December 2011

WATCH: Cops Pepper Spray Protesters In Front Of Santa

December 23, 2011

So much for the holiday spirit. Police pepper sprayed Occupy Albany protesters in front of a man dressed as Santa Claus on Thursday night. The incident occurred as police dismantled the protester’s camp, the AP reported. After a judge issued a court order allowing the city to remove the camp’s tents, a large group of city workers and police officers entered the camp. As the last tent was being removed, protesters began to fight back , holding on to it and engaging the cops in a tug-of-war. The AP reports that at least 5 protesters were pepper sprayed, 4 were arrested and 1 was taken away by an ambulance. Albany Mayor Jerry Jennings defended the police action and insisted there was “no legal ambush” or “planned force.” Watch police clash with protesters in the video below.

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The Worst Holidays Since The Great Depression

December 23, 2011

From 24/7 Wall St.: Retail sales this holiday season are expected to rise 3.8 percent to a record of $469.1 billion, according to the National Retail Federation. While the increase is less than last year, it is a significant improvement from the slow holiday seasons the last few years. How does 2011 compare to other years? While probably not among the best, it’s also certainly not among the worst, according to 24/7 Wall St.’s analysis of the worst holidays since the Great Depression. People are tempted to spend less when times are tough. Fewer presents are exchanged and people travel less. Those without work often despair. And the joy that is supposed to accompany the end of each year does not exist for many people. 24/7 Wall St. compared 2011 against each holiday season since the Great Depression. We looked at unemployment, GDP expansion (or contraction), GDP per capita, and the Consumer Price Index. These are good indications of whether a holiday season was merry or not. High inflation erodes the ability of people to buy goods and services. Slow GDP expansion or contraction means that consumer spending is likely to be in retreat. The effects of unemployment are obvious. Not surprisingly, many of the worst holiday periods coincide with deep recessions. This is certainly true for the harsh times during the downturns of the early 1970s and early 1980s. The 1982/1983 recession had a record number of months in which unemployment was more than 10 percent. People may look back on 2011 as a difficult holiday season for a number of Americans, but it was not among the worst, as history shows. These are the Worst Holidays Since The Great Depression, according to 24/7 Wall St. :

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Key Company Reverses Course In Online Piracy Fight

December 23, 2011

The largest Internet domain registrar and web hosting company Go Daddy has abandoned its support for the proposed Stop Online Piracy Act (SOPA), according to a statement released by the company Friday. “Fighting online piracy is of the utmost importance, which is why Go Daddy has been working to help craft revisions to this legislation — but we can clearly do better,” said Warren Adelman, Go Daddy’s newly appointed CEO. “It’s very important that all internet stakeholders work together on this. Getting it right is worth the wait. Go Daddy will support it when and if the internet community supports it.” Go Daddy had been one of two major tech companies to support the legislation . “If you’re Nike, and you make tennis shoes and there’s a company in some other country that can manufacture those for 10 cents on the dollar and sell them as if they were real Nikes, you have a big problem,” said Christine Jones, general counsel for Go Daddy, earlier this month. The Huffington Post’s Zach Carter reported on the bill’s implications: SOPA would imbue the federal government with broad powers to shut down whole web domains on the basis that it believes them to be associated with piracy — without a trial or even a traditional hearing. It would provide Hollywood with powerful new legal tools to stifle transactions with websites whose existence worries the movie industry. The bill’s supporters, which also include major record labels, trial lawyers and pharmaceutical giants, call SOPA a robust effort to curb piracy of American goods online. Opponents, however, have castigated it as an unparalleled attack on free speech online. Civil liberties advocates say SOPA would give the U.S. government the same censorship tools used in China. Those in the technology sector warn that the bill creates enormous new barriers to entry for web startups, threatening innovation and job creation. Farther afield, librarians say that under the letter of the proposed anti-piracy law, they could be jailed for simply doing their jobs. In a November interview with HuffPost, Jones had endorsed the legislation, saying everyone in the internet ecosystem needs to do their part to fight illegal downloading. At the time however, Jones did express some reservations about the use of Domain Name System (DNS) blocking — the tool the government would use to shut down websites — as a technique that could create significant technical problems for the functioning of the internet. She also expressed reservations about the bill’s “private right of action,” which allows movie studios and other companies to seek site takedowns outside of court. DNS blocking by the government and a private right of action for companies that believe their content is being infringed are the main features of the bill. Nevertheless, Jones wrote several blog posts for the Go Daddy website explaining and defending the bill. The company says those blog posts have now been removed. Leah Kauffman, the singer-songwriter who had a 2007 viral sensation with “I got a Crush … on Obama” released a new song attacking SOPA called “Firewall (Don’t Let Our Government Ruin The Internets).” A coalition of Silicon Valley leaders, including Google co-founder Sergey Brin, Craigslist founder Craig Newmark and Huffington Post CEO Arianna Huffington, have signed an open letter to Washington opposing the bill. The House Judiciary Committee confirmed Tuesday that work on the legislation would be delayed until Congress returns from its winter recess.

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Illinois Move-Out Rate Among Nation’s Highest

December 23, 2011

Data released this week by United Van Lines, a moving company, reports that Illinois and New Jersey tied for the highest number of customers who were moving out-of-state. The suburban St. Louis-based company, according to an AP report, tracks interstate migration patterns each year dating back to 1977, providing data so accurate that many financial firms and real estate companies use it . A spokeswoman for the company told CBS St. Louis that over 60 percent of the company’s business in Illinois involved individuals or businesses who were leaving the state . She described that number as “pretty big” — most states, she noted, hover between 50 and 60 percent. Illinois has also seen growing numbers of people leaving the state each year since the company began conducting its study, according to CBS. According to Fox Chicago, the states that were home to the highest influx of new residents were located in the South and West — the Carolinas, Arkansas, Texas, Oregon and Nevada — and the District of Columbia . Companies leaving the state of Illinois has been a hot-button issue since large corporations Sears Holdings Corp. and CME Group, the operator of the Chicago Mercantile Exchange, in response to the state’s increased income tax rate , threatened to move to states offering them a better tax deal. Democratic Gov. Pat Quinn and the state legislature responded by offering and approving tax breaks for both companies that are expected to cost the state some $330 million , despite the fact that Illinois faces a budget deficit hovering somewhere around $8.3 billion . Legislators in Springfield have continued their call for more tax breaks for corporations since approving the Sears/CME deal. Two separate proposals introduced this month would roll back the state’s corporate income tax rate to pre-hike levels , including a measure introduced by House Minority Leader Tom Cross (R-Oswego) which would connect the state’s corporate income tax rate with its unemployment rate. Specifically, the tax rate would automatically decrease by 0.25 percent anytime the state’s unemployment rate increases by 0.3 percent over a four-month period. Gov. Pat Quinn criticized Cross’s plan for threatening education funding and potentially leading to more layoffs of state employees, namely teachers. A national CEO survey previously ranked Illinois alongside California and New York as having among the “least favorite business climates” in the nation . The state’s unemployment rate had also been on the rise for six straight months before it dropped slightly — to 10 percent — last month .

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GE Admits Former Traders Rigged Bids, Agrees To Pay Millions To Stop Probes

December 23, 2011

WASHINGTON (Reuters) – General Electric Co acknowledged that three former traders at a finance unit engaged in bid-rigging of municipal bonds and agreed to pay $70.4 million to resolve probes into the matter. The agreement was with GE Funding Capital Market Services, a discontinued GE business unit, and concerned actions that occurred between 1999 and 2004. It is one of five that the U.S. Securities and Exchange Commission, Justice Department and other state agencies have reached with financial institutions charged with bid-rigging. GE, the largest U.S. conglomerate, said on Friday that it exited the business in question in April 2010 and that the three employees involved no longer work for it. The director of the SEC’s Division of Enforcement, Robert Khuzami, said, “Our in-depth investigations have uncovered pervasive corrupt practices in the municipal securities reinvestment market, and we are requiring financial firms one by one to step up and pay the price for their misconduct.” GE Funding Capital Market Services acknowledged that some of its traders entered agreements to manipulate the bidding process for municipal investments and related contracts, among other activities, the Justice Department and SEC said. GE said it was “pleased” to have resolved the matter and that it had already accounted for the settlement costs in prior quarters. Its shares were up 1 percent at $18.25 on the New York Stock Exchange. Authorities had previously reached settlements worth more than $650 million with four other companies: Wachovia Bank , J.P. Morgan Securities , UBS Financial Services and Banc of American Securities . Eighteen people including the former GE staffers, have been indicted or pleaded guilty the SEC said. (Reporting By Jeremy Pelofsky in Washington, additional reporting by Scott Malone in Boston; Editing by Steve Orlofsky) Copyright 2011 Thomson Reuters. Click for Restrictions .

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WATCH: More Shocking FedEx Delivery Footage

December 23, 2011

Earlier this week, a hidden-camera video of a FedEx delivery man throwing a computer monitor over a YouTuber’s fence went viral after getting passed around on sites like Reddit due to a striking resemblance to the opening scene in “Ace Ventura: Pet Detective.” The footage has turned into a PR nightmare for the company, and already received the “Top Ten” treatment from David Letterman, but things are about to get even messier. Upon performing a simple YouTube search, Conan O’Brien found even more totally-real, definitely-not-fake videos of FedEx delivery guys doing some pretty weird things with people’s packages. Just watch the video above and you’ll see what we mean.

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Peter Gardett: Shadow Banks Go Long Energy Projects

December 23, 2011

Hundreds of millions of dollars have been committed to solar and wind projects in recent weeks, and while the end of the year often brings with it a spate of deals to avoid upcoming changes in tax policy , that money is coming from a new and different source. The rush of dealmaking in the final weeks of 2011 has been striking after a relatively slow year in fundraising for energy deals of any kind, but even more surprising have been the players: private equity firms and hedge funds. Private equity firms and hedge funds are part of what is often referred to as the “shadow banking system,” a collection of financial players that do not take deposits and operate outside the traditional regulatory formats of large banks. They have grown in scale and importance in recent decades despite occasional problems like the failure of Long Term Capital Management, and amid increased regulation and constricted lending by traditional banks, these members of the shadow banking system are playing an increasingly important role in the energy business. The Players Change The timing of the recent deals overlapped a rush of headlines outlining new regulatory threats to traditional bank lending for comparatively risky projects. The Commodity Futures Trading Commission released new rules designed to improve the transparency of energy hedging activity but also potentially reducing trading volume in markets banks use to hedge project financing risk. The Federal Reserve indicated its intention to boost capital requirements to comply with increasingly strict Basel III international banking rules that will leave banks desperate to cut leverage and conserve capital where they can. And the largest US banks began to signal their intent to declare themselves as SIFIs (systemically important financial institutions), which would limit their ability to lend and act as counterparties but would guarantee them eased access to cheap government financing. Banks’ diminished appetite for project financing risk or lending to troubled sectors are reflected in the kinds of deals their private equity brethren picked up in recent days. The new deals announced at the end of this year include KKR’s investment in a quartet of Recurrent Energy Solar projects, Terra Firma’s purchase of wind energy assets and South Korean private equity funds in California’s Stion solar manufacturing firm. The largest private equity firms and hedge funds may need to register as SIFIs, but so far they have resisted pressure to limit their activities. They may be joined, both as partners and competitors, by discreet sovereign wealth funds and state-owned international energy companies, both of which have made significant investments in the US energy sector in recent years. The Game Remains The Same The financial world often views hedge fund and private equity players as “cowboy” institutions, keen to juice returns to investors and owners through leveraged financing, strategic reorganizations and tax-advantaged trades. The traditional view of the shadow banking system is one of fast moves and quick profitable exits, both approaches ill suited to the heavily regulated and politically sensitive but stable and potentially lucrative energy sector. The shift in KKR’s approach to the energy sector in the past few years demonstrates a new approach by private equity as they adjust to their new scale and focus on reliability of returns – a traditional banker’s approach – rather than asset appreciation. KKR purchased the massive and diversified utility TXU five years ago for $45 billion, and while that deal’s final outcome is still up for judgement, the firm has repeatedly had to dial back expectations as its plans for boosting value came up against a host of political, regulatory and economic challenges. Last week’s investment in Recurrent was made by KKR’s infrastructure fund, a pool of money dedicated more to steady returns from transparent and comprehensible credit risks better suited to energy sector investing. The money to be made in energy infrastructure is usually patient money, despite the appeal of fast returns from energy trading or oil-and-gas wildcatting. As shadow bankers learn new ways of evaluating energy investments, they will also bring with them new kinds of portfolio pressures and analysis as they knock on energy company doors. They have the potential (and increasingly the capital) to upend longstanding corporate relationships and alliances between major energy companies and major banks. The reputation of private equity and hedge fund groups for short-termism and rapacity can make it difficult for stakeholders to swallow the idea of their taking larger positions in US energy infrastructure ownership. But with as much as $4 trillion needed to shore up crumbling infrastructure and avoid blackouts in the coming twenty years, the industry needs all the private capital it can attract. If energy companies and new investor types can learn from each other, a virtuous cycle could result marked by steady returns on capital and revived national infrastructure. But get ready to navigate a bumpy, educational road while we get there. See more from Peter Gardett and other AOL Energy editors here.

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Carla Seaquist: What Next, Occupy? Revise Gordon Gekko

December 23, 2011

Quo vadis , Occupy? With the encampments folding or forcibly shut down — for reasons of public health or winter weather — and with eulogies already appearing, what next for the earthquake known as Occupy Wall Street? Rather than go dark ’til spring, inventive activists are pressing on with useful actions like Occupy the Classroom — protesting for example the teaching of economics, specifically the school of thought promoting the predatory market capitalism that produces, and tolerates, the large-scale social suffering we have today. Occupy the Campus protests have sprung up across the country, with students protesting hefty tuition hikes, unbearable debt loads, and a future short on jobs. Other actions, like Occupy the Ports , are arguably less productive. How does preventing a worker from getting to his/her job on the docks—a job all the more precious in a recession that grinds on and on — defend and advance the interests of the 99%, the constituency Occupy purports to represent? Tellingly, a growing number of unions are disavowing the “aid” of these particular occupiers ( here and here ). To the question of what next for Occupy, best guide might be a look back — at New York’s Zuccotti Park, where the earthquake began. Locating the first protest within hailing distance of the beast — Wall Street — was symbolically so powerful that millions of us non-New Yorkers got it quicker than a New York minute: This is about economic justice — a banner and a deal that the 99% could eagerly embrace. I submit, however, there is unfinished business there in Zuccotti — and it has to do with a figure operating just up the street: Gordon Gekko, predatory Wall Streeter of recent myth and creator of mass economic injustice. This unfinished business is not about hoisting tents again, but hoisting a metaphor. We need to occupy the Gekko myth and revise his nefarious motto—that “Greed is good” —a “truth” that has seeped deep, deep into American culture since Wall Street , the film he featured in, came out in 1987. While intended as a cautionary tale by its creator Oliver Stone ( here , here , and here ), how often have we heard real Wall Street figures—and, let’s be fair, a fair number of the 99%—say they embraced “Greed is good” as their operational mantra, greed having been legitimated as a cultural OK thanks to the film, with the cautionary part pretty completely ignored? A quarter-century later, we see that the greed, with its money-power, has gone too far, is not OK. (As my Republican mother established , “Greed is killing this country and we have got to turn it around.”) Were we to create a counter-motto, “Greed is not good,” or more realistically and also much better for economic recovery, “Greed is OK— within clearly defined bounds specified by the U.S. Congress and enforced by the S.E.C .,” not only Wall Street might be reformed but our culture repaired. Call it sustainable greed. Imagine: Responsibility and prudence would again become good things, not laughable or uncool. Might a sense of shared fate follow? Occupying the Gekko myth is doable because it’s about the culture, not (polarized) politics. It’s safe to talk with Republicans about how greed distorts the grand American experiment of capitalism-and-democracy and to agree in principle about economic justice, whereas to talk about, say, raising the debt ceiling, not so much. Such culture-focused talk enables supporters to better counter two big knocks on Occupy: that it’s anti-capitalist and pro-”free handouts.” We want capitalism with a human face and without the thumb of the 1% on the scales. (Note to economists from a dummy on the subject: Isn’t there a theory that proves a humane capitalism is also the most productive?) Sooner or later of course we must return to politics — where some Occupiers disdain to go. How else do we achieve the economic justice that Occupy proclaims? The to-do list is long. Finally we could press, for example, for serious campaign finance reform, to reduce the influence of money-power and greed in politics; and for a Constitutional amendment to overturn the Supreme Court’s Citizens United decision, the one giving the 1% way more than 1% of a voice. Significantly, also: Stepping back into politics will separate the anarchists of Occupy from the conscientious… Speaking of greed and anarchy, a note: At a Seattle Town Hall meeting set up ostensibly for Occupy Seattle and the community to interact, the Occupiers brought things to a quick halt — with incessant “mic checks,” twinkling fingers, innocent questions shouted down, and with political “contamination” vehemently rejected. This is anarchy not democracy, said I to myself, and I walked out — along with droves of others (see news report ). Memo to Occupy: Primal screams — for economic justice — can’t be copyrighted or occupied. Happily, none other than President Obama has taken up the call for economic justice in a major way, with his recent speech in Kansas ( here and here ). In it he cited Wall Street for “breathtaking greed” and “irresponsibility all across the system” and made a ringing defense of the middle class — a strategy with which he can (to risk overuse of a dandy new verb) occupy the 2012 presidential campaign. To reoccupy both houses of Congress — only way to break the present logjam — other Democrats might follow suit. Meanwhile, Republican contender and former financier Mitt Romney expects to be Gekko’d ( here and here ). Finally: My enduring problem with Wall Street the film was that the villainous Gordon Gekko was never forced to face off against a proper antagonist, a challenger of equal weight, one who could put the “cautionary” in the tale. The character who ultimately brought Gekko down and sent him to prison was an underling who was if anything even more greedy and predatory than his boss. Wouldn’t it be wonderful — not to say nation- and culture-saving — if We the People stepped up and, lo these many years later and in our maturity, decked Gekko the Greedster ourselves? Carla Seaquist is author of Manufacturing Hope: Post-9/11 Notes on Politics, Culture, Torture, and the American Character. Also a playwright, she is author of the forthcoming volume, Two Plays of Life and Death, and is at work on a play titled, Prodigal.

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Gary North: Bis Who Buy: Bi-Identified Consumers and Saving the Economy

December 23, 2011

While we’ve survived the autumn of our Occupied discontent, now we’re faced with the bleakness of an unforgiving economic winter — regardless of our sexualities. Consumers — bi and otherwise — vote with their money, wittingly or not: support a pizza chain or hamburger giant whose food you like but whose mogul funds anti-gay efforts, and you’ve supported your enemy. Now broaden that to the nation: we have a dysfunctional Congress — elected by the people, so we only have ourselves to blame — that has pretty much abdicated its responsibilities and paralyzed the economy (well, greedy financial institutions did that, but Congress didn’t stop them, and in some ways it greased the skids) and ensured another year of gridlock through lack of compromise, compassion, conciliation, and plain ol’ horse trading/horse sense. So how do LGBT people fit into this picture? More importantly, how can these sensitive/uppity/loving/compassionate/bitchy/benevolent souls save the nation, or at least the economy? And how does sexuality play a role in all this, if at all? To answer the last question first: not much, ironically. Whose campaign we donate to makes a difference; whose product or service we support/patronize/matronize makes a difference. That we buy with a bi sensibility and an eye toward social justice and fairness makes a difference. But it isn’t our sensibilities that will win the day; it will be our dollars that do — with our spending informed by our sexualities/sensibilities. And when we casually order that pizza or beer, well, we shouldn’t be so casual about such one-night fast-food stands. So money among us 99-percenters does speak even down here in the trenches, especially in this political season. You may call it cynical, but if you believe in a cause, then our collective financial capital, as well as our political capital, has worth — the worth of our ideas, actions, feet in the street, and shopping carts in the aisles (or online). But to truly be effective, you need to make sure that bi people who buy are visible when doing so. That means making our bi bucks more effective and visible, too – not by defacing currency (although some provocateurs do so), but by making your bisexuality or gayness visible on your check, credit card, website, donation, or wherever you want to be open and out. That constant, repeated “dollar diversity for visibility” takes vigilance, effort, political savvy, and so on to make each dollar go further, societally. And what better time than now, when our country needs us to contrarily spend and save in order to save the union? Wouldn’t it be grand if LGBT people led the way to saving the economy? Brother Barney Frank almost did so singlehandedly, but he’d probably be the first to tell you he can’t do it alone. So this holiday/political season, just remind yourself that every dollar is a vote and an investment, whether it’s in a bar, brothel, bathhouse, boite, coin-toss booth at a fair, the Bentley dealership, the Earth-friendly bike shop, or a pizza parlor — regardless of whether you hold the onions or your reaction to right-wing vitriol. It’s OK to get angry, but to channel that anger effectively and economically is so much better — one bi buck at a time.

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MF Global Collapse Puts Spotlight On Clearing Houses

December 23, 2011

LONDON (Reuters) – The collapse of U.S. futures brokerage MF Global has brought to light inconsistencies in the way clearing houses operate, prompting questions over regulatory plans to use more of these platforms to make markets safer. The confusion stems from the fact the largest European futures markets — Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe — use different arrangements when a market party defaults. Six weeks after the U.S. firm’s demise, some clients are still angry about the different approaches to the MF Global unwind the clearers took, leaving them in the dark for weeks as to what had happened to their money. “There was confusion around the clearing houses, as some transferred positions and others closed them out,” said one senior futures trader at a large investment bank. “In the immediate aftermath of the default we simply didn’t know our exposure,” this person said. Clearing houses like LCH.Clearnet, which clears Liffe, and Eurex Clearing sit between trading partners and hold money to reimburse any firm left out of pocket if a counterparty defaults, making the markets less risky. Regulators in the United States and Europe are keen to increase the use of clearing houses after the collapse of Lehman Brothers in 2008, which they say has the additional benefit of making the market more transparent. At the moment, mainly exchange-traded assets such as equities, futures and options, use clearing. But regulators are keen to expand the use of clearing into OTC products such as swaps, bonds and foreign exchange. But the confusion after the demise of MF Global has triggered demands that top clearing firms adopt a more unified approach before they adopt these greater tasks. “There is no standardization across the different clearing houses in Europe and no standardization between Europe and the U.S., which is confusing for clients, particularly when dealing with a global player like MF Global,” said Grewal. Eurex Clearing began liquidating, or selling off, positions after MF Global defaulted, a process it had completed by the following day, November 2. By contrast LCH.Clearnet, gave members the option of keeping their positions open. It then switched those positions to other brokers, a more laborious process that took until the end of November to complete. Eurex likes the liquidation approach, because clients quickly have certainty. LCH argues that transfers are preferable because clients need these positions to hedge others, and liquidating the trades increases client risk exposure. “You’d think the clearing houses would have had a conversation about this but from what we are seeing now it looks like there was no coordination,” said Simmy Grewal, analyst at research and consulting firm Aite Group. “MF Global was trading vanilla listed futures and options, and it exposed serious flaws in the clearing model. How will the clearing houses perform if a large OTC broker goes under?” she said. The criticism comes with Deutsche Boerse and NYSE Euronext set to merge, pending European support for the $9 billion merger. The combination would likely lead to greater consistency in how Eurex and Liffe are cleared but it might also expedite the growth of rival platforms that could use different clearing practices. (Editing by Douwe Miedema and Jon Loades-Carter) Copyright 2011 Thomson Reuters. Click for Restrictions .

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House Seeks Way Out Of Showdown

December 23, 2011

WASHINGTON — Capping a full retreat by House GOP leaders, Congress will convene Friday in hopes of approving a stopgap measure renewing payroll tax cuts for every worker and unemployment benefits for millions – despite serious opposition among some tea party Republicans. Friday’s unusual session, if all goes according to plan, will send a bill to President Barack Obama to become law for two months and put off until January a fight over how to pay for the 2 percentage point tax cut, extend jobless benefits averaging around $300 a week and prevent doctors from absorbing a big cut in Medicare payments. Those goals had been embraced by virtually every lawmaker in the House and Senate, but had been derailed in a quarrel over demands by House Republicans for immediate negotiations on a long-term extension bill. Senate leaders of both parties had tried to barter such an agreement among themselves a week ago but failed, instead agreeing upon a 60-day measure to buy time for talks next year. The decision by House Speaker John Boehner, R-Ohio, to cave in to the Senate came after days of criticism from Obama and Democrats. But perhaps more tellingly, GOP stalwarts like strategist Karl Rove and the Wall St. Journal editorial board warned that if the tax cuts were allowed to expire, Republicans would take a political beating that would harm efforts to unseat Obama next year. Friday’s House and Senate sessions are remarkable. Both chambers have recessed for the holidays but leaders in both parties are trying to pass the short-term agreement under debate rules that would allow any individual member of Congress to derail the pact, at least for a time. The developments were a clear win for Obama. The payroll tax cut was the centerpiece of his three-month, campaign-style drive for jobs legislation that seems to have contributed to an uptick in his poll numbers – and taken a toll on those of congressional Republicans. Obama, Republicans and congressional Democrats all said they preferred a one-year extension but the politics of achieving the goal, particularly the spending cuts and new fees required to pay for it, eluded them. All pledged to start working on that in January. “There remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out,” Senate Majority Leader Harry Reid, D-Nev., said. House GOP arguments about the legislative process and what the “uncertainty” of a two-month extension would mean for businesses were unpersuasive, and Obama was clearly on the offensive. “Has this place become so dysfunctional that even when we agree to things, we can’t do it?” Obama said. “Enough is enough.” The top Senate Republican, Mitch McConnell of Kentucky, was a driving force behind Thursday’s agreement, imploring Boehner to accept the deal that McConnell and Reid had struck last week and passed with overwhelming support in both parties. Meanwhile, tea party-backed House Republicans began to abandon their leadership. “I don’t think that my constituents should have a tax increase because of Washington’s dysfunction,” freshman Rep. Sean Duffy, R-Wis., said. If the cuts had expired as scheduled, 160 million workers would have seen a tax increase of $20 a week for an average worker earning about $50,000 a year. And up to 2 million people without jobs for six months would start losing unemployment benefits averaging $300 a week. Doctors would have seen a 27 percent cut in their Medicare payments, the product of an archaic 1997 cut that Congress has been unable to fix. Even though GOP leaders like House Majority Leader Eric Cantor, R-Va., promised that the two sides could quickly iron out their differences, the truth is that it’ll take intense talks to figure out both the spending cuts and fee increases required to finance the measure. Just hours before he announced the breakthrough, Boehner had made the case for a yearlong extension. But on a brief late afternoon conference call, he informed his colleagues it was time to yield. “He said that as your leader, you’ve in effect asked me to make decisions easy and difficult, and I’m making my decision right now,” said Rep. Jack Kingston, R-Ga., paraphrasing Boehner’s comments. Kingston said the conference call lasted just minutes and Boehner did not give anyone time to respond. There was still carping among tea party freshmen upset that GOP leaders had yielded. “Even though there is plenty of evidence this is a bad deal for America … the House has caved yet again to the president and Senate Democrats,” Rep. Tim Huelskamp, R-Kan., said. “We were sent here with a clear set of instructions from the American people to put an end to business as usual in Washington, yet here we are being asked to sign off on yet another gimmick.” Almost forgotten in the firestorm is that McConnell and Boehner had extracted a major victory last week, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Keystone XL oil pipeline, which would bring Canadian oil to the U.S. and create thousands of construction jobs. To block the pipeline, Obama would have to declare that is not in the nation’s interest. Obama wanted to put the decision off until after the 2012 election. House Republicans did win one concession in addition to a promise that Senate Democrats would name negotiators on the one-year House measure: a provision to ease concerns that the 60-day extension would be hard for payroll processing companies to implement.

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Oakland Mayor Warns Port Shutdowns Will Be Hard To Prevent

December 23, 2011

OAKLAND, Calif. — Oakland Mayor Jean Quan says the city would try to prevent future shutdowns at the port if port officials picked up the $1.5 million tab for the hundreds of police officers that would be needed. Quan also told the Chronicle that the city would probably not be able to prevent port closures anyway since a handful of protesters could sneak around police lines. Anti-Wall Street protesters blocked longshoremen from reporting to work for nearly 24 hours on Dec 12, shutting down much of the port. Police mostly stood back during the demonstration.

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Moody’s lowers Slovenia’s credit ratings to A1

December 23, 2011

(MENAFN) Moody’s Investors Service said that since Slovenia was threatened by the euro-zone’s debt crisis and might have to aid its own banks financially, the agency lowered the country’s credit …

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California’s Oldest Pot Club Shuts Down Amidst Pressure From Feds

December 23, 2011

SAN FRANCISCO — Buckling under increased pressure from the federal government, California’s oldest marijuana dispensary quietly shuttered last weekend, according to a message on its website . U.S. attorneys began forfeiture proceedings against the Fairfax-based Marin Alliance for Medical Marijuana, which has been operating since the state legalized cannabis for medical use in 1996, in November. The shop’s landlord had already started a similar eviction process earlier this year. “We are very sorry to announce that we have shut our doors until we can resolve certain legal issues,” the club’s statement read. “The battle is not over, but we must await further court action that will allow us to reopen, hopefully within a month or two.” Marin Alliance is one of a handful of dispensaries to close in the wake of the Justice Department’s renewed crackdown on California’s medical marijuana industry . Three San Francisco collectives also shut down this fall after receiving intimidating letters from federal officials. U.S. Attorney for Northern California Melinda Haag specifically targeted Marin Alliance for closure because of its proximity to nearby Bolinas Park. Under federal law, medical cannabis shops are prohibited from operating within 1,000 feet of a park or school. But the dispensary drew wide support from the Fairfax community. Not only did the town’s council and mayor specifically pass a resolution supporting the business, but Marin Alliance owner and director Lynette Shaw, a medical marijuana patient herself, was careful to never violate any state or local laws. “The whole town [of Fairfax] is up in arms,” Greg Anton, Shaw’s longtime attorney, told SF Weekly when his client first received a threatening letter from Haag last month. “For them to choose her to make an example of is like saying, ‘We don’t want to hurt the people in the house, but we’ll burn the house down.’” Shaw decided to sever her relationship with Marin Alliance, according to the company’s website, and will no longer respond to inquiries from the press. Meanwhile, marijuana advocates across the state continue to fight federal pressure against the industry. On Tuesday, a group of activists proposed a 2012 ballot initiative that would create a system for regulating medical cannabis through the Department of Consumer Affairs and require cities and counties to approve at lease one shop per 50,000 residents. For more on the Obama administration’s war on weed, take a look at the video below:

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US unemployment claims down to 364k

December 23, 2011

(MENAFN) The US Labor Department said that at the year’s end, jobless claims dropped by 4,000 to 364,000, recording their lowest level since April 2008, reported AP. The department added that the …

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Alan Grayson: Privatizing Money

December 23, 2011

Yesterday the European Central Bank (ECB) announced that it will hand out $645 billion in three-year loans to European banks, which the ECB printed out of thin air, like Monopoly money! The interest rate will be 1 percent per year. The ECB will not be lending this money to the government of Greece, even though that government is running a budget deficit of just under 10 percent of GDP — and the Greek GDP dropped by 5 percent this year. The government of Greece is now paying 37 percent per year on its 10-year bonds, when it can borrow anything at all. The ECB will not be lending this money to the people of Spain, even though official unemployment in Spain is now at 23 percent. Spain’s Economy Minister said recently that “Spain faces its deepest recession in half a century.” Tough luck; their Christmas tree has nothing under it. And when the European banks get this $645 billion, to whom will the banks be lending? Anybody, or nobody. No strings attached. They can borrow from the ECB at 1 percent, lend it back to the German government at 2 percent, lock in that profit, and take the next three years off. I just have one question: why? The world continues to face the greatest economic crisis since the Great Depression. Unemployment throughout Europe is over 10 percent. Entire national governments are on the verge of going broke. Why would anyone think that the thing that we have to do right now is hand out $645 billion in more funny money to the banks? In Europe or anywhere else? The ECB is a public institution. How can it possibly justify yet another bailout for selfish private interests while the public is sent straight to hell? If a Martian were to land in Paris today and just read the headlines of the newspapers, he could reach only one conclusion: that there has been a coup in Europe, that the banks are now in charge, and that they’re grabbing everything that they can get their hands on. Mark my words: at some point, people are just not going to take it anymore. Courage, Alan Grayson

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Clay Farris Naff: The True Meaning Of Christmas In An International Age Of Science

December 23, 2011

Steve Doocy, soulmate to 30 Rock’s Kenneth Parcell and cheerleader-in-chief for the annual “War on Christmas” pity party at Fox News, posed an interesting question. Interviewing the group church ladies behind a “Merry Christmas from Jesus” billboard campaign, he asked them what their Lord and Savior would say if he showed up at this festive time of the year. “We thought and thought, and we thought maybe he’d say, ‘I miss hearing you say, “Merry Christmas,”‘” responded the grandmotherly woman in the Santa sweater . Seems more likely to me the first words out of Jesus’ mouth would be “What the…???” Nothing about Christmas would be the least bit recognizable to the Jewish itinerant preacher who was born, as near as anyone can estimate , sometime in the spring roughly 2,015 years ago. The holiday that fervent Foxers strive to defend has no Jewish roots at all. As I have playfully pointed out in these pages , Christmas is a pagan solstice holiday co-opted by Roman Christian autocrats centuries after the life of Jesus. As for being a birthday celebration, well, that just wouldn’t have been meaningful to Jesus. People didn’t have wall calendars in those days, let alone Facebook reminders, and no one paid much attention to birthdays — not even that of Jesus Christ. There’s no evidence that Jesus was aware of all the folderol that the Bible says occurred at his birth, and there’s no evidence that anyone made anything of it for a long time after his death. Little wonder: the earliest Gospel, that of Mark, makes no mention of Christ’s birth, and the first to do so, Matthew, was written 60 years or more after his birth. Even that gives no hint that it took place around the end of December. And anyway, why would we celebrate it by decorating a fir tree? Apologists will try to con you that St. Boniface invented the Christmas tree while converting the Germanic tribes. ” Legend has it that he used the triangular shape of the Fir Tree to describe the Holy Trinity of God the Father, Son and Holy Spirit.” This is patent nonsense. Even fur-clad, club-wielding Visigoths would have known that a fir tree is conical. It’s only in modern, stylized drawings that it looks anything like a triangle. Besides, it would have been so much easier to make a cross — the main symbol of Christ — and put it up on the old hut wall than to cut down a conifer and drag that into their dwelling. In short, the “Keep Christ in Christmas” crowd is barking up the wrong solstice tree. He was never there. Does all of this render Christmas meaningless? Not at all. In fact, knowing and accepting that Christmas is much more than a Christian holiday restores it to its original, pluralistic meaning. Many different cultures in Europe and the Middle East celebrated the Winter Solstice. When the Roman Empire forcibly united them under its banner, it nevertheless allowed the varying religious celebrations of the solstice to go on — until Constantine got it into his head that Christ was his key to military victory. That was the beginning of the end for pluralism. In 350 Pope Julius I declared Dec. 25 to be Christ’s birthday, and Christianity was enforced on all members of the empire — excepting the Jews, who were merely persecuted and exploited for the next few millenia. Today, however, Christmas has recaptured some of its early multicultural splendor. Since the end of World War II, Santa has been a regular department store icon in Japan, where almost no one is Christian. There are European Muslims who celebrate a non-religious version of Christmas by having a guy dressed up as Santa come to a public place and give out presents to children. And of course, in America, despite Charlie Brown’s best efforts, Christmas has become an orgy of crass commercialism. I’m sympathetic to Charlie Brown’s view. If I were benevolent dictator, I would ban the use of Santa or sacred music in commercials. I even have a little sympathy for the church ladies. Their implicit xenophobia and cultural imperialism aside, I understand the fears they harbor — a magical, mythical childlike, worldview that Christmas more than any other holiday embodies is slipping from our grasp. Yet, this is like grieving over the fall of the British Empire while failing to notice that English has, more or less peacefully, become our global common language. True, science has torn down the illusion that we live in a morally ordered world, where a benevolent God deals out harsh justice to evildoers and upholds the righteous. We know beyond all reasonable doubt that natural disaster and tragedy strike blindly at the good, the bad and the indifferent. We know that Santa cannot possibly visit every child’s home on Christmas Eve. Worse yet, we know that on Christmas Day, as on every day, tens of thousands of children will die of starvation, accident, disease and abuse. And we know that, somehow, we have to learn to live in a world where people will never agree on a single set of sacred beliefs. None of this means that Christians cannot keep observing Christmas in their own way. It just means that they need to accept that it the days when the Holy Roman Empire could enforce it on all citizens are gone forever. Yet, despite all the disillusionment, Christmas has found a new and beautiful meaning as a celebration of love made good by the giving of gifts to children, to family and friends, and to strangers in need.

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Shadi Bushra: Hate the Players and the Game: How Legal Corruption Is Eroding Our Democracy

December 23, 2011

In the race to be the Republican nominee, attacks on a candidate have generally increased with that candidate’s poll numbers. This relationship makes perfect sense. After all, why would a campaign waste its finite money and time attacking someone who isn’t a direct threat? With Newt Gingrich’s rise came attacks on his past infidelities, arrogant personality, and conservative credentials. One refrain that has hurt his campaign is the allegation that he did something illegal in accepting $1.6 million from Freddie Mac, whose collapse was one of the early triggers of this recession. As Newt’s experience shows, there are plenty of ways to be involved in Washington corruption without breaking a single law. The 2008 financial crisis was a direct result of a political system that rewards those who can afford to donate to campaigns and offer comfortable jobs to former government officials. Legally, former senators and representatives are not allowed to leap directly from public service into lobbying. There is a two-year “cooling-off period” during which they cannot lobby their colleagues or work in an industry that they once regulated. There are, however, enough loopholes in these rules to fly a plane through. The easiest way for legislators to leverage their connections for a quick buck is to simply be hired by any of the many industries that they did not directly oversee. They are still not allowed to lobby their former colleagues for a year, so they are instead initially placed on the company’s board, where they advise the company’s lobbyists on who to call or what to say. Once the cooling-off period is over, they can start making the personal visits to Capitol Hill to call in favors for their new employer. The rules are both complicated and non-uniform. The Senate is subject to stricter rules than the House, and all Congressional staff have fewer restrictions on lobbying the executive branch than they do the legislative. Equally threatening to the quality of our democracy is the decision that corporations can donate unlimited amounts to campaigns. In 2010 the Supreme Court ruled in Citizens United v. the Federal Elections Commission that campaign contributions amounted to free speech, and so contributions from unions or corporations cannot be curtailed. Now there are no barriers for the wealthy to exert as much influence as they have dollars by donating as much as they want to so-called Super-PACs. In this context, representatives and other government officials no longer feel that their duty is to the people of the United States as a whole but to those who cut them the checks. It is easy enough to speculate that this corruption contributed to the financial crisis. Fortunately, there is hard evidence to corroborate this gut feeling. The IMF published a report in June stating that from 2000 to 2006, bills unfavorable to the financial sector were one third as likely to pass as bills favorable to the industry. Furthermore, “lenders that lobbied heavily between 2000 and 2006 tended to engage in risky lending practices more often than other institutions over the same period and suffered worse outcomes during the crisis.” Well-connected firms essentially thought they could get away with risky practices — and they could. But who wouldn’t expect some kind of return on the $3.3 billion spent on (or, rather, invested in) financial lobbying in the decade before the crisis? The National Bureau for Economic Research confirms that firms that lobbied Congress harder in the past benefited more from the bailouts. Keep in mind that this analysis was done in May, long before this month’s revelation that the Fed gave banks over $7 billion in secret and very profitable loans. These lobbying expenditures were in addition to the $1.738 billion spent on campaign contributions from 1998 to 2008. As Justice Stevens wrote in his dissent of the majority opinion in Citizens , “While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.” We can hardly blame rich corporations or individuals for taking advantage of the opportunities afforded them in this political system. They have made their money by making smart investments, and there are few better investments than buying your own congressman. However, it is the duty of our officials to serve the public interest, which they have, on balance, failed to do. Don’t expect the corporations to straighten themselves out, and don’t expect your representative to straighten them out of their own volition. It is the duty of an informed citizenry to force their representatives to do what the represented want through phone calls, letters, marches, strikes, and, most importantly, ballots.

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Oakland Opens Investigation Into Police Conduct At Occupy Protests

December 22, 2011

In the wake of violent clashes between the Oakland Police Department and Occupy Oakland protestors that shocked the nation, the city of Oakland has launched an independent investigation into the appropriateness of the actions of its embattled police force. The investigation will be led by former Baltimore Police Commissioner Thomas Frazier, who also spent time in the Bay Area as a deputy police chief in San Jose. The city has budgeted up to $100,000 for the report, and Frazier expects to have it completed within 90 days. Once the initial report is completed, the city plans on again contracting Frazier’s services for a second report looking at the November Occupy-organized general strike. “If these investigations reveal wrongdoing on the part of our officers, I am committed to taking swift and fair corrective actions,” interim police Chief Howard Jordan told the Oakland Tribune at a news conference held on Wednesday. Oakland Mayor Jean Quan, who also spoke at the event, defended the city’s police force. “For the most part, police acted professionally and the protesters demonstrated peacefully, but there were exceptions on both sides,” she told the San Francisco Examiner . “We wanted to have an outside look at what happened. We need to have a balance between maintaining the civil rights of our citizens and having effective policing.” Other members of Frazier’s team include former Los Angeles Police Department Deputy Chief Mike Hillmann, former San Jose Police Department Deputy Chief Don Anders and Richard Cashdollar, who previously served as the executive director of public safety for Mobile, Alabama. The conduct of Oakland police became a lightning rod issue after protestor and Iraq War veteran Scott Olsen suffered traumatic brain injuries after being hit in the skull with a tear gas canister fired by a still-unidentified member of one of the handful of law enforcement agencies that Quan had called in to disperse the tent city that had taken residence in the plaza in front of Oakland’s City Hall. The investigation is likely in response to a recent lawsuit filed against the department by the American Civil Liberties Union and the National Lawyers Guild alleging that: On two recent occasions (Oct. 25 and Nov. 2) the OPD and cooperating police agencies under their direction indiscriminately shot flash-bang grenades and other projectiles into crowds of Occupy Oakland protesters. These actions clearly violate the Fourth Amendment by subjecting protesters who posed no safety concerns to unnecessary and excessive force, and the First Amendment by interfering with demonstrators’ rights to assemble and demonstrate. The Frazier-led effort is just one of a spate of investigations into the way the department has handled the protests. Separate investigations, one being conducted by OPD’s internal affairs division and another by Oakland’s Citizens’ Police Review Board, are also examining the same issues. Additionally, OPD has launched a targeted investigation into an incident where a videographer was shot in a leg with a rubber bullet during the November 3 general strike in apparent violation of the department’s official crowd control policy. Captain Ersie M. Joyner III, the officer who approved the use of force in that instance, told the Contra Costa Times that he “could be could be fired or demoted pending the investigation.” Victor Garcia, the officer who actually fired the projectile, has been removed from his position on the SWAT team and is also facing investigation. Both Quan and the OPD have become major targets of late owing to their handling of Occupy Oakland. Quan is current the subject of two separate recall campaigns working to get her removed from office. Even before the added scrutiny paid to OPD surrounding Occupy Oakland, the department has long been mired in controversy . Earlier this year, Police Chief Anthony Batts resigned, citing tension between the police force and its citizen leadership–most notably Quan herself. However, many privately speculated that Batts’ resignation was in reaction to the possibility of a federal takeover of the police department for failing to adequately reform itself in the decade following the infamous “Rough Riders” scandal, where a cadre of rogue cops were found to have planted evidence, used excessive force and falsified police reports. Check out this video of Quan explaining why she felt the need to shut down the Occupy Oakland camp:

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Do Sports Teams And Casinos Mix?

December 22, 2011

The New England Patriots and Florida Panthers are seeking financial victories where many states do these days — in casino construction. Both sports franchises have announced plans this December to use their property for gambling complexes. For fans used to hearing professional leagues preach how they want to keep their integrity in the face of gambling interests, the developments might seem surprising. “There’s always been an uneasy relationship between sports and gambling,” said Scott Andresen , a sports law professor at Northwestern and Columbia College-Chicago. “Maybe this brings it out into the open more.” Each plan has its own challenges. Patriots owner Robert Kraft and casino mogul Steve Wynn have teamed up to woo the Boston suburb of Foxborough, Mass., into building a $1 billion complex near Gillette Stadium. Kraft owns the property and would profit by leasing the land to the casino. The NFL forbids owners being directly involved with casinos and frowns on a lot of other activity related to gambling, but the league is taking a wait-and-see approach with this venture. “Nothing has been presented to us concerning the specifics of any arrangement,” an NFL spokesman said. “If and when that occurs, we will evaluate the transaction under our policies.” Kraft promised the complex would be more New England woodsy than Vegas glitzy, the Boston Globe reported. He also promised to create jobs. That’s the same refrain made by many casino-building states trying to shrink their combined $95 billion deficit amid rampant unemployment. In November, Massachusetts became the latest state to allow casino expansion. Kraft, whose team has won three Super Bowls, will tell the town why he feels his plan is a winner on Jan. 10. Foxborough would have to approve the proposal in a public referendum. Kraft and the Patriots did not return a request for comment. “As successful as the Patriots are, they only have a finite number of games,” Andresen said. “That leaves a whole lot of other days when they’re not making revenue on their property.” The same cash-creating mandate seems to apply to the Florida teams in the casino hunt. The NHL’s Panthers hold a long-term lease on the land around their BankAtlantic Center in Sunrise, Fla., and have entertained pitches from Wynn Resorts and other casino bigs, the Miami Herald reported . Just one catch: Florida has yet to approve the doling out of more casino licenses. Just in case it happens, though, the football Dolphins said in October they were also looking into developing property around Sun Life Stadium. “Is there a conflict of interest per se? No,” Andresen said of the three team’s ventures. “Is it something they have to be careful about the way they handle it? Yes.”

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U.S. Government Warns Conglomerate To Fix Security Flaws

December 22, 2011

* Researchers say flaws make systems vulnerable to attack by hackers * Siemens says first fixes will be released in January (Adds comments from Department of Homeland Security) By Jim Finkle BOSTON, Dec 22 (Reuters) – Siemens said it is working to fix security flaws in industrial controls products that the U.S. government warned could make public utilities, hospitals and other critical parts of the country’s infrastructure vulnerable to attack by hackers. The German conglomerate, whose industrial control systems are widely used around the world, said on Thursday in a posting on its website that it had learned of the vulnerabilities in May and December of this year from security researchers Terry McCorkle and Billy Rios. The U.S. Department of Homeland Security issued an advisory that warned of the vulnerability, urging Siemens customers to minimize exposure of industrial control systems to the Internet to make them less vulnerable to attack. “Successful exploitation of these vulnerabilities could allow a hacker to log into a vulnerable system as a user or administrator,” the agency’s Industrial Control Systems Cyber Emergency Response Team said in the advisory. Rios told Reuters that one of the most serious of the vulnerabilities, known as an “authentication bypass,” allows hackers to get around password protections on Web interfaces, which Siemens customers use to access industrial control systems. Siemens industrial controls systems are used to run an assortment of facilities from power generators, chemical plants and water systems to breweries, pharmaceutical factories and even uranium enrichment facilities. “People with low skills will be able to use this authentication bypass,” said Rios, who described the problems on his blog, www.xs-sniper.com. Siemens said it had addressed some of the security vulnerabilities and that it would release its first security update to fix them next month. The company does not know of any cases in which hackers had exploited the vulnerabilities to attack its customers, spokesman Alexander Machowetz said. Some Siemens software is designed to automatically install services that make control systems accessible via the Internet, Rios said. They are installed with a default password, “100,” which is published in user manuals that are available on the public Siemens website, he added. “People set up control systems, and they don’t realize that they are on the Internet, waiting for people to connect to them,” Rios said. Siemens industrial control systems have been scrutinized by security researchers over the past few years. The notorious Stuxnet virus, which crippled Iran’s nuclear program, was first identified by researchers in June 2010. It targeted Siemens software used to control gas centrifuges that enriched uranium at a facility in Natanz, Iran. Last May, the U.S. government warned U.S. water districts, power companies and other Siemens customers of another security flaw uncovered by researcher Dillon Beresford that made systems vulnerable to attack. In August, Beresford disclosed at the Black Hat hacking conference in Las Vegas that he had found further vulnerabilities in Siemens products, including a “back door that could allow hackers to wreak havoc on critical infrastructure.” (Reporting By Jim Finkle; Editing by Lisa Von Ahn)

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Christopher Mitchell: Louis C.K. Takes the Internet Seriously

December 22, 2011

Louis C.K., the comedian responsible for the FX show Louie and for making people laugh at his brutally candid assessment of how much his young daughter’s opinion about anything matters, has bypassed the major studios, channels, and cable distribution systems to sell one of his concerts directly to his fans . For $5, they can easily download it and then put it on any medium they choose. Some have put it up on pirate sites so others can use it without paying. But more than enough have paid to make it well worth his while — as explored by the New York Times media critic, David Carr : While I was talking with him on the phone Thursday night, he checked his Web site and about 175,000 people had bought his special through PayPal. He expected 200,000 total downloads by the weekend, which meant he would have grossed $1 million. After covering costs of about $250,000 for the live production and the Web site, that’s a $750,000 profit. And he owns the rights, and the long tail of buyers, in perpetuity. The transparency of the enterprise, including its cost in relation to how many people bought in, was the subject of media coverage all last week. … “O.K., so NBC is this huge company and they have all these studios and these satellites to beam stuff out,” he said, “but on the Web, both NBC.com and LouisCK.com have the same amount of bandwidth. We are equals and there are things you can do with that. This has been a fun little experiment.” His “fun little experiment” demonstrates the threat posed by the Internet to the old business models of cable companies and content owners like Viacom and Disney. And this is why Comcast’s purchase of NBC is worrisome . Comcast is still fighting for the authority to prioritize some sites over others — it wants to violate the historic principle of network neutrality that prevents a service provider from interfering with what sites a subscriber visits. If Comcast had its way, it would require a taste of the action from Louis C.K. or could throttle the connections of those users watching his content. In short, this success story illustrates the threat to the cable business model. Cable has long been the gatekeeper to content — Comcast decides what channels I can choose from. But right now on the Internet, I choose what content I can choose from. Community networks, which put the public good above maximizing potential profits, are far less likely to interfere in the way that big companies like AT&T have admitted they would like to. It ultimately comes down to whether one views access to the Internet as just another product in the market or as an infrastruture or platform for everything else. While the FCC should ensure that service providers cannot prioritize some content over similar content (CNN video over Bloomberg video, for instance), communities are smart to establish networks that are locally accountable — as hundreds of communities already have . Depending on the FCC to police distant corporations is a poor strategy.

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Struggling Company Agrees To Sell Major Unit

December 22, 2011

NEW YORK — Eastman Kodak Co. said Thursday it has agreed to sell its gelatin business as the struggling photography pioneer looks to boost its dwindling cash reserves. Kodak is selling the Eastman Gelatine business to Rousselot, a division of the Vion Food Group. Terms were not disclosed. Eastman Gelatine produces gelatin used in photographic and printing processes as well as in food, pharmaceuticals. Kodak expects the sale to close within the next 30 days. About 95 Eastman Gelatine employees will transfer to Rousselot, and Rousselot will also gain a 575,000-square-foot production facility in Peabody, Mass. Kodak has been hurt in recent years by foreign competition and the widespread popularity of digital photography. With its cash reserves shrinking, Kodak warned last month it could run out of cash in a year if it doesn’t raise new financing or sell assets. The company has been trying to sell a group of 1,100 digital imaging patents, and analysts believe Kodak could raise $2 billion to $3 billion through licensing deals. Kodak is also suing Apple Inc. and Research in Motion Ltd., saying their smartphone camera features infringe on image-preview technology Kodak patented in 2001. The company is also focusing on sales of commercial and consumer inkjet printers, workflow software, and packaging. Kodak’s cash reserves shrank 10 percent to $862 million in the third quarter. In November, it set a year-end cash target of $1.3 billion to $1.4 billion that excludes any intellectual-property licensing deals, down from a previous forecast of $1.6 billion to $1.7 billion. The Rochester, N.Y., company also announced that Laura Quatela will become co-president on Jan. 1. She will work with Philip Faraci, who has been president since September 2007. Quatela, 54, is currently Kodak’s general counsel. She will be replaced by Patrick Sheller, the company’s deputy general counsel, corporate secretary, and chief compliance officer. In after-hours trading, Kodak shares jumped 7 cents, or 11.8 percent, to 70 cents. The stock is down 88.3 percent in 2011.

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Houston Wire & Cable Company Names James L. Pokluda III CEO and Director

December 22, 2011

HOUSTON, TX–(Marketwire – Dec 22, 2011) – Houston Wire & Cable Company ( NASDAQ : HWCC ) today announced that, in accordance with its previously announced succession plan, the Board of Directors has named James L. Pokluda III, President of the Company, to the additional position of Chief Executive Officer and elected Mr. Pokluda to the Company’s Board, effective January 1, 2012. Mr. Pokluda will replace Charles A. Sorrentino, the Company’s current CEO, who as previously reported, will resign from the Board and retire as Chief Executive Officer at year end.

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Jason Alderman: Credit Card Stolen? Here’s What You Do

December 22, 2011

Despite high-profile media attention, the odds of having your credit or debit card number stolen by crooks remains at historically low levels. That said, it’s always good to know what to do in case lightening does strike and someone fraudulently uses your card. Left unchecked, they might try to run up bills, drain your checking account or worse — steal your identity. Here are actions to take if this happens to you, as well as preventive measures that can lessen your risk going forward: Call the card issuer. First, contact the bank or credit union that issued your card. You’ll find a toll-free number on the back of your card, on your billing statement or at the company’s website. The issuer will closely monitor your account for odd behavior and may either reissue a card with a new CVV (card verification code) number or issue an entirely new card number. Be sure to change any related passwords or PIN numbers and notify companies that have automatic payments tied to the account to make sure you don’t miss a payment. Also keep a log of all calls, letters and emails you have with your card issuer about the fraud — this will be helpful if you need to file a claim or police report. If thieves also gain access to additional sensitive personal information such as your Social Security number and address (for example if your entire wallet was stolen), you should escalate your fraud precautions, as follows: Contact credit bureaus. Contact one of the three major credit bureaus, Equifax (888-766-0008), Experian (888-397-3742) or TransUnion (800-680-7289), and place an Initial Fraud Alert on your credit file for 90 days if you suspect you have been, or are about to be, a victim of identity theft. Whichever bureau you contact will notify the other two to do the same. If you wish, you can renew these fraud alerts each quarter, free of charge. If you determine that you actually have suffered identity theft, you can also file an Extended Fraud Alert , which will stay on your reports for seven years. To do so, you’ll need to submit an Identity Theft Report , as outlined below. Placing a fraud alert entitles you to one free credit report from each bureau. Although the alert makes it harder for someone to open new credit accounts in your name, it won’t necessarily prevent them from using existing accounts. That’s why it’s important to close compromised accounts and to carefully review your credit reports for errors, fraudulent activity or suspicious credit inquiries from an unfamiliar source. Just be aware that posting a fraud alert could delay your own ability to obtain new credit. You might want to order new credit reports every month or two for the next year or so as a precaution. Also, remember that by law, you can order one free credit report a year from each bureau through the government-authorized AnnualCreditReport.com , whether or not you suspect fraud. File theft report . If you determine that someone has indeed stolen from your account or that you are otherwise the victim of identity theft (i.e., they used your information to open new accounts, etc.), you’ll need to file a detailed Identity Theft Report with the police. The Federal Trade Commission’s Recover From Identity Theft site contains step-by-step instructions for completing and filing the report with local, state and federal law-enforcement agencies. You’ll also need to send copies of the report — by certified mail, return requested — to the credit bureaus and companies whose accounts were impacted. They then have 15 days to request further information or documentation to help verify the theft. You can also file a complaint with the FTC, which will enter the information into a secure online database shared by thousands of civil and criminal law-enforcement authorities worldwide. Financial liability. Under federal law, your maximum liability for unauthorized use of a credit card is $50; if the charges were made after you report the card lost or stolen, you have no liability. In addition, many credit card networks provide “zero liability” protection if you promptly report the loss. Liability for debit card losses is slightly different. Debit card transactions that you signed for (called “offline” transactions) typically are protected by “zero liability” policies similar to those for credit cards. If you report the loss within two business days, your maximum liability is $50 — although most banks and credit unions will waive this fee. That limit rises to $500 after two days; and if you don’t notify your financial institution within 60 days of receiving a statement showing unauthorized transactions, you could be liable for the entire amount — although most financial institutions limit your liability to $50. Be aware that some types of PIN-based transactions, where you enter your PIN at the retailer’s kiosk or an ATM instead of signing a receipt, may be excluded from your card-issuer’s zero-liability coverage, depending on which PIN debit network is used to complete the transaction. Ask your bank or credit union about its policy for both types of debit card transactions. Preventive measures. Going forward, carefully monitor your monthly credit card and bank statements for fraudulent charges. In fact, get in the habit of checking your statements online every few days. Sometimes thieves who’ve gained access to account information will slip in a minor purchase to see if you’re paying attention. Other good habits include: Make sure your anti-virus and anti-spyware software is current and use only secure websites. Never provide personal information by mail, phone or email unless you initiated the communication. Create strong, randomly patterned passwords and change them regularly. Shield keypads from the eyes of “shoulder surfers” at stores and ATMs. Review receipts for accuracy before signing and retain them for your records. Shred paperwork and receipts containing personal or account information once they’re no longer needed. Lock up documents with sensitive information at home and work. See my previous blog, Make Sure You Are Cyber Secure for more tips. There are many great resources where you can learn how to protect your personal and account information and prevent fraud, including: StaySafeOnline.org , a website filled with tips for safe Internet use, created by the National Cyber Security Alliance. The FBI’s Be Crime Smart page, which highlights the latest scams and tells you how to report crime and fraud. My employer, Visa Inc., offers VisaSecuritySense.com , which contains tips on preventing fraud online, when traveling, at retail establishments and ATMs, deceptive marketing practices, and more. The Federal Trade Commission’s ID Theft, Privacy and Security page, which contains extensive information about identity theft, privacy and information security. Having your accounts stolen from can be a frightening and frustrating experience. Just make sure you act quickly to minimize the damage and prevent future violations. This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

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Federal Judge Rudolph Randa Rules SEC Agreement Too Soft

December 22, 2011

A federal judge in Milwaukee has criticized the Securities and Exchange Commission for being too soft with corporate enforcement, marking the second time the agency has been criticized for weak settlements in the past month. Shadowing last month’s decision by U.S. district judge Jed Rakoff to kibosh the agency’s $258 million proposed settlement with Citibank, a federal judge in Milwaukee told the SEC that its proposed settlement with the Koss Corp. is too vague and asked the agency to provide more facts by January 24. In October the SEC charged Koss Corp., a headphone-manufacturer, with accounting fraud. Wednesday’s ruling from U.S. district judge Rudolph Randa is the latest in a string of actions by federal judges to challenge the way the government agency enforces regulations. The decision underscores the significance of the November ruling by Judge Rakoff to toss out the proposed settlement between the SEC and Citigroup that didn’t have enough facts, Rokoff said, and did not force the corporation to admit guilt. After the Citibank settlement, the SEC responded, saying the proposed agreement was business as usual . But Judge Rakoff’s decision — now followed by Judge Randa — suggests the status quo is getting a rethink. Adam C. Pritchard, a law professor at the University of Michigan Law School, told The Huffington Post last month, “Judge Rakoff is saying that he thinks it’s time to figure out what the law is, what the obligations are for these banks.” However, amid criticism that the agency isn’t doing enough to hold executives accountable for the financial crisis, the SEC announced last week that it is suing six former Fannie Mae and Freddie Mac executives for misleading the public about the mortgage giants’ exposure to risky subprime mortgages as the housing bubble deflated. Last February, SEC chairwoman Mary Schapiro said that the agency doesn’t have enough money to satisfactorily police Wall Street or draft new regulations required by the Dodd-Frank financial reform law. Frustration on the bench has been growing elsewhere. In 2010, two federal judges in Washington raised eyebrows over SEC and other government settlements . One federal judge refused to approve a $75 million settlement with Citibank in another case related to subprime mortgages. Another federal judge was critical of a $298 million deal between Barclay’s and the U.S. Department of Justice over charges that the bank had altered records to obscure international money transfers.

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Grace Nasri: The 10 Most Active VCs and the Most Funded Companies

December 22, 2011

Last quarter, venture capital firms invested nearly $7 billion into 876 deals , according to data reported by Thomson Reuters. In terms of deals, the top 10 most active VCs funded 172 deals, making up about 20 percent of all deals in the third quarter. Top 10 most active VCs of last quarter: 1. New Enterprise Associates, Inc.: (27 deals) 2. Kleiner Perkins Caufield & Byers: (23 deals) 3. First Found Capital: (22 deals) 4. Sequoia Capital: (16 deals) 5. Intel Capital: (15 deals) 6. U.S. Venture Partners: (15 deals) 7. Accel Partners: (14 deals) 8. InterWest Partners: (14 deals) 9. Google Ventures: (13 deals) 10. Rho Capital Partners, Inc.: (13 deals) Compare the top 10 VC firms. The 10 companies that were the beneficiaries of the largest investments received a total of $1.08 billion — raking in 15.5 percent of the total amount invested last quarter, according to data reported by the National Venture Capital Association. The largest U.S. venture capital investments last quarter were as follows: 1. Reata Pharmaceuticals, Inc., Biotech, $300 million 2. Cvent, Inc., Software, $136 million 3. Airbnb, Inc., Media and Entertainment, $112 million 4. Tumblr, Inc., Media and Entertainment, $85 million 5. HelioVolt Corp., Industrial/energy, $85 million 6. Valeritas, Inc., Medical Devices & Equipment, $76 million 7. ZocDoc, Inc., Healthcare Services, $75 million 8. ClearEdge Power, Inc., Industrial/Energy $73.5 million 9. Essence Group Holdings Corp., Software, $70 million 10. Palantir Technologies, Inc., Software, $68 million The vast majority of funding came out of Silicon Valley, with the New York Metro area and Texas coming in second and third, respectively. Interestingly, however, while Silicon Valley’s dollar investments fell by 13 percent between Q2 and Q3, dollar investments from New York Metro grew 33 percent and dollar investments from Texas grew 113 percent. New England and the LA/Orange County area came in fourth and fifth in terms of dollar investments. The most active VC regions: 1. Silicon Valley $2.7 billion, 38.38% of investments 2. NY Metro $891 million, 12.82% of investments 3. Texas $596 million, 8.57% of investments 4. New England $586 million, 8.42% of investments 5. LA/Orange County $401 million, 5.77% of investments

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Buyer For NYSE Gets Justice Dept. Approval For Deal Worth Billions

December 22, 2011

WASHINGTON (Reuters) – Deutsche Boerse won U.S. antitrust approval to buy NYSE Euronext on Thursday in a $9 billion deal that has hit serious antitrust headwinds in Europe. The Justice Department said on Thursday that the deal, which was announced in February, won approval on condition that a Deutsche Boerse subsidiary, the International Securities Exchange, divest its 31.5 percent interest in Direct Edge. Direct Edge is the fourth-largest U.S. exchange, the department said. Despite the divestiture, Deutsche Boerse and NYSE must continue to provide some services to Direct Edge, the department said. In Europe, there have been weeks of negotiations during which European Union antitrust staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading. Both Boerse and NYSE Euronext have said they would not pursue the merger if they were asked to divest either Eurex or Liffe. A formal decision by the European Commission is not expected until January or early February. (Reporting By Diane Bartz; Editing by Gerald E. McCormick) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Healthcare Giant Recalls Motrin Pills That May Work Too Slowly

December 22, 2011

TRENTON, N.J. — Healthcare giant Johnson & Johnson has issued another recall of Motrin pain relievers, at least the sixth in two years. It’s part of a string of more than two dozen recalls of consumer health products, prescription drugs and medical devices over 2 1/2 years. This time, it’s because Motrin IB pills may not dissolve and begin working as soon as intended as they approach their three-year expiration date. That could delay relief of pain. The recall covers Motrin IB coated caplets and coated tablets, in packages with either 24 pills or 30 pills. A company spokeswoman said Thursday that J&J is only recalling packages from retailers, not consumers, because there’s no safety concern. “It’s 59 product lots. It’s about 12 million bottles,” said spokeswoman Bonnie Jacobs. Consumers with questions can call J&J’s Consumer Call Center at 1-888-222-6036, Monday through Friday from 8 a.m. to 8 p.m. Eastern Time. The packages were manufactured between February 2009 and July 2011. Some were produced by an outside contract manufacturer and others were manufactured at J&J’s factory in Las Piedras, Puerto Rico. That’s one of three J&J factories that have been under extra scrutiny by the U.S. Food and Drug Administration over a variety of problems with manufacturing quality. Johnson & Johnson’s McNeil Consumer Healthcare factory in Fort Washington, Pa., has been closed since spring 2010 because of serious problems there. The company is in the process of completely gutting and rebuilding the factory. Since September 2009, J&J has recalled a host of prescription and nonprescription medicines, as well as replacement hip joints, contact lenses and diabetes test strips. Among the recalls were tens of millions of bottles of children’s and adult Tylenol and Motrin, Benadryl, Zyrtec, Rolaids and Simply Sleep pills. The prescription drug recalls have included HIV medicine Prezista and epilepsy pill Topamax. Reasons for the recalls have ranged from contamination with metal shards and class particles, to nauseating odors and inaccurate levels of active drug ingredients. The recalls have cost the company $900 million in 2010 alone in lost revenue from products not being on store shelves, on top of costs for upgrading factories and legal expenses. Along with the FDA, Congress has been investigating the handling of the manufacturing problems and recalls by executives at Johnson & Johnson, which stresses in its corporate credo its responsibility to the doctors, patients and parents who use its products.

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Andrew Winston: Top 10 Green Business Stories of 2011

December 22, 2011

Yes, it’s December again somehow: time to look back on what we’ve learned and oversimplify into a handy list. Here’s my take on the 10 big stories in sustainability and green business this year: 1. The usual sustainability drivers got stronger Ok, this one is cheating a bit, but on a fundamental level, the top themes in green business haven’t actually changed too much ( see the 2010 list ). So, rather than take up valuable list real estate with these perennial favorites and big-picture drivers, I’ll quickly list them in one big bucket of mega-trends: The rise of the consumer around the world, related to… China, China, and China . From relentless demand for resources to bamboo-like 9% growth to vicious competition for the technologies and industries of the future, China will be the big story for a long time. The greening of the supply chain . Big organizations keep asking more of their suppliers. Increased demand for transparency and its close partners, (a) the quest to define and develop useful sustainability metrics and (b) the growing sustainability data explosion . The military continues to lead the way on energy and climate. The ongoing failure of policy at a global level (with the important exceptions of some successes/workarounds such as new mileage targets for cars and trucks and a carbon tax in Australia ). These drivers underpin a number of stories from 2011, but a few new themes came out as well. Here’s the rest of my top 10 stories, with callouts for companies and examples that typify the trend. 2. Malthus strikes back: Coca-Cola takes an $800 million hit on commodity costs Coca-Cola was not alone in facing increasing costs in 2011; one of my clients, Kimberly-Clark, took an earnings hit from record pulp prices. These companies are notable victims of a new reality: resources are constrained and input prices are fundamentally rising. For over 200 years, from Thomas Malthus to the Limits to Growth gang, many people have made the case that it won’t be long before we’ll run out of food, energy, materials, and on and on. It’s an idea that has enthralled many, but has seemed to be wrong. But this year, something felt different as we hit 7 billion hungry, striving humans on the planet. While “running out” isn’t really the right phrase, it’s clear that delivering many commodities to market is getting harder and more expensive (we don’t dig for oil a mile under the ocean for the heck of it). And the dangerous mix of supply crunch and rising demand is only increasing, across nearly all commodities. In January, China “seized” its rare earth metals (meaning it wouldn’t export them anymore). In June, the New York Times declared a warming world hostile to food production . The best analysis of the resource scarcity mega-trend came from asset manager Jeremy Grantham. His analysis of commodity availability on a finite planet is compelling, thorough, and absolutely fascinating. Here’s the gist: after 100+ years of fundamentally declining resource prices, the data show a rising trend for nearly every input into our society. Business as usual is no more. 3. Climate Change Arrives: Texas weather triumphs over (some) ignorance Climate change is here. The list of “once-in-a-century” storms, floods, and droughts this year is too long to list. I know, I know — no single storm or season “proves” climate change. Was a year like 2011 possible in a world without climate change? Of course. But please. Was a year like 2011 likely? Not at all. In the words of climate scientist Jim Hansen, we’ve loaded the dice in favor of extreme weather events. From Thailand to Pakistan to Texas, some areas are deluged with water, while others have absolutely none. Please look at the numbers for how dry and hot Texas was this summer (I’ll wait). The data speaks for itself: Texas’ heat was literally off the charts this year . What was once temporary drought is looking more like permanent change. For another angle on a changing “normal,” read Jeff Goodell’s piece in Rolling Stone on ” Climate Change and the End of Australia .” Finally, if the immediacy of the “look out the window” method of gauging climate change didn’t work for some, at least one major climate skeptic changed his tune based on longer-term data. Richard Muller ran the models himself and discovered that, surprise, the thousands of scientists before him had gotten it right . It’s probably wishful thinking, but I believe the climate debate is actually over (and a solid majority of Americans agree ). 4. High-profile “failures” shake up clean tech: Solyndra has its day in the, um, sun What can one say about the failure of solar company Solyndra ? It certainly has become a media darling for clean tech skeptics. Soon after this quasi-fiasco, a few other stories seemed to indicate that corporate America was backing off of green tech. Google stopped its high-profile pursuit of cheaper-than-fossil-fuel renewables, and California utility PG&E quietly pulled the plug on its carbon offset program . In my view, none of this is all that distressing. So one technology and company failed miserably (and perhaps the government made a bad investment choice). And some initiatives didn’t work out as planned. So what. Whether it’s government money, venture capital, or corporate initiatives, you gotta place lots of bets to get some winners. These were all experiments, and you always learn from what doesn’t work. But the real reason I’m not too worried is that… 5. …clean tech is rising fast: Renewable investment tops fossil fuels for first time Markets have a remarkable way of sorting the wheat from the chaff. While the overall carbon emissions news is not good , the renewable energy market is growing very fast. The sector is larger than most people realize, with clean tech investment hovering around $200 billion globally . Total investment in new power generation is a good indication of where we’re headed, and for the first time renewables beat fossil fuels globally . Right now, the U.S. and China are entering a trade battle over solar subsidies , which tells me it’s a real market now. They wouldn’t be arguing if the prize were not very large. 5b. Nuclear on the outs Following the nuclear meltdown in Fukushima , Japan, the once-resurgent nuclear industry is flatlining: generation actually fell globally in 2011, with Germany alone shutting down 8 gigawatts’ worth. In September, Siemens, one of the world’s largest nuclear power plant suppliers, exited the business . CEO Peter Loscher declared Germany’s plans to move aggressively toward renewables “the project of the century.” 6. Water rising — both literally and as a serious issue for business: Honda’s supply chain gets slammed, Levi’s gets creative A list of floods that devastated lives, homes, and countries this year would be tragically long. So it’s no wonder that business started to wake up to the serious danger that storms and shortages present to their operations, both from direct damage to property and from massive production interruptions (i.e., “business continuity”). Think back to the January floods in Australia which covered an area larger than France and Germany combined . The extreme weather seriously disrupted coal production , one of the most important economic engines in the country. At the microeconomic level, consider what Thailand’s floods have done to the market for disk drives , or to supply chains for Honda and Toyota (which are dealing with a double flood hit from the tsunami as well). On the use side of the water issue, companies with products that depend on water in production (beverages) or in use (shampoo, apparel) are also seeing the writing on the wall and getting creative. Levi’s announced a low-water jeans production method, Unilever started asking customers to shorten showers , and beverage companies are working with farmers and NGOs to drive water use down throughout the value chain (see my last blog , co-written with Andy Wales from SABMiller). In 2011, the phrase “water footprint” became a lot more common. 7. Value chain and transparency partnerships growing: The apparel industry bands together One of my favorite new partnerships is the new Sustainable Apparel Coalition , an impressive mix of powerful retailers, apparel manufacturers, and NGOs. The group is leveraging extensive data from Nike and the Outdoor Industry Association on supplier sustainability performance (energy, water, toxicity, etc.) for ” every manufacturer, component, and process in apparel production .” The goal: to reduce negative environmental and social impacts of the $1.4 trillion market for clothes and shoes. The larger trend here is the continued growth of “open” — open data and open innovation, including new value-chain business partnerships and cattle-call contests inviting in any and all ideas. The movement has been building for years, from P&G opening up its product development pipeline early in the 2000s to the launch of the GreenXchange for sharing green patents early in 2010. But the trend accelerated this year, with GE’s expanded Ecomagination Challenge and other coalitions and open competitions . 8. Valuing and internalizing the externalities: Puma Calculates its Environmental P&L A few very cutting edge companies are starting to ask some deeper questions about the value they create and destroy in the world. Puma, in a surprise leap to the front of the sustainability leadership pack, commissioned TruCost and PwC (full disclosure: I have a partnership with PwC) to assess the value of its total environmental impacts from operations and supply chain, including carbon pollution, water use, land use, and waste generated. The total: 145 million euros . In a similar vein, Dow Chemical launched a 5-year, $10 million partnership with The Nature Conservancy to ” value nature ” (so called “ecosystem services”) as an input into their businesses. It’s unclear what companies can do with these numbers since externalities are by their nature, well, external to the regular P&L. But it’s the beginning of something very important — companies are starting to understand the real value and costs of their businesses, to themselves and to society. Watch this space. 9. The people speak: Keystone and OWS Speaking of getting companies and governments to think longer term about value and costs to society: against all odds and expectation, the protests against the Keystone XL pipeline from Canada — led most prominently by uber-environmentalist Bill McKibben — were successful (for now). And what can one say about Occupy Wall Street? The movement is, in part, about this larger question of value and values. Do we value the right things (equity, fairness, justice) or just promote growth and profit above all? Currently, our businesses are driven entirely by quarterly profits . Pursuing the short-term payback can cause a firm to deviate wildly from actual, long-term, sustainable profitability. This disconnect was bound to stir some passions eventually. Whatever your politics, ignoring or dismissing this movement is a big mistake. The concerns underpinning the anger out there stem from concern about what’s good for the long-term, and what’s truly sustainable. None of these questions are going away. 10. A path to sustainable consumption begins to emerge: Patagonia asks us to buy only what we need Perhaps the most heartening business story of the year came from perennial thought (and action) leader, Patagonia. Its Common Threads campaign/business model questions consumption at its core. The company announced that it would take back its clothing and refurbish, resell, reuse, re-whatever. The website proposes a grand bargain – we make clothes that last, and you don’t buy what you don’t need. A holiday ad got more specific and demanded we ” Don’t buy this jacket. ” Patagonia is testing new ground and it’s not a gimmick — it’s a sign of the future. Looking Forward to 2012 and beyond: New business models coming Patagonia has always been at the leading edge; it was one of first companies to buy organic cotton or to turn recycled plastic into fleece. Now it’s showing the way to new business models. I’ve written about this kind of heresy before , but the few examples out there are generally B-to-B (Waste Management, Xerox). Patagonia’s move is a warning shot over the bow that the consumer-facing consumption question is coming. The near future will hold more questions about how businesses can and should operate in a resource-constrained, hotter, drier (or wetter) world. And companies will increasingly question the wisdom of focusing on quarterly profits . It won’t all come to fruition in 2012, but it’s on its way. As usual, I’m sure I’m missing many great stories in my list. I look forward to your suggestions. Happy holidays and Happy New Year! (This post first appeared at Harvard Business Online .)

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Analysis: Region Formerly Gorged On Debt Adjusting To Great Stagnation

December 22, 2011

LONDON (Reuters) – With governments laboring under too much debt and banks hobbled by too little capital, 2012 is shaping up as another year of hard slog for Europe’s economy that could yet test the single currency to destruction. The Netherlands on Thursday became the latest country to report that output shrank in the third quarter, lending credibility to forecasts that the broader euro zone will soon be in recession if it is not already. A generation that gorged on debt is now adjusting to what some are calling the Great Stagnation. Talk of a lost decade, like Japan in the 1990s, no longer seems outlandish. So far so familiar. What worries economists is that the longer the deleveraging of government and bank and household balance sheets drags on, the greater the risk of market or policy accidents. If the economy is already at stall speed, an unexpected shock could send it into a deep dive. In an age of globally integrated supply chains and capital markets, the impact on the rest of the world could be severe. “Entering 2012, we are facing uncertainty on the grandest of scales,” HSBC economists led by Stephen King said in their latest quarterly report. The good news was that euro zone policymakers recognized that a break-up of the 17-member bloc could spark another great depression. But, despite signs of greater urgency, investors for the most part remained unconvinced that a strategy was in place to ease the debt burdens straining the single currency. “This loss of faith is reminiscent of the collapse in confidence in 2008, when the wheels came off the global economy. Back then, forecasters completely failed to grasp the gravity of the situation. The same may be true today,” HSBC said. TALL ORDER As the world economy slumped after the collapse of U.S. investment bank Lehman Brothers in 2008, governments had room for maneuver. Today, with fiscal austerity in fashion and interest rates near zero across the developed world, firepower is limited. “Indeed, with the risk of recession on the rise, debt dynamics are in danger of spinning out of control,” HSBC said. The European Central Bank acted decisively on Wednesday to limit the immediate danger by lending banks a whopping 489 billion euros in cheap three-year loans. The cash injection will reduce the risk of a credit crunch and fire sales of assets by banks shut out of the wholesale funding markets. But the ECB is at best buying time to help weaker euro zone members put their finances back in order and recoup competitiveness lost as a result of having weaker productivity and higher labor costs than core countries led by Germany. It is the sheer magnitude of this task that is unnerving markets. Take Greece, which is racing to thrash out sweeping pro-growth structural reforms demanded by the European Union and the International Monetary Fund to unlock a 130 billion euro loan needed to stave off default. “This is a process, as we’ve seen in IMF program countries, that takes well over 10 years and that’s as long as Greece will need with the help of financial support and technical assistance missions from the EU and the IMF,” said Antonio Garcia Pascual, an economist at Barclays Capital in London. Yet Greece is already in the fourth year of a deep recession. And even if the EU-IMF program succeeds, its debt in 2020 would still be a suffocating 120 percent of GDP. How long will voters endure austerity imposed from abroad and, at the same time, go along with sweeping changes to everything from pensions to labor laws and the prizing open of long-protected professions and industries? “Structural reform is essentially about a society changing its way of life,” a senior European central banker said. “It’s not obvious that creating extra liquidity can make those fundamental reforms easier.” QUESTION OF BALANCE New modeling by Goldman Sachs dramatizes the challenge facing countries on the periphery of the euro zone. In order to stabilize the net debt of the entire economy these countries need a sizeable adjustment in their current account deficits. This in turn points to the need for a depreciation in the real, or inflation-adjusted, exchange rate of as much as 44 percent in Portugal, 35 percent in Greece and Spain and 20 percent in Italy, Goldman estimates. That means prices would need to rise less, or even decline, relative to the euro zone average for about 15 years in the case of Greece and Spain and almost 20 years in Portugal, requiring savage wage cuts in the process. This required correction immediately throws up another huge problem: if the periphery is holding inflation down to zero to cut costs, core countries will have to tolerate prices rising above 3 percent if the ECB is to keep euro area average inflation on target at no more than 2 percent. “This might be problematic for the ECB as certain core countries (such as Germany) could potentially have difficulties accepting such higher inflation for a prolonged period of time,” wrote Goldman economist Lasse Holboell W. Nielsen. GLOBAL DEBT MESS The euro zone is not alone in its struggles to manage excessive debt. Japan’s gross public debt has soared to more than 200 percent of GDP. The deterioration has not prevented the government from selling its bonds at low and stable yields, but a new IMF working paper warns that over the medium term, the market’s capacity to absorb new debt is likely to diminish as the population ages and appetite for riskier assets recovers. The result could be a worsening of Japan’s debt dynamics that poses a threat to financial stability. “Without a significant policy adjustment, the stock of gross public debt could exceed household financial assets in around 10 years, at which point domestic financing may become more difficult,” IMF economists Waikei Raphael Lam and Kiichi Tokuoka wrote. And in the United States, alongside what most economists see as an unsustainable public-sector debt trajectory, families still have too much debt accumulated in the go-go years before the great financial crisis. Household debt as a percentage of disposable income peaked in mid-2007 at 135 percent of GDP. It has since declined to around 120 percent but remains more than 20 percentage points above its 30-year average, according to Nathan Sheets, global head of international economics at Citi in New York. He said it was reasonable to assume deleveraging would continue at the same steady rate – which would prolong the process into the second half of this decade – but the pace could quicken markedly in the event of a collapse of asset prices, a sharp drop in disposable income or a renewed tightening of financial conditions. Which brings us back to the mountain the euro zone still has to climb in 2012. “Given the ongoing stresses in Europe, such risks are not just abstract possibilities but rather all-too-plausible outcomes that need to be carefully considered, with an eye to reducing potential vulnerabilities,” Sheets said in a report. (Editing by Mike Peacock) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Italy Approves Austerity Budget, Stymieing Crisis

December 22, 2011

ROME — Italian Premier Mario Monti easily won a vote of confidence in the Senate on Thursday, signaling parliamentary approval of the government’s euro30 billion ($39 billion) package of tax hikes and pension changes. The austerity package is intended to save the country from financial disaster and follows rising concerns in the markets that Italy will find it difficult to pay off its massive debts, which stand at around euro1.9 trillion ($2.5 trillion). The vote passed 257-41, following passage in the lower Chamber of Deputies last week. Had it been defeated, Monti and his government of technocrats would have been forced to resign. The new government is tasked with making sure that Italy did not become the next victim of Europe’s debt crisis. In remarks to lawmakers prior to the vote, Monti said the package was “of extreme urgency and will allow Italy to face the European crisis with its head held high.” Among the most disputed measures in the legislation is a reform to Italy’s generous pension system, which will require Italians to work longer. Many of former premier Silvio Berlusconi’s loyalists, who make up Parliament’s largest party, also opposed Monti’s decision to revive a home property tax that Berlusconi had eliminated. Unions staged strikes and demonstrations last week to protest the measures. Monti has said his package of tax hikes, reforms and growth-boosting measures was the only way to save Italy financially and give young Italians a foundation for economic recovery and growth. Data released Wednesday showed that Italy, the eurozone’s third-largest economy, contracted 0.2 percent in the third quarter, furthering predictions of a mild recession in 2012.

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Rich Less Likely To Be Attuned To Others’ Suffering, Study Finds

December 22, 2011

Social psychologists are making an argument that Occupy Wall Street protesters have been saying for months: Many rich people just aren’t in the habit of thinking of others. According to researchers at the University of California-Berkeley, people who grew up in economically comfortable circumstances are less attuned to the suffering of other people . In multiple trials that involved both questionnaires and physical-response tests, the researchers found that young adults whose upbringing involved some degree of financial struggle were quicker and more likely to register signs of empathy than young adults who came from affluent backgrounds. Such conclusions are especially relevant now, as the Occupy movement continues to focus national attention and criticism on the growing divide between rich and poor . While some wealthy people have defended themselves as merely embodying the ideals of American capitalism — a system where, the argument goes, anyone can make it to the top if they’re willing to work hard — many Occupy protesters have offered a less flattering theory: that the rich, as a class, simply aren’t concerned with the well-being of anyone else. The findings of the UC Berkeley team seem to suggest that this might be true, though the researchers make a point of saying it’s likely the result of inexperience on the part of the rich, not necessarily malice. “It’s not that the upper classes are coldhearted,” Jennifer Stellar, a social psychologist at UC Berkeley and the lead author of the study, is quoted as saying in a press release. “They may just not be as adept at recognizing the cues and signals of suffering because they haven’t had to deal with as many obstacles in their lives.” This particular piece of research appeared earlier this month in the journal Emotion , but one of the academics involved in the study, psychologist Dacher Keltner, has published at least twice before on the correlation between economic struggle and empathetic response. Last October, Keltner was part of a research team that found that wealthy people had greater difficulty reading facial expressions . In August, Keltner and others argued that financial security seems to be associated with an impulse to think about oneself more than others — and that a dozen separate studies had produced the same implication . But the relationship between wealth and compassion may work both ways. In 2005, researchers found that if a stock trader suffers from some kind of emotional impairment — that is, brain damage that prevents them from fully experiencing their own emotions — it may allow them to make more profit on the market , since they can make decisions based more firmly in rationalism. And in what may be a more extreme example of the same phenomenon, research published earlier this year suggests that some stockbrokers actually have a more pronounced competitive streak than diagnosed psychopaths .

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Morty Lefkoe: Do You Feel You Don’t Deserve Your Success?

December 22, 2011

Are you one of the many executives who secretly feels that you are an impostor who doesn’t really deserve your success? Do you feel, deep down, that you are really not good enough and that if others knew the truth about you, you’d lose all you had achieved? If so, you are not alone. So many business executives have this feeling that it has been labeled the “Impostor Syndrome.” This common psychological phenomenon demonstrates how it is possible to hold negative beliefs about oneself despite a tremendous amount of evidence to the contrary. It seems that once we form these negative beliefs as a child, lots of evidence (a lot of practical success) and logical arguments are not sufficient to get rid of the beliefs. I’ve written in prior posts why so many of us have negative self-esteem beliefs. But the question remains: Why do many people who believe I’m not good enough, I’m inadequate, I’m not capable, There’s something wrong with me, I’m not important, I’m a fake and a fraud and other similar beliefs fail to achieve business success while other people with the same beliefs achieve tremendous success in business. How do you survive? There is a simple answer: a special type of belief that I call a “survival strategy belief.” Let me explain. Imagine you are a young child who has created a host of negative beliefs about yourself or about life. At this point you are in school, interacting with lots of other kids and adults. It dawns on you that you are going to grow up and will have to make your own way in life. You are confronted with a real dilemma, albeit an unconscious one: “How will I make it in life if there’s something fundamentally wrong with me?” Imagine the fear and anxiety you must feel when you experience these two conflicting “facts”: On one hand, you sense that you must make it on your own in life. On the other hand, you have concluded that “There’s something fundamentally wrong with me that will make it difficult, if not impossible, to make it on my own.” Anxiety is a painful feeling, so children who have it try to find ways of not feeling it. In tens of thousands of sessions with clients, I’ve discovered that people have two basic ways of dealing with the unpleasant feelings that are caused by negative self-esteem beliefs: First, they use alcohol, drugs, sex, food, or other substances to cover up the feelings and numb themselves or to make themselves feel good. Underneath all addictions is a negative sense of self-esteem. Second, they develop strategies that help them deal with the anxiety that stems from their negative beliefs. I call them “survival strategies” because the fear one experiences when one has negative self-esteem beliefs often makes one feel as if his survival is being threatened. When a survival strategy is formed, the child also forms a belief about that strategy: “What makes me good enough (or important, or worthwhile, etc.) is having others think well of me (or making a lot of money, or taking care of people, etc.)” A variation of that is: “The way to survive is ….” Survival strategies are based on a child’s observation of what it takes to feel good about herself, to be important, to be worthwhile, or to be able to deal with life in spite of negative self-esteem beliefs. (By the way, if you think you don’t have any negative self-esteem beliefs, ask yourself: What makes you good enough [or important, or worthwhile, etc.]? When you answer anything other than “Nothing,” it becomes clear that you need whatever you answered in order to be okay.) $1,000,000 a year didn’t help Lawrence, a former client who works as an executive in a Wall Street firm, earns over $1,000,000 a year. His core belief is I don’t matter , and his survival strategy belief is: What makes me worthwhile is being seen as important by others. As a result, he becomes anxious whenever a new person gets hired, or a colleague wins praise, or he isn’t included in a meeting, or his boss doesn’t acknowledge him after he’s completed a project. In addition, that same belief has him work 14 hours a day, seven days a week, achieving things that his peers will see as important. One consequence of being run by survival strategy beliefs is that you experience your survival as dependent on the success of your survival strategy. The need to fulfill the terms of your survival strategy dominates your life. Once you say you’re not worthwhile just the way you are, no amount of accomplishment or praise will provide the unconditional sense of self-esteem you want and need. So it should now be clear how it is possible to reach high positions in management and have all the trappings of success and still doubt yourself: you have a survival strategy belief that drove you to succeed and, at the same time, you had a lot of negative self-esteem beliefs underneath that makes you feel like an impostor. Luckily, it is possible to eliminate your negative self-esteem beliefs, which will enable you to enjoy your success and no longer fear it will be taken away from you. For more information about Morty Lefkoe and how his method for eliminating beliefs can improve business success, please go to http://lefkoe.com . copyright © 2011 Morty Lefkoe

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Which Kind Of Bulb Should I Buy?

December 22, 2011

Given the man light bulb choices available today and the new bulb efficiency standards that are set to go into effect in 2012, selecting the right bulb for your home can difficult. Below, check out the tips from the Natural Resources Defense Council for selecting the light bulb that both looks best and is energy efficient. The efficiency standards that are set to take effect on January 1, 2012 mean that older, incandescent bulbs will be phased out. Consumers, however, will still have a choice between newer, more efficient incandescent bulbs, CFLs and LED bulbs, reports the NRDC . Congressional Republicans included a rider in a spending bill last week that will delay enforcement of the light bulb efficiency law that was signed by President Bush in 2007. The Associated Press reports Rep. Fred Upton (R-Michigan) said, “Americans don’t want government standards determining how they light their homes.” According to the NRDC, the change is hardly a coup . The Republican rider “pertains only to funding for federal enforcement of federal lighting standards for this fiscal year.” The delay will not affect standards for manufacturers, or ultimately, consumers. Rocky Kistner, a HuffPost blogger with the NRDC, said “the money-saving law” is ” good for American consumers — and for American workers and their companies .” Light bulb manufacturers even oppose Congress’ efficiency standards funding delay. A statement from the National Electrical Manufacturers Association , representing over 90 percent of the lighting industry, said the industry “remains committed and supportive of the lighting standards established [by the 2007 law].” Captions courtesy of NRDC . Images courtesy of NRDC unless otherwise credited.

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McConnell Calls On House To Act On Expiring Provisions

December 22, 2011

WASHINGTON — Moments after House Republican leaders dug in their heels on blocking a two-month extension of the payroll tax cut, Senate Minority Leader Mitch McConnell offered his colleagues a path out of the politically damaging position. Last week the Senate overwhelmingly passed a two-month extension of the 2 percent break, which expires New Year’s Day. But House GOP leaders rejected that deal, saying they would only accept a yearlong extension, even though many in their own party have been highly critical of the opposition. So McConnell (R-Ky.), who negotiated the Senate deal, offered a new idea Thursday, suggesting that Senate Majority Leader Harry Reid (D-Nev.) appoint members to a conference committee to work out a longer deal between the two chambers in return for the House passing the two-month stopgap now. “House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms,” McConnell said in a statement. “These goals are not mutually exclusive. We can and should do both.” “Leader Reid should appoint conferees on the long-term bill and the House should pass an extension that locks in the thousands of Keystone XL pipeline jobs, prevents any disruption in the payroll tax holiday or other expiring provisions, and allows Congress to work on a solution for the longer extensions,” McConnell continued. The Senate bill includes a provision demanding that President Barack Obama make a decision on the controversial oil pipeline from Canada to Texas within 60 days. It also extends unemployment benefits and higher Medicare reimbursement rates for doctors, which expire Jan. 1. Just before McConnell released his suggestion and despite the political pressure mounting on the GOP, House Speaker John Boehner (R-Ohio) and several other Republican leaders insisted that the only path was for Democrats to come back to the Hill and negotiate a new, yearlong bill in a conference committee. “Sometimes it’s hard to do the right thing,” Boehner told reporters Thursday. An aide to Boehner said the speaker had talked to the president earlier and reiterated his insistence on the longer extension. “The speaker proposed that the president send members of his economic policy team up to Congress to find a way to accommodate the president’s full-year request,” the aide said. “The speaker explained his concern that flaws in the Senate-passed bill will be unworkable for many small business job creators. He reiterated that if their shared goal is a one-year bill, there is no reason an agreement cannot be reached before year’s end. The president declined the speaker’s offer.” Boehner’s office did not immediately react to McConnell’s proposal. Reid responded by essentially repeating the Democratic position that his side has sought a longer-term bill all along and that he will continue to seek that — once workers, the unemployed and those who rely on Medicare are protected in the short run. “Once the House passes the Senate’s bipartisan compromise to hold middle class families harmless while we work out our differences, I will be happy to restart the negotiating process to forge a year-long extension,” Reid said in a statement. “Now, it is important that we now hear from Speaker Boehner in light of Senator McConnell’s comments.” House Democrats, who were calling on Boehner to relent Thursday, sounded somewhat dubious that the McConnell plan would go anywhere, noting that McConnell had believed he cut a deal last week that the House would pass, only to have the House GOP rebel. “I don’t know whether Senator McConnell can speak on behalf of Speaker Boehner,” remarked House Minority Whip Steny Hoyer (D-Md.). Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook .

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Gilt Addicts Anonymous: The Daily Online Flash Sale Fixation

December 22, 2011

NEW YORK — Over a four-year period, Heather racked up more than $50,000 in credit card debt. The 35-year-old New York-based talent agent, who declined the use of her last name, once considered a Kate Spade handbag a perfectly reasonable status symbol. But over the last few years, aided in part by the rise of online midday flash sales, she quickly developed a penchant for Chanel, Louis Vuitton, and Hermes — and the credit card debt to match. Heather finally knew she was in trouble when, immediately following a big-ticket purchase, she began fixating on the next one. “If you’re just buying it because it’s on sale and the clock is ticking down and you have to buy it before someone else does, you have a problem,” said Heather, who describes flash sales as a gateway drug for the would-be shopping addict. Darleen Meier , a 33-year-old mother of four from Fairfield County, Conn., is a self-described recovering Gilt addict. Meier first suspected that she might have a problem when she had to disable the daily chime on her Gilt Groupe iPhone App . While out running midday errands or picking up her son from nursery school, Meier would pull her car over to the side of the road in order to get her daily fix. Within seconds, she would click open the app, scroll through the discounted daily offerings of everything from party dresses to hotel reservations, place the desired items in her digital shopping cart, complete the purchase with the credit card information saved on file and continue on about her day. “It was so easy to lose track of how much I was spending,” said Meier, who, in addition to caring for her children, also runs a small jewelry business out of her home. Eventually, $2,000 monthly credit card bills started to surface. “At the high point, I was getting boxes delivered to my doorstep every single day of the week. It was time to stage an intervention.” Heather and Darleen are hardly alone in their fondness for shopping at daily, online flash sales. Whether on Gilt, Rue La La , Haute Look , Ideeli , or another of the numerous membership-only discount shopping websites, it’s become an obsession and a compulsion that many women can’t afford to maintain. Several of the women interviewed are simultaneously finding shopping on these sites financially problematic yet a tough habit to break. It can become an especially chronic fixation during the holiday shopping season, when the pressure to spend — and potentially save — has millions clamoring to join in the frenzy of the midday flash sale. THE THRILL OF THE HUNT Nicole R., a 42-year-old Manhattan resident , is one such recovering shopping addict. At her high point, Nicole owed more than $30,000 on various credit cards. Last year, after the debt started to negatively impact her marriage and left her unable to pay her monthly bills, she finally sought treatment. The program required that she cease shopping online and block all email solicitations. Earlier this year, however, the flash-sale fixation inevitably crept back in. Nicole says she finds the deals too enticing to pass up. “It’s almost like a video game, in that the money doesn’t even seem real,” said Nicole, who works for an insurance company as a behavioral therapist. “All of a sudden, you’re signed up for a cruise, or a juice cleanse, or you have six new dresses on the way to your house and you’re not even out of your pajamas.” Since Thanksgiving, Nicole has charged about $2,000 to her American Express card, the majority of it from daily flash sale purchases. Though she has stopped using other credit cards, it’s still an amount she will have trouble paying off at month’s end, given that her monthly take-home salary equals about the same. April Lane Benson, a Manhattan-based psychologist and author of ” To Buy or Not to Buy: Why We Overshop and How to Stop ,” routinely counsels patients who can no longer set limits. All too often, she finds women purchasing items they “don’t wear, didn’t need and don’t use.” “A number of the people I’ve worked with have high-stress 24/7 jobs and this is seen as relaxation, as something they deserve,” Benson said. “They start to fantasize that maybe they’ll actually get out of the office for long enough to actually wear it.” According to Benson, potential warning signs that online shopping is spiraling out of control include: using shopping as a quick fix for the blues, buying more than originally intended, feeling guilt or shame about purchases afterwards, trying to stop but being unable to curtail the behavior and hiding purchases from family and friends. When it comes to curbing online flash-sale purchases, Judy Lawrence , a financial counselor, advises many women who have become deluded about how much money they’re actually plunking down. “There’s the fact that it’s a sale and that whole adrenaline thing. It really taps into the whole addictive process,” said Lawrence, author of “The Budget Kit.” Another clear sign of danger, says Lawrence, is when individuals can no longer pay their credit card balances in full each month — or when they’re barely able to make the minimum payments. Often, Lawrence sees women falling into the trap of making purchases as a way to increase their self-esteem. “There’s a lot of really tricky, extraneous stuff at play behind these spur-of-the-moment purchases,” said Lawrence. But at some point, you have to ask yourself: What’s all this stuff really about?” A DAILY ADRENALINE BOOST “Socially, I hear people telling me that they’re on a Gilt diet,” said Jyothi Rao, general manager for Gilt.com’s women’s division, which is headquartered in New York. “But like any diet, people generally fall off the wagon.” Between the magical hour of noon and 1 p.m., Rao routinely keeps an eye on a computer monitor, which measures Gilt’s traffic. She watches as the numbers soar. Recently during the noontime hour, the company netted seven-figures in revenue . According to Rao, of Gilt’s five-million members, approximately 110,000 members line up at their virtual storefront each day. By comparison, Stacey Santo, vice president of marketing communications at the Boston-based Rue La La, said that about 200,000 of its more than five-million members generally visit the website on a given weekday. Rue La La’s daily sales begin at 11 a.m. Even in a stagnant economy, the popularity of online flash sales has grown by leaps and bounds. According to Experian Hitwise, which tracks Internet traffic, flash-sale websites have become an increasingly popular destination. In November, traffic totaled 45 million visits — a 55 percent increase from November of 2010. The data, it should be noted, does not include mobile traffic. Part of the thrill on many flash-sale websites, as Rao and Santo readily concede, is the limited number of available quantities. They’ve even heard of customers deploying strategic tactics to snag coveted items: shopping in groups, using several browser windows at one time and corralling nearby colleagues to try for the desired purchase on the buyer’s behalf. “Everyone wants a little retail therapy in the middle of their day,” Rao said. “It’s really part entertainment and part sport. LIMITING EXPOSURE Sophie Askew , a 35-year-old New Yorker who works at a luxury retailer, readily concedes that her near-daily online shopping expeditions feel nothing if not competitive in spirit. She describes her coworkers, most of whom also peruse various midday flash sales, as fellow enablers. “Going on these sites really is the new cigarette break. You get that same fix,” said Askew. She routinely sets her Entourage calendar to remind her about upcoming meetings and upcoming sales. Askew, who estimates that she makes online purchases a few times each month, has tried to pry herself away — and generally without success. “If it’s on the verge of taking over your life, you just have to stop. You really have to have to courage to logout, to turn off your email notifications, to just walk away,” said Askew, who has yet to successfully implement any of her own strategies. It’s a scenario to which Darleen Meier can relate. Back in Connecticut, while Meier has since limited her Gilt exposure, she has yet to curtail it entirely. Sometimes, it’s just about the rush of putting items in her cart, and not actually going through with the purchase. “I still get on almost every day, but not every single day. I’m trying to be better about sometimes just looking and not always buying,” said Meier, who still has unworn dresses hanging in her closet, tags still attached. She estimates her yearly Gilt expenditures to be in the $5,000 to $7,000 range. Despite trying to cut back, it’s still a habit she largely keeps hidden from her husband. Since she’s responsible for paying the family’s monthly bills, Meier is able to disguise the amount of money she’s spent. She doesn’t consider it lying, even though the two combine their resources, and with four kids, Meier readily admits that the money could easily be put to use elsewhere. The only time it potentially becomes an issue is when her husband sees her wearing what appears to be a new item. “I guess I just don’t want to hear the questioning. I don’t want to hear him be on me about it,” said Meier, whose general strategy is to avoid her husband’s criticism, rather than confront it. “If he saw all the boxes being delivered, he’d start to question it. Let’s face it, he’s really more of a saver and I’m really more of a spender.”

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What’s Causing House Fires From Lightning Strikes?

December 22, 2011

WESTERVILLE, Ohio (AP) — Reports of lightning-related fires and gas leaks in at least a dozen states have raised concerns about the use of flexible gas lines made of corrugated stainless steel tubing and have led to lawsuits, studies and efforts to better track the incidents. Manufacturers have defended the plastic-coated metal tubing, known as CSST, which has become increasingly common in new homes since it was introduced domestically more than two decades ago. Fire officials and researchers are trying to determine whether to blame a faulty product, unsafe installation or something else for the blazes. Four homes caught on fire in central Ohio over a stormy 12-hour period this summer. Genoa Township Fire Chief Gary Honeycutt said he believes lightning struck at or near the homes, and the electrical charge traveled along the CSST before jumping to a less resistant pathway nearby such as a metal ventilation duct. It then punctured a hole the size of a pencil tip in the tubing and created a gas leak that could ignite, he said. One of the fires charred the ceiling in the lowest level of Michael Wagner’s dream home, a two-story property near a country club and golf course in an area where farmland has been turned into neatly manicured neighborhoods of newer homes. “It had been burning the joists much like a blowtorch,” said Wagner, whose family moved into the home a few weeks before the fire and has been displaced for months because of smoke damage. The home passed inspection without problems, they said, but they later learned lightning had struck it and created a gas leak in 2004. Firefighters and gas providers point out that the fires seem to occur with an unusual combination of factors — a newer building that has CSST, a lightning strike in just the right place, the puncture of the tubing and the spark to ignite the gas. Most of the Ohio fires were in the central part of the state, though it’s possible there are others that haven’t been linked to the tubing because the reports didn’t include that detail. “I’d say we’ve got a problem with that product, but it’s very anecdotal evidence that we have,” said state Fire Marshal Larry Flowers, who recently started collecting information about such fires around Ohio. A class-action lawsuit filed in Arkansas against several manufacturers claimed the tubing posed an unreasonable risk of fire from lightning strikes, leading to a 2006 settlement that was worth up to about $29 million, according to a copy of the settlement agreement provided by an attorney not affiliated with the case. Lawyers involved in the case did not respond to messages for comment. And an unresolved wrongful death lawsuit blames a CSST failure for a 2008 blaze that killed three children and their grandmother in rural Jefferson, S.D. “For a homeowner or a business owner, really the problem with the product is it’s very unpredictable when it’s going to fail, and it’s a very difficult product to make safe,” said Mark Utke, a lawyer with the Cozen-O’Connor firm in Philadelphia, which is working on the South Dakota case and dozens more it connects to CSST. Manufacturers say the flexible tubing was developed in Japan as an alternative to rigid gas piping that could break during an earthquake, and hundreds of millions of feet of tubing have been installed in U.S. homes and other buildings. It can cost significantly more than black metal pipe, with one recent estimate putting the cost at 65 cents for a foot of rigid pipe in Ohio and about a dollar more for standard CSST. But the tubing is easier to install and can bend around corners, appearing much like a garden hose affixed to ceiling joists. Both types of lines meet existing product and code requirements, but manufacturers say that CSST is the safer option and that it’s less likely to crack, leak or cause a gas explosion because it doesn’t require as many joints to follow the shape of a building’s interior. “Of course we would like everything in the house to be safe from lightning, but that’s not a requirement,” said Bob Torbin, the director of codes and standards for Exton, Pa.-based Omega Flex Inc., one of the producers targeted in lawsuits. “And so we have to ask ourselves: Does this represent an unreasonable risk compared to other risks that you take when you occupy your home?” That’s a measurement that’s tough to quantify, he said. In response to concerns, Omega Flex stopped offering its earlier CSST product this fall and instead is promoting tubing wrapped in a special covering intended to make it more resistant to lightning strike damage. Some manufacturers and builders say there may be other contributing factors in the tubing fires, including whether gas lines are correctly grounded and bonded, meaning they’re linked into a system that would direct energy from a lightning strike into the earth. The president of the Ohio Home Builders Association said he has used the tubing and has no doubt that it’s a safe product when installed properly. “We have it in our home,” said Bill Owens, who’s also founder and president of Owens Construction in suburban Columbus. “A lot of it is just paying attention to the actual installation requirements and the code requirements associated with safe installation.” In Indiana, officials increased code requirements for bonding and grounding in new homes and expanded the required gap between gas tubing and other metal items to help decrease the risk of a problem. The research foundation affiliated with the National Fire Protection Association, which sets national codes that pertain to construction, is studying how to mitigate any lightning-related dangers of CSST and has sought information from various stakeholders in the discussion, including manufacturers and insurers. “Now that it’s out there, how do we make it safe?” said Mitchell Guthrie, an engineering consultant from Blanch, N.C., who has researched CSST and lightning protection and worked with a panel studying concerns. Iowa Fire Marshal Ray Reynolds said people in the insurance industry have linked the tubing to more than 200 fires in his state over the past two years, and he doesn’t believe proper grounding and bonding is the only solution. He said Iowa has seen some problems with properly bonded systems, and he decided to replace the tubing in his own home with the updated, extra-protected CSST. Wagner, the Ohio homeowner displaced by a fire, said he decided to replace his flexible tubing with rigid lines to help his family feel safer. The American Gas Association, which represents gas providers, doesn’t think CSST is a defective product, but it has helped develop product standards and has supported the industry’s effort to educate the public about concerns and to minimize any dangers. “It’s just a situation that could occur, just like lightning could penetrate a home and damage wiring,” said Jim Ranfone, the AGA’s managing director of codes and standards. “It’s not a panic situation, but it’s one that I would sort of keep tabs on to make sure the system was properly bonded,” he said. ___ Associated Press writer Doug Whiteman contributed to this report. ___ Kantele Franko can be reached at http://www.twitter.com/kantele10.

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Xerox Lab Founder Dies At 90

December 22, 2011

Jacob E. Goldman, a physicist who as Xerox’s chief scientist founded the company’s vaunted Palo Alto Research Center, which invented the modern personal computer, died on Tuesday in Westport, Conn. He was 90.

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Liz Ryan: Putting The ‘Human’ Back In HR, Part Two

December 22, 2011

Go to Part One here I took a 360-degree feedback test (oh that’s right, it’s not a test) and the guy who administered it, who also bills himself as the guy who invented 360-degree feedback (and I must say, with no rancor whatsoever I’d have trouble thinking of a worse legacy for oneself) was there in person to share my 360-degree feedback results with me. He told me, “You scored very high with your bosses and peers and subordinates, except that your 360 was heavily weighted toward a lot of right-brained stuff, and HR is a left-brained job.” “It is?” I asked. “In my company, we HR people put almost all our energy toward communication and culture and digging into employee and leadership snarls to make sure we get the right answer.” “No, no no,” said the father of 360. “HR is an administrative job.” “That’s gospel?” I asked. “Where does that come from?” “It just is,” said F360. “It just is?” I asked. “God decided that?” Over the years since I left the corporate world, there’s been a split in HR. There are the old-school people who truly believe it when they say “I’m a Strategic Business Partner” (thereby establishing beyond any doubt that these folks are neither businesspeople, nor strategic, nor partners) but live in the world of here’s-how-we-always-do-it and if-we-make-an-exception-for-you, and then there are the people who are reading this paragraph right now thinking “Yes, sing it. I am a pixie dust person. All of my other tools are subordinate to that.” My friend M., a search person who specializes in placing HR leaders, says that twenty percent of her corporate clients want ‘switched-on’ HR people, and the other 80% want the standard policy-and-process model. That is good, says M., because twenty percent of her candidates can get out of the conventional HR frame (reports, recruiting, benefits, process, policy, spreadsheets, don’t make waves, keep the company out of court) to see where else they might play to great effect — at the level of trust and pixie dust, for instance — and the other eighty percent cannot. As one HR leader wrote to me recently, “You can talk all you want about talent, but at the end of the day people need to be managed closely or they’ll take advantage.” They will? Who’s hiring these miscreants — surely not you and your talented recruiting team? Don’t we see that when we fear our employees, we’re really giving voice to the primordial admission “I don’t trust myself to spot talent, so I use keywords instead. I don’t know how to manage people, because I know nothing about myself and I’m terrified to look in the mirror. I’m only capable of hiring people who need to be supervised like a hawk, so I’ve set it up to keep our company full of them.” I talk to HR leaders many times a week who tell me “culture change is hard, but I’m moving the conversation along, little by little.” They sing the song about culture and talent. They find allies. They spark debates on important topics that’ve been pushed aside or loudly not discussed at all. They make organizational health – such a mushy, unbusinesslike topic! – an agenda item, with stories to illustrate their observations and concerns. They speak up when something is rotten in Denmark and believe that if they’re in place to have influence on the organization, they’re going to have the most impact influencing the CEO and the executive team, every day. HR people want influence. This is the influence we get to have, this critical influence on talent, culture, ethics and leadership — but this is also the scary kind of influence that separates ‘oh-screw-it, if-they-fire-me-I’ll-find-something-else’ HR types from the HR masses. As the lady said to me after my presentation on personal power a few years ago, “No one wants to hear about personal power. You can’t learn it over the weekend in a For Dummies book, so what good can it be?” When we influence the conversation and take the time to understand a thorny employee issue and push for ethical decision-making, we’re doing HR work, but we wouldn’t know if it we believed the lie that says HRIS data and HR metrics tell the story. We know the numbers in the cells can only move in the direction we’d like because of conversations, whether they’re sticky, sobering, uncomfortable, charming, angry or just sad. We know viscerally that numbers on a spreadsheet have no capacity to tell the story of a culture or an organization’s energy or its problems or its wins. It is funny that I talk in my work with job-seekers about finding one’s voice. It’s funny because I sing opera and always struggled as a corporate person with the tug-of-war between my artsy self and my blue-suit one; it’s also funny because although I sang “Quando men vo” in the hallways of our warehouse back then (great acoustics!) I never found my voice enough to totally drop the mask and the corporate persona, or only in very small gatherings of brief duration. My company was way less buttoned-down and closed-mouth than most, so the problem wasn’t them, but me; I’d sucked down enough of the Kool-Aid by my mid-twenties to keep lots of myself under wraps and behind the veil, the way most corporate people do — a stupid waste of creativity and human power. Whoever misconceived of HR as a process and systems role (whose purpose is, when all is said and done, to keep employee issues from disrupting the machinery and to keep the company out of court) and the many HR people who bought that lie are fooling themselves and the millions of working people who rely on them — who could really use a thoughtful, eyes-open human advocate and partner in place of a fearful bureaucrat. I am sad about it, because the real work to be done is fun and joyous and empowering and important for employees and customers and shareholders, and for the planet. The left brain has done its job in the business world and then much more, not knowing when to stop; we’re policy-and-guideline-drunk and can’t see that we’re slicing and dicing our way to oblivion. You can’t legislate spark, genius, or inspiration. They come on their own when the stage is set. How about this for an analogy: an HR chief is the stage manager for a Broadway production, one where the goal is to play to delighted sell-out crowds every night and sweep the Tonys, and where the actors re-write the script every day?

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How To Contact The Companies Who Support SOPA

December 22, 2011

Who’s officially on the record backing what could be the worst thing to ever happen to the internet? All of these companies listed below. Don’t take our word for it–this list comes straight from Congress. Just FYI.

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Jeff Madrick: The 10 Worst Economic Ideas of 2011

December 22, 2011

Cross-posted from New Deal 2.0 . I was at an Occupy Wall Street demonstration this weekend and many clergy addressed the group. One nun told the crowd it was Christmas season and that it was time for something new to be born in America. It was a nice thought, and I hope that the “something new” is good sense, because it has been a year in which some of the worst economic ideas ever have gained support and are being applied around the world. So here’s my list of the 10 worst economic ideas of 2011: 1. Taxes should be more regressive. At the top of the list for sheer scandalous insensitivity are Herman Cain’s and New Gingrich’s tax plans for America. Cain and Gingrich are both flat tax advocates. Cain proposes “9-9-9″ — a 9 percent sales tax, 9 percent income tax, and 9 percent corporate tax. He would also eliminate most deductions. Would this raise more or less money? The romantic conservatives claim the lower income tax rate would mean more growth. Never mind that the evidence to support that claim has been found profoundly lacking time and again. What is eyebrow-raising is how regressive the Cain tax would be. According to the Tax Policy Center , those who make more than $1 million would get a tax cut of about $455,000 on average. Those who make between $40,000 and $50,000 would get a tax increase of about $4,400. The tax rate would be 23.8 percent for this group, compared to 17.9 percent for those who make $1 million or more. Cain’s plan might take in as much money as is now taken in by the federal government. But Gingrich’s plan wins the gold medal: his plan is both regressive and a gigantic revenue loser . His flat tax is 15 percent on incomes, with plenty of deductions like the one for mortgage interest still intact. He would eliminate taxes on capital gains and dividends. Those who earn more than $1 million would make out like bandits, saving an average of more than $600,000 a year, while those earning $50,000 a year would save about $1,000. Meanwhile, the government would forego about $1 trillion in annual revenues by 2015. 2. Austerity works. Is it conceivable that we have learned nothing from history — or from economic theory, for that matter? It is hard to believe that after a year or so of the momentary return of Keynesianism in the wake of the deep recession of 2007-2009, it has been utterly renounced in practice in most rich nations around the world. The U.S. refuses to adopt a new fiscal stimulus as fears of a long-term deficit now determine short-term policy. The eurozone’s decision makers are even more obtuse and dangerous . Germany is leading the pack by imposing harsh limits on deficits as a percent of GDP on member states, which is sure to lead to slow growth and probably growing deficits. In the near term, the refusal to restructure the debt of the southern periphery along with demands for harsh austerity there could lead to a break-up of the eurozone and general catastrophe. The conventional wisdom, however wrong-headed, is widely accepted in the media. Britain is imposing austerity and its economy only gets weaker, yet a recent Financial Times article gives the country points for economic enlightenment compared to France because it is more willing to punish itself. John Banville, the estimable Irish novelist, writes in The New York Times that Ireland is now considered the “good boy” of Europe because of its intense austerity program. I am not sure he was being ironic. In fact, despite a couple of spikes in GDP, austerity is failing there as well. GDP and GNP (which is relevant because so much of their income is export-dependent) are way below their highs of a couple of years ago in Ireland. IMF economists have recently produced solid research putting the lie to claims that austerity has led to rapid growth in some countries in the past. It almost never has, and in the couple of cases it has, it was because the countries devalued their currencies sharply to promote exports. Of course, there will be no devaluations in the eurozone. 3. Export growth models are sustainable. Germany is especially proud that it has exported its way to becoming the strong man of Europe. It has suppressed wage growth , used subsidies to make its products more competitive, and taken advantage of the fixed euro , set at too low a rate to maintain trade balances. It is determined to remain oblivious to the fact that such a model requires countries that buy its products to run deficits and therefore borrow lots of money. This is why export models are known as beggar-thy-neighbor models, and it is why Germany has a moral obligation to help bail out nations like Greece, Italy, and Spain. Export models are really debt models on a global scale. China also runs on an export model, and the U.S. borrows relentlessly from it. But China occasionally seems to recognize that this model may not be sustainable and is trying to raise wages and reduce imbalances some. More to the point, unlike Germany, it is now prepared to increase fiscal stimulus. This doesn’t mean China gets an A for policy — more like a C. But Germany gets an F, and its low-wage export model cannot be adopted by all of Europe. Someone has to be able to afford to buy something. 4. Fannie and Freddie did it. A lawsuit by the Securities and Exchange Commission has revived the argument that Fannie Mae and Freddie Mac were the causes of the housing collapse and the financial crisis. The SEC is suing high-level executives for failing to disclose that they had more sub-prime loans than they admitted. In fact, by the actual definition for subprimes that was commonly used, they probably did make these disclosures. But they also piled on risky mortgages in 2006 and 2007, not to meet affordable lending goals as some claim, but to make a profit. Frank Partnoy and I have written about this in the New York Review of Books. The problem was not Fannie and Freddie. The crisis was created by the highly risky mortgages bought and sold by the private sector between 2003 and 2006, when Fannie and Freddie were cutting back their activities. They became big buyers when the damage was already done. And even now, their mortgage defaults as a percentage of their portfolios, despite the devastation in the housing market, are much lower than defaults in the private sector. Those who want to blame the government for the crisis keep coming back to this stale and very misleading issue. Get over it. And as for the SEC, can it be that the only case they can drum up against high-level executives is at Fannie and Freddie? You mean there were no bad big-time execs at Citigroup, Merrill Lynch, Morgan Stanley, Lehman, Goldman, and so on? 5. Cutting Social Security benefits is a priority. We have a very long-term deficit problem, not a short-term one. Social Security did not contribute to the short-term deficit — the Bush tax cuts, the recession, and the slow recovery are the main culprits over the next 10 years. But even in the longer run, Social Security benefits will rise from a little under 5 percent of GDP to 6 percent of GDP. Cutting these benefits is not a priority and any deficit can be fixed with affordable tax increases. So why is everyone focusing on Social Security? Because it is the low-hanging fruit. The really big problems, like Medicare and Medicaid, are driven by a dysfunctional healthcare system, and that is too hard to fix. It is a little like Reagan invading Grenada and calling it a great American victory. 6. Inflation is just around the corner. Remember the claims by the right wing that all that Federal Reserve stimulus in 2008 and 2009, not to mention the Obama spending bill, would lead to big-time inflation? Nothing would be better than a little inflation in the U.S. right now, but the economy has been too weak to deliver it. Bring on some inflation, please. 7. The Medicare eligibility age should be raised. Reports had it that President Obama had momentarily agreed to raise the Medicare eligibility age from 65 to 67. Indeed, a New York Times editorial recently seemed (a little less than wholeheartedly) to endorse the idea . Yes, this might reduce Medicare expenditures, but it would raise the total amount Americans spend on health care. In fact, the Kaiser Family Foundation figures it would increase private health care costs for most of the seniors leaving Medicare by more than $2,000 a year on average. There would be other cost-raising effects, as, for example, healthier seniors left Medicare. Kaiser figures the increase in total health spending by Americans would be twice the amount of savings to Medicare. And of course some seniors would simply give up coverage. Call it triage. 8. Competition between Medicare and private health insurance will reform the health care system and reduce costs. Say it ain’t so, Ron Wyden. The Democratic senator from Oregon has teamed up with Congressman Paul Ryan to propose an option for Medicare recipients to buy private plans. They would be offered a flat payment to buy private plans if they so chose. Competition for these dollars will supposedly make Medicare and the health insurance companies more efficient. More likely, however, it will result in misleading claims by the health insurance companies or reduced coverage plans. It will raise costs for Medicare as healthy seniors are induced to take cheaper private plans with healthier individuals. Allegedly, the Wyden-Ryan plan would control for all this by setting minimal standards. Forget about that. The Obama administration has already given in on federal standards for Obamacare, letting states set their own. Guess who most of the states will favor. Seniors will probably have to move to New York or Massachusetts to get decent plans. But that’s not even the big rub. It is that Medicare payments will be limited to growing just 1 percent faster than GDP. Health care costs have risen considerably faster than that for a long time. Somehow Wyden thinks that such a limit will force reforms. In sum, it will simply lead to less coverage and more expense for beneficiaries. 9. Federal spending should be capped at 21 percent of GDP. The president’s Simpson-Bowles budget balancing commission proposed this cap because it is the average for the last 40 years. How’s that for reasoning? With fast-rising health care costs and an aging population, such a limit is patent nonsense. For a nation that needs significant investment in infrastructure, energy savings, and education, it is especially damaging. There is no evidence to support the claim that such a cap would promote economic growth. An alternative plan offered by Rivlin and Domenici at least raises the cap to about 23 percent, according to the Center on Budget and Policy Priorities. The whopper is the House Republican plan to adopt a budget balancing amendment to the Constitution. It would reduce federal expenditures to 18 percent of the previous year’s GDP, meaning more like a 16.5 percent cap. This would change America as we know it, testing the nation’s political stability with harsh cuts in social spending and precluding any serious public investment in the nation’s economic foundations. 10. Balancing the budget should involve equal parts tax hikes and government spending cuts. This is not economics; it is politics. But economists argue for it all the time as if it is good economics, not admitting their conservative bias that high taxes are bad for growth and government social and investment spending never helps. Most of the major budget balancing plans of 2010 and 2011 argued for more spending cuts than revenue increases. The Bowles-Simpson plan is comprised of two-thirds spending cuts, one-third revenue increases. Obama’s budget plan last spring also had much more in spending cuts than tax increases. Only the Rivlin-Domenici plan was balanced. The one conspicuous exception was the plan from the Congressional Progressive Caucus, which of course got short shrift in the press. It was about two thirds tax increases to one third program cuts.

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Occupy Y’All Street: Three Generations Try To Escape Poverty Through Occupy Columbia

December 22, 2011

This is the third in a series of stories and short films on under-publicized Occupy sites. The first is here . The second is here . Stay tuned in the coming days for more from our road trip through the South. COLUMBIA, S.C. — In the early morning of Oct. 15, Jessica Smith, 29, packed up her mother’s late ’90s Crown Victoria and said goodbye to her mobile home, located on a half-acre off a dirt road. She woke up her 12-year-old son, Dakota, whom she home-schools, for the 20-minute ride northeast to Columbia. She had decided that they needed to join the Occupy group assembling there that morning. Smith wasn’t planning on coming back anytime soon. Smith’s mother dropped her and her son off at the state capitol. It was 8:45 a.m. The grounds were quiet and empty. A few cops silently walked through the area. The last steady work Smith had was inside the capitol. She had joined on with a small furniture company that repaired antiques and had refinished every desk inside the statehouse. The job ended when they ran out of desks. That was two years ago. Smith realized that she was the first would-be Occupier on the site. “God I hope I’m not the only one who shows up,” she recalls thinking. “I was hoping to walk up and see hundreds of people.” Smith had brought blankets, a pillow, a sleeping bag, several changes of clothes, a pre-paid Walmart cellphone, school supplies for her son and hundreds of pieces of poster board and markers for her fellow Occupiers. As she waited for the others, she sat with her blank posters and let Dakota climb trees and run around the statehouse grounds. At 9 a.m., Smith set up the first table of the Occupation and got to work making protest signs. Many of her posters addressed getting money out of politics. Others took swipes at Republican Gov. Nikki Haley. Her favorite was one she made for herself to hold. It asked simply: “Who owns you?” Eventually, people started coming from different sides of the capitol grounds and up to Smith’s table. “Is this the Occupy place?” she recalls them asking. “Are you with Occupy? What are you up here for?” More and more started to join Smith. It felt surreal, she says. It felt like the beginning of something. Smith had never been to a protest. Later that day, her mother would rejoin her and her son. “I never felt so important before,” Smith says. Smith grew up in poverty and hadn’t managed to lift herself out of the temp work, food-service uniforms and double shifts that have become emblems of the anonymous, working poor. At the mobile home, Smith relied on a well for water. She couldn’t remember a time when she didn’t worry about paying the electricity bill. “When you have to decide whether you eat or pay your light bill, sometimes you have to eat,” she says. In the previous installments of our Occupy Y’All Street series, The Huffington Post chronicled how the Occupy movement has drawn membership from victims of the Great Recession. We followed a recently laid-off painter and struggling restaurant owner in Gainesville, Florida, and a family whose home had been foreclosed on in the suburbs of Atlanta. Smith didn’t become another statistic during the Great Recession, however. She had already fallen through the safety net. Before she set up camp on the South Carolina capitol grounds, Smith was just poor. * * * * * First came fear. Before Jessica was born, her mother, Gwyndolyn Garner, spent much of the pregnancy at a Columbia homeless shelter. “It was fear every day,” Garner says of her shelter stint. The shelter didn’t look kindly at her, she says, nor did they want her around for so long. “Any day they could throw you out,” Garner, 56, remembers. “It was run by Catholic sisters. Sometimes they threw people out just because. I tried to be good. I tried to do all the work. They started coming down saying I had been there too long. … I think I lost 12 pounds during that pregnancy.” Her pregnancy got her fired from a burger and ice cream franchise where she waitressed. Just as the homeless shelter was threatening to kick her out, Garner started receiving unemployment benefits and was able to move in with some friends who had a house behind a chicken plant. She took a job cleaning a big house once a week, but it hardly covered expenses. She worked as a landscaper. She walked everywhere. She searched constantly for jobs. Opportunity didn’t knock. “I’ve been in a recession all my life,” she says. Garner says she developed survival skills. She supplemented her income by selling plasma twice a week. “I don’t have big veins,” she says. “I have tiny veins. My whole arm would be black.” After she’d had Jessica, when she didn’t have money for baby formula, she made her own homemade version using canned milk, liquefied baby vitamins, corn syrup and water. A problem with rats led Garner to move to another apartment. This one had no stove, no fridge and no heat. “I went to a thrift store,” she recalls, “and got an electric frying pan, toaster oven, a plastic pot that could heat up water, and got a cooler and put ice in it every other day or so.” That first night, she and Smith both woke up screaming, their bodies covered in ants. “Honestly, God got me through it. I don’t know. Just got through it,” Garner says. “I don’t know how it happened. I don’t know how I managed it, but I did. Every single day, I got up and did everything I could.” “I had a child that was dependent on me.” Smith’s father had wanted little to do with his family. An iron worker, he could drink heavily and get violent. Garner says he died after accidentally lighting himself on fire when Smith was 16 months old. Garner took on a job waitressing and another managing a laundromat. She says she lived on sweet tea and Dexedrine. She also found a job as a cab driver. She liked that she could set her own hours, and if her electricity bill needed paying, she could just keep driving until she had enough cash to settle it. But cab driving could be a seedy business. “You had to learn how to stay alive,” she says. “Being a female and people like they are, if you don’t have intuition then you probably shouldn’t drive a cab. Every little bit of dirt that gets done is done in a cab.” Garner says she drove prostitutes to big houses on Sundays during church services, strippers to work, and at least a few men who tried to get physical with her. The last guy to threaten her, she simply drove the fare to the nearest cop. There was a warrant out for the man for domestic violence and he was arrested on the spot. “He was all over me, putting his arms around me trying to touch me,” she says. “I was mad.” In the early ’90s, Garner achieved a temporary hold on the first rung into the middle class. She started making payments on a three-bedroom house with a little front porch and a rose-colored den. But an abusive boyfriend shattered the small bit of tranquility they had, she says. Garner had to let the house go. Garner wanted to flee to Alaska. Instead she and Smith settled in a small town in Montana. She found a job caring for people with mental disabilities at a state-run group home, where she changed adult diapers and kept watch over patients through the night. It was, Garner says, the best job she ever had. After a year, though, she started to get sick. Doctors weren’t sure whether she had heart problems or emphysema. She decided to return to Columbia. She got back in her cab and took a second job at a Kroger grocery store until her knees gave out. * * * * * Growing up, Smith rarely saw her mother for any extended period of time. “When I was younger, it was more of, God, passing ships kind of thing. It’s always been that way with us,” Smith says. “By the time I got home from school, she was napping getting ready to go to work.” Garner says she felt her daughter constantly tearing from her grasp, escaping into mischief. “It was like holding a leash on a really big dog that’s been dragging me down the road,” she says. “I never could catch up.” “I was a hyper kid,” Smith admits, “on the go all the time. I was ready to go constantly. I don’t think it was a matter of rebelling against my mom. I wanted to go and play and run and nevermind what anybody else said.” Garner moved around a lot, trying to find the right school, the right fit for her daughter. “I wasn’t unintelligent in school, but because of the neighborhoods I grew up in, or because of how much money was in our pocket or was not in our pocket, we were not treated the same,” Smith says. When she was 13, Smith got into a fight at school and was charged with inciting a riot. She served 45 days in a juvenile justice facility. “We got up in the morning, we marched everywhere, we were told when to go the bathroom, when to go to school, when to eat,” she says. “It was definitely jail.” Smith got out and ended up at an alternative school. She quit at 16 and got a job at a Zesto , a fast-food chain famous for its soft-serve ice cream. She took orders at the counter. It was the same establishment that Garner says fired her when she got pregnant with Smith. When Smith got pregnant with her son at 17, she says the restaurant kept up the tradition and fired her too. Smith wasn’t ready to take on the responsibilities of motherhood. Garner legally adopted Dakota. Smith and Garner have yet to bring themselves to discuss the difficult circumstances of Smith’s pregnancy with each other, let alone publicly. “I’m not sure I want to publicly divulge that part of my life,” Smith says. “It would be more harmful than anything to my son. There was a reason I let my mom adopt him. It was the best thing at the time. I was very upset about how I became pregnant. It was the best option at the time.” Just as she had with Smith, when Garner brought Dakota home from the hospital, she had to be resourceful. They survived on day-old bread giveaways and community food pantries. Garner scoured flea markets for clothes. The day before she was set to have her phone cut off, she got a job dispatching cabs and sought out a self-help class to relieve her from an intractable depression. Dakota knew they were poor. “I do see it,” he says. “Sometimes she’s, like, hiding it from me. But I see it myself. I can’t really explain that. … It makes me aggravated, but I can’t explain it. It’s hard to put into words. It just really made me aggravated.” Smith buried her disappointments in 17-hour workdays at a Waffle House, cooking on the second shift and waiting tables on the third. She worked six days a week and lived on coffee. She hardly made any money. “I wasn’t working for anything but just to survive,” she says. When Smith was old enough to drink, she started partying. Once she called her mom to tell her that she had tried cocaine. “Felt like it was her fault at the time,” Smith explains. “It felt like a lot of things were her fault. She was all I had. … My whole life I don’t feel like my family has fallen through the cracks. I feel like we’ve been pushed through the cracks.” Soon, after Garner began having problems with Dakota’s school, she decided to start homeschooling him. He was 10 years old at the time. A year into the effort, Smith returned and asked to raise him. The reunion hasn’t always been easy. The transition into motherhood has been gradual. Dakota still calls Garner “mom.” He and Smith are only now building a relationship beyond basketball games and chores, the family says. “I’m so thankful that he’s here,” Smith says. “I wish that this point in my life would have come sooner. I wish I would have grown up faster so I could have taken care of him.” “I don’t really worry about her,” Dakota says. “She’s really strong.” * * * * * That first night at the Occupy camp in Columbia, after a chaotic first general assembly, Smith and her son stayed up late, excited to be camping out. Within the next couple of days, Smith continued making posters and she started helping run the kitchen. She also taught lessons to Dakota. That first week, they tackled adding and subtracting decimals. Later, they read a book about a girl who invented her own way of flying. In the afternoons, they made a habit of taking out their homemade posters and waving them at motorists leaving downtown. They chanted constantly. Soon, Smith lost her voice. Every time a car honked in approval, Dakota got more and more excited. “Every day that went by, everything became easier and more natural,” Smith recalls. At the camp, Smith has helped keep track of the cash and clothing donations, and served on the food committee. When tents needed to be broken down and moved — to prevent the grass from dying — she was eager to take charge. She has been mistaken for a military veteran. When we met Smith on the 26th day of the Occupation, the activists had just moved the entire camp of roughly 15 tents. Her mood was light, almost giddy. “She’s absolutely amazing,” says Melissa Harmon , a 34-year-old organizer with Occupy Columbia. “She’s fully engaged. When someone wants something, she’s the person at the camp that knows where everything is. She really deals with a lot of the camp stuff, a lot of organizing, helping in the kitchen, [doing] the stuff that has to happen that no one wants to do.” Smith says it hasn’t felt like grunt work. “I had never been responsible for such a large-scale situation before,” Smith says. “It was very liberating. I put myself in the position to be responsible. And I loved it.” A little after the first week, Smith sent Dakota back to the mobile home, so he could concentrate more on his studies. She arranged for her girlfriend, nephew and mother to pitch in and give him his lessons. Dakota visits during the week and stays with her on the weekends. She sleeps on the ground, with Dakota next to her on a donated cot. Parting can be tough. “When we’re at home, all we do is watch TV or go outside,” Dakota explains. “But now protesting, we’re actually spending time together … I get to hold signs and chant, just have fun. I’m probably the only kid in Columbia who’s understanding what’s going on.” Garner has also become a regular presence at the encampment. She’ll sit in a lawn chair and hold a sign up for the rush-hour traffic. After a court victory that allowed the camp to remain on the capitol grounds, Garner exclaimed on the phone: “We won!” Garner feels like the Occupation has helped turn her daughter’s life around. “She’s woken up,” she says. “I don’t know. She’s awake. She wasn’t awake before.” Smith has no plans to leave Occupy Columbia: “I don’t know what it is but I do know I want more than this. I think I’m at the point in my life where I’m willing to do what it takes to have more than this. … I want more than just the day-to-day grind. Life shouldn’t be hard from the time you are born to the time you take your last breath. It shouldn’t be so hard for so long.”

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Farmers Insurance Appoints Scott Stice and Joe Richardson to Senior Executive Posts Effective January 2012

December 22, 2011

LOS ANGELES, CA–(Marketwire – Dec 22, 2011) – Farmers Insurance, a leading personal lines insurer with an industry-leading exclusive agency distribution system, has named two insurance veterans, Scott Stice and Joe Richardson, to newly-created senior officer positions.

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Jonathan Weil: SEC Lawsuit Against Fannie, Freddie Ignores Enablers

December 22, 2011

Let’s boil down the Securities and Exchange Commission’s claims last week against six former Fannie Mae (FNMA) and Freddie Mac executives to their essence. Every disclosure that the SEC says amounted to fraud is something the government blessed or turned a blind eye to as it was happening. So who is holding the regulators accountable for letting these alleged frauds go on? No one, naturally.

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McCain Says Payroll Tax Cut Fight Hurts GOP

December 22, 2011

WASHINGTON — Sen. John McCain said Congress’ failure to reach agreement on legislation extending a payroll tax cut for working Americans “hurts the Republican Party.” The GOP’s 2008 presidential nominee said his party made a mistake in voting down the Senate-passed version of a bill that would have kept the current payroll tax relief intact for at least two more months. McCain told CBS’s “The Early Show” he feels badly for 160 million Americans, whom he called “innocent bystanders.” He said the House should pass the same bill that cleared the Senate “but put a year on it” and send it back. McCain said in the CBS interview, “This is really tragic for the American people, and I would say that next November, no incumbent is safe, nor should they be.” The Arizona senator also blamed President Barack Obama for not doing more to end the standoff on CNN’s “American Morning.” He said past presidents “exerted a lot more leadership than going shopping,” according to The Hill , referring to President Barack Obama’s Christmas shopping trip Wednesday. “Republicans are losing this fight. We need to get back on track,” he added. McCain said earlier this month that Republicans were getting “picked apart” on the issue. He added, “I think there is certainly ample evidence that the Democrats are winning this debate.” McCain approvingly tweeted the Wall Street Journal editorial accusing House Speaker John Boehner (R-Ohio) and Sen. Mitch McConnell (R-Ky.) of possibly helping Obama win reelection because of their handling of the payroll tax cut extension. One House Republican who voted with Speaker Boehner to reject the Senate version said that a two-month extension may end up happening anyway. Rep. Charlie Dent (R-Pa.) said in the Wall Street Journal Thursday that “if we can’t get the Senate sign-off on a one-year extension soon–in the next few days–we’re going to have to move quickly to extend the payroll tax for a duration of time less than a year.” He added, “That may end up being two months.” Sen. Scott Brown (R-Mass.) also attacked House Republicans for not approving the Senate’s two-month extension. “The House Republicans’ plan to scuttle the deal to help middle-class families is irresponsible and wrong,” he said in a recent statement .

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Enable IPC Issues Update on National Science Foundation Project, New Board Member Dan Finch and S/Cap RFID Tag(R) Products

December 22, 2011

VALENCIA, CA–(Marketwire – Dec 22, 2011) – Enable IPC Corporation ( PINKSHEETS : EIPC ) today issued an update to shareholders and interested parties regarding its National Science Foundation Phase II Proposal for funding testing of its lithium-ion battery nanoparticulate technology, a new addition to the board of directors, Dan Finch, and updates on the S/Cap RFID Tag®.

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President Obama Fires New Shot At GOP In Tax Cut Fight

December 22, 2011

WASHINGTON — The White House has launched an online campaign that enlists regular Americans to pressure House Republicans into passing an extension of the 2 percent payroll tax cut before the cut expires on New Year’s day. Democratic campaign organizations have started similar efforts , but an online campaign by the White House — with it’s millions-strong list of online supporters — is likely to yield the most potent results. Since an extension of the tax break that passed the Senate last week only last for two months — in the hopes of giving time to negotiate a longer deal == some Republicans have belittled the cut as providing very little money for middle class families, perhaps only $160. But the White House argued in a Thursday statement: “If Congress fails to extend the payroll tax cut, the typical family making $50,000 a year will have about $40 less to spend or save with each paycheck.” And to lean on the House GOP to get them to vote on the Senate bill — which passed Saturday, 89 to 10 — the White House is asking people to go online and tell members of Congress what 40 bucks means to them coming out of the holiday season. “Tell us what $40 per paycheck would mean for you and your family. What would you have to give up? We’ll highlight your stories publicly so that they’re part of the debate here in Washington,” the site reads. President Barack Obama plans to highlight some of those stories in an event Thursday afternoon, when he is expected to again appeal to the House leaders on the issue. He tweeted about the campaign Wednesday night. The House rejected the Senate bill earlier this week in a complicated procedural maneuver that called for appointing members to negotiate a new, year-long deal with the Senate in a conference committee. But the House leaders could take it up again as a more straight-forward yes-or-no vote that even many Republicans believe would pass.

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Raymond J. Learsy: For an Effective U.S. Policy, Embargo Iran’s Oil to Halt Its Nuclear Ambitions

December 22, 2011

The prospect the of messianic fanatic mullahs acquiring nuclear weapons will present an existential danger to entire swaths of the world and put millions of lives at risk. Clearly the Obama administration understands this and has chosen to act at this juncture in the most effective manner short of a military or surgical air strike, with all its potential ramifications to the stability of the Middle East, not to speak of the world itself. The policy that will have maximum impact on the Iranian regime is to cut off the billions of oil revenues, their instrument of power and moral corruption, enabling the brutal dominance over an otherwise cowered populace that would otherwise celebrate the departure of the mullahs and their ilk from their seats of draconian power. The greatest impact can be realized by crippling Iran’s oil revenues through a worldwide and effective embargo on its oil exports, Iran’s main source of income, reaping more than $73 billion in 2010 alone and covering more than 50% of its national budget. Combining such an embargo along with extensive sanctions — both those already in place, and those about to be instituted such as blacklisting Iran’s National Bank and all banks or institutions who transact with it — would render a crippling blow to the ability of the Iranian regime to keep their largely restive populace under their tyrannical control. In its most wide ranging effort to date the Obama administration is sending State Department officials and interlocutors to visit and meet with officials from various countries including Saudi Arabia in order to assure the availability of additional oil supplies to cover any shortfall in world markets from an effective Iranian embargo. This in spite of, or because of, reports coming out of OPEC’s meeting earlier this month that Iran’s oil minister Rostam Ghasaemi reported that Saudi Arabia and Iran had “reached a deal that the Saudis wouldn’t raise their oil production to make up for Iran’s market share in case U.S. and Europe sanction Iran’s oil.” The Administrations objectives were clearly highlighted by the State Department’s spokesoperson Victoria Nuland’s comments earlier this week, “encouraging all our partners to do what they can to wean themselves from Iranian Oil”, such as discussions with Japanese officialdom urging Japan to reduce it reliance on Iranian oil, now covering some 10% of their oil import needs. Most significantly is the prospective cooperation of France and Britain toward cutting off all Iranian oil imports together with the 27 European Union Countries. Such an embargo covering some 450,000 barrels/day, or near 25 percent of Iran’s daily loadings, would have enormous financial and symbolic impact on the Iranian regime. Yet there is one oily fly in this ointment. And that is the perceived and misguided wisdom that any interruption in the flow of Iranian oil would cause enormous damage to the world’s economy. It is a singular canard propagated in large measure by Iran itself . It is a misnomer effectively exploited by crude oil traders and too oft manipulators, together with a compliant press, making this perception an important driver of oil prices, while giving the Iranians ever higher returns for their oil exports and delivering enormous profits to the oil speculators. Yesterday alone when it became generally known that a meeting was being held in Rome between the U.S., EU nations and their Asia-Pacific allies, vowing to bring increased pressure on Iran to abandon its nuclear program, the speculators had a field day. The price of oil quoted on the New York Mercantile Exchange surged by 3.4 percent or $3.19 per barrel, and in the one way momentum of these events, another near $1.50 the following day. Other than the oil traders, the oil producers and ironically Iran itself, no one benefits by these pricing distortions, and worse they place the economic recovery at great risk. Yet to countervene the speculators and to put at ease the ‘built in’ anxieties elicited whenever there is even the vaguest concern about oil supplies, the U.S. has in its arsenal a mighty weapon. It is the 750 million barrels that the government has in its Strategic Petroleum Reserve. It is an instrument that can calm these excitable markets if used effectively. All that needs be done is for the government to announce a policy that any unusual price movements due to Iranian oil embargo policies will be met with a release from the Strategic Petroleum Reserve. Just the broadcast of such a policy will have an enormous becalming effect on the markets. It will take away from the oil traders the surety of a one way bet of ever higher prices. It will deny the Iranians greater income for what they are able to export. Most importantly, it may very well achieve the Administration and much of the world’s shared objective of either bringing the Iranian nuclear program to an end or even achieving a change in regime. And this without a major economic disruption or a spike in oil prices. Can one think of a better strategic function for our Strategic Petroleum Reserve?

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Credit Agency Warns Debt Could Lead To U.S. Downgrade

December 22, 2011

NEW YORK (Daniel Bases) – Fitch Ratings on Wednesday warned again that the United States’ rising debt burden was not consistent with maintaining the country’s top AAA credit rating, but said there would likely be no decision on whether to cut the rating before 2013. Last month, Fitch changed its U.S. credit rating outlook to negative from stable, citing the failure of a special congressional committee to agree on at least $1.2 trillion in deficit-reduction measures. “Federal debt will rise in the absence of expenditure and tax reforms that would address the challenges of rising health and social security spending as the population ages,” Fitch said in a statement. “The high and rising federal and general government debt burden is not consistent with the U.S. retaining its ‘AAA’ status despite its other fundamental sovereign credit strengths,” the ratings agency said. In a new fiscal projection, Fitch said at least $3.5 trillion of additional deficit reduction measures will be required to stabilize the federal debt held by the public at around 90 percent of gross domestic product in the latter half of the current decade. Fitch, when it lowered its outlook to negative, had said it was giving the U.S. government until 2013 to come up with a “credible plan” to tackle its ballooning budget deficit or risk a downgrade from the AAA status. “A key task of an incoming Congress and administration in 2013 is to formulate a credible plan to reduce the budget deficit and stabilize the federal debt burden. Without such a strategy, the sovereign rating will likely be lowered by the end of 2013,” Fitch reiterated. Rival ratings agency Standard & Poor’s cut its credit rating on the United States to AA-plus from AAA on August 5, citing concerns over the government’s budget deficit and rising debt burden as well as the political gridlock that nearly led to a default. On November 23, Moody’s Investors Service, warned that its top level Aaa credit rating for the United States could be in jeopardy if lawmakers were to backtrack on $1.2 trillion in automatic deficit cuts that are set to be made over 10 years. The plan for automatic cuts was triggered after the special congressional committee failed to reach an agreement on deficit reduction. Moody’s said any pullback from the agreed automatic cuts to take effect starting in 2013 could prompt it to take action. (Reporting By Daniel Bases; Editing by Leslie Adler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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