US is deeply in debt and dependent on foreign creditors. The dollar has lost 60 per cent of its value against other tradable currencies, and its reserve currency status, the basis of American power, is in doubt. The US has lost millions of middle class jobs which have been replaced with low paid domestic service jobs. Except for the very rich, Americans have experienced no gains in real income in the 21st century. As the ladders of upward mobility are dismantled and the middle class struggles and fails, America is left with a few rich and many poor. America's reputation and credibility are damaged perhaps beyond repair. Congress and the press have enabled the executive branch's disregard of the Constitution and civil liberty. The US is mired in two lost wars which are pushing Lebanon and nuclear-armed Pakistan into deepening political crises.
As Buchanan concludes, "Our day of reckoning is at hand."
Pat Buchanan is too patriotic to come right out and say it, but the message of his new book, Day of Reckoning, is that America as we have known her is finished. Moreover, Naomi Wolf agrees with him. These two writers of different political persuasions arrive at America's demise from different directions.
Buchanan explains how hubris, ideology, and greed have torn America apart. A neoconservative cabal with an alien agenda captured the Bush administration and committed American blood, energy, and money to aggression against Muslim countries in the Middle East, while permitting America's domestic borders to be overrun by immigrants and exporting the jobs that had made the US an opportunity society. War and offshoring have taken a savage economic toll while open borders and diversity have created social and political division.
...
The Bush administration has been a catastrophe. Its failures are unprecedented. Energy prices are at all time highs. The US is deeply in debt and dependent on foreign creditors. The dollar has lost 60 per cent of its value against other tradable currencies, and its reserve currency status, the basis of American power, is in doubt. The US has lost millions of middle class jobs which have been replaced with low paid domestic service jobs. Except for the very rich, Americans have experienced no gains in real income in the 21st century. As the ladders of upward mobility are dismantled and the middle class struggles and fails, America is left with a few rich and many poor. America's reputation and credibility are damaged perhaps beyond repair. Congress and the press have enabled the executive branch's disregard of the Constitution and civil liberty. The US is mired in two lost wars which are pushing Lebanon and nuclear-armed Pakistan into deepening political crises.
As Buchanan concludes, "Our day of reckoning is at hand."
[is] the American superpower is also experiencing a terminal illness, with its decline marked by the dollar's downward drift
Michael Hirsh | In the Realm of the Dying Dollar | The plunging greenback threatens to cripple U.S. power. Why are the candidates ignoring this critical issue? | Nov 23, 2007 | Updated: 3:50 p.m. ET Nov 23, 2007
Great powers die slowly. It took years before the world realized that Great Britain was an imperial corpse, sapped of its strength by two world wars. The funeral finally occurred on Feb. 21, 1947, a freezing winter day in bomb-torn, bedraggled London, when the British wrote their own epitaph. ...
One has to wonder now whether the American superpower is also experiencing a terminal illness, with its decline marked by the dollar's downward drift. ... Yet the signs of imperial decadence are unmistakable. The world is losing confidence in the dollar, in no small part because it has lost confidence in America's strategic judgment and in its sustainability as a great power in the face of record budget and trade deficits, which are forcing the United States to borrow ever more money from future rivals like China and Russia. ...
... The irony for George W. Bush, of course, is that more than anything else he began as a president who wanted to build up American power, which he presumed to have been frittered away by Bill Clinton. ...
Great powers die slowly. It took years before the world realized that Great Britain was an imperial corpse, sapped of its strength by two world wars. The funeral finally occurred on Feb. 21, 1947, a freezing winter day in bomb-torn, bedraggled London, when the British wrote their own epitaph. ...
One has to wonder now whether the American superpower is also experiencing a terminal illness, with its decline marked by the dollar's downward drift. ... Yet the signs of imperial decadence are unmistakable. The world is losing confidence in the dollar, in no small part because it has lost confidence in America's strategic judgment and in its sustainability as a great power in the face of record budget and trade deficits, which are forcing the United States to borrow ever more money from future rivals like China and Russia. ...
... The irony for George W. Bush, of course, is that more than anything else he began as a president who wanted to build up American power, which he presumed to have been frittered away by Bill Clinton. ...
Wednesday, November 21, 2007
[India tech] shortage means something feared here: higher wages [+quality problems] ... [but static / declining wages in US ...ergo NO SHORTAGE?! ed.]
India High-Tech Industry Out of Workers | Apr 7, 12:13 AM (ET) | By TIM SULLIVAN [eWeek]
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Nearly two decades into India's phenomenal growth as an international center for high technology, the industry has a problem: It's running out of workers.
There may be a lot of potential - Indian schools churn out 400,000 new engineers, the core of the high-tech industry, every year - but as few as 100,000 are actually ready to join the job world, experts say.
...
On the most basic level, it's a problem of success. The high-tech industry is expanding so fast that the population can't keep up with the demand for high-end workers.
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A shortage means something feared here: higher wages.
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India has technical institutes that seldom have electricity, and colleges with no computers. There are universities where professors seldom show up. Textbooks can be decades old. ...
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Nearly two decades into India's phenomenal growth as an international center for high technology, the industry has a problem: It's running out of workers.
There may be a lot of potential - Indian schools churn out 400,000 new engineers, the core of the high-tech industry, every year - but as few as 100,000 are actually ready to join the job world, experts say.
...
On the most basic level, it's a problem of success. The high-tech industry is expanding so fast that the population can't keep up with the demand for high-end workers.
...
A shortage means something feared here: higher wages.
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India has technical institutes that seldom have electricity, and colleges with no computers. There are universities where professors seldom show up. Textbooks can be decades old. ...
most benefits from the H-1B visa program are not technology companies such Microsoft, IBM, ... but Indian outsourcing firms ...
H-1B Scramble Hits Fever Pitch | By Deborah Perelman | March 31, 2007 [eWeek]
The yearly rough and tumble for H-1B temporary workers' visas is in full swing this weekend, as the first day of the filing season is Monday, April 2. The year's allotment of 65,000 slots is anticipated to be exhausted in record time.
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Yet, a BusinessWeek report, published Feb. 7, shed light on the fact that the companies that reap the most benefits from the H-1B visa program are not technology companies such Microsoft, IBM, Intel, Oracle and Sun Microsystems, which are usually associated with a large number of H-1B workers, but Indian outsourcing firms.
The yearly rough and tumble for H-1B temporary workers' visas is in full swing this weekend, as the first day of the filing season is Monday, April 2. The year's allotment of 65,000 slots is anticipated to be exhausted in record time.
...
Yet, a BusinessWeek report, published Feb. 7, shed light on the fact that the companies that reap the most benefits from the H-1B visa program are not technology companies such Microsoft, IBM, Intel, Oracle and Sun Microsystems, which are usually associated with a large number of H-1B workers, but Indian outsourcing firms.
In reviewing visa data for the 2006 fiscal year, the report found that seven of the top 10 applicants were Indian companies that provided services to U.S. companies from India, from technology support to back-office processing. In fact, Infosys Technologies and Wipro took the top two spots for the second year in a row. Cognizant Technology Solutions, based in Teaneck, N.J., but operating mostly in India, took third place. The only other U.S. companies in the top 10 were Deloitte & Touche, an accounting and consulting firm, and Accenture, a consultancy, taking seventh and ninth place, respectively.
"brightest kids worrying about their jobs being outsourced. ... serious problems with the quality of bachelors from India, China ...
Study: There Is No Shortage of U.S. Engineers | By Deborah Perelman | April 4, 2007 [eWeek]
A commonly heard defense in the arguments that surround U.S. companies that offshore high-tech and engineering jobs is that the U.S. math and science education system is not producing a sufficient number of engineers to fill a corporation's needs.
A commonly heard defense in the arguments that surround U.S. companies that offshore high-tech and engineering jobs is that the U.S. math and science education system is not producing a sufficient number of engineers to fill a corporation's needs.
However, a new study from Duke University calls this argument bunk, stating that there is no shortage of engineers in the United States, and that offshoring is all about cost savings.
This report, entitled "Issues in Science and Technology" and published in the latest National Academy of Sciences magazine further explores the topic of engineering graduation rates of India, China and the United States, the subject of a 2005 Duke study.
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Duke's 2005 study corrected a long-heard myth about India and China graduating 12 times as many engineers as the United States, finding instead that the United States graduates a comparable number.
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"You had the brightest kids worrying about their jobs being outsourced. We thought, if kids at Duke were worried, then let's do a study about what's going on in education," Vivek Wadhwa, executive in residence at Duke University's master's in engineering management program and a co-author of the study, told eWEEK at the time.
"The first thing you do in a study is you look at the facts. But we couldn't find any facts. The more we dug, the more we looked, the more we discovered there were no facts," said Wadhwa.
However, Duke's 2005 study reported serious problems with the quality of Indian and Chinese bachelor-level engineering graduates, and predicted both shortages in India and unemployment in China. The current report finds these predictions to be accurate, with China's National Reform Commission reporting that the majority of its 2006 graduates will not find work. There are also oft-heard whisperings of a engineering shortage in India, though private colleges and "finishing schools" are going far to make up for the Indian deficiencies, the report said. ...
At least 17 percent of computer programming, software engineering and data entry jobs were likely to be offshored ...
Report: IT Service Jobs to Take Biggest Offshoring Hit | By Deborah Perelman | February 12, 2007 [eWeek]
Updated: Over the next seven years, service offshoring is expected to have a relatively small impact on the overall U.S., but a sharply felt one on IT-concentrated metropolitan regions, finds a new report.
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It was metropolitan areas with high concentrations of IT jobs, however, that were expected to be the hardest hit by service offshoring. Between 2005 and 2015, these IT-focused areas were expected to lose 2.6 percent of their jobs to offshoring, 2.4 percent in metropolitan areas that specialize in back-office services but only 1.9 percent of jobs in other metropolitan areas.
At least 17 percent of computer programming, software engineering and data entry jobs were likely to be offshored in these IT-concentrated metropolitan areas, including Bergen-Passaic and Newark in New Jersey; Boston; Boulder, Colo.; Danbury, Stamford and Hartford in Connecticut; Minneapolis; Orange County, San Francisco and San Jose in California and Wilmington, Del. ...
Updated: Over the next seven years, service offshoring is expected to have a relatively small impact on the overall U.S., but a sharply felt one on IT-concentrated metropolitan regions, finds a new report.
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It was metropolitan areas with high concentrations of IT jobs, however, that were expected to be the hardest hit by service offshoring. Between 2005 and 2015, these IT-focused areas were expected to lose 2.6 percent of their jobs to offshoring, 2.4 percent in metropolitan areas that specialize in back-office services but only 1.9 percent of jobs in other metropolitan areas.
At least 17 percent of computer programming, software engineering and data entry jobs were likely to be offshored in these IT-concentrated metropolitan areas, including Bergen-Passaic and Newark in New Jersey; Boston; Boulder, Colo.; Danbury, Stamford and Hartford in Connecticut; Minneapolis; Orange County, San Francisco and San Jose in California and Wilmington, Del. ...
Thursday, November 15, 2007
United States spent nearly $1 trillion on security in fiscal year 2007 ... not just the $463B for the DoDefense ...
November 14, 2007 by MinutemanMedia.org | Here’s What America Really Spends on Security | by Christopher Hellman
Back in February 2006, the Bush administration requested, and Congress later approved, roughly $463 billion in funding for the Defense Department. But when it comes to what American taxpayers really spend on national security, this is just the tip of the iceberg. All told, the United States spent nearly $1 trillion on security in fiscal year 2007, which ended on September 30.
In addition to the money allocated to the Pentagon each year as part of the Defense Department’s “base budget,” hundreds of billions of dollars are spent on other federal programs that are a direct result of the United States supporting and maintaining its military.
For example, the United States spent $173 billion last year on the wars in Iraq and Afghanistan and other costs the Pentagon says are related to the “Global War on Terror.” ...
The government also spent $43 billion on homeland security, not including $17 billion funded through the Defense Department budget. ...
The White House further revealed that it spent $43 billion on intelligence-related activities last year. ...
Veterans’ benefits accounted for $73 billion in federal spending last year to provide for those who’ve served their country in the past. ...
And the list goes on. According to the White House, the government paid $433 billion in interest on the national debt, and a conservative estimate puts the cost of past military spending attributable to this debt at $99 billion annually. ...
Back in February 2006, the Bush administration requested, and Congress later approved, roughly $463 billion in funding for the Defense Department. But when it comes to what American taxpayers really spend on national security, this is just the tip of the iceberg. All told, the United States spent nearly $1 trillion on security in fiscal year 2007, which ended on September 30.
In addition to the money allocated to the Pentagon each year as part of the Defense Department’s “base budget,” hundreds of billions of dollars are spent on other federal programs that are a direct result of the United States supporting and maintaining its military.
For example, the United States spent $173 billion last year on the wars in Iraq and Afghanistan and other costs the Pentagon says are related to the “Global War on Terror.” ...
The government also spent $43 billion on homeland security, not including $17 billion funded through the Defense Department budget. ...
The White House further revealed that it spent $43 billion on intelligence-related activities last year. ...
Veterans’ benefits accounted for $73 billion in federal spending last year to provide for those who’ve served their country in the past. ...
And the list goes on. According to the White House, the government paid $433 billion in interest on the national debt, and a conservative estimate puts the cost of past military spending attributable to this debt at $99 billion annually. ...
New JEC Report Reveals Total Economic Costs of War Could Exceed $3.5 Trillion if U.S. Stays the Course
New JEC Report Reveals Total Economic Costs of War Could Exceed $3.5 Trillion if U.S. Stays the Course
November 13: Senate Majority Leader Harry Reid (D-NV) and House Majority Leader Steny Hoyer (D-MD) will join Joint Economic Committee (JEC) Chairman Charles E. Schumer (D-NY), and JEC Vice Chair Carolyn Maloney (D-NY) today released a new report exposing the hidden costs of the war in Iraq. The Joint Economic Committee report investigates the costs of the war in Iraq that are not included in direct budgetary appropriations, including long term veteran’s health care, foregone investment, oil market disruptions and interest payments on borrowed war funding. The JEC estimates these costs could total in the trillions of dollars. ...
November 13: Senate Majority Leader Harry Reid (D-NV) and House Majority Leader Steny Hoyer (D-MD) will join Joint Economic Committee (JEC) Chairman Charles E. Schumer (D-NY), and JEC Vice Chair Carolyn Maloney (D-NY) today released a new report exposing the hidden costs of the war in Iraq. The Joint Economic Committee report investigates the costs of the war in Iraq that are not included in direct budgetary appropriations, including long term veteran’s health care, foregone investment, oil market disruptions and interest payments on borrowed war funding. The JEC estimates these costs could total in the trillions of dollars. ...
83 percent of crushing federal debt is a product of past three GOP presidents
September 12, 2007 | Contact: Israel Klein | (202) 224-5171 | NEW ANALYSIS BY JOINT ECONOMIC AND HOUSE BUDGET COMMITTEES: 83 PERCENT OF CRUSHING FEDERAL DEBT IS A PRODUCT OF PAST THREE GOP PRESIDENTS
Schumer and Maloney Urge White House to Stop Loading Future Generations with Backbreaking Debt
Washington, D.C. – Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC) and Rep. Carolyn B. Maloney, Vice Chair of the JEC released a new JEC and House Budget Committee analysis of total national and public debt incurred under the past five administrations. The analysis highlights a proven track record of fiscal responsibility under Democratic administrations, and conversely a sharp increase in debt under Republican administrations.
The great majority of our national debt has been incurred by the past three Republican administrations. Over the past thirty years, those administrations have borrowed an average of $233 billion each year from the public. In contrast, under Democratic administrations the Federal government has borrowed an average of $26 billion each year, just one-ninth as much. ...
Schumer and Maloney Urge White House to Stop Loading Future Generations with Backbreaking Debt
Washington, D.C. – Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC) and Rep. Carolyn B. Maloney, Vice Chair of the JEC released a new JEC and House Budget Committee analysis of total national and public debt incurred under the past five administrations. The analysis highlights a proven track record of fiscal responsibility under Democratic administrations, and conversely a sharp increase in debt under Republican administrations.
The great majority of our national debt has been incurred by the past three Republican administrations. Over the past thirty years, those administrations have borrowed an average of $233 billion each year from the public. In contrast, under Democratic administrations the Federal government has borrowed an average of $26 billion each year, just one-ninth as much. ...
Wednesday, November 14, 2007
wars in Iraq and Afghanistan have thus far cost the average U.S. family of four more than $20,000
'Hidden Costs' Double Price Of Two Wars, Democrats Say | By Josh White | Washington Post Staff Writer | Tuesday, November 13, 2007; Page A14
The economic costs to the United States of the wars in Iraq and Afghanistan so far total approximately $1.5 trillion, according to a new study by congressional Democrats that estimates the conflicts' "hidden costs"-- including higher oil prices, the expense of treating wounded veterans and interest payments on the money borrowed to pay for the wars.
That amount is nearly double the $804 billion the White House has spent or requested to wage these wars through 2008, according to the Democratic staff of Congress's Joint Economic Committee. Its report, titled "The Hidden Costs of the Iraq War," estimates that the wars in Iraq and Afghanistan have thus far cost the average U.S. family of four more than $20,000. ...
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The report argues that war funding is diverting billions of dollars away from "productive investment" by American businesses in the United States. It also says that the conflicts are pulling reservists and National Guardsmen away from their jobs, resulting in economic disruptions for U.S. employers that the report estimates at $1 billion to $2 billion. ...
The economic costs to the United States of the wars in Iraq and Afghanistan so far total approximately $1.5 trillion, according to a new study by congressional Democrats that estimates the conflicts' "hidden costs"-- including higher oil prices, the expense of treating wounded veterans and interest payments on the money borrowed to pay for the wars.
That amount is nearly double the $804 billion the White House has spent or requested to wage these wars through 2008, according to the Democratic staff of Congress's Joint Economic Committee. Its report, titled "The Hidden Costs of the Iraq War," estimates that the wars in Iraq and Afghanistan have thus far cost the average U.S. family of four more than $20,000. ...
...
The report argues that war funding is diverting billions of dollars away from "productive investment" by American businesses in the United States. It also says that the conflicts are pulling reservists and National Guardsmen away from their jobs, resulting in economic disruptions for U.S. employers that the report estimates at $1 billion to $2 billion. ...
Tuesday, November 13, 2007
Why Americans Don’t Study Science—It Doesn’t Pay ... pursuing an advanced degree in these fields is a bad investment.
February 15, 2005 | National Data, By Edwin S. Rubenstein | Why Americans Don’t Study Science—It Doesn’t Pay
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There they go again. Claiming they can’t find enough skilled Americans, the high-tech industry has browbeaten Congress into allowing them to bring in another 20,000 foreign workers. The little-noticed legislation, inserted into an appropriations bill required for the government to continue normal operations, expands the number of foreign workers eligible for H-1b visas from 65,000 to 85,000 in 2005.
...
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There they go again. Claiming they can’t find enough skilled Americans, the high-tech industry has browbeaten Congress into allowing them to bring in another 20,000 foreign workers. The little-noticed legislation, inserted into an appropriations bill required for the government to continue normal operations, expands the number of foreign workers eligible for H-1b visas from 65,000 to 85,000 in 2005.
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But native enrollment in graduate S&E programs peaked at 330,148 in 1993. Not coincidentally, 1993 was also the year in which S&E unemployment spiked at 3.5 percent. And, although unemployment fell during the 1990s boom, salaries in S&E occupations lagged those of other professional fields.
The reason Americans hesitate to study science and engineering is simple: pursuing an advanced degree in these fields is a bad investment.
For PhDs for example, the salary premium is not high enough to compensate for the five or more years of foregoing an industry salary while pursuing graduate study.
For U.S. citizens a doctorate in science or engineering causes a net lifetime LOSS in earnings.
For foreigners, of course, an American S&E degree remains attractive—relative to their options at home.
Allowing the importation of cheaper foreign workers is simply a form of corporate welfare for the high-tech industry—and it’s a solution that, by flooding the S&E market and discouraging potential native-born students, makes the problem worse.
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.Engineer Shortage? Duke Study Says No ... real issue is cheap overseas labor
Engineer Shortage? Duke Study Says No | Listen Now [3 min 43 sec] add to playlist
Morning Edition, April 30, 2007 · Why are so many engineering jobs being sent overseas? Leaders of tech companies say the United States does not produce enough engineers. But a Duke University study says the real issue is cheap overseas labor. Vivek Wadhwa discusses his study's findings.
Morning Edition, April 30, 2007 · Why are so many engineering jobs being sent overseas? Leaders of tech companies say the United States does not produce enough engineers. But a Duke University study says the real issue is cheap overseas labor. Vivek Wadhwa discusses his study's findings.
US’ education system produces a supply of qualified STEM graduates in much greater numbers than jobs available ...less attractive career opportunities
Globalization of R&D and Innovation: Implications for U.S. STEM Workforce and Policy | Testimony before the U.S. House Subcommittee on Technology and Innovation
Current policy is driven by the twin perceptions of a labor market shortage of scientists and engineers and of a pool of qualified students that is small in number and declining in quality. Math and science education are viewed as the primary policy levers to increase labor market supply, supplemented by increased immigration. But the data show little evidence to support those positions, and, in fact, indicate an ample supply of students whose preparation and performance has been increasing over the past decades. We are concerned that the consensus prescriptions are based on some misperceptions about efficient and sustainable strategies for economic and social prosperity. ...
Other Availability: PDF | Printer-Friendly Page
Posted to Web: November 06, 2007
Permanent Link: http://www.urban.org/url.cfm?ID=901129
Dr. Harold Salzman tells a House subcommittee on innovation and technology that new perspectives on competition and new routes for sharing knowledge freely across borders have prompted firms and universities to globalize. Salzman argues that globalization is not prompted by any deficiencies in the domestic supply of trained workers, and that "techno-nationalist" policies of the past are outdated and ineffective.
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science, technology, engineering, and mathematics (STEM) workforce ...
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The available data indicate that the United States’ education system produces a supply of qualified STEM graduates in much greater numbers than jobs available. If there are shortages, it is most likely a demand-side problem of STEM career opportunities that are less attractive than career opportunities in other fields. However, standard labor market indicators do not indicate any shortages.
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The standard education measures indicate there are enough students with the requisite skills to succeed in science and engineering courses of study, and managers we have interviewed rarely if ever note a lack of technical skills among their STEM workers.
...
Supply and Demand for STEM workers
Common to many policy reports is a call for large increases in the STEM workforce, and improvement in K-12 math and science as the means of achieving this increase.4 The data do not reflect the claim that U.S. students show declining interest in science and engineering fields, either in college or in entering the workforce.
...
From 1985 to 2000, the United States graduated about 435,000 S&E students annually with bachelor’s, master’s, and doctoral degrees—that total includes only U.S. citizens and permanent residents (about 72 percent of STEM workers hold a bachelor’s, 20 percent a master’s, and 7 percent a doctorate degree). Over the same period, the net change in STEM occupational employment ran about 150,000 annually, such that the average ratio of all STEM graduates to net employment change was about three to one.
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... However, there is a surprisingly low rate of STEM retention for the 1993 to 2001 cohorts of STEM graduates.
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For example, in a bid to increase visa caps, a number of high-tech CEOs discussed the demand their companies had for U.S.-based science and engineering workers to a Wall Street Journal reporter in June, 2006:
...Dr. Harold Salzman tells a House subcommittee on innovation and technology that new perspectives on competition and new routes for sharing knowledge freely across borders have prompted firms and universities to globalize. Salzman argues that globalization is not prompted by any deficiencies in the domestic supply of trained workers, and that "techno-nationalist" policies of the past are outdated and ineffective.
...
science, technology, engineering, and mathematics (STEM) workforce ...
...
The available data indicate that the United States’ education system produces a supply of qualified STEM graduates in much greater numbers than jobs available. If there are shortages, it is most likely a demand-side problem of STEM career opportunities that are less attractive than career opportunities in other fields. However, standard labor market indicators do not indicate any shortages.
...
The standard education measures indicate there are enough students with the requisite skills to succeed in science and engineering courses of study, and managers we have interviewed rarely if ever note a lack of technical skills among their STEM workers.
...
Supply and Demand for STEM workers
Common to many policy reports is a call for large increases in the STEM workforce, and improvement in K-12 math and science as the means of achieving this increase.4 The data do not reflect the claim that U.S. students show declining interest in science and engineering fields, either in college or in entering the workforce.
...
From 1985 to 2000, the United States graduated about 435,000 S&E students annually with bachelor’s, master’s, and doctoral degrees—that total includes only U.S. citizens and permanent residents (about 72 percent of STEM workers hold a bachelor’s, 20 percent a master’s, and 7 percent a doctorate degree). Over the same period, the net change in STEM occupational employment ran about 150,000 annually, such that the average ratio of all STEM graduates to net employment change was about three to one.
...
... However, there is a surprisingly low rate of STEM retention for the 1993 to 2001 cohorts of STEM graduates.
...
For example, in a bid to increase visa caps, a number of high-tech CEOs discussed the demand their companies had for U.S.-based science and engineering workers to a Wall Street Journal reporter in June, 2006:
- Mr. McNealy says Sun does 75% to 80% of its research and development in the U.S. Craig Barrett, chairman of Intel Corp., says his company also employs most of its researchers in the U.S. and wants to keep it that way. The reasons? … “If engineering is happening here in the U.S., I think my children will have a richer work environment.” (Wall Street Journal 2006)
- Sun Microsystems Inc. has chosen four of its facilities around the world to take the place of its Silicon Valley office as the research and development hub…. “We are over-invested in high-cost geographies like the U.S., and underinvested in low-cost geographies like India,” … the company's senior vice president of global engineering told reporters in Bangalore. [He] said the company will not lay off programmers in the U.S.—but won't hire many, either.… The company has reduced its staff to about 30,000, from roughly 43,000 four years ago. (Associated Press 2005; emphasis added)
Current policy is driven by the twin perceptions of a labor market shortage of scientists and engineers and of a pool of qualified students that is small in number and declining in quality. Math and science education are viewed as the primary policy levers to increase labor market supply, supplemented by increased immigration. But the data show little evidence to support those positions, and, in fact, indicate an ample supply of students whose preparation and performance has been increasing over the past decades. We are concerned that the consensus prescriptions are based on some misperceptions about efficient and sustainable strategies for economic and social prosperity. ...
80% of H1-B visas going to Indian-owned outsourcing companies last year .. [supposed to help US companies get short skills !!]
Indian outsourcing companies take the lion's share of U.S. H-1B visas | 16 April 2007
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Many other individuals and companies also expected to fulfill one of the key reasons for the program: to bring needed skills to the United States. Companies send representatives around the world to recruit the best and the brightest that they can find.
But something unusual happened last year and this year.
In past years a large percentage of H-1B visas have been granted to citizens of India. Only 7.5% of H-1B's were granted to Indian nationals in 1992, but that had jumped to about 40% in 2005 and then to 43,167 (66.5%) of the 65,000 in 2006. The trend has been strongly toward Indian companies obtaining the H-1B visas, with eight of every ten visas going to Indian-owned outsourcing companies last year.
In 2005 it was four in ten.
Alone, that statistic is a little bit surprising. After all, the program is intended to benefit U.S. companies in need of critical skills.
In fact, by definition, the visas granted are not supposed to displace American workers.
But what has happened is that the vast majority of H-1B visas appear to be going to Indian outsourcing companies. ...
...
Many other individuals and companies also expected to fulfill one of the key reasons for the program: to bring needed skills to the United States. Companies send representatives around the world to recruit the best and the brightest that they can find.
But something unusual happened last year and this year.
In past years a large percentage of H-1B visas have been granted to citizens of India. Only 7.5% of H-1B's were granted to Indian nationals in 1992, but that had jumped to about 40% in 2005 and then to 43,167 (66.5%) of the 65,000 in 2006. The trend has been strongly toward Indian companies obtaining the H-1B visas, with eight of every ten visas going to Indian-owned outsourcing companies last year.
In 2005 it was four in ten.
Alone, that statistic is a little bit surprising. After all, the program is intended to benefit U.S. companies in need of critical skills.
In fact, by definition, the visas granted are not supposed to displace American workers.
But what has happened is that the vast majority of H-1B visas appear to be going to Indian outsourcing companies. ...
cannot use the H-1B visa as a "cheap labor" program: evidence that Indian IT companies seeking H-1B visas may have paid lower wages than US companies
Visa program may aid foreign companies | By Ed Frauenheim, News.com | Published on ZDNet News: Jan 14, 2004 8:44:00 PM
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The H-1B visa program has been a hot topic in the tech industry for several years. The issue is boiling over again because of a dramatic rise in overseas outsourcing, which is costing thousands of U.S. workers their jobs, and the presidential election campaign.
...
H-1B visas are supposed to be gap fillers, allowing companies to find well-educated employees when they run into trouble hiring qualified U.S. workers. Critics have charged, however, that some companies are using them on a constant basis to cut costs. Also, the visas are intended to help U.S. employers stay competitive, but Hira said his research shows their use by foreign-based companies has accelerated the shift of tech work abroad.
...
Hira surmised that Infosys, Satyam and Wipro all fit the category of "H-1B dependent" employers based on their public statements. Organizations with at least 51 full-time employees in the United States were defined as H-1B dependent if 15 percent or more of their workers were holders of that visa.
...
Miller found nothing inherently wrong with a high proportion of H-1Bs at the Indian companies. "There's nothing in the law, that I'm aware of, that says a company can't have 100 percent" of their employees on H-1B visas, he said. The key, he said, is that the employer cannot use the H-1B visa rules as a "cheap labor" program.
Hira, though, presents evidence that Indian IT companies seeking H-1B visas may have paid lower wages than U.S. counterparts. For example, for the year ending Sept. 30, 2001, Wipro requested a total of 3,120 H-1Bs, and pledged to pay a total of $158 million in wages, for an average annual wage of $50,648, Hira found. EDS requested a total 452 H-1Bs and pledged to pay $32 million in wages, for an average annual wage of $71,251, according to the study. ...
...
The H-1B visa program has been a hot topic in the tech industry for several years. The issue is boiling over again because of a dramatic rise in overseas outsourcing, which is costing thousands of U.S. workers their jobs, and the presidential election campaign.
...
H-1B visas are supposed to be gap fillers, allowing companies to find well-educated employees when they run into trouble hiring qualified U.S. workers. Critics have charged, however, that some companies are using them on a constant basis to cut costs. Also, the visas are intended to help U.S. employers stay competitive, but Hira said his research shows their use by foreign-based companies has accelerated the shift of tech work abroad.
...
Hira surmised that Infosys, Satyam and Wipro all fit the category of "H-1B dependent" employers based on their public statements. Organizations with at least 51 full-time employees in the United States were defined as H-1B dependent if 15 percent or more of their workers were holders of that visa.
...
Miller found nothing inherently wrong with a high proportion of H-1Bs at the Indian companies. "There's nothing in the law, that I'm aware of, that says a company can't have 100 percent" of their employees on H-1B visas, he said. The key, he said, is that the employer cannot use the H-1B visa rules as a "cheap labor" program.
Hira, though, presents evidence that Indian IT companies seeking H-1B visas may have paid lower wages than U.S. counterparts. For example, for the year ending Sept. 30, 2001, Wipro requested a total of 3,120 H-1Bs, and pledged to pay a total of $158 million in wages, for an average annual wage of $50,648, Hira found. EDS requested a total 452 H-1Bs and pledged to pay $32 million in wages, for an average annual wage of $71,251, according to the study. ...
Monday, November 12, 2007
Oil: trading on exchanges like the New York Mercantile Exchange, or Nymex, is contributing “enormously” to high prices ... India’s petroleum secretary
India’s Solution for Oil Prices: Ban Speculation by Banning Trading | By HEATHER TIMMONS | Published: November 8, 2007
NEW DELHI, Nov. 7 — As oil approaches the $100-a-barrel milestone, M. S. Srinivasan, India’s petroleum secretary, has an unorthodox recommendation for cooling overheated prices: halt trading of crude oil on commodity exchanges.
There are “no supply constraints right now, and demand has not escalated out of control,” Mr. Srinivasan said in a recent interview in his New Delhi office. Rather, trading on exchanges like the New York Mercantile Exchange, or Nymex, is contributing “enormously” to high prices, he said.
If crude was eliminated from the commodities traded on Nymex, Mr. Srinivasan predicted, the world would “see a drastic reduction in the price.” The benchmark price of crude touched $98.10 on Nymex on Wednesday, a new record, before retreating to $96.37.
Mr. Srinivasan’s idea is based on a widely held belief that investors are artificially driving up oil prices. Hedge funds, banks and pension funds have poured capital into oil trading in recent years, betting that demand will increase. Analysts say these bets have become self-fulfilling prophecies, helping to push prices higher.
What analysts cannot agree on is how much of the increase is attributable to the investors — estimates vary from $10 a barrel to over $30 a barrel — and what, if anything, should be done about it. ...
NEW DELHI, Nov. 7 — As oil approaches the $100-a-barrel milestone, M. S. Srinivasan, India’s petroleum secretary, has an unorthodox recommendation for cooling overheated prices: halt trading of crude oil on commodity exchanges.
There are “no supply constraints right now, and demand has not escalated out of control,” Mr. Srinivasan said in a recent interview in his New Delhi office. Rather, trading on exchanges like the New York Mercantile Exchange, or Nymex, is contributing “enormously” to high prices, he said.
If crude was eliminated from the commodities traded on Nymex, Mr. Srinivasan predicted, the world would “see a drastic reduction in the price.” The benchmark price of crude touched $98.10 on Nymex on Wednesday, a new record, before retreating to $96.37.
Mr. Srinivasan’s idea is based on a widely held belief that investors are artificially driving up oil prices. Hedge funds, banks and pension funds have poured capital into oil trading in recent years, betting that demand will increase. Analysts say these bets have become self-fulfilling prophecies, helping to push prices higher.
What analysts cannot agree on is how much of the increase is attributable to the investors — estimates vary from $10 a barrel to over $30 a barrel — and what, if anything, should be done about it. ...
underpinnings of the Bush economy are terrible : Median income stagnant, purchases up 18% ... How? Tons of debt
The Worst Economy Of Our Lifetime, pt. II | Posted November 5, 2007
...
...
Yet last week the economic news was upbeat. The U.S. economy grew 3.9 percent and the economy added 166,000 jobs. Shouldn't people be happy about those developments?
The answer is no they shouldn't. As I noted in the first installment in this series, job and wage growth for this expansion is poor at best. Simply put, if you hadn't had a meaningful raise for the duration of "greatest story never told" you'd be frustrated, too. But that poor job and pay growth only tell part of the story. The bottom line is the underpinnings of the Bush economy are terrible -- and they are starting to come home to roost in a big way.
...
Notice how the median national income has stagnated? Yet over the duration of this expansion, personal consumption expenditures have increased 18.34 percent in chained (inflation-adjusted) dollars. So, at the beginning of this expansion people were already spending everything they made on a weekly basic. Over the last seven years income has stagnated, yet people have increased their purchases by 18.34 percent. Where did all this new money come from?
Tons of debt. Here is a chart compiled from information from the Federal Reserve's Flow of Funds Report.
...
Let's put some figures on that chart. In the fourth quarter of 2001, total household debt outstanding totaled $7.680 trillion dollars. In the second quarter of 2007, total household debt outstanding increased to $13.331 trillion -- a 73.56 percent increase.
Let's place those figures in perspective.
In the fourth quarter of 2001, total household debt was 75.10 percent of GDP. In the second quarter of 2007 it was 96.82 percent
...
The problem with this debt is we have now partially crippled our economy going forward. ...
Elites need to stop denying the breadth and reach of economic pain caused by America's integration with a much poorer global economy
The pain of globalisation | 11/09/07 "Guardian" | By Jared Bernstein and Josh Bivens
For years Americans have been told that they all benefit from trade with poorer countries - yet many now find they are worse off.
These poll results, however, should not surprise anyone who understands the economics of trade. Chapter one of the trade textbook was essentially written by David Ricardo, and it does indeed teach that trade, on the basis of comparative advantage, typically boosts a nation's average income. ...
Sadly, both for American workers and the quality of the trade debate, the textbook has other chapters. One of them explains the Stolper-Samuelson Theorem (SST), which points out that when the US exports insurance services and aircraft while importing apparel and electronics, we are implicitly selling capital - physical and human - for labour. This exchange bids up capital's price (profits and high-end salaries) and bids down wages for the broad working and middle-class, leading to rising inequality and downward wage pressure for many Americans.
Note that this is not just a story about laid-off factory workers, who obviously suffer the toughest losses. Rather, all workers in the US economy who resemble import-displaced workers in terms of education, skills, and credentials are affected. Landscapers won't lose their jobs to imports, but their wages are lowered through competition with those import-displaced factory workers.
...
Lastly, we - and "we" here refers to the economic elites in both parties playing guard-dog for the trade status quo - need to stop denying the breadth and reach of economic pain caused by America's integration with a much poorer global economy. The polls are telling us something pretty ironic: the people have read ahead of us in the trade textbook. We'd better catch up.
...
For years Americans have been told that they all benefit from trade with poorer countries - yet many now find they are worse off.
These poll results, however, should not surprise anyone who understands the economics of trade. Chapter one of the trade textbook was essentially written by David Ricardo, and it does indeed teach that trade, on the basis of comparative advantage, typically boosts a nation's average income. ...
Sadly, both for American workers and the quality of the trade debate, the textbook has other chapters. One of them explains the Stolper-Samuelson Theorem (SST), which points out that when the US exports insurance services and aircraft while importing apparel and electronics, we are implicitly selling capital - physical and human - for labour. This exchange bids up capital's price (profits and high-end salaries) and bids down wages for the broad working and middle-class, leading to rising inequality and downward wage pressure for many Americans.
Note that this is not just a story about laid-off factory workers, who obviously suffer the toughest losses. Rather, all workers in the US economy who resemble import-displaced workers in terms of education, skills, and credentials are affected. Landscapers won't lose their jobs to imports, but their wages are lowered through competition with those import-displaced factory workers.
...
Lastly, we - and "we" here refers to the economic elites in both parties playing guard-dog for the trade status quo - need to stop denying the breadth and reach of economic pain caused by America's integration with a much poorer global economy. The polls are telling us something pretty ironic: the people have read ahead of us in the trade textbook. We'd better catch up.
...
Alternative Tax Showdown: Their defense of the [private equity] morally indefensible tax breaks is tawdry. ... contributed $11.8 million to candidate
Alternative Tax Showdown | Published: November 8, 2007
...
Under current tax law, 23 million taxpayers will owe the alternative tax for 2007, up from 4 million last year. The tax was originally intended to apply to multimillionaires. But most of this year’s alternative taxpayers make between $100,000 and $500,000 and about a third make less than $100,000. They all have good cause to feel rooked and to expect help from Congress. ...
...
The House tax committee met the challenge, drafting a bill that provides the needed tax relief and plugs the resulting budget gap, mainly by raising taxes on private equity partners and hedge fund managers. The bill is good policy. The tax relief assuages justifiably aggrieved taxpayers. Tax increases on private equity firms and hedge funds rectify outdated rules that have allowed the very wealthiest to enjoy tax rates lower than those paid by middle-income Americans and, in some cases, to defer taxes indefinitely.
...
But key Democratic senators, among them New York’s Charles Schumer, who is the main fund-raiser for Senate Democrats, are balking. They know they must provide alternative tax relief, but they don’t want to tax private equity and hedge funds to pay for it. Their defense of the industries’ morally indefensible tax breaks is tawdry. As The Washington Post reported yesterday, in the first nine months of 2007, as pressure built to dismantle the tax breaks, investment firms and hedge funds contributed $11.8 million to candidates, party committees and leadership political action committees. That’s more than was given in 2005 and 2006 combined. More than two-thirds of that money went to Democrats. ...
...
Under current tax law, 23 million taxpayers will owe the alternative tax for 2007, up from 4 million last year. The tax was originally intended to apply to multimillionaires. But most of this year’s alternative taxpayers make between $100,000 and $500,000 and about a third make less than $100,000. They all have good cause to feel rooked and to expect help from Congress. ...
...
The House tax committee met the challenge, drafting a bill that provides the needed tax relief and plugs the resulting budget gap, mainly by raising taxes on private equity partners and hedge fund managers. The bill is good policy. The tax relief assuages justifiably aggrieved taxpayers. Tax increases on private equity firms and hedge funds rectify outdated rules that have allowed the very wealthiest to enjoy tax rates lower than those paid by middle-income Americans and, in some cases, to defer taxes indefinitely.
...
But key Democratic senators, among them New York’s Charles Schumer, who is the main fund-raiser for Senate Democrats, are balking. They know they must provide alternative tax relief, but they don’t want to tax private equity and hedge funds to pay for it. Their defense of the industries’ morally indefensible tax breaks is tawdry. As The Washington Post reported yesterday, in the first nine months of 2007, as pressure built to dismantle the tax breaks, investment firms and hedge funds contributed $11.8 million to candidates, party committees and leadership political action committees. That’s more than was given in 2005 and 2006 combined. More than two-thirds of that money went to Democrats. ...
“wealth creating” components of the economy have been subordinated to a finance-driven model which suddenly derailed due to abusive expansion of debt
Welcome to Year 27 of the Reagan Revolution | by Mike Whitney / November 8th, 2007
...
Why do the banks need such a huge infusion of credit if they are as “rock solid” as Bernanke says?
As most people now realize, the mortgage industry is on life-support. ...
...
Additionally, the banks are holding an estimated $200 billion in mortgage-backed securities and derivatives for which there is currently no market. This is compounded by $350 billion in “off balance sheets” operations — which are collateralized with dodgy long-term mortgage-backed securities — that provide funding for “short-term” asset-backed commercial paper. ASCP has shriveled by $275 billion in the last 10 weeks leaving the banks with gargantuan liabilities. ...
...
The news is bleak. The systemic rot is appearing everywhere presaging ongoing losses for the financial giants and a long-downward spiral for the markets. The banks are currently under-regulated, over-leveraged and under capitalized. ...
...
Former Fed chief Paul Volcker summarized the overall economic situation last week at the second annual summit of the Stanford Institute for Economic Policy Research. In his speech he said:
Altogether, the circumstances seem as dangerous and intractable as I can remember. Boomers are spending like there is no tomorrow. Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.. As a Nation we are consuming about 6 per cent more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 billion per day.” The nation is facing “huge imbalances and risks.
Volcker is right. The country is in a bigger pickle than any time in its 230 year history. ...
...
The biggest losers of all, however, are the financial giants that created most of the abstruse, debt-instruments that are now devouring the system from within. The productive and “wealth creating” components of the economy have been subordinated to a finance-driven model which suddenly derailed due to the abusive expansion of debt. Inevitably, some of the banks that took the greatest risks will be shuttered and trillions of dollars in market capitalization will disappear. ...
...
... The pervasive “free market” ideology rejects the notion of supervision or oversight, and as a result, the markets have become increasingly opaque and unresponsive to rules that may assure their continued credibility or even their ability to function properly.
The “supply side” avatars of deregulation have transformed the world’s most vital and prosperous markets into a huckster’s shell-game. All regulatory accountability has vanished along with trillions of dollars in foreign investment. What’s left is a flea-market for dodgy loans, dubious over-leveraged equities and “securitized” Triple A-rated garbage.
Let’s hear it for the Reagan Revolution. ...
...
Why do the banks need such a huge infusion of credit if they are as “rock solid” as Bernanke says?
As most people now realize, the mortgage industry is on life-support. ...
...
Additionally, the banks are holding an estimated $200 billion in mortgage-backed securities and derivatives for which there is currently no market. This is compounded by $350 billion in “off balance sheets” operations — which are collateralized with dodgy long-term mortgage-backed securities — that provide funding for “short-term” asset-backed commercial paper. ASCP has shriveled by $275 billion in the last 10 weeks leaving the banks with gargantuan liabilities. ...
...
The news is bleak. The systemic rot is appearing everywhere presaging ongoing losses for the financial giants and a long-downward spiral for the markets. The banks are currently under-regulated, over-leveraged and under capitalized. ...
...
Former Fed chief Paul Volcker summarized the overall economic situation last week at the second annual summit of the Stanford Institute for Economic Policy Research. In his speech he said:
Altogether, the circumstances seem as dangerous and intractable as I can remember. Boomers are spending like there is no tomorrow. Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security.. As a Nation we are consuming about 6 per cent more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 billion per day.” The nation is facing “huge imbalances and risks.
Volcker is right. The country is in a bigger pickle than any time in its 230 year history. ...
...
The biggest losers of all, however, are the financial giants that created most of the abstruse, debt-instruments that are now devouring the system from within. The productive and “wealth creating” components of the economy have been subordinated to a finance-driven model which suddenly derailed due to the abusive expansion of debt. Inevitably, some of the banks that took the greatest risks will be shuttered and trillions of dollars in market capitalization will disappear. ...
...
... The pervasive “free market” ideology rejects the notion of supervision or oversight, and as a result, the markets have become increasingly opaque and unresponsive to rules that may assure their continued credibility or even their ability to function properly.
The “supply side” avatars of deregulation have transformed the world’s most vital and prosperous markets into a huckster’s shell-game. All regulatory accountability has vanished along with trillions of dollars in foreign investment. What’s left is a flea-market for dodgy loans, dubious over-leveraged equities and “securitized” Triple A-rated garbage.
Let’s hear it for the Reagan Revolution. ...
Federal Liabilities Now Equal $175,000 for Every American
Federal Liabilities Now Equal $175,000 for Every American | By Terence P. Jeffrey | CNSNews.com Editor in Chief | November 08, 2007
(CNSNews.com) - Deficit spending and promised benefits for federal entitlement programs have put every man, woman, and child in the United States on the hook for $175,000, says a new report by David Walker, comptroller general of the United States. ...
(CNSNews.com) - Deficit spending and promised benefits for federal entitlement programs have put every man, woman, and child in the United States on the hook for $175,000, says a new report by David Walker, comptroller general of the United States. ...
The damage done to the American economy ...repercussions will be felt beyond the lifetime of anyone reading this page
The Economic Consequences of Mr. Bush | by Joseph E. Stiglitz December 2007
The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup.
When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.
I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.
And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both. ...
...
... A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II.
Agricultural subsidies were doubled between 2002 and 2005. Tax expenditures—the vast system of subsidies and preferences hidden in the tax code—increased more than a quarter. Tax breaks for the president’s friends in the oil-and-gas industry increased by billions and billions of dollars. ... In a nutshell, money was being spent everyplace except where it was needed. During these past seven years the percentage of G.D.P. spent on research and development outside defense and health has fallen. Little has been done about our decaying infrastructure—be it levees in New Orleans or bridges in Minneapolis. ...
...
... You’ll still hear some—and, loudly, the president himself—argue that the administration’s tax cuts were meant to stimulate the economy, but this was never true. The bang for the buck—the amount of stimulus per dollar of deficit—was astonishingly low. ... Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. ...
... The president undoubtedly hoped the reckoning would come sometime after 2008. It arrived 18 months early. As many as 1.7 million Americans are expected to lose their homes in the months ahead. ...
...
America’s budget and trade deficits have grown to record highs under President Bush. To be sure, deficits don’t have to be crippling in and of themselves. If a business borrows to buy a machine, it’s a good thing, not a bad thing. During the past six years, America—its government, its families, the country as a whole—has been borrowing to sustain its consumption. Meanwhile, investment in fixed assets—the plants and equipment that help increase our wealth—has been declining.
...
In short, there’s a momentum here that will require a generation to reverse. Decades hence we should take stock, and revisit the conventional wisdom. Will Herbert Hoover still deserve his dubious mantle? I’m guessing that George W. Bush will have earned one more grim superlative.
...
The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup.
When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.
I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance.
And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both. ...
...
... A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II.
Agricultural subsidies were doubled between 2002 and 2005. Tax expenditures—the vast system of subsidies and preferences hidden in the tax code—increased more than a quarter. Tax breaks for the president’s friends in the oil-and-gas industry increased by billions and billions of dollars. ... In a nutshell, money was being spent everyplace except where it was needed. During these past seven years the percentage of G.D.P. spent on research and development outside defense and health has fallen. Little has been done about our decaying infrastructure—be it levees in New Orleans or bridges in Minneapolis. ...
...
... You’ll still hear some—and, loudly, the president himself—argue that the administration’s tax cuts were meant to stimulate the economy, but this was never true. The bang for the buck—the amount of stimulus per dollar of deficit—was astonishingly low. ... Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. ...
... The president undoubtedly hoped the reckoning would come sometime after 2008. It arrived 18 months early. As many as 1.7 million Americans are expected to lose their homes in the months ahead. ...
...
America’s budget and trade deficits have grown to record highs under President Bush. To be sure, deficits don’t have to be crippling in and of themselves. If a business borrows to buy a machine, it’s a good thing, not a bad thing. During the past six years, America—its government, its families, the country as a whole—has been borrowing to sustain its consumption. Meanwhile, investment in fixed assets—the plants and equipment that help increase our wealth—has been declining.
...
In short, there’s a momentum here that will require a generation to reverse. Decades hence we should take stock, and revisit the conventional wisdom. Will Herbert Hoover still deserve his dubious mantle? I’m guessing that George W. Bush will have earned one more grim superlative.
...
Thursday, November 8, 2007
103,000 of [the new jobs], before seasonal adjustment — were added by the statisticians, not reported by employers
November 2, 2007, 11:12 am | Making Up Jobs
Today’s employment report is mediocre at best. But to understand that, you have to look past the headline numbers.
Those numbers say that the government’s survey of employers showed a gain of 130,000 private sector jobs, on a seasonally adjusted basis, in October. That seems to be better than in recent months.
I don’t believe it. Most of those jobs — 103,000 of them, before seasonal adjustment — were added by the statisticians, not reported by employers. (It should be noted that, before seasonal adjustment, there were 201,000 jobs added, so this is just more than half.)
Why add jobs? It is an effort to include jobs created by new companies not surveyed, less an estimate for jobs lost at companies that went out of business and therefore did not respond to the survey.
Of those 103,000 jobs, 14,000 were in the construction industry, and 25,000 were in finance. Does anyone believe that all those new companies are being created in those industries now? (You can see the government’s explanation for this here.) ...
Fears of dollar collapse as Saudis take fright
Fears of dollar collapse as Saudis take fright | By Ambrose Evans-Pritchard, International Business Editor | Last Updated: 10:14pm BST 21/09/200
Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.
"This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.
"Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said. ...
Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.
"This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.
"Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said. ...
Shouldn't We Talk About... Manufacturing Jobs? ... net job loss last month (including 47,000 lost manufacturing jobs),
Shouldn't We Talk About... Manufacturing Jobs? | Posted September 20, 2007
...
But we've heard nothing more than whispers about jobs so far. With an unsettled market, a mortgage and housing mess, massive trade deficits, and net job loss last month (including 47,000 lost manufacturing jobs), that should change -- and change soon. We need a national strategy to grow jobs, spur domestic innovation, and strengthen our manufacturing base.
...
But we've heard nothing more than whispers about jobs so far. With an unsettled market, a mortgage and housing mess, massive trade deficits, and net job loss last month (including 47,000 lost manufacturing jobs), that should change -- and change soon. We need a national strategy to grow jobs, spur domestic innovation, and strengthen our manufacturing base.
We need to jumpstart the talk about jobs. That's why the Alliance for American Manufacturing (AAM) has partnered with actor John Ratzenberger (of Cheers fame and Travel Channel's Made in America show) to host a national series of seven "Keep It Made In America" Town Hall meetings this fall. ...
Wednesday, November 7, 2007
When half of our population trying to make it on 12 percent of the nation's payroll can no longer meet the interest payments, ... happy doomsday ...
October 30, 2007 (web only) | Give Us This Day Our Daily Debt | Nicholas von Hoffman
It was almost 100 years ago that Henry Ford startled the world by giving his workers a raise without being asked. He explained that if they didn't have money they could not buy Ford automobiles.
From then on, his self-evident bit of common sense was accepted decade after decade. But in recent years it got lost and forgotten. The big boys have stopped giving us little folks enough to buy the big boys' stuff.
Get this from the Wall Street Journal: "The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks. The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000."
...
Should we reach the point where the half of our population trying to make it on 12 percent of the nation's payroll can no longer meet the interest payments, we shall have a crisis where all the choices are worse than awful. And a happy doomsday to you, too.
It was almost 100 years ago that Henry Ford startled the world by giving his workers a raise without being asked. He explained that if they didn't have money they could not buy Ford automobiles.
From then on, his self-evident bit of common sense was accepted decade after decade. But in recent years it got lost and forgotten. The big boys have stopped giving us little folks enough to buy the big boys' stuff.
Get this from the Wall Street Journal: "The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks. The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000."
...
Should we reach the point where the half of our population trying to make it on 12 percent of the nation's payroll can no longer meet the interest payments, we shall have a crisis where all the choices are worse than awful. And a happy doomsday to you, too.
The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. ...
Sinking Currency, Sinking Country | By Patrick J. Buchanan
11/04/07 -- -- - The euro, worth 83 cents in the early George W. Bush years, is at $1.45.
The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.
Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.
Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?
Nope. The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. Indeed, Bush is presiding over a worldwide abandonment of the American dollar.
...
In 2006, that U.S. trade deficit hit $764 billion. The current account deficit, which includes the trade deficit, plus the net outflow of interest, dividends, capital gains and foreign aid, hit $857 billion, 6.5 percent of GDP. As some of us have been writing for years, such deficits are unsustainable and must lead to a decline of the dollar.
...
The oil-producing and exporting nations, with trade surpluses, like China, have also begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in the United States -- investment banks and American companies.
Nor is there any end in sight to the sinking of the dollar. For, as foreigners demand more dollars for the oil and goods they sell us, the trade deficit will not fall. And as the U.S. government prints more and more dollars to cover the budget deficits that stretch out -- with the coming retirement of the baby boomers -- all the way to the horizon, the value of the dollar will fall. And as Ben Bernanke at the Fed tries to keep interest rates low, to keep the U.S. economy from sputtering out in the credit crunch, the value of the dollar will fall.
The chickens of free trade are coming home to roost.
11/04/07 -- -- - The euro, worth 83 cents in the early George W. Bush years, is at $1.45.
The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.
Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.
Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?
Nope. The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. Indeed, Bush is presiding over a worldwide abandonment of the American dollar.
...
In 2006, that U.S. trade deficit hit $764 billion. The current account deficit, which includes the trade deficit, plus the net outflow of interest, dividends, capital gains and foreign aid, hit $857 billion, 6.5 percent of GDP. As some of us have been writing for years, such deficits are unsustainable and must lead to a decline of the dollar.
...
The oil-producing and exporting nations, with trade surpluses, like China, have also begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in the United States -- investment banks and American companies.
Nor is there any end in sight to the sinking of the dollar. For, as foreigners demand more dollars for the oil and goods they sell us, the trade deficit will not fall. And as the U.S. government prints more and more dollars to cover the budget deficits that stretch out -- with the coming retirement of the baby boomers -- all the way to the horizon, the value of the dollar will fall. And as Ben Bernanke at the Fed tries to keep interest rates low, to keep the U.S. economy from sputtering out in the credit crunch, the value of the dollar will fall.
The chickens of free trade are coming home to roost.
Tuesday, November 6, 2007
insisting that she be paid in almost any currency but the U.S. dollar
Supermodel Bundchen Joins Hedge Funds Dumping Dollars (Update3) | By Bo Nielsen and Adriana Brasileiro | Nov. 5 (Bloomberg) --
Gisele Bundchen wants to remain the world's richest model and is insisting that she be paid in almost any currency but the U.S. dollar.
Like billionaire investors Warren Buffett and Bill Gross, the Brazilian supermodel, who Forbes magazine says earns more than anyone in her industry, is at the top of a growing list of rich people who have concluded that the currency can only depreciate because Americans led by President George W. Bush are living beyond their means. ...
Gisele Bundchen wants to remain the world's richest model and is insisting that she be paid in almost any currency but the U.S. dollar.
Like billionaire investors Warren Buffett and Bill Gross, the Brazilian supermodel, who Forbes magazine says earns more than anyone in her industry, is at the top of a growing list of rich people who have concluded that the currency can only depreciate because Americans led by President George W. Bush are living beyond their means. ...
Friday, November 2, 2007
"the CEOs of Exxon, Texaco, and Shell for figuring out how to quadruple the price of oil over a seven-year period without an actual shortage."
October 30, 2007 5:37 p.m. PT | Be honest about gas gouging | By ROBERT WEINER AND JOHN LARMETT | GUEST COLUMNISTS
Gasoline prices are poised to explode again. Oil companies are setting up the framework for higher prices because of fears of a Turkish invasion of Kurdish-controlled northern Iraq and administration saber rattling about Iran. Crude oil, at $29.59 a barrel when President Bush took office in January 2001, is now pushing toward $100. Washington state's current gasoline cost of $3.09 per gallon, double Seattle's 2001 price of $1.52, is now second only to California in the 48 contiguous states.
Jay Leno joked on "The Tonight Show" Oct. 17, "The Nobel Prize for economics was awarded to three people -- the CEOs of Exxon, Texaco, and Shell for figuring out how to quadruple the price of oil over a seven-year period without an actual shortage."
...
... Oil companies raised gas prices 24 cents a gallon in the 24 hours after Katrina. The FTC reported increases "not substantially attributable to increased costs." It was pure fear mongering.
...
However, there is no "violation" if the price charged is "substantially attributable to local, regional, national, or international market conditions." The House is saying it is not gouging if the public will bear it. The oil companies could still charge whatever they want -- a loophole big enough for a gas-guzzling Mack truck. ...
Gasoline prices are poised to explode again. Oil companies are setting up the framework for higher prices because of fears of a Turkish invasion of Kurdish-controlled northern Iraq and administration saber rattling about Iran. Crude oil, at $29.59 a barrel when President Bush took office in January 2001, is now pushing toward $100. Washington state's current gasoline cost of $3.09 per gallon, double Seattle's 2001 price of $1.52, is now second only to California in the 48 contiguous states.
Jay Leno joked on "The Tonight Show" Oct. 17, "The Nobel Prize for economics was awarded to three people -- the CEOs of Exxon, Texaco, and Shell for figuring out how to quadruple the price of oil over a seven-year period without an actual shortage."
...
... Oil companies raised gas prices 24 cents a gallon in the 24 hours after Katrina. The FTC reported increases "not substantially attributable to increased costs." It was pure fear mongering.
...
However, there is no "violation" if the price charged is "substantially attributable to local, regional, national, or international market conditions." The House is saying it is not gouging if the public will bear it. The oil companies could still charge whatever they want -- a loophole big enough for a gas-guzzling Mack truck. ...
Workers' retirement-plan participation declines ... drops from 44% in 2000 to 40% in 2006 ...
Workers' retirement-plan participation declines | By Andrea Coombes, MarketWatch | Last Update: 5:31 PM ET Nov 1, 2007
SAN FRANCISCO (MarketWatch) -- Thanks in part to fewer employers enrolling their workers in traditional pensions, the portion of employees participating in a retirement plan dropped in 2006, the Employee Benefit Research Institute said Thursday.
The decline was steepest -- a drop of 2 percentage points -- among the full-time, full-year workers who are considered most strongly connected to the work force and likeliest to participate in an employer-sponsored retirement plan, according to the report.
...
Looking at all workers, including part-timers, the percentage participating in an employment-based retirement plan decreased to about 40% in 2006, from 41% in 2005, but that drop was largely fueled by the decrease among the full-time group. In 2000, the level topped 44% of all workers, a recent high. ...
SAN FRANCISCO (MarketWatch) -- Thanks in part to fewer employers enrolling their workers in traditional pensions, the portion of employees participating in a retirement plan dropped in 2006, the Employee Benefit Research Institute said Thursday.
The decline was steepest -- a drop of 2 percentage points -- among the full-time, full-year workers who are considered most strongly connected to the work force and likeliest to participate in an employer-sponsored retirement plan, according to the report.
...
Looking at all workers, including part-timers, the percentage participating in an employment-based retirement plan decreased to about 40% in 2006, from 41% in 2005, but that drop was largely fueled by the decrease among the full-time group. In 2000, the level topped 44% of all workers, a recent high. ...
Thursday, November 1, 2007
Homes targeted by some sort of foreclosure activity from July to September, up 100.1 percent from a year-ago ...
Foreclosure filings soar in 3rd quarter | Number of US Homes Facing Foreclosure Doubles in Third Quarter | ALEX VEIGA | AP News | Nov 01, 2007 05:34 EDT
...
A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1 percent from 223,233 properties in the year-ago period, according to Irvine-based RealtyTrac Inc.
The current figure was 33.9 percent higher than the 333,731 properties in foreclosure in the second quarter of this year. ...
...
A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1 percent from 223,233 properties in the year-ago period, according to Irvine-based RealtyTrac Inc.
The current figure was 33.9 percent higher than the 333,731 properties in foreclosure in the second quarter of this year. ...
Wednesday, October 31, 2007
Is U.S. Stuck in Internet's Slow Lane? ... low levels of investment by the big telecom companies and regulatory failure.?
Is U.S. Stuck in Internet's Slow Lane? | Oct 30, 4:41 PM (ET) | By PETER SVENSSON
NEW YORK (AP) - The United States is starting to look like a slowpoke on the Internet. Examples abound of countries that have faster and cheaper broadband connections, and more of their population connected to them.
...
The Organization for Economic Co-operation and Development - a 30-member club of nations - compiles the most often cited international comparison. It puts the U.S. at 15th place for broadband lines per person in 2006, down from No. 4 in 2001.
...
But the OECD numbers are in line with other international measures. Figures from the British research firm Point-Topic Ltd. put the U.S., with 55 percent of its households connected, in 17th place for adoption rates at the end of June (excluding some very small countries and territories like Macau and Hong Kong).
"We're now in the middle of the pack of developed countries," said Dave Burstein, telecom gadfly and the editor of the DSL Prime newsletter, during a sometimes tense debate at the Columbia Business School's Institute for Tele-Information.
Burstein says the U.S. is lagging because of low levels of investment by the big telecom companies and regulatory failure.
Several of the European countries that are doing well have forced telephone companies to rent their lines to Internet service providers for low fees. The ISPs use them to run broadband Digital Subscriber Lines, or DSL, often at speeds much higher than those available in the U.S.
...
Part of the problem may be that people don't see fast Internet access as an essential part of modern life, and may need more of a push to get on. The U.S. does have wider income disparities than many of the countries that are outdoing it in broadband, and people in poverty may have other priorities for their money.
Dan Correa, research analyst at the Information Technology and Innovation Foundation, believes the U.S. needs a more "proactive" broadband policy, and compares the lack of government involvement in the field with the situation in other utilities, which are mostly heavily regulated.
"In the 1930s, we recognized that electricity was essential. We're not quite at that level in broadband," Correa said. ...
The U.S. Federal Communications Commission went down this regulatory road a few years ago, but legal challenges from the phone companies forced it to back away. ...
NEW YORK (AP) - The United States is starting to look like a slowpoke on the Internet. Examples abound of countries that have faster and cheaper broadband connections, and more of their population connected to them.
...
The Organization for Economic Co-operation and Development - a 30-member club of nations - compiles the most often cited international comparison. It puts the U.S. at 15th place for broadband lines per person in 2006, down from No. 4 in 2001.
...
But the OECD numbers are in line with other international measures. Figures from the British research firm Point-Topic Ltd. put the U.S., with 55 percent of its households connected, in 17th place for adoption rates at the end of June (excluding some very small countries and territories like Macau and Hong Kong).
"We're now in the middle of the pack of developed countries," said Dave Burstein, telecom gadfly and the editor of the DSL Prime newsletter, during a sometimes tense debate at the Columbia Business School's Institute for Tele-Information.
Burstein says the U.S. is lagging because of low levels of investment by the big telecom companies and regulatory failure.
Several of the European countries that are doing well have forced telephone companies to rent their lines to Internet service providers for low fees. The ISPs use them to run broadband Digital Subscriber Lines, or DSL, often at speeds much higher than those available in the U.S.
...
Part of the problem may be that people don't see fast Internet access as an essential part of modern life, and may need more of a push to get on. The U.S. does have wider income disparities than many of the countries that are outdoing it in broadband, and people in poverty may have other priorities for their money.
Dan Correa, research analyst at the Information Technology and Innovation Foundation, believes the U.S. needs a more "proactive" broadband policy, and compares the lack of government involvement in the field with the situation in other utilities, which are mostly heavily regulated.
"In the 1930s, we recognized that electricity was essential. We're not quite at that level in broadband," Correa said. ...
The U.S. Federal Communications Commission went down this regulatory road a few years ago, but legal challenges from the phone companies forced it to back away. ...
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax
I should pay more tax, says US billionaire Warren Buffett | Andrew Clark in New York | Wednesday October 31, 2007 | The Guardian
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax.
Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."
During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.
"There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said.
Mr Buffett also took a pot shot at hedge fund managers. He said: "Hedge fund operators have spent a record amount lobbying in the last few months - they give money to the political campaigns. Who represents the cleaning lady?" ...
The United States' second-richest man has delivered a blunt message to the Bush administration: he wants to pay more tax.
Warren Buffett, the famous investor known as the "Sage of Omaha", has complained that he pays a lower rate of tax than any of his staff - including his receptionist. Mr Buffett, who is worth an estimated $52bn (£25bn), said: "The taxation system has tilted towards the rich and away from the middle class in the last 10 years. It's dramatic; I don't think it's appreciated and I think it should be addressed."
During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.
"There wasn't anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don't have an accountant or use tax shelters. I just follow what the US Congress tells me to do," he said.
Mr Buffett also took a pot shot at hedge fund managers. He said: "Hedge fund operators have spent a record amount lobbying in the last few months - they give money to the political campaigns. Who represents the cleaning lady?" ...
Tuesday, October 30, 2007
the burgeoning poultry industry ... motels have been converted into permanent living quarters for Mexican and Central American workers
The New Face of Unionbusting | by David Bacon | Part 5 | Designing a "Union-Proof" Workforce
... trying to design a "union-proof" workforce. ...
This tactic has again become widespread. In Los Angeles, the cleaning contractors in office buildings in the late 1980s dumped their union workforce, which had a high percentage of African-American workers, and hired immigrants. They shed their union contracts at the same time.
Today in the midwest and southeast, the burgeoning poultry industry is using the same strategy. In tiny towns in Missouri and Arkansas, motels have been converted into permanent living quarters for Mexican and Central American workers, recruited by labor contractors to take jobs in local chicken plants. ...
...
"When you flood the labor market with workfare recipients," explains Fran Bernstein, from the national office of the American Federation of State, County and Municipal Employees, "you see enormous wage depression for the bottom third of the workforce. That's intentional." ...
... trying to design a "union-proof" workforce. ...
This tactic has again become widespread. In Los Angeles, the cleaning contractors in office buildings in the late 1980s dumped their union workforce, which had a high percentage of African-American workers, and hired immigrants. They shed their union contracts at the same time.
Today in the midwest and southeast, the burgeoning poultry industry is using the same strategy. In tiny towns in Missouri and Arkansas, motels have been converted into permanent living quarters for Mexican and Central American workers, recruited by labor contractors to take jobs in local chicken plants. ...
...
"When you flood the labor market with workfare recipients," explains Fran Bernstein, from the national office of the American Federation of State, County and Municipal Employees, "you see enormous wage depression for the bottom third of the workforce. That's intentional." ...
Occupations that were formerly all Black, such as construction, dry-wall and the hotel services are now exclusively Mexican.
Mexican War, Part II | By Paul Streitz | Mar 21, 2006 - 8:07:00 PM | Effect on African-Americans
African-Americans, or as the patriot Terry Anderson has said, “Americans who are Black” have been the group that has been most damaged by the Mexican invasion.
Terry Anderson’s south-central Los Angeles has turned from 90% Black to 90% Mexican. ...
Occupations that were formerly all Black, such as construction, dry-wall and the hotel services are now exclusively Mexican. Occupations that were formerly unionized have been replaced by low-wage, non-unionized Mexicans.
...
The New York Times reports on March 20, 2006, “Plight Deepens for Black Men, Studies Warn.” It says, “By 2004, the share (of young black men without jobs) had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts.” Even when high school graduates were included, half of black men in their 20’s were jobless, in 2004.”
Of course, The New York Times does not mention the impact of legal and illegal immigration on African-Americans. ...
African-Americans, or as the patriot Terry Anderson has said, “Americans who are Black” have been the group that has been most damaged by the Mexican invasion.
Terry Anderson’s south-central Los Angeles has turned from 90% Black to 90% Mexican. ...
Occupations that were formerly all Black, such as construction, dry-wall and the hotel services are now exclusively Mexican. Occupations that were formerly unionized have been replaced by low-wage, non-unionized Mexicans.
...
The New York Times reports on March 20, 2006, “Plight Deepens for Black Men, Studies Warn.” It says, “By 2004, the share (of young black men without jobs) had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts.” Even when high school graduates were included, half of black men in their 20’s were jobless, in 2004.”
Of course, The New York Times does not mention the impact of legal and illegal immigration on African-Americans. ...
US is by far the world's biggest debtor nation. ... A quarter century ago, the US was the world's largest creditor nation.
The mystery of the missing $2.9 trillion | By David R. Francis | columnist | from the October 29, 2007 edition
Economists scour the US to find out why we're more in debt than the Department of Commerce says we are.
Like most people, economists love a mystery – especially if it involves not a missing person but a missing $2.9 trillion in United States debt.
That's $2.9 with 11 zeros after it.
Some words of explanation: Every quarter the Department of Commerce comes up with the US "International Investment Position." At the end of 2006, for instance, the US had a net negative position – by this measurement of international assets and liabilities – of $2.6 trillion. In other words, the country is by far the world's biggest debtor nation.
A quarter century ago, the US was the world's largest creditor nation. ...
...
So when the dollar loses value, foreign holders of dollar assets lose on their dollar investments. Almost all US foreign liabilities are in dollars and about 70 percent of US foreign assets are in foreign currencies.In what Gourinchas calls an "eye-catching, back-of-the-envelope calculation," a 10 percent depreciation of the dollar represents a transfer of 5.3 percent of US GDP from the rest of the world to the US. America's GDP is currently $13.7 trillion, and the dollar is down 20.6 percent since 2002. So foreigners have – in effect – given the US about $1.3 trillion. ...
Economists scour the US to find out why we're more in debt than the Department of Commerce says we are.
Like most people, economists love a mystery – especially if it involves not a missing person but a missing $2.9 trillion in United States debt.
That's $2.9 with 11 zeros after it.
Some words of explanation: Every quarter the Department of Commerce comes up with the US "International Investment Position." At the end of 2006, for instance, the US had a net negative position – by this measurement of international assets and liabilities – of $2.6 trillion. In other words, the country is by far the world's biggest debtor nation.
A quarter century ago, the US was the world's largest creditor nation. ...
...
So when the dollar loses value, foreign holders of dollar assets lose on their dollar investments. Almost all US foreign liabilities are in dollars and about 70 percent of US foreign assets are in foreign currencies.In what Gourinchas calls an "eye-catching, back-of-the-envelope calculation," a 10 percent depreciation of the dollar represents a transfer of 5.3 percent of US GDP from the rest of the world to the US. America's GDP is currently $13.7 trillion, and the dollar is down 20.6 percent since 2002. So foreigners have – in effect – given the US about $1.3 trillion. ...
Monday, October 29, 2007
Mr. Gramlich, Federal Reserve official, tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere
A Catastrophe Foretold | By Paul Krugman | The New York Times | Friday 26 October 2007
“Increased subprime lending has been associated with higher levels of delinquency, foreclosure and, in some cases, abusive lending practices.” So declared Edward M. Gramlich, a Federal Reserve official.
These days a lot of people are saying things like that about subprime loans — mortgages issued to buyers who don’t meet the normal financial criteria for a home loan. But here’s the thing: Mr. Gramlich said those words in May 2004.
And it wasn’t his first warning. In his last book, Mr. Gramlich, who recently died of cancer, revealed that he tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere.
...
Second, much if not most of the subprime lending that is now going so catastrophically bad took place after it was clear to many of us that there was a serious housing bubble, and after people like Mr. Gramlich had issued public warnings about the subprime situation. As late as 2003, subprime loans accounted for only 8.5 percent of the value of mortgages issued in this country. In 2005 and 2006, the peak years of the housing bubble, subprime was 20 percent of the total — and the delinquency rates on recent subprime loans are much higher than those on older loans.
So, once again, why was nothing done to head off this disaster? The answer is ideology.
In a paper presented just before his death, Mr. Gramlich wrote that “the subprime market was the Wild West. Over half the mortgage loans were made by independent lenders without any federal supervision.” What he didn’t mention was that this was the way the laissez-faire ideologues ruling Washington — a group that very much included Mr. Greenspan — wanted it. They were and are men who believe that government is always the problem, never the solution, that regulation is always a bad thing. ...
“Increased subprime lending has been associated with higher levels of delinquency, foreclosure and, in some cases, abusive lending practices.” So declared Edward M. Gramlich, a Federal Reserve official.
These days a lot of people are saying things like that about subprime loans — mortgages issued to buyers who don’t meet the normal financial criteria for a home loan. But here’s the thing: Mr. Gramlich said those words in May 2004.
And it wasn’t his first warning. In his last book, Mr. Gramlich, who recently died of cancer, revealed that he tried to get Alan Greenspan to increase oversight of subprime lending as early as 2000, but got nowhere.
...
Second, much if not most of the subprime lending that is now going so catastrophically bad took place after it was clear to many of us that there was a serious housing bubble, and after people like Mr. Gramlich had issued public warnings about the subprime situation. As late as 2003, subprime loans accounted for only 8.5 percent of the value of mortgages issued in this country. In 2005 and 2006, the peak years of the housing bubble, subprime was 20 percent of the total — and the delinquency rates on recent subprime loans are much higher than those on older loans.
So, once again, why was nothing done to head off this disaster? The answer is ideology.
In a paper presented just before his death, Mr. Gramlich wrote that “the subprime market was the Wild West. Over half the mortgage loans were made by independent lenders without any federal supervision.” What he didn’t mention was that this was the way the laissez-faire ideologues ruling Washington — a group that very much included Mr. Greenspan — wanted it. They were and are men who believe that government is always the problem, never the solution, that regulation is always a bad thing. ...
Wednesday, October 24, 2007
If you really want to reduce spending, you must dismantle the overseas empire.
Time To Choose | By Charley Reese
10/23/07 "KFS" - -- - Most politicians, when they talk about reducing spending, chatter on about cutting waste and fraud. That's OK, but it's a mere nick on the federal budget. If you really want to reduce spending, you must dismantle the overseas empire.
Excluding Iraq, Afghanistan and the other facilities in the Gulf states that have been built since the Republican war, the Pentagon lists 702 overseas bases in 130 foreign countries on which are stationed more than 250,000 uniformed troops. There are also dependents and civilian employees on many of those bases.
...
Americans need to realize that we are not the police force of the world. It is not our responsibility to overthrow dictators or effect regime change in other people's countries. It is not our responsibility to stop slaughters such as seem to be a permanent feature of Africa.
...
You can't have a free republic and an empire. It is time to choose.
10/23/07 "KFS" - -- - Most politicians, when they talk about reducing spending, chatter on about cutting waste and fraud. That's OK, but it's a mere nick on the federal budget. If you really want to reduce spending, you must dismantle the overseas empire.
Excluding Iraq, Afghanistan and the other facilities in the Gulf states that have been built since the Republican war, the Pentagon lists 702 overseas bases in 130 foreign countries on which are stationed more than 250,000 uniformed troops. There are also dependents and civilian employees on many of those bases.
...
Americans need to realize that we are not the police force of the world. It is not our responsibility to overthrow dictators or effect regime change in other people's countries. It is not our responsibility to stop slaughters such as seem to be a permanent feature of Africa.
...
You can't have a free republic and an empire. It is time to choose.
“Societies should not rely on market forces to protect the environment or provide quality health care for all citizens …”
Sunday, October 21, 2007 by the Sunday Gazette-Mail (Charleston, West Virginia) | Nobel Prize Sees What Market-Fundamentalists Don’t | by Rick Wilson
...
Three Americans, Eric Maskin, Roger Myerson and Leonid Hurwicz, shared the honor for their work in mechanism design theory, which studies under what conditions markets work well or don’t. Sneak preview: They do better with private than with public goods.
...
According to this cult, the market is like an all-wise and all-good but jealous god which becomes exceedingly wrathful when interfered with by things like coal mine or workplace safety laws, minimum wage protections, or taxes that pay for health, education or other services. Its ways are not our ways, nor are its thoughts our thoughts. And if it demands an occasional human sacrifice, we just have to deal with it.
...
... Here’s the short version of a key finding: Markets work well with what economists call private goods, like refrigerators or cars, but not for public goods, such as a clean environment or public health.
According to Maskin in an article in Bloomberg.com, “There are some things we want that are never going to be attainable by markets,” he said in a telephone interview. “If we are going to get them at all we have to find alternative ways of delivering them. That’s where mechanism design comes in.”
A Reuters report on the prize noted, “Societies should not rely on market forces to protect the environment or provide quality health care for all citizens …”
In such cases, public investments and policies should promote and protect public goods.
None of this would have come as a surprise to Adam Smith, who wrote in 1776 that there was a need of government support for “public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.” ...
...
Three Americans, Eric Maskin, Roger Myerson and Leonid Hurwicz, shared the honor for their work in mechanism design theory, which studies under what conditions markets work well or don’t. Sneak preview: They do better with private than with public goods.
...
According to this cult, the market is like an all-wise and all-good but jealous god which becomes exceedingly wrathful when interfered with by things like coal mine or workplace safety laws, minimum wage protections, or taxes that pay for health, education or other services. Its ways are not our ways, nor are its thoughts our thoughts. And if it demands an occasional human sacrifice, we just have to deal with it.
...
... Here’s the short version of a key finding: Markets work well with what economists call private goods, like refrigerators or cars, but not for public goods, such as a clean environment or public health.
According to Maskin in an article in Bloomberg.com, “There are some things we want that are never going to be attainable by markets,” he said in a telephone interview. “If we are going to get them at all we have to find alternative ways of delivering them. That’s where mechanism design comes in.”
A Reuters report on the prize noted, “Societies should not rely on market forces to protect the environment or provide quality health care for all citizens …”
In such cases, public investments and policies should promote and protect public goods.
None of this would have come as a surprise to Adam Smith, who wrote in 1776 that there was a need of government support for “public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.” ...
1983 - 2004: wealth of the top 1 percent of households grew by 78 percent ... bottom 40 percent lost 59 percent
Monday, October 22, 2007 by CommonDreams.org | Billionaires Up, America Down | by Holly Sklar
When it comes to producing billionaires, America is doing great.
Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only.
This year, you’d need a Forbes 482 to fit all the billionaires.
...
We have a record 482 billionaires — and record foreclosures.
We have a record 482 billionaires — and a record 47 million people without any health insurance.
Since 2000, we have added 184 billionaires — and 5 million more people living below the poverty line.
...
Wealth is being redistributed from poorer to richer.
Between 1983 and 2004, the average wealth of the top 1 percent of households grew by 78 percent, reports Edward Wolff, professor of economics at New York University. The bottom 40 percent lost 59 percent.
...
The Forbes 400 is even more of a rich men’s club than when it began. The number of women has dropped from 75 in 1982 to 39 today.
...
The 400 richest Americans have a conservatively estimated $1.54 trillion in combined wealth. That amount is more than 11 percent of our $13.8 trillion Gross Domestic Product (GDP) — the total annual value of goods and services produced by our nation of 303 million people. In 1982, Forbes 400 wealth measured less than 3 percent of U.S. GDP.
...
Tax cuts will save the top 1 percent a projected $715 billion between 2001 and 2010. And cost us $715 billion in mounting national debt plus interest.
...
Inequality has roared back to 1920s levels. It was bad for our nation then. It’s bad for our nation now.
When it comes to producing billionaires, America is doing great.
Until 2005, multimillionaires could still make the Forbes list of the 400 richest Americans. In 2006, the Forbes 400 went billionaires only.
This year, you’d need a Forbes 482 to fit all the billionaires.
...
We have a record 482 billionaires — and record foreclosures.
We have a record 482 billionaires — and a record 47 million people without any health insurance.
Since 2000, we have added 184 billionaires — and 5 million more people living below the poverty line.
...
Wealth is being redistributed from poorer to richer.
Between 1983 and 2004, the average wealth of the top 1 percent of households grew by 78 percent, reports Edward Wolff, professor of economics at New York University. The bottom 40 percent lost 59 percent.
...
The Forbes 400 is even more of a rich men’s club than when it began. The number of women has dropped from 75 in 1982 to 39 today.
...
The 400 richest Americans have a conservatively estimated $1.54 trillion in combined wealth. That amount is more than 11 percent of our $13.8 trillion Gross Domestic Product (GDP) — the total annual value of goods and services produced by our nation of 303 million people. In 1982, Forbes 400 wealth measured less than 3 percent of U.S. GDP.
...
Tax cuts will save the top 1 percent a projected $715 billion between 2001 and 2010. And cost us $715 billion in mounting national debt plus interest.
...
Inequality has roared back to 1920s levels. It was bad for our nation then. It’s bad for our nation now.
Bush discretionary spend; “He has presided over massive increases in almost every category … a dramatic change of pace from most previous presidents,”
Bush is the biggest spender since LBJ | By David Lightman | McClatchy Newspapers | Wednesday, October 24, 2007
...
The numbers are clear, credible and conclusive, added David Keating, the executive director of the Club for Growth, a budget-watchdog group.
“He’s a big spender,” Keating said. “No question about it.”
...
Discretionary spending went up in Bush's first term by 48.5 percent, not adjusted for inflation, more than twice as much as Bill Clinton did (21.6 percent) in two full terms, Slivinski reports.
...
“He has presided over massive increases in almost every category … a dramatic change of pace from most previous presidents,” said Slivinski.
War Costs May Total $2.4 Trillion ... nearly $8,000 per man, woman and child in the country ... "it boggles the mind,"
War Costs May Total $2.4 Trillion | By Ken Dilanian, USA Today. Posted October 24, 2007.
The cost of the wars in Iraq and Afghanistan could total $2.4 trillion through the next decade, or nearly $8,000 per man, woman and child in the country, according to a Congressional Budget Office estimate scheduled for release Wednesday.
A previous CBO estimate put the wars' costs at more than $1.6 trillion. This one adds $705 billion in interest, taking into account that the conflicts are being funded with borrowed money.
The new estimate also includes President Bush's request Monday for another $46 billion in war funding, said Rep. John Spratt, D-S.C., budget committee chairman, who provided the CBO's new numbers to USA TODAY.
Assuming that Iraq accounts for about 80% of that total, the Iraq war would cost $1.9 trillion, including $564 million in interest, said Thomas Kahn, Spratt's staff director. The committee holds a hearing on war costs this morning.
"The number is so big, it boggles the mind," said Rep. Rahm Emanuel, D-Ill. ...
The cost of the wars in Iraq and Afghanistan could total $2.4 trillion through the next decade, or nearly $8,000 per man, woman and child in the country, according to a Congressional Budget Office estimate scheduled for release Wednesday.
A previous CBO estimate put the wars' costs at more than $1.6 trillion. This one adds $705 billion in interest, taking into account that the conflicts are being funded with borrowed money.
The new estimate also includes President Bush's request Monday for another $46 billion in war funding, said Rep. John Spratt, D-S.C., budget committee chairman, who provided the CBO's new numbers to USA TODAY.
Assuming that Iraq accounts for about 80% of that total, the Iraq war would cost $1.9 trillion, including $564 million in interest, said Thomas Kahn, Spratt's staff director. The committee holds a hearing on war costs this morning.
"The number is so big, it boggles the mind," said Rep. Rahm Emanuel, D-Ill. ...
Monday, October 22, 2007
Home Energy Assistance ... LIHEAP, only has enough funding to cover 16 percent of the 38 million poor households eligible ... Bush proposes budget cut
Government money short to help poor pay heating bills | By Tom Doggett Fri Oct 19, 5:44 PM ET
WASHINGTON (Reuters) - About 30 million low-income American households who will need help paying heating bills this winter from a U.S. government program will be left in the cold because of a lack of funding for the program.
...
Consumer groups and state energy officials have sounded the alarm, saying a federal program to help poor families pay heating bills will have nowhere near the money needed to cover those expected to seek assistance.
The government's Low Income Home Energy Assistance Program, known as LIHEAP, only has enough funding to cover 16 percent of the 38 million poor households eligible for the program.
The current $2.16 billion LIHEAP budget in only $300 million more than what the program had when it was created by Congress in 1981. Despite higher energy costs, the Bush administration has proposed cutting the program's budget.
WASHINGTON (Reuters) - About 30 million low-income American households who will need help paying heating bills this winter from a U.S. government program will be left in the cold because of a lack of funding for the program.
...
Consumer groups and state energy officials have sounded the alarm, saying a federal program to help poor families pay heating bills will have nowhere near the money needed to cover those expected to seek assistance.
The government's Low Income Home Energy Assistance Program, known as LIHEAP, only has enough funding to cover 16 percent of the 38 million poor households eligible for the program.
The current $2.16 billion LIHEAP budget in only $300 million more than what the program had when it was created by Congress in 1981. Despite higher energy costs, the Bush administration has proposed cutting the program's budget.
Sunday, October 21, 2007
“These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation a go,” ...
Wednesday, October 17, 2007 by CommonDreams.org | What Do Brazil, Mexico, Russia and the USA Have in Common? | by Russell Mokhiber
What do Brazil, Mexico, Russia and the USA have in common?
A rapidly expanding billionaire class.
Rampant poverty.
And a distressed middle class.
That’s the take of Pulitzer prize-winning New York Times reporter David Cay Johnston in a soon to be released book - Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill) (Portfolio, December 2007).
In it, Johnston seeks to afflict the comfortable top one tenth of one percent of Americans — the 300,000 men, women and children who last year made more money than the bottom 150 million Americans.
...
Much of the wealth transfer upstairs has come at the hands of corporate welfare artists who have shifted billions from the middle class to the billionaire class.
...
Johnston points out that we used to prosecute loan sharks. But then we got rid of usury laws and passed new laws that allow “Goldman Sachs and Lehman Brothers, MBNA and Citibank to exploit the poor, the unsophisticated and the foolish.”
“These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation a go,” he says. “The result? In the last 25 years or so, one American family in seven has sought refuge in federal bankruptcy court. ”
...
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, http://www.corporatecrimereporter.com.
What do Brazil, Mexico, Russia and the USA have in common?
A rapidly expanding billionaire class.
Rampant poverty.
And a distressed middle class.
That’s the take of Pulitzer prize-winning New York Times reporter David Cay Johnston in a soon to be released book - Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill) (Portfolio, December 2007).
In it, Johnston seeks to afflict the comfortable top one tenth of one percent of Americans — the 300,000 men, women and children who last year made more money than the bottom 150 million Americans.
...
Much of the wealth transfer upstairs has come at the hands of corporate welfare artists who have shifted billions from the middle class to the billionaire class.
...
Johnston points out that we used to prosecute loan sharks. But then we got rid of usury laws and passed new laws that allow “Goldman Sachs and Lehman Brothers, MBNA and Citibank to exploit the poor, the unsophisticated and the foolish.”
“These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation a go,” he says. “The result? In the last 25 years or so, one American family in seven has sought refuge in federal bankruptcy court. ”
...
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, http://www.corporatecrimereporter.com.
[Tight money] affecting day-to-day calculations of merchants like Wal-Mart ... "customers running out of food products, paper towels sooner in month"
Living Paycheck to Paycheck Gets Harder | Oct 19, 4:16 PM (ET) | By ANNE D'INNOCENZIO
...
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc. (WMT) (WMT), 7-Eleven Inc. and Family Dollar Stores Inc. (FDO) (FDO)
...
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
"It's pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. "It seems like to us, customers are running out of food products, paper towels sooner in the month."
Wal-Mart, the world's largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
...
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they're further skimping on basic medical care and other critical services. ...
...
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc. (WMT) (WMT), 7-Eleven Inc. and Family Dollar Stores Inc. (FDO) (FDO)
...
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
"It's pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. "It seems like to us, customers are running out of food products, paper towels sooner in the month."
Wal-Mart, the world's largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
...
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they're further skimping on basic medical care and other critical services. ...
Tuesday, October 16, 2007
only 34% of Americans expected today’s children to be better off - down from 55% shortly before President Bush came to power
October 15, 2007 by The Guardian/UK | The Land of Optimism Is in the Dumps, But Refuses to Accept How It Got There | by Gary Younge
Not since Watergate has such pessimism afflicted Americans. They want politicians to lift them without facing the cause
...
This sense of optimism has been in retreat in almost every sense over the past few years. According to Rasmussen polls, just 21% of Americans believe the country is on the right track, a figure that has fallen by more than a half since the presidential election of 2004. Meanwhile only a third think the country’s best days are yet to come, as opposed to 43% who believe they have come and gone - again a steep decline on three years ago. These are not one-offs. In the past 18 months almost every poll that has asked Americans about their country’s direction has produced among the most pessimistic responses on record - a more extended period than anyone can remember since Watergate.
...
There are three main reasons. Closest to home is the economy. Wages are stagnant, house prices in most areas have stalled or are falling, the dollar is plunging, and the deficit is rising. A Pew survey last week showed that 72% believe the economy is either “only fair” or poor and 76% believe it will be the same or worse a year from now. Globalisation is a major worry. Of 46 countries polled recently, the US had the least positive view on foreign trade and one of the least positive on foreign companies.
The sense that things will improve for the next generation has all but evaporated. Another Pew poll from last year found that only 34% of Americans expected today’s children to be better off than people are now - down from 55% shortly before President Bush came to power.
...
Second is the Iraq war and the steep decline in America’s international standing it has prompted. A global-attitudes Pew poll from last year showed that 65% of Americans believe the country is less respected by the rest of the world than it was - double the figure of 20 years ago. The fact that only half those polled thought this was a problem is telling.
...
Which brings us, finally, to the political class. Once again the American public have lost faith. The rot starts at the top. Almost as soon as they elected Bush in 2004 they seemed to regret it. Since Katrina, his favourability ratings have been stuck in the 30s and show no signs of moving - or at least not upwards. Bush’s only comfort is that public approval of the Democratically controlled Congress is even worse, hovering just below where it was shortly before the 2006 elections. In other words, however Americans believe their country will return to the right track, they no longer trust politicians to get them there. ...
Not since Watergate has such pessimism afflicted Americans. They want politicians to lift them without facing the cause
...
This sense of optimism has been in retreat in almost every sense over the past few years. According to Rasmussen polls, just 21% of Americans believe the country is on the right track, a figure that has fallen by more than a half since the presidential election of 2004. Meanwhile only a third think the country’s best days are yet to come, as opposed to 43% who believe they have come and gone - again a steep decline on three years ago. These are not one-offs. In the past 18 months almost every poll that has asked Americans about their country’s direction has produced among the most pessimistic responses on record - a more extended period than anyone can remember since Watergate.
...
There are three main reasons. Closest to home is the economy. Wages are stagnant, house prices in most areas have stalled or are falling, the dollar is plunging, and the deficit is rising. A Pew survey last week showed that 72% believe the economy is either “only fair” or poor and 76% believe it will be the same or worse a year from now. Globalisation is a major worry. Of 46 countries polled recently, the US had the least positive view on foreign trade and one of the least positive on foreign companies.
The sense that things will improve for the next generation has all but evaporated. Another Pew poll from last year found that only 34% of Americans expected today’s children to be better off than people are now - down from 55% shortly before President Bush came to power.
...
Second is the Iraq war and the steep decline in America’s international standing it has prompted. A global-attitudes Pew poll from last year showed that 65% of Americans believe the country is less respected by the rest of the world than it was - double the figure of 20 years ago. The fact that only half those polled thought this was a problem is telling.
...
Which brings us, finally, to the political class. Once again the American public have lost faith. The rot starts at the top. Almost as soon as they elected Bush in 2004 they seemed to regret it. Since Katrina, his favourability ratings have been stuck in the 30s and show no signs of moving - or at least not upwards. Bush’s only comfort is that public approval of the Democratically controlled Congress is even worse, hovering just below where it was shortly before the 2006 elections. In other words, however Americans believe their country will return to the right track, they no longer trust politicians to get them there. ...
Sunday, October 14, 2007
66% of execs said the compensation of top executives was high relative to their performance.... 33% just right ... 2% too low
We are overpaid, say US executives | By Francesco Guerrera in New York | Published: October 14 2007 22:03 | Last updated: October 14 2007 22:03
Most US corporate leaders believe chief executives are overpaid and do not provide value for money for their companies, according to a study that will embolden critics of excessive compensation.
The findings – to be published today by the National Association of Corporate Directors – are likely to strengthen calls by investors and politicians, including George W. Bush, US president, for restraint on executive pay at a time of growing income inequality in the US.
...
Four out of six chief executives or company presidents polled by the NACD in July and August said the compensation of top executives was high relative to their performance.
Only 2.2 per cent of the nearly 70 chief executives and presidents involved in the survey said compensation was too low, while a third deemed it “just right”.
Their views were backed up by outside directors, with more than 80 per cent of them saying chief executives were overpaid. ...
Most US corporate leaders believe chief executives are overpaid and do not provide value for money for their companies, according to a study that will embolden critics of excessive compensation.
The findings – to be published today by the National Association of Corporate Directors – are likely to strengthen calls by investors and politicians, including George W. Bush, US president, for restraint on executive pay at a time of growing income inequality in the US.
...
Four out of six chief executives or company presidents polled by the NACD in July and August said the compensation of top executives was high relative to their performance.
Only 2.2 per cent of the nearly 70 chief executives and presidents involved in the survey said compensation was too low, while a third deemed it “just right”.
Their views were backed up by outside directors, with more than 80 per cent of them saying chief executives were overpaid. ...
Friday, October 12, 2007
The wealthiest 1% of Americans earned 21.2% of all income in 2005 ... up from 19% in 2004 ... highest since 1920's ... financiers and lawyers ...
Income-Inequality Gap Widens | Boom in Financial Markets Parallels Rise in Share For Wealthiest Americans | By GREG IP | October 12, 2007; Page A2
The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.
The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
...
The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.
...
One study by University of Chicago academics Steven Kaplan and Joshua Rauh concludes that in 2004 there were more than twice as many such Wall Street professionals in the top 0.5% of all earners as there are executives from nonfinancial companies.
Mr. Rauh said "it's hard to escape the notion" that the rising share of income going to the very richest is, in part, "a Wall Street, financial industry-based story." The study shows that the highest-earning hedge-fund manager earned double in 2005 what the top earner made in 2003, and top 25 hedge-fund managers earned more in 2004 than the chief executives of all the companies in the Standard & Poor's 500-stock index, combined. It also shows profits per equity partner at the top 100 law firms doubling between 1994 and 2004, to over $1 million in 2004 dollars. ...
The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.
The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.
...
The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.
...
One study by University of Chicago academics Steven Kaplan and Joshua Rauh concludes that in 2004 there were more than twice as many such Wall Street professionals in the top 0.5% of all earners as there are executives from nonfinancial companies.
Mr. Rauh said "it's hard to escape the notion" that the rising share of income going to the very richest is, in part, "a Wall Street, financial industry-based story." The study shows that the highest-earning hedge-fund manager earned double in 2005 what the top earner made in 2003, and top 25 hedge-fund managers earned more in 2004 than the chief executives of all the companies in the Standard & Poor's 500-stock index, combined. It also shows profits per equity partner at the top 100 law firms doubling between 1994 and 2004, to over $1 million in 2004 dollars. ...
Thursday, October 11, 2007
Since 2001 the dollar has lost more than half its value against the euro.
Almighty US dollar turns into ‘American peso’ | DEMAND AND SUPPLY | By BOO CHANCO | The Philippine Star
There is this joke circulating in financial circles that the once “almighty US dollar,” is fast turning into the “new American peso.” Since 2001 the dollar has lost more than half its value against the euro. It now costs nearly $1.40 to buy one euro. And it isn’t just the euro that seems to be growing stronger against the US dollar. It has declined against many other major world currencies, and even including minor ones like our peso, reflecting the dollar’s loss of purchasing power.
As the Los Angeles Times reported, “in much of the world — from Brazil to Poland to Thailand — one dollar buys less than it did a year ago, and far less than it did four years ago. On Friday, the US currency hit a 30-year low against its Canadian peer.”
...
... Mr. Greenspan says Mr. Bush ignored his advice to veto “out-of-control” bills that sent the US deeper into deficit.
There is this joke circulating in financial circles that the once “almighty US dollar,” is fast turning into the “new American peso.” Since 2001 the dollar has lost more than half its value against the euro. It now costs nearly $1.40 to buy one euro. And it isn’t just the euro that seems to be growing stronger against the US dollar. It has declined against many other major world currencies, and even including minor ones like our peso, reflecting the dollar’s loss of purchasing power.
As the Los Angeles Times reported, “in much of the world — from Brazil to Poland to Thailand — one dollar buys less than it did a year ago, and far less than it did four years ago. On Friday, the US currency hit a 30-year low against its Canadian peer.”
...
... Mr. Greenspan says Mr. Bush ignored his advice to veto “out-of-control” bills that sent the US deeper into deficit.
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