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LA Dodgers Latest Victim of Financial Crisis

April 29, 2011

The recent financial crisis, brought about largely by a lethal mixture of negligently lax lending standards and often less-than-candid borrowers, has claimed another victim – the venerable Los Angeles Dodgers baseball franchise and the team’s legions of fans. At the same time, add Frank and Jamie McCourt, the Dodgers’ deeply tanned and high-living owners, to the list of notorious villains that have slunk from the ruins. In about the time it takes to play an old-fashioned double header, the McCourts journeyed from newly-minted toasts of Los Angeles to joining the ranks of disgraced Wall Street executives like former Lehman Brothers CEO Richard Fuld and Angelo Mozilo , the founder of mortgage giant Countrywide Financial . The reasons are fairly simple and entirely symptomatic of an era in which everyone seemed determined to believe that real estate prices would never fall. In short, the McCourts, erstwhile Boston real estate developers, took advantage of a reckless lending environment to obtain a giant loan that left them so deeply leveraged it has apparently pushed them to the brink of default. Sound familiar? It should. It’s the same thing countless Americans did last decade, using sketchy credit information to obtain mortgages for houses they couldn’t afford, and then using the paper equity in those homes to fund lifestyles they also couldn’t afford. Meanwhile, they were leveraging themselves into deeper and deeper holes. Millions of them have lost their homes to foreclosure. Fuld and Mozilo lost their companies to bankruptcy and a fire sale, respectively. Now the McCourts, currently embroiled in a nasty divorce, could very well lose their team. Last week Major League Baseball moved to seize control of the Dodgers, appointing a trustee to oversee day-to-day operations of a franchise believed to be carrying more than $430 million in long-term debt, according to court records. “I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interest of the club, its great fans and all of Major League Baseball,” commissioner Bud Selig said in a statement. The arrangement reportedly requires baseball to approve any Dodger expenditure above $5,000. It was a shocking turn of events for the storied franchise, the same organization which under the stewardship of the O’Malley family in 1947 tore down the racial barrier in baseball and, a decade later, brought big-time professional sports to the West Coast. Ironically, when the McCourts purchased the team from News Corp .’s ( NASDAQ : NWSA) FOX division in 2004, many in Los Angeles were relieved to see the team pass from corporate ownership back into the hands of a family-run business: the McCourts would be the new O’Malleys, it was hoped. But that dream has turned into a nightmare, not least because the McCourts didn’t remain a family for long. In fact, it was their vicious divorce battle – essentially a battle for control of ownership of the team — that revealed to the team’s horrified fans the harsh reality that the couple were essentially using the Dodger brand to fund an exceedingly extravagant lifestyle. Michael D’Antonio, author of Forever Blue , a book on Walter O’Malley’s Dodgers, said the difference between the O’Malleys and the McCourts is that the former saw the team as an investment and the latter as “an ATM.” “Walter built the team as a sports enterprise and a business enterprise. He clearly recognized that, besides the product he put on the field, good will was his major asset,” said D’Antonio. “Even more than any business I can imagine, sports teams thrive based on their relationship with their customer. You need to have people love you,” he said. For decades, Los Angeles fans loved their team and loved the team’s owner. “It’s what’s known as ‘the Dodger way’ and it means fair but all out play. It also stands for the best in everything – whether it’s a spring training facility or the Dodger Dogs sold at Dodger Stadium. The idea was to give Los Angeles something that was first class in every respect. That was the product O’Malley delivered,” D’Antonio said. In hindsight, the current mess might have been predicted given the circumstances surrounding the sale of the team to the McCourts in 2004 for $430 million. A lawyer representing Frank McCourt in the divorce proceedings once referred to the purchase as “one of the most highly leveraged acquisitions in the history of major league baseball,” adding that McCourt himself had “put not a penny of cash” into the deal. According to the Los Angeles Times, McCourt had to borrow $145 million from FOX to get the deal done. His only collateral was a handful of parking lots in Boston. The team actually flourished under the new ownership, taking on a high profile manager in Joe Torre and making a string of playoff runs led by the flamboyant and wildly popular outfielder Manny Ramirez. “McCourt got a good product onto the field, but the relationship between the entity called the Dodgers and the community of Los Angeles deteriorated under his ownership,” said D’Antonio. “I think fans sensed a different style. Fans experienced the ballpark and team management as less accessible, less committed to the community, less devoted to doing everything right.” In 2009, just days after the team was eliminated from the playoffs, the McCourts announced they were separating. After that all hell broke loose. McCourt promptly fired his wife, whom he had installed as the team’s CEO in happier days, and it’s only gotten uglier since then. As has been widely reported in Los Angeles media, the bitter divorce proceedings have revealed that the couple used the team as their personal piggy bank. Frank drew a $5 million salary and paid Jamie $2 million. A couple of their kids were on the payroll as well, pulling down six figure salaries. Two Malibu homes were purchased, side by side and reportedly valued at $46 million. Meanwhile, ticket and concession prices rose each year, making it more difficult for fans to attend the games. “Where the McCourts fell down was in their approach to the team as an LA institution,” said D’Antonio. “I think people feel that. People feel they were too focused on the revenue streams and not enough on what the Dodgers meant to their fans and the city.” It seems Dodger fans may not have to suffer the McCourts much longer.

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Where It’s Better To Rent Than Buy

April 29, 2011

Of the 50 most populated cities in the United States, New York remains the city where it’s better to rent than buy. The Big Apple’s competition? Fort Worth, Texas. That’s according to the recently released Q2 2011 Rent vs. Buy Index by Trulia , an online real estate resource. The site compares rent of a two-bedroom apartment with median list price of a home to create price-to-rent ratio. Using that ratio, they divide cities into three groups: (1) cities where it is beneficial to buy a home; (2) cities where the choice should be made on a case-by-case basis; and (3) places where renting is much less expensive. According to Trulia’s release, buying a home has become more affordable than renting an apartment in 80 percent of major cities. Besides New York and Fort Worth, only in Kansas city is renting the preferable option. Right behind those cities are Memphis, Los Angeles and San Francisco,. On the other end of the spectrum, the majority of cities where buying makes sense are located in the Western United States. Las Vegas comes out atop the buy-here rankings, followed, in order, by Phoenix, Arlington, Miami and Mesa (Ariz). Taken by itself, the price-to-rent ration doesn’t completely explains why a high-rent, foreclosure-addled city like Miami lands in the buy-here sector, while a city with low rents like Fort Worth is the second most friendly rentable city. As always, caveat rentor. Below is the graphic visualizing the rent-to-buy ratios of fifty metropolitan cities:

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Video: Nutter Says Philly Schools in `Tough’ Funding Situation

April 29, 2011

April 29 (Bloomberg) — Philadelphia Mayor Michael Nutter talks about the funding of the city’s education system and the impact of education on the city’s future. Nutter speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Steve Blank: Stanford’s Hottest Student Startups Furiously Work to Iterate and Pivot

April 28, 2011

The Stanford Lean LaunchPad class was an experiment in a new model of teaching startup entrepreneurship. With one week and one more updates to go, this post is part seven. Parts one through six are here , Syllabus is here . With a week to go the teams are starting to look like opening night before the big play. Teams are iterating and pivoting right and left, one team threw their entire business model out the window and did a complete restart, and another team was having a meltdown over personalities. Week seven of the class Last week the teams were testing their hypotheses about their Channel (how a company delivers its value proposition (i.e. its product or service) to its customers. This week they were testing their hypotheses about Revenue Models: what are customers really willing to pay for? How? Are you generating transactional or recurring revenues? Is it a multi-sided market, and if so who’s the user versus who’s the payer? The Nine Teams Present The first team up was PersonalLibraries the team making a (reference management system for discovering, organizing and citing researchers’ readings). Oops. No more. The team looked at the potential revenue and concluded that the outlook for this business with this customer segment was dismal. They decided to do something more dramatic than just a Pivot. They did a restart. They moved from “Reference Libraries” to “Product Libraries” — an online social shopping system. (If this had been a real startup rather than a class we would have had the team test many more variants on customer segment, revenue models, channels, etc before such an extreme move.) They quickly came up with a new business model canvas, value proposition and customer segment. The team hasn’t been getting much sleep as they have a week and a half to make meaningful progress. Lets see what they can pull off. To see the slides, click here . Autonomow , the robotic farm weeder, had a busy week. In talking to their sales channel (farm equipment dealers) and customers (organic farmers) they realize they have an opportunity to come up with a unique revenue stream. Instead of selling or leasing the equipment they are going to charge for leasing according to weed density in the farm fields . The denser the weeds, the higher the rental price per day. Customers and dealers agree that it’s a fair deal. Wow. On the way to the WorldAg Expo their Carrotbot (their research platform they built to gather data for machine vision/machine learning) hit the farm fields near Avenal , California. The videos of the robot in the field were priceless. CarrotBot hits the ground Where are we? At the World Ag Expo in Tulare the team encounters its first potential competitor — “Robocrop.” (No kidding, I couldn’t make this up.) The Robocrop Precision Guidance System for row crop cultivators uses a camera to shift a hitch so cultivators can cut very close to the plant rows and the Robocrop InRow is a robotic weeder. To see the slides, click here . The next team was D.C. Veritas , the team building a low-cost wind turbine for cities and utilities. Last week the team pivoted and their wind turbine is now embedded into street and highway light poles. This week the D.C. Veritas team put it into overdrive and did mass interviews of city officials across the United States. In Palo Alto they talked to the financial and utilities mangers. In Williamstown, West Virginia, they spoke to the city planner and a member of the budget committee. In Oklahoma City, Oklahoma, it was the city engineer and director of public works. In Amarillo, Texas, they had interviews with the head of the bidding process, the Street light manager, Director of Public Works and the utilities engineer. They quickly got a good handle on the canonical project approval process inside a city. They combined their understanding of the city approval process with the data they gleaned from customer interviews and developed preliminary archetypes . These represented the different customers in the approval cycle inside a city. To see the slides, click here . Agora Cloud Services The Agora team, (a marketplace for cloud computing), (a relative island of calm in a turbulent sea of other teams) now believed their business was providing a tool set for managing Amazon Web Services cloud compute usage. They believed they could build tools that would save customers 30% of their Amazon bill by providing service matching, capacity planning and usage monitoring and control. The team was a paragon of steady and relentless progress. They had another four interviews with potential customers and consultants. To see the slides, click here . The Week 7 Lecture: Partners Our lecture this week covered partners. Which partners and suppliers leverage your model? Who do you need to rely on? Our assignment for the teams for next week: what partners will you need? Why do you need them and what are risks? Why will they partner with you? What’s the cost of the partnership? What are the benefits for an exclusive partnership? What are the incentives and impediments for the partners? To see the slides, click here . —— The pressure was on. The other five teams were also furiously iterating and pivoting. The JointBuy team (the one that sent out 16,000 emails last week) realized that the low-fidelity website they used to test key concepts needed to get real to attract buyers and sellers in volume. The team pulled a week of all-nighters and turned the wireframe prototype into a fully functioning site . In almost every entrepreneurship class with a team project there’s a team that can’t figure out how to work together. These are the same problems one sees in real startups (disagreements over who controls the vision, team members not pulling their weight, disillusionment with the team direction, individuals uncomfortable in rapid decision making with less than perfect data, etc.) We give the students an escalation path if they’re having interpersonal problems (mentors — to teaching assistant — to professors) to see if they can first work through the issues without our intervention. While these are always painful we try to teach that they are part of the learning process. Better you encounter the problems in a classroom than after you raised a venture round. At this point in the class almost all the teams are in a full sprint to the finish line. Next week, the last lecture. Then the final presentations. Steve Blank’s blog : steveblank.com

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Chinese Truckers Strike For Third Day, Threatening China’s Exports

April 22, 2011

SHANGHAI – (Melanie Lee and Royston Chan) – Striking truck drivers protested for a third day on Friday in Shanghai’s main harbor district amid heavy police presence and signs the action has already started to curb exports from the world’s busiest container port. The strike is a very public demonstration of anger over rising consumer prices and fuel price increases in China. It comes as the government struggles to contain higher inflation, which hit 5.4 percent in March, fearful that rising prices could fuel protests like those that have rocked the Middle East. A crowd of up to 600 people milled about outside an office of a logistics company near the Baoshan Port, one of the city’s ports. Some threw rocks at trucks whose drivers had not joined in the strikes, breaking the windows of at least one truck. The strikers, many of them independent contractors who carry goods to and from the port, stopped work on Wednesday demanding the government do something about high fuel costs and what some called high fees charged by logistics firms, said the drivers, who clashed with police on Thursday. China is especially wary about threats to social stability following online calls for Middle East-inspired “Jasmine Revolution” protests and has detained dozens of dissidents, including renowned artist Ai Weiwei. As many as 50 police officers were at the area on Friday, and at least two people were arrested after throwing rocks at trucks. Plainclothes officers also briefly detained some foreign reporters and manhandled a Reuters photographer. The crowd thinned out after a policeman said authorities planned to meet representatives of the truck drivers on Monday for talks aimed at ending the strike. “Please disperse and go back,” he said through a megaphone to truckers who had gathered near a road junction. “We are already talking to your representatives. There will be an answer for you on Monday.” But two truck drivers told Reuters that they would continue their campaign for the government to offset the rising cost of fuel. “We are continuing our strike,” said a 38-year-old truck driver surnamed Liu. “There has been no response from the government or anybody else. There’s nothing we can do.” Workers organized the strike using word of mouth, said a driver. China’s tightly controlled state media has made no mention of the unrest, and the city’s government, which is working hard to turn glamorous Shanghai into a global financial hub to compete with Hong Kong and London, has denied knowledge of the strike. “We’re currently not aware of the situation,” a spokesman with the Shanghai city government said. He declined to be identified. EXPORTS SLOW Duncan Innes-Ker, China analyst at the Economist Intelligence Unit, said the strikes could inspire protests by workers in other transport sectors, given rising fuel prices. “There are strikes in the taxi driver industry on a regular basis in numerous cities across China,” he said. “These are happening and they will continue to happen, and if the oil price continues to rise they will get worse.” China said in early April it would lift retail gasoline and diesel prices by 5-5.5 percent to record highs. [ID:nSGE736009]. An official reached by telephone at Shanghai International Port (Group) Co, which runs the Shanghai port, told Reuters the strike “has not affected operations,” though would not comment further. But one executive said the action was already starting to affect the port’s operations, at least for exports. “The strike has delayed exports and many ships cannot take on a full load before leaving,” said Wei Yujun, assistant to the general manager at China Star Distribution Center (Shanghai) Co. “For example, if one ship carries 5,000 containers en route to Hong Kong and the U.S., now they can only carry 1,000 or 2,000 containers,” Wei said, adding that such containers typically carry goods such as textiles and machinery. Traders said that the strike had caused only minimal disruptions to refined copper flows. Waigaoqiao, together with two other bonded areas in Shanghai, hold about 80 percent of China’s bonded copper stocks. “There is more than enough stocks in the bonded warehouses to offset any short-term impact on supplies,” said Bonnie Liu, a Macquarie analyst based in Shanghai. Shanghai’s most active copper futures contract closed flat at 71,440 yuan at midday. FEW OPTIONS FOR WORKERS Chinese workers have few means of pressing for better wages. The government prohibits unions independent of the All-China Federation of Trade Unions, an umbrella organization run by the Communist Party. Historically, the ACFTU tries to prevent strikes. “The most basic issue isn’t simply that fuel prices are rising. It is that when fuel prices rise, the truck drivers don’t have an independent channel to express their interests,” said Li Qiang, executive director of China Labor Watch, told Reuters from New York. The unrest is occurring near at least one of the port’s five major working zones — Waigaoqiao, a massive free-trade zone and bonded storage warehouse. Shanghai overtook Singapore in 2010 to become the world’s busiest container port. The Shanghai port handled 29.05 million 20-foot equivalent units, or TEUs, in 2010 — 500,000 TEUs more than Singapore . Shanghai’s cargo throughput rose to about 650 million tons in 2010, remaining the world’s largest, up from 590 million tons in 2009. Situated in the middle of the 18,000 km-long Chinese coastline, the Shanghai port is managed by the publicly listed Shanghai International Port (Group) Co Ltd (600018.SS), which is 44.23 percent owned by the Shanghai Municipal Government. Last May, a burst of labor disputes disrupted production for many foreign automakers including Toyota and Honda, which laid bare the rising demands of China’s 150 million migrant workers and raised questions about the region’s future as a low-cost manufacturing base. (Additional reporting by Jason Subler, Jane Lee, Carlos Barria in Shanghai, Ben Blanchard, Sui-Lee Wee, Michael Martina, Niu Shuping in Beijing and Tan Ee Lyn in Hong Kong,; Writing by Ben Blanchard and Sui-Lee Wee; Editing by Don Durfee and Robert Birsel) Copyright 2011 Thomson Reuters. Click for Restrictions .

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WATCH: The City That Privatized (Nearly) Everything

April 22, 2011

In 2005, decades after Sandy Springs first attempted annexation, the Republican-dominated Georgia state legislature allowed the affluent city, located 15 miles outside of Atlanta, to break off and become a largely autonomous, self-governing entity. Scrambling to ready themselves for the division, Sandy Springs effectively privatized the large majority of the municipal services by entering into a public-private partnership with CH2M HILL, a full-service operations company that now controls nearly all of the once-public sector, from road maintenance to cleaning up trash in the park. “Nobody likes change,” Sandy Springs Mayor and former economist Eva Galambos told Reason , a libertarian magazine. “But, if your city is fiscally bankrupt, there may have to be some change.” The city, sixth-largest in the state with a 2010 population of 93,853, wanted to separate itself from what it saw as wasteful government spending in surrounding communities. The city benefits greatly, though, from the number of Fortune 500 companies headquartered there, boasting an extremely high per capita income, with the median family household income, according to a 2008 census estimate, approximated at $129,810, and the average family income $169,815. Comparatively, the surrounding Fulton County has a median family income of only $58,573. The median national income is $49,777. Adding to that, only 3.1 percent of families — 7.9 percent of the entire population — live below the poverty line in Sandy Springs. The percentage of Fulton County families living in poverty, in comparison, is nearly four times higher at 11.5 percent. Without needing to provide to as many poverty-stricken families, who typically use more public services, Sandy Springs can more easily keep taxes at a lower, sustainable level. Not all of Sandy Spring’s public services have been privatized, however. Public safety continues to be handled by government police officers and firefighters, and the Fulton County School System still operates public schools within the city, something not noted in the below video by Reason magazine. Mayor Galambos also notes the city “made a clear decision” to not hand out “defined benefits” of any sort to police officers and firefighters, in order to keep taxes low and avoid future obligations. In light of municipal budget crises wreaking havoc across the country, the fiscally-conservative Sandy Springs government is proud of their radical decision, which they say has left them with no long-term liabilities. The $25 million they paid to CH2M HILL for one year’s work, Reason argues, is less than half what they would pay in a typical, government-run scenario. Since 2005, four surrounding Georgia cities have adopted the model. Watch Reason Magazine’s video on Sandy Springs’ privatization:

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H&R Block Names Robert A. Gerard Chairman of the Board

April 21, 2011

KANSAS CITY, MO–(Marketwire – Apr 21, 2011) – H&R Block ( NYSE : HRB ) today announced that Robert A. Gerard has been elected chairman of the company’s board of directors, effective immediately. Gerard replaces Richard Breeden, who stepped down April 18.

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Oklahoma Set To Repeal Collective Bargaining Law

April 19, 2011

OKLAHOMA CITY (Reuters) – The Republican-controlled Oklahoma Senate dealt organized labor another defeat on Tuesday when it voted to repeal a collective bargaining law. The 29-19 vote means that some of the state’s fastest-growing cities no longer will be required to collectively bargain with sanitation workers and other non-uniformed workers. The measure already passed the Oklahoma House and now goes to Governor Mary Fallin, a Republican, who is expected to sign it into law. The bill would repeal a law passed in 2004, when the Oklahoma Legislature and the governorship were controlled by Democrats. The law required cities with populations over 35,000 to engage in collective bargaining with non-uniformed workers, though it did not affect Oklahoma City, Tulsa, Norman and Muskogee, which already were engaged in collective bargaining. Three Senate Republicans crossed party lines to keep the 2004 law intact, but that wasn’t enough to stop repeal. City employees affected by the bill include sanitation workers, 911 operators, mechanics, animal welfare workers, secretaries and street and water department workers. Some cities have complained the 2004 law was arbitrary in selecting cities with populations of 35,000 or more for mandatory collective bargaining. In Edmond, a thriving city of 81,000 north of Oklahoma City, city manager Larry Stevens said it cost at least $50,000 annually to collectively bargain with nonuniformed employees who voted to join a union. Repeal of the 2004 law means cities will have to decide whether they want to authorize collective bargaining with their workers. With Republicans now in charge of Oklahoma state government, organized labor has been on the defensive this year, just as it has been in Wisconsin and Ohio, where collective bargaining rights have been curbed. “We thought Oklahoma could rise above the stuff that happened in Wisconsin,” James Curry, president of the Oklahoma AFL-CIO, said of the Senate vote. “We’ve been on the defensive for several different bills.” The Oklahoma Legislature earlier passed a bill making it easier for local school districts to fire teachers by taking away their right to appeal terminations to a district court. In Oklahoma, a right-to-work state in which workers are not required to join a union to hold a job, a majority vote is required before municipal workers can be represented by a union and engage in collective bargaining. (Editing by Corrie MacLaggan and Greg McCune) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Josh Burstein: Shoes and a Slice of MyPi for Several Inner-City Scholars

April 18, 2011

I grew up as the son of an academic, hopping from campus to campus while my father pursued tenure. It was a charmed gypsy life, as I had the pick of the litter of cute undergraduate babysitters. The thought never crossed my mind that I would not go to college. For many inner-city high schoolers, further education is by no means a given. The desire may be there, but an uncomfortable reality tends to get in the way. I live in California, a state heralded for its top-notch public universities, but 47th in state spending per public school student. So while the world looks to the glorious left coast as a dynamic power of industry and culture, its local development of young minds is rather lacking. I don’t know precisely how many of those inner-city kids can see beyond the horizon of a high school diploma, but whatever the number is, it’s clearly not what the promise of America is supposed to mean. That’s why this year my colleague Zach Fishbain and I founded MyPi, the Millennial Youth Professionals Initiative. We’re always hustling after something — we both work in business development to pay the bills. Mentoring an underprivileged 14-year-old, Zach was eager to find a fun activity and leveraged our business contacts at Electronic Arts to take “Andy” through the halls where his favorite video games are made. He met with artists, developers and programmers. Zach couldn’t introduce young Andy to Blake Griffin, but he did introduce him to the men and women that made NBA JAM, the idea being that with a lot of hard work, Andy could do the same some day. At one point during the experience, Andy was very quiet. Pensive. When asked if everything was okay, his soft-spoken response was: “Man, I’m just thinking how I have to make it to college.” Zach raved about the experience the next day, and we started thinking about how we could reach out to inner-city youth and repeat the process on a larger scale — show them firsthand that anything was possible if they stayed in school. So we formed a 501(c)3, leaning on professionals who could guide two fledgling entrepreneurs from a good intention to a realizable venture. Recently, MyPi had its pilot trip, bringing eight kids from south central Los Angeles to TOMS Shoes . We wanted to inspire an entrepreneurial spirit in these middle and high schoolers, and TOMS’ model of conscious capitalism, a “One for One,” was the perfect catalyst. If you don’t know their tale, for each pair of shoes sold, TOMS donates a pair to a child in need — and the shoes are really cool. As the kids arrived, they were mostly quiet. They stuck close to their mentors and chaperones (we envisioned this trip to be a shared experience). Much love to Jake Strom, our contact at TOMS, who conveyed his enthusiasm as he told the stone-faced young crowd the company’s history. Then we toured the facilities. We impressed upon these young minds that work could be fun, not just something that old people drudged through between breakfast and dinner. When the tour ended, they were led into a room filled with shoe boxes — one fresh pair of white kicks for each student. It was a “Style your Sole” party, and as they started to paint, pen and tag their own custom canvas, we brought additional employees from TOMS to talk about their work and how they got there. This was an opportunity for the kids to express themselves outside of the classroom, an open place to get creative and show off their interests. Some young artists showed love for their city, some made stylish cleats for their sport of choice. However poker-faced they were during the tour, they were chatterboxes talking about TOMS the whole way home. Many slapped the TOMS motto on their shoes, along with their names, hoping to start a conversation and tell the story of barefoot children in Africa that had it even harder than they did. Skills have value in the workplace: that was the main message. My hope is that each student understood that he or she has options and that college was the logical next step. As co-founders of a fledgling NGO, Zach and I learned so much from our first event. As we navigate this new world — establishing a board, attracting new companies, constructing an engaging curriculum and partnering with new mentorship programs to fuel our events — our narrative is continuously shaped by all of those involved. And we love the art of improvisation. In a perfect world, teenagers like the initial eight students we brought to TOMS will find internships at the companies we introduce them to, and some day, perhaps, lead new groups of MyPi kids through the halls of a forward-looking company, of which there are many. I’m interested in education reform, and a true believer in the axiom that ingenuity is to be found in all strata of society. So as MyPi explores ways to incubate an entrepreneurial spirit, I open it up to debate how to explore and enlarge this vision. For more content from our trip to TOMS, visit MyPi.org , follow us @mypidotorg and like us .

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The Day The Music Died: Major Orchestra Files For Bankruptcy

April 17, 2011

PHILADELPHIA — The world-renowned Philadelphia Orchestra, long considered one of the best in the nation, will be filing for Chapter 11 bankruptcy protection – an apparent first in recent history for a major U.S. orchestra. Board chairman Richard Worley said members made a nearly unanimous vote Saturday to file for reorganization in a federal bankruptcy court in Philadelphia after a “long meeting, thoughtful meeting, emotional meeting.” “We’re running low on cash, we’re running a deficit, and we have to put ourselves in a position to attract investment funds to help us,” Worley told reporters. Allison Vulgamore, president and chief executive officer, also cited a “tremendous decline” in audiences over the past five years. Officials stressed, however, that concerts would go on as scheduled, including the evening’s performance of a Mahler symphony. And they said a revitalization campaign was planned to increase revenues by about two-thirds and bring in new art and audiences. John Koen, chairman of the members committee, which represents the musicians, said the five musicians at the meeting were the only “no” votes on the 65-member board. “It was a terrible letdown. I think this is a tragic decision for the orchestra,” said Koen, who said he has been with the organization for almost half of his 44 years. “A big orchestra has never done this before. It’s impossible for the musicians not to feel betrayed by the board of directors … It feels like a vote of no confidence for the future of this orchestra that’s been around for 111 years and world famous for 99 of those years at least.” “We’re in a state of shock, really,” said Richard Woodhams, principal oboe. “I think it’s a very, very sad day for culture in the United States and the world.” The orchestra is expected to take in a combined $33 million from this season’s ticket sales, fund-raising, endowment income and other revenue, according to its financial records. That won’t cover its $46 million operating costs, and its projected deficit is $5 million despite an emergency fund-raising effort. The country’s economic woes have taken a toll on nonprofit arts organizations, and smaller orchestras in cities such as Syracuse, N.Y., and Honolulu have filed for bankruptcy in recent years. But Philadelphia’s is the first major metropolitan orchestra to do so, said John Bence, spokesman for the League of American Orchestras, citing records his organization has kept dating as far back as 1986. Jesse Rosen, the orchestra league’s president and CEO, said the Philadelphia Orchestra is experiencing the same challenges as other arts organizations in figuring out how to stay viable in the current economy and an era of “on demand” entertainment made possible through technology. “We’ve had a belief for a long time that if we’re really, really good, and the Philadelphia Orchestra is off-the-charts fantastic … everything will follow, and really, times have changed and it’s not enough anymore,” Rosen said. Philadelphia Orchestra musicians who object to a bankruptcy filing distributed leaflets to the audience before Thursday night’s concert, calling such an action “unnecessary” and saying it would have “both an immediate and a long-term devastating impact” on the orchestra. Union officials and others have cited the orchestra’s $140 million endowment, but Vulgamore said use of that money was restricted. “Thank heavens it’s there, it’s the future we have to live off of,” she said. “If we take that money now, then we frankly don’t have annual monies to keep going.” Musicians, who in recent years have agreed to take pay cuts totaling millions of dollars, have expressed concern about the effect of bankruptcy on their pensions. Worley said that would be worked out in negotiations, but officials want orchestra members to have a “reasonable and respectable pension.” The orchestra’s management is seeking a 16-percent pay cut and other concessions from the musicians as part of ongoing contract negotiations. Players say there have been no talks since March 27 and none are scheduled. The Philadelphia Orchestra, which rose to national prominence under conductors Leopold Stokowski and Eugene Ormandy, has traditionally been considered one of the “Big Five” American orchestras along with those in New York, Chicago, Boston and Cleveland. It made history in 1973 when it became the first American orchestra to tour communist China. Its hundreds of recordings include the soundtrack for Walt Disney’s 1940 film “Fantasia,” which helped popularize symphonic music in the U.S. “I think it’s emotional because we feel the weight and burden of a tremendous legacy,” Vulgamore said. But she said the situation was not unique even in the orchestra’s long history, citing “Save the Symphony” campaigns from early in the 20th century. “We’ve been through this before, we’ve been through two world wars and a depression,” she said. “We’re going to need to pull ourselves through this bankruptcy with pride and will to remain the Philadelphia Orchestra.” Audience members picking up tickets in the lobby of the Kimmel Center for the evening performance were taken aback by the news. “It’s shocking,” said Tianhui Ng, 32, who said he tries to see concerts every week. “I think they do a wonderful job, and the city loves them.” Stan Swigoda, 53, of Philadelphia has heard of the orchestra’s endowment and wonders why some of that can’t be tapped. “It seems to me that this whole movement to Chapter 11 is just an attempt to … renege on the union contract,” he said. Spencer Jarrett, a visiting 17-year-old high school junior from Highland, Utah, said he hopes to make playing trombone his career and said the impending bankruptcy filing was “kind of scary to be honest.” But he said he was generally optimistic about the future of his calling. “There’s always going to be an orchestra in the world,” he said. “Music is just that thing that we can’t live without. It’s a necessary part of being human. It’s a shame that people aren’t recognizing it.”

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Akhtar Badshah: Creative Capitalism, a CEO’s Viewpoint

April 14, 2011

I had a pleasure of moderating a discussion with Arunas A. Chesonis, the Chairman, President and Chief Executive Officer of PAETEC, founded in 1998. I sought to understand why he — as a CEO and business leader — invests in the city of Rochester, New York, and why he has developed a culture of investing back into the community at PAETEC. Chesonis, an MIT graduate and an entrepreneur, is a visionary who thinks outside of the box regarding how to build a business and how to build a community around him. He told the audience at the BCLC Corporate Community Investment 2011 conference in Philadelphia that one of his company’s four guiding principles is “caring culture,” a concept in PAETEC’s objectives and a metric for performance evaluation. Chesonis said: “If you have two managers and both are very good, but one is involved in the community, he’ll drive more business and will build more relationships within the company, outside the company, and with clients. That’s the manager who will get the promotion. People like that get to move up in the organization because they’re the ones who do business better.” Community involvement at the individual employee level, he said, not only helps managers excel — their success helps to grow the business. In our talk, he explained that PAETEC also uses the same criteria when considering procurement bids from his partners. With price being more or less equal, PAETEC wants to know how engaged potential business partners are in investing back in the community. He wants to know how they’re investing in communities, how they’re giving back, how they’re making the country do better. For Chesonis, corporate social responsibility (CSR) is a strategic weapon. He said that if you’re not doing CSR, if you’re not engaged in CSR, then you’re not going to be as successful, you’re not going to optimize your stock price, you’re not going to optimize your performance, and you’re not truly, fully engaged with all your team members. In short, it’s better business to be engaged in CSR. So how does Chesonis make sure engagement is constant and thorough? First, he sees engagement in CSR as building an extended family among a range of stakeholders (even the name of the company stems from the first letter of the names of the Chesonis family). He said he came to Philadelphia for the BCLC conference to lend support to those who are in the CSR business. “Maybe,” he said, “I’ll give you some tricks that we’ve used to trick people within our ecosystem into seeing why this is important for all of us.” Second, engagement in CSR work should be decentralized. At PAETEC, Chesonis lets his community relations managers decide where to focus the company’s CSR efforts instead of dictating what to do with a top-down approach. “I feel like I’m the match.com for CSR at my company. It’s my responsibility to connect my employees with our community,” he said and noted that he wants connections to grow organically between his community relations managers and the local organizations. Building your own community is important, and connecting your community to other communities in common goals is the next step in building capacity. Chesonis asked, “Wouldn’t it be great if there were a BCLC in all communities?” Organizations that convene and connect, he said, are needed at the local chamber level so that local corporate citizens and community leaders can come together, learn, and expand their capacity. Having a network of local BCLC-like organizations, he said, would encourage public-private partnerships. Chesonis said: “It’s hard for SMEs to travel to national conferences and major events like this — that makes local collaboration level so much more needed. People could develop their own approaches at the local levels and decide what fits best with their communities and businesses.” While his community relations managers guide the company’s strategy, the Chesonis family is building its own legacy in environment and energy research — the need for intense research in these fields is astounding, he said. With the belief that researchers should be allowed time to fail and experiment to find the best, most innovative solutions, Arunas and his family are funding long-term research spots for post-grad MIT students. Most Nobel Prize winners in science, he noted, made their discoveries at the age of 28: “We need to be funding young, energetic people who have time and inspiration to immerse themselves in their research 100 hours per week.” He ended the thought that corporate responsibility should be a strategic priority for all companies. “Don’t be a ‘dumb philanthropist’ and just write checks,” he said. “Work on the strategic piece-what’s good for a company can be good for a community and vice versa.” For those in business still sitting on the fence, this is a good piece of advice.

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Potential State Takeover Looms Over Detroit

April 12, 2011

Detroit must cut $200 million in spending or face a takeover by the state of Michigan, Mayor Dave Bing said on Tuesday. With the city’s population dropping to a 100-year low, while its budget deficit is projected to climb to $1.2 billion by fiscal 2015, Bing outlined a plan to the city council to balance Detroit’s finances over five years. That plan includes cuts in personnel costs, a one-year suspension of a payment to employee pensions, and a temporary gambling tax increase. “If we are unable or unwilling to make these changes, an emergency financial manager will be appointed by the state to make them for us. It’s that simple,” Bing said in his budget address. In March, Governor Rick Snyder signed into law a bill that bulks up the state’s ability to intervene in fiscally troubled local governments and appoint someone to oversee them. The new law also gives state-appointed financial managers the power to modify or end collective bargaining agreements with public sector workers — a move that sparked pro-union demonstrations in the state capitol earlier this year. Bing, who pegged the current deficit at $155 million, said the city council, unions and the pension boards had to work together to turn around Detroit’s finances. Otherwise, he said, the state will step in and “existing contracts will be voided, legislative powers will be stripped and decisions will be made without the input of elected officials or residents.” That reality was not lost on members of the city council. “I want to make sure we’re not the group that’s the answer to the trivia question — Who was in charge of the city of Detroit when the emergency financial manager came in and took over?” said Council Member James Tate. Detroit’s shaky finances are a major concern in the $2.9 trillion municipal bond market, where the city’s bonds are rated in the junk category. Detroit was also cited in a recent Reuters poll as a potential candidate for rarely used municipal bankruptcy. The mayor’s proposed fiscal 2012 $3.11 billion all-funds budget includes nearly $1.22 billion of general fund spending, according to budget documents. Some of Bing’s budget-balancing proposals depend on getting bills passed through the Republican-controlled Michigan Legislature. They include the higher tax on Detroit casinos, pension reforms, the suspension of state driver licenses for three unpaid Detroit parking tickets and the continuation of the city’s ability to collect income and utility taxes. Detroit’s population under current state law must be at least 750,000 to collect the taxes, which generated $265 million last year, Bing said. U.S. Census figures released last month showed Detroit’s population fell to 713,777 in 2010 from 951,270 in 2000, as the region suffered from a struggling automotive industry, plant closures and job losses. Bing said while he believes the final census count will be revised upward, the city must deal with the reality of a shrinking population base and the loss of state and federal funding. State revenue sharing has already been dropping and Detroit expects to receive less than half of the $332 million it got in 2002, according to Bing, who added that talks with the legislature and governor were ongoing. But Council Member Saunteel Jenkins said she will be pushing for revenue alternatives in case Michigan lawmakers don’t pass needed legislation. Detroit, which sold nearly $250 million of deficit financing bonds last year, begins fiscal 2012 on July 1. (Reporting by Bernie Woodall, writing by Karen Pierog, Editing by Chizu Nomiyama) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Bloomberg’s Follies — A Lesson for Other School Districts

April 8, 2011

NEW YORK — Whether circumventing term limits or banning smoking in restaurants, Mayor Michael Bloomberg is nothing if not a politician accustomed to getting his own way — without apologizing for it. Cathie Black’s brief tenure and resignation from post as schools chief represents a serious blot on the mayor’s record. Thursday marked one of Bloomberg’s only public displays of remorse during his three-term reign. But the perceived guilt resulting from the publishing executive’s appointment and abrupt removal from office offers a timely lesson to school districts across the country now searching for new education leaders: a primer on precisely what not to do. Early in Bloomberg’s first term, the same ruthless acumen that made him a billionaire in business was transferred to the governance of New York City. Nowhere was this more evident than in his power over the nation’s largest school system. After wresting control of the largely failing system, he appointed the Department of Justice’s trust-busting attorney Joel Klein to preside over the city’s 1.1 million schoolchildren and their teachers. Dennis Walcott is Bloomberg’s new appointee. Nationally, Klein’s promotion signaled an important shift in what had otherwise been a more traditional governing structure. In other words, Bloomberg brought his private boardroom manner into the city’s grittier public classrooms. A business-minded approach, whether in merit pay or shutting down schools, ruled the day. Seen in this light, and in the light of similar policies promoted by U.S. Secretary of Education Arne Duncan, Black’s promotion as an outsider wasn’t really all that different. But the jury is still out on whether what works in big business can so easily be transposed onto the fixing of schools. “In the business world, there’s an assumption that if you can sell soap, you can sell automobiles,” said Diane Ravitch, a New York University education historian and former U.S. Assistant Secretary of Education. “That doesn’t transfer to education.” Hence, the lesson: Bloomberg’s latest gaffe may have larger implications, especially for cities like Detroit, Atlanta and Newark that are currently on the hunt for new education leaders. The credentials are key, or at least a resume demonstrating some time in the classroom, said Pedro Noguera, an NYU education professor. “Bloomberg defended Cathie Black even though she has no background in education, saying that her managerial experience was more than enough to make up the difference,” he said. Anthony Adams, president of Detroit’s school board, said the decision-making process in New York was botched from the beginning. “The process in New York was handled by the mayor only,” he said. “We’re advocating a much broader process with a lot of stakeholders involved. We’re being more consultative, so we’ll end up with a better result.” His search committee includes deans of education colleges and communicaty education advocates. Adams added that he hopes to announce the name of Detroit’s new chief academic officer — not superintendent, given the district’s emergency management — by June. The recent search for a new leader of New Orleans’s Recovery School District is a textbook example of putting these lessons to use. Just one day before her exit, Black’s deputy chancellor John White, who is a career educator, announced his departure to head the RSD. To Louisiana’s education chief Paul Pastorak, who recruited White, it was important that the next leader of the Katrina-ravaged district have experience in the classroom. That White had already been in the business of restructuring New York’s schools was particularly attractive. A life-long attorney himself, Pastorak said a traditional pathway into school leadership was not necessary — as long as there was some time in the classroom. White rose up through the ranks of Teach for America. Pastorak said that during the process, he was “keen on engaging” educators and the community to understand its educational needs. These superintendent searches, and others in Providence, Chicago, Florida’s Broward County and Montgomery, Maryland are coming to a head as the national education debate takes on a decidedly corporate tinge. Duncan, the current U.S. Secretary of Education who defended Black in December , has been a long-time champion of charter schools, a model embraced by corporate types for its emphasis on accountability, since his days as CEO of Chicago’s schools. Michelle Rhee and Klein rose to national prominence promoting similar big business-backed reforms. “Some believers in this corporate model think there are generic management skills that simply transfer readily from corporation to corporation to the public sector, regardless of the particular industry,” said Jeffrey Henig, a professor of political science at Columbia University’s Teachers College. The question remains: To what extent will the Black fiasco reverberate through the next generation of education reform darlings? Aaron Pallas, a professor of sociology and education at Teachers College, guesses not much. “This will not derail the widespread efforts to look at expertise outside of education,” he said. “I suspect this is going to be an aberration — not viewed as any kind of bellwether.” Likewise, his colleague, Henig, isn’t waiting for a sea change. “I don’t think it will cast a shadow on the Michelle Rhee/John White model, or folks in charters and new venture funds,” he said, referring to the recent wave of outside hedge funders who have stepped in to reform education. “At least Rhee and White have the educational credentials. And I don’t think they were particularly Cathie Black fans, either.”

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Shutdown: Washington Workers Could Be Collateral Damage

April 8, 2011

WASHINGTON — If the Obama administration and House leadership can’t strike a budget deal within the next few hours , here are just a few things that won’t be happening in the District of Columbia next week: trash collection, road repair, parking enforcement, traffic management, license and registration renewal, street sweeping and library book checkout. In another threat to the local economy , roughly 14,000 of the District’s 35,000 public employees would be told to stay home, not yet knowing when, or if, they’d be paid for the missed work. This is in spite of the fact that they’re employed by the city and draw salaries funded mostly by local dollars. Congress, which still technically appropriates tax dollars to the District, has to sign off on the city’s budget — a peculiar rule held over from before it was granted home rule in 1973. Congress’ control of city purse strings infuriates many locals, not least of all Del. Eleanor Holmes Norton (D), the District’s non-voting member of Congress. In a television interview yesterday, Norton said Washington workers and residents were “being treated as colonists of the Congress” and that the shutdown’s potential impact on the city would be “the functional equivalent of bombing innocent civilians.” She topped it off by saying D.C. residents should tell Congress “to go straight to hell.” The city’s mayor, Vincent C. Gray, has posted a plan online detailing which agencies would be affected and which services would be cut back or eliminated. In an online chat on the Washington Post ’s website today, Gray also sounded a defiant, if more restrained, note. He said the shutdown threat is an “injustice” that has left him “outraged.” “We steadfastly believe that the District of Columbia Government should not be included in this shutdown and we have been fighting to have the entire city exempted,” Gray wrote. “We are not an agency of the federal government.” Even though the city’s cops, firefighters and teachers would continue punching in, a huge swath of the city’s public-works employees and administrative workers would temporarily be out of a job if a federal budget can’t be agreed upon. The city’s transportation department, for instance, has roughly a thousand workers, many of them doing infrastructural work around town like fixing potholes, repairing sidewalks and laying down speed bumps. All of that has been deemed “non-essential,” along with more urgent-sounding work, like directing traffic. The city’s major construction projects — such as bridge and roadway repairs — could also ground to a halt. “Some, if not most, of our projects will shut down,” department spokesman John Lisle told The Huffington Post. As little as a quarter of the transportation department’s workers will be told to come to work in the event of a shutdown, and the vast majority of the still-employed will be school crossing guards, he said. “It’s a real difficult time for people. They’ve got families and responsibilities,” Lisle said. “Not knowing whether they’re going to lose income or exactly what’s going to happen — it’s tough.” Similarly, the city’s Department of Public Works would operate in a skeleton capacity. The agency has 1,400 workers, many of them trash collectors and parking-enforcement officers. According to agency spokeswoman Linda Grant, the “vast majority” of them would be told to take an unscheduled leave of absence. Even though some people might relish the idea of the agency’s ticketing squad taking some time off, residents would probably miss the street sweepers and garbage collectors, who would also get furloughed. “Those are things that affect people every day,” Grant said. In the event of a shutdown, trash collection would be suspended for up to a week, at which point it would be reinstituted out of public-health concerns. A few D.C. residents, outraged at the prospect of garbage accruing around town, have launched the Facebook group ” If Boehner shuts down the government I am taking my trash to his house .” In part to highlight the city’s congressional disenfranchisement, the organizers will lead protestors to Boehner’s Capitol Hill residence tomorrow morning — though they urge attendees not to bring “lots of dirty, gross trash.” The workers, who may soon find themselves with unpaid time off, won’t be spending it at any of the District’s more than two dozen libraries, all of which would be closed during a shutdown. Adult literacy classes, tax preparation assistance, computer courses –- all of it would be nixed. The online library catalog would go dark at midnight tonight, along with all of its associated online services, including its website for job seekers. Agency spokesperson George Williams said the city’s 416 library workers “are focusing on what this is going to mean for the public, for people who’ve checked out books and people who are coming to story time. They’re trying not to worry about themselves.” The closures, he added, would have employment implications for more than just library workers. “For some people in the public, the library computers are their only computers,” Williams said. “The library is the place where they access the internet. This is where they come to look for jobs.”

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Dirty Dishes

April 7, 2011

Zagat, as we know, matches restaurant features to diners’ needs by way of scores for food, décor, service, and cost. Never does it mention the count of cockroaches in a dimly-lit kitchen, or the fact that the bathroom tiles have never known the feel of a mop. Instead we read of a dinner spot “nestled amid the brownstones” that is either “edgy,” “cozy” or “filled with hipsters.” Oh, for “the best Peking Duck in town,” or an “ambience à la Paris”! But as to the cleanliness of those hands around the throat of our Peking duck, Zagat is mute. Since last July, the Health Department’s placement of letter grades in New York restaurants served to make possible a different sort of choosing, one based not in the crispness of the table linens, or the perfect glaze of orange sauce. Finally the hungry neurotic can seek out specifics as to the sordid ecosystem of the urban kitchen. Any man or woman who has ever held a spatula understands the filth a city kitchen can attract — as does anyone who has ever gripped the pole on a subway train, held a door open at Macy’s, touched a mailbox, a stranger’s dog, a garbage chute, a taxi cab, swiped their finger across their nose, dropped a quarter in the cup of a homeless man, worn shoes inside their apartment, climbed into bed, turned off the light or taken several deep and wholesome breaths. As it is perhaps best not to read about bedbugs after 8 p.m., it may be best to avoid the specifics of a charming, four-month-old Department of Health document entitled, “What To Expect When You’re Inspected.” For those curious about the backstage area for the brand-new letter grades, and what makes the difference between clear blue “A” and filthy “C,” diners can have a grand time with the Inspection Scoring Parameters Table. This describes, for restaurant owners, a description of each “Violation” and provides examples of their progressive severity. These include cleanliness of surfaces, bathrooms and presence of lighting: “Food worker prepares food or handles utensil when ill with a disease transmissible by food or has exposed infected cut or burn on hand,” “Cans of food products swollen, leaking or rusted and not segregated from consumable food,” and, like a recipe for Shakespeare’s witches, “… house flies, little house flies, blow flies, bottle flies and flesh flies. Food/refuse/sewage-associated flies in clued fruit flies, drain flies and Phorid flies.” In order to determine the severity of conditions and assign a grade, inspectors assess each offense in detail: counting cans of spoiled food, the number of dirty or broken eggs, counting live mice, flies or any equivalent evidence. A certain number of fresh mouse droppings, for instance, equal the presence of one mouse. And 31-70 fresh mice droppings in a food preparation area (or 11-30 in two areas or 1-10 in three areas), represents a violation level III, whereas “71-100 fresh mice droppings in one area; 31-70 in two areas, 11-30 in three areas; or 1-10 in four areas,” means a violation level IV. A level V must be where the mice are actually serving the food. If any one mouse ever questioned whether his vote counted, he should rest assured: A single mouse turd can make all the difference. Zagat provides an impressive capacity for searching, as do Yelp , Chowhound and New York Magazine . But once the hungry neurotic discovers the New York City Department of Health’s website , it becomes the indispensable diner’s guide. Equipped with a map, searchable by zip code, sortable and filterable by restaurant’s name, borough, score or cuisine, the guide can, with a click, turn one’s long-time favorite into the culinary equivalent of a cheating spouse. (Let us say, an uptown noodle house, a favorite, perhaps, of students out for a quick, hot meal. This noodle house may do passably well in Zagat — which tells it as it is: a dive-y place for a frenzied feed. They maybe be rude, but in an authentic way, in a way that says, “This is the city, kid. Here’s your food, now eat it and get out.” And so one might on occasion have found a cube of something veiny floating around in vegetarian soup. A tuber of some sort? A beetroot? Alas not, but beef. Oh well, let he who is without sin cast the first stone. But finally, horrifically, governmental vindication for the pathologically ill at ease. Words like “contamination” and “vermin” sing much louder than the menu’s savory adjectives. The romance is dead at the plate.) When out-of-towners talk about New York, they say quite often that eye contact with strangers should be at all costs avoided. But rarely do they mention avoiding eye contact with one’s lunch.

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QualityHealth Adds Performance Marketing and Technology Talent to Executive Team

April 6, 2011

JERSEY CITY, NJ–(Marketwire – April 6, 2011) – QualityHealth , the largest targeted online customer acquisition solution for healthcare marketers, announced today that Chris Mancini and Malcolm Smith have been appointed to executive leadership positions. Chris Mancini assumes the role of Executive Vice President and General Manager and Malcolm Smith takes on Senior Vice President and Chief Technical Officer. Mancini and Smith are accomplished industry veterans with extensive experience in performance-based and online marketing in health and other verticals. Their expertise will contribute significantly to the growth and management of the QualityHealth performance marketing platform.

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John M. Eger: Creative Clusters Lead to Creative Communities

April 5, 2011

“Creative Clusters” are the early indicators that a creative community — committed to nurturing an economy and society based on the importance of art and culture — is being developed; that a new architecture of a city is taking shape. In the creative age, developing the “creative clusters,” like author Michael Porter’s earlier industrial or ” economic clusters “, is perhaps more important to meeting the challenges of a new, global, knowledge-based economy. Why? Because art and culture are central to ensuring vibrant economic activity and to workplace success in the 21st century. Indeed, as we talk about the development of creative enterprises today and the foreshadowing of a whole economy based upon creativity and innovation — the dawn of a Creative Age — we are more acutely aware of the importance of a new overlay called the creative cluster, and the growing importance of fostering the development of creative products and services. In a sense, these essentially real estate developments are often are the first signs that a community is awaking to the importance of creativity and innovation as essential elements of a successful new global economy, It is no surprise that these clusters of creativity are popping up in cities in Europe and across America. In the UK, co-location of creative industries has been a mainstay of economic development. The National Endowment for Science, Technology and the Arts ( NESTA ) said it best in a major study on Creative Clusters and Innovation: “The case studies also show that the mere existence of a creative agglomeration is not enough for the benefits from clustering to emerge. The other crucial ingredient is connectivity between firms within a cluster, with collaborators, business partners and sources of innovation elsewhere… and finally, with firms in other sectors that can act as clients, and as a source of new and unexpected ideas and knowledge. These three layers of connectivity are underpinned by a dense web of informal interactions and networking.” In Miami, we are well aware of the astounding success the city has had establishing such a cluster. Maybe it was getting the most successful art fair in the world — The Basel — to host as second fair in Miami. Maybe it was the art deco hotels or the weather. Nonetheless, the Miami Design District is one of the most successful examples of a city revitalizing itself for the new economy. In the last few years, the Urban land Institute (ULI) helped start a project in Chicago called the “Industrial Renaissance” aimed at “establishing a Creative Industries District” in one of the oldest but most blighted areas of the city. If successful, the district will be a “jobs producing creative hub” targeting designers, graphic designers, architects, urban planners, all the entertainment arts professionals and others representing one of fastest growth sectors of the new economy, the “creative industries”. More than 200 organizations, and over 1000 individuals are part of the Chicago effort . And in San Diego, entrepreneur Pete Garcia, a successful artist and engineer, is also planning an arts district called I.D.E.A., for Innovation, Design, Education and Art. Garcia sees design itself, combining technology and art in ways that the new economy most values, as the next wave of economic development. Co-location, he says, is the secret to nurturing this kind of development and he and others involved in the effort envision a ten block area of the city as ideal for such a new district. Key, as elsewhere is getting the politicians, the business community, the developers and the education establishment to see the opportunity — indeed the urgency — of reinventing the city through incubators, through arts districts, through the establishment of creative clusters. It is slowly but surely becoming apparent that the most successful communities of the 21st century will be places with strong and vibrant creative clusters. Those communities placing a premium on cultural, ethnic and artistic diversity will likely burst with creativity and entrepreneurial fervor. Those that don’t will be the ghost towns of the era.

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Ron Gitter: Homeowners Placed Under House Arrest

April 4, 2011

The Never Ending Case-Shiller Bummer It’s been a rough few days for housing statistics. First and foremost, the Standard and Poors Case-Shiller Home Price Index , issued on March 29, 2011, was downright depressing. As indicated in the press release, January 2011 home prices slipped below December figures in all but 2 of the 20 major cities tracked in the report. Economists crunch numbers for a living and I have no real doubt about the accuracy of the calculations. But after more than three years of unrelenting doom and gloom in the housing market, one starts to wonder what it all means for the owners of those homes on which the data is based. Housing’s Dirty Little Secret Even if the housing market starts to improve throughout the country in the next few months, and actually begins an upward trend, the damage done to middle class homeownership can’t be estimated even by using the most sophisticated algorithms. As a result of changing business models, many Americans looked to the equity in their home as their 401K plan and the foundation for retirement. For many homeowners, equity equaled net worth. With that equity evaporating, and an inability to sell a home even at drastically reduced prices, lives have been so dramatically impacted financially, that a “housing recovery,” if and when it happens, may not really matter. The Migration is on Hold Remember those 80 million baby boomers that were about to retire and move all over the country? In places like Arizona, Florida, Nevada and North Carolina, builders counted on that wave of retiring boomers to sell their homes in high property tax states and to move to cities with lower taxes, attractive lifestyles and better weather. But if you can’t sell your home, and if your equity has disappeared even if you can sell your home, you won’t be relocating any time soon and the oversupply of inventory can’t be absorbed. That inability to sell has resulted in a paralysis taking over the housing market that the monthly movement in housing statistics doesn’t really capture. Unfortunately, the gears of the real estate economy that have always been counted on to churn out the jobs are now frozen. New York Goes “Crazy Eddie” That’s not to say that all markets are suffering the same fate. At least in the New York metropolitan area, the data seems to show that trading volume has improved and the market has stabilized. One could even argue that the upward trend hoped for by the City’s real estate professionals may have started to materialize. But market stability has been achieved through deep discounting. Paraphrasing the guy in the Crazy Eddie commercials, the housing prices in New York “are insane!” As Vivian Toy’s recent article in the Times pointed out, the prices of studio apartments have plummeted to a point of absurdity, creating a window for entering the New York market that is unprecedented in recent memory. Celebrity real estate does not fare much better. Although the glitterati continue to throw millions of dollars at a small number of high end properties, the pricing in many cases is as depressed as more modest properties. There are just bigger winners and losers. And a few large transactions can’t revitalize the market and incentivize continued buying and selling. So even in New York, the cycle of immobility continues. And Now for A Double Dip… Just to make things interesting and add to the woe pile, Robert Reich in his Huffington piece on March 31, asked why Americans “aren’t being told the truth about the economy?” Citing a gaggle of scary statistics, he took stock of the dismal state of things and dared to speak that phrase that haunts the policy makers: the double dip recession. Although the double dip alarm needs to be sounded, I have to ask, are Americans really that dumb? After more than three years of catastrophic unemployment, a decimated housing market and the downward spiral of dwindling net worth, is anyone really counting on the truth being told about how well things are not going? I don’t think so. Just ask any homeowner… they already got that memo.

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Interior Secretary: ‘Absolutely’ No BP Deal On Deepwater Drilling

April 4, 2011

MEXICO CITY/WASHINGTON – The U.S. interior secretary on Monday rejected media reports that BP was striking a deal to resume deepwater drilling in the Gulf of Mexico a year after the worst oil spill in U.S. history. UK media have said BP is in talks with the U.S. government to restart drilling at existing wells less than a year after a blast on the Deepwater Horizon rig ruptured BP’s underwater Macondo well, unleashing millions of barrels of oil. Interior Secretary Ken Salazar called that a “misconception” and a spokeswoman for the Bureau of Ocean Energy Management regulator said “there are no ongoing negotiations”. “There is absolutely no such agreement nor would there be such an agreement” with BP to resume drilling, Salazar said at a briefing while visiting the Mexican capital. He added that the company would need to go through the same process to resume drilling as other companies. U.S. legal probes into the accident are ongoing, but a presidential commission earlier this year released a report blaming the disaster on systemic safety lapses and a series of mistakes made by BP and its contractors. Months after lifting a temporary ban on deepwater drilling, the bureau has begun approving permits for such activity, greenlighting more than a handful of projects in the past few weeks. (Reporting by Mica Rosenberg and Roberta Rampton, writing by Ayesha Rascoe; editing by John Picinich and Dale Hudson) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Friendly Energy Adds Experienced Executive

April 4, 2011

CARSON CITY, NV–(Marketwire – April 4, 2011) – Friendly Energy Exploration ( OTCBB : FEGR ) is pleased to announce that Rick Hutchins will join the company as it’s Chief Operating Officer and will oversee all drilling operations going forward.

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Shelly On Bloomberg’s Teacher Layoff Claim: Just Use Your Rainy Day Funds

April 1, 2011

State Assembly Speaker Sheldon Silver is not buying Mayor Bloomberg’s line about having to cut thousands of teachers’ jobs under the just passed state budget. From the Daily News : “The mayor has announced layoffs and layoffs and layoffs,” Silver said after adopting the austere $132.5 billion budget. “He did that before even the governor proposed a budget [in February]. So this budget didn’t lead him to do anything,” Silver said. He said, given the state’s economy, the city did OK under the new budget. Silver said the city should use its “rainy day” funds to cover the gaps left by cuts made in the budget passed this week. Bloomberg’s spokesman Marc LaVorgna told the News there were no reserves. “We put in $2.2 billion more this year into education than last year to cover much of the state cuts,” LaVorgna said. “If the state cuts didn’t happen, we’d have the funds in place, but they did.” Bloomberg has warned that as many as 6,000 teachers could be cut under the state budget. At first, Bloomberg said he was outraged by the state cuts, but, two days later, he called them “good government.” Both Bloomberg and Gov. Cuomo were against the so-called “millionaires tax” on high earners which would have brought an extra $700 million in revenue to the state. Silver favored the tax, but said it wasn’t crucial to include in the budget.

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Tea Party Rallies In City Activists Love To Hate To Send GOP Message On Spending

March 31, 2011

WASHINGTON — The tea partiers who helped drive GOP gains in the last election are rallying in the city they love to hate Thursday, urging Republican House leaders – Speaker John Boehner above all – to resist the drive toward compromise in the protracted fight over the federal budget. Even, they say, if that means Congress fails to do its most important job – paying for the government. And if Boehner opts instead to agree to a deal with President Barack Obama? “You’re going to see massive amounts of (GOP) primaries” in next year’s election, said Mark Meckler of the Tea Party Patriots. If the Ohio Republican strikes a budget deal that doesn’t cut spending enough, Meckler said Wednesday, “he is going to face a primary challenge.” It’s tough talk from a member of the loosely affiliated political force that helped drive Boehner’s Republican troops into the House majority last year on a platform of smaller, more austere government. And during three months in power, Boehner’s been listening. The House passed a tea party-friendly budget that would cut hundreds of programs and eliminate others, including a costly defense project. It also would repeal the Democrats’ year-old health care law and assorted regulations on industry – all unlikely to pass the Democrat-controlled Senate. The intensifying talks are as much a test of credibility and clout for the tea party as they are a measure of Boehner’s ability to lead. There’s evidence that some of the 87 members of the freshmen class have been educated by their real bosses – their constituents – on the fact that compromise is sometimes the only path to governing. And governing is what lawmakers get paid for. “Compromise on the subject of spending is a tough sell. It doesn’t mean it’s an impossible sell,” said freshman Rep. Steve Womack, R-Ark., a member of the Appropriations Committee who won his seat with 72 percent of the vote. Though he acknowledges the voters’ mandate to cut spending, “I also live in a realistic world.” Another freshman suggested the no-compromise crowd save their powder. The current, slow-motion showdown is only over a budget to fund the rest of this fiscal year. Just wait, said Rep. Adam Kinzinger, for the fireworks over next year’s budget, as well as a must-pass bill to allow the government to borrow more money to meet its commitments. Republicans hope to use that measure to force further spending cuts on the president. “What I tell folks is: This is like Fort Sumter in the Civil War,” the Illinois Republican said Wednesday. “This is the first fight. The big battle is still ahead of us.” Such rhetoric reflects a reality that budget negotiators have assumed for weeks: That with time, those new to Capitol Hill would learn that the only way a budget passes is with spending cuts that all sides agree on. And that means reductions somewhat less than the $61 billion Republicans approved in the budget the House passed last month. Wednesday night, talks centered on $33 billion in cuts, and there was evidence that members of the broader Republican caucus weren’t balking. “I don’t believe that shutting down government is a solution to the problem. Republicans and Democrats need to work out a compromise,” said Rep. Charles Bass, R-N.H. “Let’s get this over with and get on to the budget.” The tea party rally Thursday promised political muscle and headline-grabbing rhetoric aimed at reminding lawmakers of the populist budget-cutting furor that propelled them to power. Headlining the event was to be the movement’s star and possible presidential contender Michele Bachmann, who also happens to be the top Republican fundraiser in the House. House Republican leaders weren’t expected to attend the event. But Senate Republican Leader Mitch McConnell is expected to defend the tea party movement on the Senate floor against Democrats who have suggested it has lost popularity. A new AP-GFK poll of 1,001 adults conducted March 24-28 showed that support for the movement hasn’t budged since the election. About 30 percent of respondents said they were tea party supporters, the same percentage reported in surveys since October. “If you ask me, the goals of the tea party sound pretty reasonable,” McConnell said in remarks prepared for a Senate floor speech Thursday. “These folks recognize the gravity of the problems we face as a nation, and they’re doing something about it for the sake of our future,” McConnell said. “They’re making their voices heard. And they’ve succeeded in changing the debate here in Washington from how to grow government to how to shrink it.” The senator learned about tea party power in his own backyard last year when the movement’s candidate, now-Sen. Rand Paul, won the GOP nomination over one that McConnell had endorsed. Then, in deference to the tea party’s demand for a ban on so-called earmarks, McConnell reversed years of unapologetic resistance to such a policy and lined up with its supporters. Lest lawmakers forget the lessons of 2010 as they face an April 8 deadline for the current budget, the rally Thursday is aimed at reminding them. “We’re still here,” Meckler said.

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Lyfe Communications Names Co-Founder and Digital Media Industry Veteran, Greg Smith CEO

March 31, 2011

SALT LAKE CITY, UT–(Marketwire – March 31, 2011) – Lyfe Communications, Inc. ( OTCBB : LYFE ), www.connectedlyfe.com , a technology leader in the development of next generation media services integrating TV, high-speed Internet and enhanced voice services, today announced that Lyfe co-founder Greg Smith has been appointed CEO. Greg has over 17 years of technology and product development experience in digital media technology businesses.

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America’s Foreclosure Ghost Towns

March 30, 2011

On the cover of their most recent issue, Fortune declares the “return of Real Estate” to be upon us. With the national housing market wrecked by low sales and marred by high foreclosure rates, the optimistic sentiment seems odd. Have they not seen the scores of empty homes? Across America, these abandoned homes have formed into something more disturbing: ghost towns. Las Vegas, a city that The Economist calls the “foreclosure capital of America,” is now surrounded by “eerily quiet” suburbs. Detroit, another declining city, has watched the city’s population drop 25 percent over the last decade. Last year, in an effort to rid the city of its rapidly expanding inventory, Mayor Dave Bing announced plans to demolish 10,000 of Detroit’s abandoned homes. In February, new home sales have plunged to record lows, down 28 percent from the year prior, according to new government data . Economists and analysts, however, think things may actually get worse. According to Lender Processing Services, around 6.9 million homeowners were either delinquent or in foreclosure proceedings through February, and 1 in every 577 housing units received a foreclosure filing last month, finds data provider RealtyTrac . Nationwide, empty houses are leading to empty neighborhoods, especially in Arizona, California, Nevada and Michigan . The slide show below shows a few examples of the results: once vital communities reduced to empty living rooms and overgrown weeds. Do you have abandoned homes in your area because of the foreclosure crisis? Click “Add A Slide” and submit your photos below:

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Does This Tax Drive Businesses From San Francisco?

March 30, 2011

Not only is the San Francisco Chronicle lacking the professional courtesy to link to TechCrunch for first reporting the tech industry’s fears about San Francisco taxing stock options– the paper is also missing the broader point in the escalating debate. This isn’t about Zynga and Twitter negotiating a special deal, nor is it about a two-year deferral of payroll tax. Sure, that could keep a few companies and thousands of jobs in the city. But what would really cripple the city’s future economic growth is if every other startup reading this news, grimaces at the idea of haggling with unsympathetic elected officials who don’t seem to want their jobs, and decide instead to follow Mark Zuckerberg’s lead and open their company in Palo Alto or another Bay Area city from day one.

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Government Shutdown Could Slow Tax Refunds, Crimp Use Of Largest Federal Anti-Poverty Program

March 29, 2011

WASHINGTON — A prolonged government shutdown could deliver a blow to many poor American families by limiting or delaying access to the federal government’s largest anti-poverty program, the Earned Income Tax Credit. Last year, 26 million families received about $59 billion from the EITC, according to the Treasury Department . While a broad majority of recipients may be unaffected by a possible government shutdown, which at the earliest could come little over a week from this year’s April 18 deadline for individual tax returns, the sheer scope of EITC recipients means a vast number of households can still be hurt by any problems with poverty-relief payments. Such pain could throw a wrench into federal efforts to fight poverty during the worst economic downturn since the Great Depression. The details of a potential shutdown — including its possible duration and effects — remain unclear . And even if Congress cannot strike a deal to continue government operations, some programs would still be designated as “essential” functions and permitted to continue running. But it remains to be seen exactly which programs would be considered essential, and some operations of the Internal Revenue Service may not be. The IRS and the Treasury Department declined to comment for this report, but policy observers say that while it is very unlikely that a shutdown would prevent the government from collecting tax money, other key IRS functions — including the delivery of billions in tax refunds — could be affected. “Our expectations are … taxes will be processed as if there was no shutdown,” said Cristina Martin Firvida, the director for economic security for AARP’s government-relations division. “We’re unclear whether or not there would be significant delays in refunds, including refunds that involve the EITC.” For many citizens, their tax refund from the EITC program represents a critical component of their annual income, sometimes as much as 30 percent of their household finances. The average EITC benefit is around $2,250, but some families receive as much as $5,666, depending on their circumstances. Benefits are scaled to the number of children a family has and the family’s annual income. Individuals making $13,460 or less can receive $467 from the EITC, while families with up to three children can receive the $5,666 benefit if they make less than $48,362. For families at the lower end of the economic spectrum, the EITC can be essential for paying their bills. Fortunately, most poor families file their refunds relatively early in tax season, hoping to receive government checks sooner rather than later. But many families still wait until the mid-April tax filing deadline, and roughly one-fourth of American households who qualify for the EITC never actually apply for it, according to Adam Perry, an organizer for Capital Area Asset Builders ‘ DC EITC assistance program . Those unaware citizens often file much later in tax season, since they do not realize they are eligible for anti-poverty benefits in earlier months. DC EITC provides free tax preparation and advice to low-income residents of the nation’s capital, avoiding expensive tax preparation services , some of which have been flagged as predatory by consumer advocates. Perry says his group’s efforts to reach out to potential EITC recipients continue right up to the filing deadline. “The good news is that since its April 8, it’s almost the end of tax time, so the majority of people will have it done,” he said. “The bad news is, a lot of people still wait to the last date.” The consequences of a delayed refund for poor households can be devastating. “If that check was to be delayed, that would cause a problem, much more so than for families making $100,000 a year,” said Lee Davenport of OneEconomy Corp. , a global nonprofit that attempts to advance the interests of low-income households through techonology. OneEconomy is currently promoting software that helps low-income households file their taxes online for free. Perry said he is also concerned that the IRS may not be available to answer questions from taxpayers, noting that his volunteer advocates frequently confer with IRS experts about individual cases. “The problem is, if the IRS call centers are classified as ‘not essential’ and they’re not able to answer questions, the folks who need help the most are going to be the ones left to try and figure things out on their own,” Perry said. The peculiar funding specifics of the local Washington, D.C. government could also create hurdles for poor taxpayers living in the nation’s capital. Local government funds rely on congressional approval, and if they don’t get it, many local buildings will be forced to close. DC EITC offers help at 11 locations in the city, including one at the public Martin Luther King, Jr. Memorial Library. Perry estimated that between 400 and 500 people who planned on filing with his organization during the last week before tax day will have to make alternative plans if the library closes for the second week in April.

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Data Storage Corporation Appoints John Coghlan to Its Board of Directors

March 29, 2011

GARDEN CITY, NY–(Marketwire – March 29, 2011) – Data Storage Corporation (DSC), a provider of data protection and business continuity solutions, today announced the appointment of John Coghlan to its Board of Directors. With more than 30 years in the financial services industry and his experience serving on multiple boards, Mr. Coghlan is well-positioned to provide DSC with guidance on its investment and strategic growth initiatives.

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Nearly A Tenth Of Japanese Farmland Affected By Tsunami, AP Says

March 26, 2011

SENDAI, Japan — The rice paddies on the outskirts of this tsunami-hit city are ankle-deep in a black, salty sludge. Crumpled cars and uprooted trees lie scattered across them. His house destroyed, rice farmer Shinichi Shibasaki lives on a square of blue tarp on the top floor of a farming cooperative office with others like him. He has one set of soiled clothes. But all he can think about is getting back to work. “If we start washing the soil out now, we can start growing our rice seedlings at the end of April at a different location, and plant them here a month later,” the 59-year-old farmer said. That may prove overly optimistic, but agriculture experts – as well as Indonesian farmers hit by a tsunami in 2004 – say a quick recovery is possible, maybe within a year. A key factor will be how long it takes for the salt to wash out from the fields, some still flooded with seawater. Whenever it comes, the return of bright green stalks swaying in the breeze will be a symbol of rebirth. The affected area may represent only a small part of Japan’s overall production, but rice is a spiritual touchstone in this country. The nation’s soul – despite a modern fascination with all things high-tech – remains rooted in the soil. In the name of preserving tradition, Japan’s mostly small-scale rice farmers are heavily protected from cheaper foreign competition. The emperor plants and harvests symbolic stalks every year, and some city dwellers rent small plots to grow rice on the edge of town. The country’s mythology is filled with references to rice, and the written character for “rice field” forms part of many surnames. In the small city of Natori, Akemi Miura can only laugh as she looks at the land around her home, which her family has worked for more than a century. But the 46-year-old says they will replant, though she thinks it will take a few years for the soil to recover. A fishing boat washed more than a mile (1.5 kilometers) inland smashed into her carnation greenhouse and caught fire. Debris and a thick, sticky mud covers the fields. “I think we’re finished with carnations, but we’ll always grow rice,” she says. There are no official estimates yet of how much farmland was affected. The Associated Press made a rough calculation based on last year’s harvest in tsunami-hit towns. It indicates that at most 8 percent of Japan’s 4 million acres (1.6 million hectares) of rice farms has been hit, affecting about 4 percent of total production. Makie Kokubun, a professor at Tohoku University in Sendai, will soon accompany government officials on a trip to take samples and analyze the soil. Japan’s coastal farmland has been damaged by salt from major typhoons in the past, and farmers have been able to flush it clean. “Recovery may be faster than some think. The key is the water flow through the land, which varies by region,” he said. “There is also some evidence that light salt can actually help crops grow, though this is obviously in far greater amounts.” The 2004 tsunami ravaged rice fields in Indonesia’s Aceh province, and scientists made dire predictions of years without a crop. But many recovered quickly. “Thank God, we were able to harvest rice just one year after the tsunami decimated my rice fields,” said Sulaiman Abdullah, 55, who farms a third of an acre (1,300 square meters) in the village of Beuradeuen. “And the quality is even better than it was before, maybe because the mud, garbage and sea water brought in by the wave made the land more fertile,” he added. “The same tsunami that first destroyed our lives was in the end a blessing of sorts.” Even if the soil recovers, farmers in Fukushima prefecture – known for the light and sticky “koshihikari” strain of rice preferred by many Japanese – face another problem. Radiation from a damaged nuclear power complex has found its way into vegetables, milk and the water supply. Japanese consumers are notoriously fickle about food safety and may shun Fukushima products, even if health experts say the radiation is not a threat. Up and down the tsunami-ravaged coast, a greater concern may be manpower. Many of the tsunami victims came from coastal families that have farmed for generations. Here in Miyagi prefecture, the state that includes Sendai and Natori, farmland was converted from swamps about 400 years ago to generate funds for the local ruler. But the younger generation increasingly doesn’t want to farm. The average age of farm workers in Miyagi topped 65 last year, according to a prefectural survey. Now some older farmers, their homes gone and land in tatters, are saying they will call it quits. “I’m worried that a lot of these elderly farmers are just going to leave their fields and not come back,” said Masao Takahashi, an official in the Miyagi office of the Japan Agricultural Cooperatives, a politically powerful national network of farming groups. In Natori, 60-year-old rice farmer Kikuo Endo points to a shed full of ruined farm equipment, which he estimates was worth 10 million yen ($125,000). He doesn’t know if insurance will cover it. “People shouldn’t give up, but I don’t think I will farm again,” he says. “It’s time to pass the baton to the next generation.” There may not be one. His three sons, he said, have abandoned the fields and moved to the city. ___ Associated Press writer Fakhrurradzie Gade in Beuradeuen, Indonesia, contributed to this story.

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Gaddafi’s Son Had Internship In U.S. Just Before Libyan Conflict

March 26, 2011

WASHINGTON (AP) — A son of Libyan leader Muammar Gaddafi toured U.S. ports and military facilities just weeks before he helped lead deadly attacks on rebels protesting his father’s authoritarian regime. Khamis Gaddafi, 27, spent four weeks in the U.S. as part of an internship with AECOM, a global infrastructure company with deep business interests in Libya, according to Paul Gennaro, AECOM’s Senior Vice President for Global Communications. The trip was to include visits to the Port of Houston, Air Force Academy, National War College and West Point, Gennaro said. The West Point visit was canceled on Feb. 17, when the trip was cut short and Gaddafi returned to Libya, Gennaro said. The uprising there began with a series of protests on Feb. 15. By late February, forces controlled by Khamis Gaddafi were leading the brutal assault to retake Zawiya, a city near Tripoli that rebels captured soon after the uprising began. Gennaro said the U.S. State Department approved of the trip, and considered Gaddafi a reformer. He said the government signed off on the itinerary, at times offering advice that affected the company’s plans for Gaddafi. State department officials denied any role in planning, advising or paying for the trip. “We did greet him at the airport. That is standard courtesy for the son of the leader of a country,” said State Department spokesman Mark Toner. Toner said the government was aware of Gaddafi’s itinerary, but “did not sign off on it.” AECOM was not paid to arrange the trip, and did not pay for related expenses, Gennaro said. He said the trip was arranged at the request of a Libyan, whom he declined to name. Gennaro was one of the AECOM executives who met with Gaddafi during the trip, to educate him on U.S. corporate practices. He said Gaddafi was “very, very interested in the planning, design, how do you advance large infrastructure projects.” “That was the nature and the tenor of this internship,” he said. Khamis Gaddafi was killed earlier this week after a disaffected Libyan air force pilot who crash-landed his jet in the ruling family’s headquarters, according to unconfirmed reports cited by ABC News and Al-Arabiya television. He died from burn injuries after the crash, the reports said. Gaddafi, Muammar Gaddafi’s youngest son, was pursuing an MBA at the IE Business School, in Madrid, Spain, until earlier this month. The school expelled him because of his role in attacks on Libyan protestors. Khamis Gaddafi led the Khamis Brigade, one of several professional military units that are loyal to leader Muammar Gaddafi. U.S. diplomats in leaked memos have called it “the most well-trained and well-equipped force in the Libyan military.” In one brutal attack, his forces surrounded Zawiya while rebels in the city celebrated their victory and cared for the injured. The Khamis Brigade then unleashed an all-out assault from three sides, unloading their weapons and artillery as they stormed the city. The city sank into darkness at night due to power outages and the main hospital became too dangerous for patients because it was under the control of government forces. ____ Associated Press writer Matthew Lee contributed to this report.

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This Tiny Town Is The Population Center Of The U.S.

March 25, 2011

KANSAS CITY, Mo (By Kevin Murphy) – Village officials in Plato, Missouri are trying to figure out how to make the most of being declared by the U.S. Census Bureau as the population center of the United States. The village, which is so small that its employees are volunteers and the town board meets in the bank basement, will create a 12-inch Missouri stone marker to celebrate its census distinction. “We may put a sign up somewhere, though we are not on a main road,” Mayor Bob Biram said Friday. “Sometimes when there’s an interesting point, you stop and see it.” Each decade, the Census Bureau calculates the mean center of population, determined as the place where an imaginary, flat, weightless and rigid map of the U.S. would balance perfectly if all 308,745,538 residents were of identical weight. The center has shifted west over the centuries. In 1790, it was near Chestertown, Maryland. In 1880, it was in Covington County, Kentucky. On the edge of the Mark Twain National Forest some 35 miles from the nearest city of any size, Plato is pleased with the population distinction, said Barbara Pinkston, village clerk. “We are proud to be in the center of everything because we are stuck out here in the country,” Pinkston said. Plato has only 109 residents, according to the latest census, but it has a cafe, bank and school. Yes, Plato is named after the philosopher, Pinkston said. Plato replaces Edgar Springs, Missouri, about 25 miles to the northeast as the population center. The shift is because of the population growth of the southwest United States, according to the Census Bureau. The actual center is 2.7 miles northeast of Plato. Edgar Springs held the population center distinction since 2001, which it noted by putting up a monument, along with a flag and picnic table. People from as far away as Hong Kong visited the setting and took pictures, City Clerk Paula James said. “It was just a little something different,” James said. “We haven’t really talked about what we’ll do now.” (Writing by Kevin Murphy; Editing by Mary Wisniewski and Greg McCune) src=”http://i.huffpost.com/gen/211216/REUTERS-LOGO.jpg”> Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: London Banks Pay Premium for City, Shun Canary Wharf

March 25, 2011

March 25 (Bloomberg) — Bloomberg’s Poppy Trowbridge reports on the competition between Canary Wharf and the City, London’s two financial districts, to attract financial services companies.

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Fred Hochberg: American Business Needs to Get in the Game

March 24, 2011

Teamwork. Cooperation. Intense preparation. That’s what is needed to win at the highest levels of athletic competition. It also is what will be needed in Brazil as the country prepares to host two of the world’s largest sporting events: the 2014 World Cup and the 2016 Summer Olympics. As I traveled with President Obama in Brazil, you could see the anticipation and excitement building for these events; you also could see the enormous investment and planning that is required to ensure that they will be successful. Brazil is planning to spend $200 billion in additional infrastructure across the country on everything from roads and public transportation to airports and sports stadiums. World Cup events alone will be played in 12 cities. It is critical, as President Obama told business leaders in Brazil, that America does more than just watch these projects from the stands. It is critical that we get in the game. We may not always win on the soccer field, but when it comes to providing the engineering services, machinery, security systems and IT support required to build and run the stadium, or the buses and transportation systems needed to get fans into their seats, American business is second to none. This is no time for the United States, particularly our business community, to be sitting on the sidelines. These projects play into America’s strength — and require the types of high-quality capital goods and services that U.S. companies lead the world in producing. To ensure that Brazil can obtain more American-made products and services for these important projects, President Obama announced $1 billion in financing through the Export-Import Bank of the United States. Its purpose is to facilitate the purchase of more American goods and services for various infrastructure projects, including those associated with the World Cup, the Olympics and the rebuilding that is needed in the wake of recent flooding in Brazil. One of the key points President Obama emphasized in our meetings was the enormous opportunity for Brazil and the United States to be doing more business together. And to be doing the kind of business that is mutually beneficial for our countries — the type that creates good jobs and boosts local economies. 2010 was a strong year for that type of cooperation and teamwork. And there is reason to be even more bullish on the future. U.S. goods exports to Brazil were up 35 percent in 2010. These sales support about 250,000 U.S. jobs. And over the last five years we have doubled our exports to Brazil. This has allowed our countries to build a strong and mutually beneficial $80 billion trading relationship — and we see enormous opportunity to grow and deepen these economic ties in the coming years. Brazil’s economic trajectory has been remarkable. Today, it is the world’s seventh largest economy –a nd this growth has helped put millions of Brazilians on a path to the middle class. However, meeting the needs of this growing middle class will require significant additional investment in building power capacity and infrastructure. In Rio today, 16 percent of people move around the city using mass transit. The country is making plans to raise that figure to 50 percent by 2016. This will require an incredible investment. The city currently has 25,000 hotel rooms. To meet the demand for upcoming events, they are looking to grow that by 4,000 rooms by 2013, with the goal of further increasing capacity for the Summer Olympics. In addition to these infrastructure projects, Brazil is expecting electricity consumption to grow more than 60 percent between 2009 and 2019, requiring total investment of more than $128 billion. To address this, Brazil is rapidly developing its renewable energy sector, with a particular focus on biofuels, hydropower, wind and solar. The country also recently discovered deepwater oil reserves that are twice the size of our reserves. These are all additional areas of opportunity and for partnership between our countries — and they are sectors where private investment is critical. They also happen to be areas where Ex-Im Bank’s financing is particularly effective at ensuring the success of a project. We have a long history of working with Brazil, beginning back in 1936. Much of our early work involved financing the sale of millions of dollars of American-made electrical, railway, mining, and cargo equipment. As Brazil continues to build and rebuild, there is an enormous opportunity for the U.S. to assist on these critical projects. And we are continuing to look for new and innovative ways to finance these transactions. In the last two years, our nation has made real progress in building the foundation for an export-focused economy. And the results are beginning to show: Exports were up 16.7 percent in 2010, putting us on target to meet President Obama’s goal of doubling exports by 2015. And in January they hit the highest one-month total ever recorded. To continue building on that momentum, we need to focus on strategic partnerships with key markets across Latin America. In today’s global economy, nations that build together — and buy from each other — are invested in ways that go far deeper than just business transactions. They are investing in each other’s prosperity, security and economic vitality. They are investing in the hopes and dreams of each other’s citizens. When we make these investments, regardless of what happens on the playing field, both our countries — and our citizens — come away winners.

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Inmates Bake Bread For Entire NYC Prison Population

March 24, 2011

NEW YORK — Each morning, and again in the afternoon, the blades of three bread-slicing machines are counted carefully. Only then does the bakery let workers go home – to their jail cells on Rikers Island. Twenty inmates of one of the nation’s largest jail complexes are part of a team that bakes 36,000 loaves of bread a week to feed the city’s entire population behind bars – about 13,000 people. Employees in orange-and-white-striped jumpsuits and surgical caps earn $31 a week churning out whole wheat bread. There’s not an apron in sight The prison bakers say they are learning skills that may keep them gainfully employed once they get out. “I’m learning teamwork,” says prisoner Nikos Alexis, 24, as he walks off in black leather boots caked with flour. He’s serving a four-month sentence for possession of a forged instrument, according to correction records. It’s a privilege to get this work assignment; only inmates already sentenced to one year or less in jail are considered. Most of the other Rikers residents are awaiting trial on charges including murder. The bakers behind bars get up before dawn and climb into a van for the ride to the other side of the 413-acre island in the East River between Queens and the Bronx. Passing a double row of razor wire-topped fences, they enter the mammoth, single-story bakery around 6 a.m., guarded by correction officers with a captain and a deputy warden. By the loading dock, a sign in the glass window of a supervisor’s office reads: “FAKE & BAKE” – a small try at making people smile in this grim community. More than culinary discipline is needed in this kitchen – part of a jail system where arguments between inmates or with guards can erupt in a flash, resulting in stabbings and slashings. In December, a Rikers correction officer had part of his thumb bitten off by an inmate. So far, the bakery itself remains violence-free. But it’s a dynamic, noisy place. Dangers include fast-moving industrial machinery tagged with hands-off warning signs and blinking yellow lights. The baking process starts in giant metal tubs where 1,600 pounds of dough is mixed for each batch – half white flour and half the darker one – and hoisted with a lift into a machine that divides it into balls that are shaped and fed into corn oiled pans. The finished bread is stored in a walk-in refrigerator with the words “Fort Knox” whimsically chiseled into its steel door. The soothing smell of warm, freshly baked bread drifts across the 11,000-square-foot space, a labyrinth of white-coated metal machines mixing, shaping, baking, slicing and packing the loaves. The men take turns at various stations, from mixing the flours in the tubs – “an awesome kind of combination,” says Alexis – to working the ovens. The brows of three young men drip with sweat as they gently load 240 risen loaves into a giant oven – a sea of dough that emerges golden a half hour later. In summer, with only fans whirring overhead, the air is hotter than the bread. “Man, it gets hot – sometimes up to 120 degrees!” says Aubrey Simpson, the supervising baker and a civilian who was once an army officer in his native Guyana. Above a conveyor belt is a sign in Gothic script that reads: “Give Us This Day Our Daily Bread.” And the Rikers bakery does – tens of thousands of wax-paper-wrapped loaves that fill two storage rooms, ready to be trucked out. The bakery’s products are not for sale to the public – even though prisoners agree it’s tasty enough to succeed outside the island. “I would definitely give it a thumbs up and say it’s better than the bread I buy at the store,” says inmate Taiwan Taylor, 32, who’s serving an eight-month sentence for criminal trespass. Taylor loves to bite into a fresh slice on his 10 a.m. break. “It’s delicious when it’s warm, when it first comes out of the oven,” he says. At about 1 p.m., the day’s baking is done. Then come the cleanup and maintenance of equipment, most of it dating to the 1960s. “It’s old, and any minute, something could go wrong,” says chief mechanic Andrew Sonni, also a civilian and Guyanese native who keeps dog-eared repair logs in his tiny office off the bakery floor. Tacked to a wall next to a pinup girl is a booklet with a two-word reminder scribbled on it in bold letters: “COUNT BLADES.” Keeping track of the blades in the slicing machines is a security measure to keep inmates from spiriting away any object “that might be turned into a handmade weapon,” says Stephen Morello, a Department of Correction spokesman. But the incarcerated bakers appear more interested in good behavior that could get them sprung early than in harming each other. Until two years ago, the jail bakery made only white bread. Under Mayor Michael Bloomberg, a nutrition task force opted for the healthier wheat loaves. And to meet city budget cuts, prisoners in New York City now get a maximum ration of six half-inch slices a day, instead of the previous eight – saving the city $350,000 a year. For holidays, the prisoners also make “the best carrot cake I have ever tasted,” Alexis says. Simpson, the senior baker, made some changes in a recipe already in use when he started working at Rikers more than 20 years ago. When fellow baker Kay Fraser – also a civilian employee born in Guyana – arrived about five years ago, she tweaked the recipe some more. “I put in less cloves and allspice, and more ginger,” she says. “And I add a lot of love.” The work is done in 25-loaf batches, using 25 pounds of sugar, 25 pounds of eggs and 25 pounds of shredded carrots. When the cakes – shaped like bread loaves – emerge from the oven, she lets them cool. Then comes her special touch: wrap them in wax paper and refrigerate them “to seal the moisture.” In April, Alexis expects to cross the bridge linking the island jail with Queens – and freedom. “I want to just get back on my feet and do things the right way,” he says, “and bake bread for my mother.” ____ Online: Array

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Video: Ciccarone Says Majority of Muni Bond Market `Healthy’

March 22, 2011

March 22 (Bloomberg) — Richard Ciccarone, managing director and chief research officer at McDonnell Investment Management LLC, and Ronald Green, controller for the city of Houston, talk about the outlook for the municipal finance. They speak with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Rising Yen Threatens Japanese Trade, Worsening Existing Challenges

March 18, 2011

As Japanese factories and ports lie in ruins, a new threat to trade has emerged. The yen reached a record-high value Thursday, making exports more expensive and raising fresh concerns about the prospect of Japan’s economic recovery. Last Friday’s 9.0-magnitude earthquake off Japan’s northeastern coast has destroyed factories that produce goods for export , and it has ruined roads and ports that would otherwise be used to export those goods. Already, trade disruptions have prompted experts to downgrade their forecasts for the country’s economy. Now, the outlook seems even worse: The value of Japan’s currency has risen to a territory not seen since World War II, meaning the products that Japan does manage to export will seem less attractive to buyers. Amid concerns that this development could affect economies worldwide, leaders from the Group of Seven industrial nations, in a release issued Thursday evening, pledged to support Japan’s economy with financial intervention while declining to say what this intervention would entail. Starting Friday, the U.S., the U.K., Canada and the European Central Bank will join Japan in attempting to tame exchange rates, the U.S. Treasury said in the release. There seemed to be an acknowledgement that economic pain in Japan could be felt worldwide. But the real strain, experts say, will be in Japan. The yen’s rise could hardly be coming at a worse time for the country. “It’s one more blow to the Japanese economy,” said Nariman Behravesh, chief economist of IHS Global Insight. “A strong yen is the absolute last thing they need right now.” Investors, expecting an expensive rebuilding process in Japan, are contributing to the currency’s rise, experts say. To pay for damage claims and construction expenses, Japanese institutions will likely convert assets into yen, which would cause the value of the currency to rise. This process will likely be expensive, involving massive amounts of yen: Early estimates place the damage as high as 15 trillion yen, according to a Thursday report from Wells Fargo. That’s about $190 billion. In anticipation, investors are buying the currency. Those who had placed bets against the yen are now likely buying yen to protect against losses. Such trades help drive up the value of the currency, even before the rebuilding actually begins. “Speculation is probably the most important element here,” said Marc Chandler, global head of currency strategy at the financial services firm Brown Brothers Harriman. “There’s been a huge jump in open interest this week. That would seem to imply speculators are buying yen, perhaps anticipating repatriation.” The yen has climbed 5 percent against the dollar since last Thursday’s close, according to data provided by the website of the Financial Times . The yen achieved an all-time high on Wednesday, reaching its highest value since it was first tied to the dollar after World War II. The previous record, in 1995, occurred months after an earthquake struck the city of Kobe. This new development doesn’t bode well for Japan. The yen has been steadily increasing in value for more than a decade, as deflationary pressures have strained Japan’s economy. When the yen is strong, goods shipped out of Japan become more expensive, and therefore potentially less attractive, for major trading partners like the U.S. In recent years, exports from Japan have been diminishing. During 2010, Japanese exports measured in yen were 20 percent less than in 2007, according to Japan’s records . During that period, the yen gained more than 30 percent against the dollar. The yen’s dramatic rise over the last few days could worsen that trend. “That certainly increases the pressure,” said Scott Anderson, senior economist at Wells Fargo. “It could magnify the downside risks for the Japanese economy in the second quarter.” In a report released Thursday, Wells Fargo slashed its forecast for Japan’s economic growth. Earlier this week, the bank’s economists expected Japan’s gross domestic product to grow by 0.3 percent in the second quarter of this year, a revision down from an earlier forecast of 1.3 percent. But after new developments, those economists now expect the economy to shrink in the second quarter. Before natural disaster struck, a recovery seemed to be underway. Japan’s economy likely grew in the first quarter of this year, economists say, after shrinking at the end of last year. But now, that glimmer of hope appears temporarily extinguished. A stronger yen means a weaker dollar, but experts said that wasn’t a concern for the U.S. It could actually be slightly positive, as American goods become relatively cheaper abroad. “It moves the needle a little bit away from Japan,” said Gus Faucher, director of macroeconomics for Moody’s Analytics. But he added that that’s not necessarily a good thing for the world. “Global trade in general is going to take a hit.”

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Richard C. Breeden to Step Down as Chairman and Director of H&R Block

March 17, 2011

KANSAS CITY, MO–(Marketwire – March 17, 2011) – H&R Block, Inc. ( NYSE : HRB )

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Al Norman: Wal-Mart: Unions Love Us

March 13, 2011

Last month Wal-Mart commissioned a poll which purported to show that 75% of union members in New York City were “all for” a Wal-Mart in the city. The New York Post ran a story which began, “New York City’s union workers love Wal-Mart.” The improbable results of this “poll” are part of organized effort by Wal-Mart which dates back to 2005, when the giant retailer began to use “push-polls” to counter-attack its critics. On his way out the door in 2009, Wal-Mart CEO Lee Scott told Fortune Magazine that one of the mistakes he made during his tenure was being far too slow in responding to public criticism of his company. According to Fortune , Scott admitted “he didn’t take its concerns as seriously as he should have, believing instead that the negative feedback was coming from blue-state elites who didn’t shop at Wal-Mart and therefore didn’t understand the money the company saved consumers.” But in 2005, Wal-Mart started to push back at the ‘blue state elites,’ and behave more like a candidate running for public office than a retailer. Scott hired the Democratic PR firm Edelman in 2005, and created a “war room” of operatives in its Bentonville headquarters. A prime weapon was the push-poll. In 2005, Thomas Riehle, a Democrat, and V. Lance Tarrance, Jr., a Republican, doing business as RT Strategies, produced a poll commissioned by Working Families For Wal-Mart, which concluded that: • 54% of union households believe union leaders should make protecting union jobs a higher priority than attacking Wal-Mart • 42% of union households believe the campaign against Wal-Mart makes labor union leaders less relevant to solving the economic challenges facing working families today. • 44% of union households agree that the campaign against Wal-Mart is not a good use of union dues Working Families For Wal-Mart issued the following statement with their poll: “The data clearly show that Americans in union households — as well as those not in union households — are skeptical about the goals and priorities of the anti-Wal-Mart campaign being waged by union leaders at a time when U.S. manufacturers are eliminating tens of thousands of union jobs…This poll shows that union families also support Wal-Mart.” In fact, the 2005 poll indicated that 56% of union households agreed that fighting Wal-Mart was a good use of union dues. In 2009, Wal-Mart produced a political push-poll in Chicago in which residents were asked the following leading question: Mayor Daley says that a Wal-Mart at 83rd & Stewart would bring 400+ jobs to the city and make fresh food available to the neighborhood; others believe jobs are not enough. Press 1 if you believe a Wal-Mart should be allowed to be built or Press 2 if you believe it should not. More recently, Wal-Mart commissioned two polls in New York City designed to bolster its wooing of the City Council. In December of 2010, the Brooklyn Daily Eagle ran a story which began : “A recent poll commissioned by Wal-Mart reveals that 76% of Brooklyn residents say they favor Wal-Mart coming to the city.” The newspaper added: “Based on these facts, it appears Brooklyn could soon have a Wal-Mart.” The pollster hired by Wal-Mart was Douglas E. Schoen, whose website describes him as “one of the most influential Democratic campaign consultants for over thirty years.” According to Crain’s New York Business , Schoen was hired by Wal-Mart “to counter those who would argue that a Wal-Mart poll would be biased.” The Schoen poll showed that 37% of respondents did not favor locating a Wal-Mart in their neighborhood, and 30% did not agree that New York City should have a Wal-Mart. These are remarkably high negative numbers for a retail store. As one Wal-Mart executive pointed out years ago, “Why all the fuss? We’re not a nuclear waste dump.” While on Wal-Mart’s payroll, Schoen also produced another poll of 400 small businesses in New York, which concluded that 62% of businesses with 50 workers or less wanted Wal-Mart to come to New York. But Schoen’s poll also showed that among small retailers — the only businesses surveyed who actually compete with Wal-Mart — 45% refused to say they favored Wal-Mart coming to New York City. In Manhattan and Brooklyn, 42% of small businesses did not say they were favorable to Wal-Mart, and in the Bronx, 56% of small business did not say they favored a Wal-Mart. Schoen apparently did not want the public to see his survey questions, because neither of his Wal-Mart surveys are posted on his website, nor are they mentioned on Wal-Mart’s websites. But Schoen was part of Mayor Michael Bloomberg’s inner circle, and Bloomberg’s former campaign manager, Bradley Tusk, was running Wal-Mart’s campaign in New York City. Lee Scott may have thought that Wal-Mart was slow to respond to its critics, but the company is working overtime now producing a wall of polling data to make it appear that everyone in urban America — including Democrats and union members — want a Wal-Mart in their neighborhood. No retailer in American history has ever had to divert so far from its corporate mission to do damage control on its image. Rather than focus on mass marketing cheap Chinese anythings, Wal-Mart has been forced to spend millions of dollars to sell itself instead. If its polling numbers were better, the company wouldn’t have to keep producing more polls. Al Norman is the founder of Sprawl-Busters. His book “Slam-Dunking Wal-Mart” is a classic in community organizing strategy. Sprawl-Busters can be found on Facebook.

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Video: Commuters Stranded After Japan Earthquake, Tsunami

March 11, 2011

March 11 (Bloomberg) — Tokyo’s subway system, the world’s busiest with about 8 million riders a day, shut down after today’s 8.9-magnitude quake and tsunami struck the city, leaving commuters to wait hours for taxis or search for somewhere to spend the night. Retail store shelves were also left empty as victims struggled to buy supplies and food amid the disaster. Police say 60 people were killed and 56 are missing, according to the Associated Press. Bloomberg’s Mike Firn reports. (Source: Bloomberg)

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The 10 Wealthiest Divorcées In The World (PHOTOS)

March 11, 2011

Forbes published their annual Billionaires List on Wednesday, comprised of the 1,210 wealthiest people on the planet, totaling a net worth of $4.5 trillion. This year’s crop broke world records: More billionaires than ever before, China doubled it’s number of billionaires, Moscow has more billionaires than any other city, and six Facebook founders made it on the list. Okay, so we know they have it covered when it comes to money, but what about marriage? We’ve compiled the 10 wealthiest divorcées from this list–and by extension, in the world. Some are available, others are taken. Check out how they measure up and weigh in: would you pursue a billionaire?

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Strategic Environmental & Energy Resources Announces the Appointment of New Executive Vice President

March 10, 2011

COMMERCE CITY, CO–(Marketwire – March 10, 2011) – Strategic Environmental & Energy Resources, Inc. (SEER) ( PINKSHEETS : SENR ), a provider of vapor and emission control products, as well as technology-based industrial services in the environmental, oil & gas, renewable energy, and rail transportation sectors, announced today that it has appointed John Jenkins to serve as the company’s new Executive Vice President. Mr. Jenkins will also join the Board of Directors of SEER where he will lead the formation of an Audit Committee.

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Strategic Environmental & Energy Resources Announces the Appointment of New Executive Vice President

March 10, 2011

COMMERCE CITY, CO–(Marketwire – March 10, 2011) – Strategic Environmental & Energy Resources, Inc. (SEER) ( PINKSHEETS : SENR ), a provider of vapor and emission control products, as well as technology-based industrial services in the environmental, oil & gas, renewable energy, and rail transportation sectors, announced today that it has appointed John Jenkins to serve as the company’s new Executive Vice President. Mr. Jenkins will also join the Board of Directors of SEER where he will lead the formation of an Audit Committee.

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Oil Prices Climb As Libyan Violence Intensifies

March 4, 2011

(Reuters) – Crude oil rose on Friday, with Brent pushing toward $116 a barrel, as Libyan security forces began a violent crackdown on protesters in Tripoli and clashed with rebels near the major oil terminal of Ras Lanuf. Al Jazeera television also reported that an oil facility at Zueitina, south of Benghazi was damaged and on fire. By 1448 GMT (9:48 a.m. EST), Brent crude futures for April delivery were up 87 cents to $115.66 a barrel, after earlier touching $116.30. U.S. crude futures for April rose $1.27 cents to $103.18 a barrel. The intraday peak was $103.57, the highest since front-month crude hit $106.91 on September 29, 2008, eclipsing $103.41 reached on February 24. “Tension in the Middle East is like a runaway train,” said Michael Hewson, an analyst at CMC Markets. “Once it starts it’s very difficult to stop. And if there is a danger that it impacts the supply chain, people will understandably get nervous.” Libyan security forces fired shots and used tear gas to disperse a protest against Muammar Gaddafi’s regime in the capital Tripoli. Demonstrators began the protest in the city’s eastern district after Friday prayers. Meanwhile, rebels advanced on the major oil terminal of Ras Lanuf, clashing with forces loyal to Gaddafi. The head of Libya’s rebel National Libyan Council vowed “Victory or death”, in a short speech in the town of Al Bayda in the rebel-held east of the country. A rebel spokesman told Al Jazeera rebel forces will attack Tripoli once a “no-fly” zone is enforced by international powers. He added rebel forces had repelled an attempt by Gaddafi forces to seize control of Brega airport in the rebel-held east. Barclays Capital analysts said in a note the chances of a swift resolution in areas of tension had reduced considerably. “Libyan oil is likely to be lost to the market for an extended period, tying up considerable amounts of replacement oil in much longer supply chains, and events in Nigeria, Iraq, Iran and Bahrain are likely to provide a continuing backdrop of headline risks,” they said. SAUDI ARABIA Investors and traders have been tracking the civil unrest in North Africa and the Middle East for any sign that Saudi Arabia, OPEC’s leading oil producer, would be affected. On Thursday Saudi Shi’ites staged protests in two towns in its oil-producing Eastern Province, demanding the release of prisoners they say are being held without trial. “Saudi Arabia is the main risk in the region,” said Christophe Barret, global oil analyst at Credit Agricole Corporate and Investment Bank. “It has all the spare capacity, and if there is unrest and production disruption, then it means an explosion in oil prices. But I think the risk is an exaggeration.” He argued there were always problems between the Shi-ites and the Sunnis. “I don’t think it will go like Libya, but the Eastern Province is a significant oil-producing province of Saudi Arabia, so that is why everyone is looking at it.” Unrest continues in other parts of the region. Iraqi security forces used water cannon and batons to disperse protesters in the southern oil hub of Basra as thousands of Iraqis rallied around the nation against corrupt officials and poor basic services. In Yemen, hundreds of thousands protested against President Ali Abdullah Saleh, who rejected an opposition plan for him to transfer power by the end of 2011. And in Bahrain several people were reported hurt in fighting between Sunni and majority Shi’ite Muslims. Libya’s oil output has fallen to 700,000-750,000 barrels per day (bpd) from normal levels of 1.6 million bpd as most foreign oil workers have taken flight, according to Shokri Ghanem, the head of Libya’s state-owned oil company. (Additional reporting by Florence Tan and Robert Gibbons, editing by Jane Baird) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Lacy Schutz: Women at Work: Historic Photos From the Museum of the City of New York

March 2, 2011

The first half of the 20th century was filled with changes for women in the United States, not the least of which was the right to vote, granted by a constitutional amendment in 1920. The rise of manufacturing created factories and industries that provided new jobs for women, and the opportunity to gain financial independence and pursue jobs outside domestic confines. The mobilization of troops in both of the World Wars opened up job prospects for women in fields formerly dominated by men. Women also served in record numbers in many roles in the United States military during World War II. The Museum of the City of New York is committed to digitizing its photographic holdings and has put more than 52,000 historic images of the city online so far, with more to come in the near future. We celebrate Women’s History Month with this selection of photographs, and observe the 100th anniversary of the Triangle Shirtwaist Factory fire, a seminal event in women’s labor history.

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Jamie Court: Will Google Maps New Street View Tricycles Take Pictures of Our Kids’ Playground?

March 2, 2011

Should our right to privacy be sacrificed so Google can make billions of dollars off images of us and our things? Google's grand experiment in photographing the world's places for Google Maps has taken its “street view” cameras off-road with new hi-tech tricycles equipped with 360 degree view cameras to photograph the back roads, parks, college paths and inner sanctums of our world. The engineer's latest design raises the question: What will Google be capturing on its backroad tour that people don't want seen?

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Data Storage Corporation Announces the Appointment of Richard Rebetti to Chief Operating Officer

March 2, 2011

GARDEN CITY, NY–(Marketwire – March 2, 2011) – Data Storage Corporation (DSC), a provider of data protection and business continuity solutions, today announced that it has appointed Richard Rebetti to Chief Operating Officer (COO), effective immediately. Mr. Rebetti has more than 20 years of operational management and merger and acquisition experience at technology and telecommunications organizations, including one year with DSC. As COO, he will be responsible for managing the company’s day-to-day operations, as well as overseeing its marketing and information systems functions.

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With Lockout Looming, NFL Owners Downplay Economic Benefits Of Football

March 1, 2011

WASHINGTON — In the past two decades, National Football League owners have received at least $5 billion from local governments to build and maintain football stadiums for their lucrative franchises. The argument was almost always the same: With a little taxpayer investment, the city would get a big boost in economic activity. With no investment, the team would up and leave. With three days until the owners lock out the players for refusing to give up their claims to $1 billion of the sport’s $9 billion in annual revenues, local officials and players are raising concerns that a canceled season could deprive cities of needed economic activity — as much as $160 million per city, according to the NFL Players Association — at the worst time possible. But now that the argument is working against it, the NFL calls such concerns “fairy tales.” Economists have debunked claims that a shutdown would devastate a stadium’s host city, or that a new stadium offers the kind of windfall that would justify significant public contributions. But NFL Commissioner Roger Goodell had a different take in 1997, when he was a league executive. “A new stadium provides more than just a new place to watch a game,” Goodell said at the time. “It can revitalize and stabilize both a team and a city.” “For them to be dismissive of the NFLPA’s claims now is sort of ironic,” said Dennis Howard, a business professor at the Lundquist College of Business in Oregon. “Many of them have used the economic benefit argument as a way of extracting significant public support for new stadiums.” Twenty-eight of the league’s 31 stadiums (the Jets and the Giants share the New Meadowlands Stadium) have been built with some amount of public financing, according to the National Sports Law Institute at Marquette University’s law school. Eleven have been 100 percent publicly financed. Taxpayers have put up more than $5 billion since 1990. In Indiana in 2004, the president of the Marion County Capital Improvement Board argued that a new publicly-funded multi-use venue would keep the NFL’s Indianapolis Colts from leaving town, which would “create 1,500 full- and part-time jobs and annually produce $104 million in economic benefit.” The $750 million Lucas Oil stadium went up in 2008, with the public bearing 50 percent of the cost. In Ohio in 1995, a Hamilton County commissioner argued that a study showed the Cincinnati Reds and Bengals were worth $160 million a year to the city’s economy, according to the Pittsburgh Post-Gazette, and that the town should pony up. Paul Brown Stadium was built in 2000 as a $453 million gift from taxpayers. The Maryland Stadium Authority, which successfully poached the Cleveland Browns and renamed them the Baltimore Ravens in the mid-1990s, estimated that a football stadium inhabited by Cleveland’s team would add 1,400 jobs and $123 million annually to the city’s economy. The state of Maryland coughed up $200 million for a stadium, built in 1998. The city of Cleveland, meanwhile, ponied up 76.5 percent of the $315 million used to build a new stadium for a new Browns team in 1999. Now, the NFL’s owners are threatening to scrap the coming season if the players, who currently receive 50 percent of the $9 billion revenue pie, don’t cede $1 billion of that revenue. The owners say they need the money for stadiums, but the players union is skeptical because the owners have refused to open their books to show how they spend the cut of revenue they already receive. Owners also want limits on rookie pay and two additional regular season games. The players, for their part, have been happy with the status quo, and say more regular season games will lead to more players with grievous injuries. The NFL owners’ threats of abandoning host cities or a whole season are probably more trustworthy than the economic arguments in favor of public financing for stadiums or the players’ claims of an economic calamity precipitated by a work stoppage, both of which have been deemed false by academics. Analyzing economic data from local Florida economies during professional sports strikes and lockouts — like the one that may be at hand for the NFL — economists Robert A. Baade, Robert Baumann and Victor A. Matheson concluded in a 2006 paper ( PDF ), that a team’s presence or absence does not have a measurable impact on the surrounding local economy, despite the estimates by “sports leagues, franchises, and civic boosters” using “league and industry-sponsored studies.” “An analysis of taxable sales in Florida cities demonstrates that none of the 6 new franchises or 8 new stadiums and arenas in the state since 1980 have resulted in a statistically significant increase in taxable sales in the host metropolitan area,” they wrote. “In addition, using the numerous work stoppages in professional sports as test cases, again no statistically significant effect on taxable sales is found from the sudden absence of professional sports due to strikes and lockouts.” Mark Rosentraub, a sports management professor at the University of Michigan, told HuffPost that the NFLPA overreached with its $160 million estimate of the economic impact of a lost season. “It fails to account for the fact that people spend money anyway,” Rosentraub said, noting that people will spend their disposable income at places like movies theaters and restaurants if not football stadiums. Rosentraub said, however, that while a canceled game won’t have a big effect on a region as a whole, it could have big effects within that region. And smaller cities would suffer more without a season, he said, than larger cities would. “It’s gonna matter a whole lot to the city of Cleveland,” he said. “It won’t even be perceivable in San Diego.” It could also matter a lot to some of the individual people who work at or near stadiums. John Marler is a beer vendor at professional hockey, baseball and football games, as well as special events, in Detroit. Marler, 25, told HuffPost that if there’s no football season, he’d lose about 15 percent of his income. “Basically, you’re just taking money, you’re taking revenue away from businesses that provide jobs,” said Marler, a member of the AFL-CIO-affiliated union Unite Here, which has partnered with the players’ union to fight the lockout. “The people that lose — it’s the businesses, it’s the people that work in casinos, the people that work in stadiums. Those are the people that lose out.” And Jerry Watson, owner of a bar near Lambeau Field in Green Bay, Wis., told HuffPost that without an NFL season, his business would lose a third of its income. “It’s going to hurt the state of Wisconsin,” he said. The Baltimore Business Journal estimated that the state of Maryland stands to lose $3.8 million in revenues just from ticket sales. When HuffPost first asked the NFL to respond to various mayors’ complaints that a lockout would hurt their cities, a league spokesman sent a link to a story in the Atlanta Journal-Constitution that rate the $160 million claim “false.” The story suggested Baade’s more modest estimate of a $16 million impact would be more accurate. Nevertheless, several experts seemed to find the NFL’s “fairy tales” position deeply ironic in light of the arguments used to win taxpayer dollars for new stadiums. “This is a classic case of the NFL talking out of both sides of its mouth,” Tim Chapin, an associate professor in the department of urban and regional planning at Florida State University, wrote in an email. “The economic benefits are HUGE when the NFL needs a stadium built, but the benefits are minuscule when the numbers don’t reflect well on the league. The truth is that the economic benefits are relatively small, but they are almost certainly in the millions.”

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Providence Mayor Urged To Avoid Firing All Teachers

February 28, 2011

PROVIDENCE, R.I. — A union representing teachers in the state’s financially troubled capital city says it has met with the mayor to discuss the decision to send them all termination notices. The Providence school board voted Thursday night to send the notices to the nearly 2,000 teachers after city officials said the move would give them “maximum flexibility” to make budget cuts. The terminations would be effective at the end of the 2010-11 school year. The Providence Teachers Union said its president, Steve Smith, met with the city’s new mayor, Angel Taveras, on Sunday to explain the potential ramifications to the city based on what it called “the unlawful firing” of all 1,926 teachers. Taveras, elected in November as the city’s first Hispanic mayor, suggested firing a smaller percentage of teachers, the union said. But Smith remained steadfast in the position that such action isn’t the solution to the city’s financial problems, it said. Smith, who wants the termination letters rescinded, said firing any teacher without cause is unacceptable and would be more costly to the city, the union said in an e-mailed statement. He said layoff letters, if necessary, should be sent based on the anticipated number of positions at risk because of expected budget cuts, the union said. “We remain committed, ready to sit down with the mayor and prepared to be a part of the solution of solving the city’s financial woes,” Smith said. Taveras, who said he wanted to work with the teachers and their union, insisted most of the teachers will have their dismissal letters rescinded in the coming weeks. He said the notices were sent because of a state law requiring school departments to notify teachers by March 1 if they’ll be laid off the following school year. The notices don’t mean the teachers definitely will lose their jobs, but the vote means some of them could. The 4-3 vote gives the city the opportunity to terminate as many teachers as it deems necessary for budgetary reasons, but the city hasn’t indicated how many that could be. Taveras said the decision to issue the notices was difficult but the city’s financial crisis is staggering. The financial problems in Providence, the state’s biggest city, have caused enough alarm at the state level that Gov. Lincoln Chafee instructed two of his top fiscal officers to meet with city officials. A recent audit showed Providence, which has about 175,000 residents, had nearly depleted its rainy-day fund and overspent its budget last year by more than $57 million. Taveras last month created a Municipal Finances Review Panel to review the city budget across all departments. The panel will offer recommendations to the mayor in the next two weeks. Taveras said Sunday in a message to residents posted on the city’s website that issuing the dismissal notices to all the teachers was “a decision of last resort.” He said he had to avoid a situation in which next year the city has more teachers on its payroll than it can afford to pay. “My administration has a fiduciary responsibility to the taxpayers of Providence to address the fiscal crisis we face AND a moral responsibility to our children to make sure we manage cuts to school funding in a way that best serves our students and the community,” the message said. Taveras said the notices sent were of dismissal, not layoff. He said layoffs often come with provisions that could affect the city’s ability to control costs as much as it wants to. He said dismissals are different because they enable the school district to end its financial obligations to people.

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April Rudin: This Is My Detroit — Here’s What The Motor City Means To Me

February 26, 2011

This is the 20th anniversary of my move from Detroit to New York City. I traveled on a one-way ticket from Detroit’s Metropolitan Airport to New York’s LaGuardia airport. I left behind the city that had been my home for my first 30 years. I did not look at what I was leaving behind in Detroit, but I was focused on my future in NYC. The city of Detroit that I left behind 20 years ago was burned out and bruised, and since then, it has declined even further. Brad Anderson recently filmed a movie, “Vanishing on 7th Street,” in Detroit and claimed, “If you are doing an apocalyptic movie, Detroit is the place to go. The streets are devoid of people and the vacant buildings are endless.” In fact, there are no longer traffic reports within the city of Detroit. There are simply not enough cars and people to fill the large geographic expanse that is the City of Detroit. Sadly, I read the negative press as Detroit wrestles with itself to figure out how to reinvent itself through rezoning, bringing in new industries like filmmaking and trying to figure out how to retrain its workforce. It was with much pride that I watched the Chrysler commercial with Eminem during the Superbowl and saw the familiar images of Detroit as they flashed across the screen. The commercial itself was lauded because of its spirit of renewal. But for me, the images of Detroit reminded me of my Motor City soul. Although it was Eminem who first made “8 Mile” widely known, for me that was simply where my grandmother lived; 8 Mile Road is the imaginary dividing line between the city of Detroit and the surrounding northern suburbs. There were some images in the commercial that resonated with me, as they represented my Detroit — for example, frescos from the Detroit Institute of Arts. These famous frescos were created by acclaimed artist Diego Rivera and feature images of Henry Ford, Thomas Edison, Edsel Ford (who commissioned the work) and William Valentiner (Director of the DIA at the time). These men were contemporaries and influential on the artistic, technological and industrial roots of Detroit. Cars define the Motor City, not because Henry Ford invented the car there but rather because he invented the method of efficient manufacturing: the assembly line. His goal was to mass-manufacture and mass-market his cars so that his workers could each drive a Ford car. Although most people know that Detroit has one of the largest Arab populations outside the Middle East, the reason is not widely known. It was Henry Ford who brought them to Detroit: because Muslims did not drink alcohol, they were more reliable as assembly line workers. Growing up in Detroit as the daughter of a Teamster attorney, I was keenly aware of the car/industrial culture as well as the management/labor tension. The Big Three automakers (Chrysler, Ford and GM) were like big battleships, almost unstoppable and unable to easily change course. They were strong and mighty. During the MidEast oil crisis of the ’70s, each of the Big Three automotive companies had two parking lots for their vendors: a near parking lot for those driving American cars, and a far parking lot for those driving foreign cars. The first car that I had was a Plymouth Duster with an awesome stereo and eight-track tape player. This is my Detroit! Another important part of Detroit is the African-American cultural imprint. Detroit was the last stop on the Underground Railroad — the escape route for slaves during the Civil War — before Canada. Many African Americans stayed in Detroit without ever crossing over to the border (the only place where the U.S. is north of Canada.) The Fist of Detroit—”Brown Bomber” Joe Louis’s fist was shown during the commercial. Downtown Detroit is also home to the Joe Louis Arena where the Red Wings play hockey. Another important image in the Chrysler commercial showed a gospel choir, central to the culture in Detroit, from which Motown music was an outgrowth. Aretha Franklin was the daughter of a preacher. Many Motown artists grew up attending large churches with active choirs and were influenced by the music they heard. The original home of Motown Records, “Hitsville USA,” was also located downtown near Wayne State campus. I would drive by it almost every day in my car with my Motown music blaring! The soundtrack of my Detroit years is a combination of Motown music including Marvin Gaye, Al Green, Stevie Wonder, Aretha Franklin, The Supremes, et al . But I also listened to the music of homegrown Detroit Rock ‘n’ Roll artists like Bob Seger, Alice Cooper, Mitch Ryder, Ted Nugent and Grand Funk Railroad. This is my Detroit! There is also the food of Detroit — the longtime rivalry of the next-door Coney Island restaurants: hot dogs with “skin” slathered in “loose” chili, onions and mustard. American Coney Island and Layfayette Coney Island battle today for the top dog and “loose” hamburger (chili in a hamburger bun). In Detroit’s Greektown, you can yell “oompah” to saganaki — cheese grilled in brandy and lit on fire! If you are thirsty, there is the famous “pop” (soda) of Detroit — Vernors Ginger Ale (the oldest soft drink brand in America) and Faygo Red Pop. Or even drink a Stroh’s beer! Also, pizza is a Detroit staple ith two successful chains beginning there: Little Caesar’s and Domino’s. Fondly, I remember going to Sander’s, which was an old-fashioned fountain shop, when I was growing up. Typically, they served water in paper cones that fit into the tin bottoms. Sander’s was famous for their Hot Fudge cream puff! It’s a pastry filled with cold vanilla ice cream and hot Sanders Fudge poured on top! Mmm… and I almost forgot Sander’s bumpy cake — chocolate cake and frosting with “bumps” of buttercream between the frosting and cake! While I was growing up in Detroit, fall meant going to the cider mills for freshly squeezed apple cider and piping hot greasy donuts. You could smell the apples a mile away! Hudson’s (now Macy’s) was my favorite destination for shopping and lunch. Usually on Saturdays, we would go to the mall, Northland Mall (the first mall in the country and the location of my first job!). We would go to Hudson’s for their famous Maurice Salad with its creamy dressing, slivered pickles and turkey. It was often imitated but never duplicated. And then there was the classic Detroit/Chinese dish: almond boneless chicken. I have never seen it served anywhere else except Detroit! This is my Detroit! I could go on and on, but here is a random list of things that I think of in my Detroit: Ambassador Bridge to Canada, going Up North, water skiing on the lakes, the Detroit Zoo, Greenfield Village, ice-fishing in a shanty, tobogganing and sledding, Bob-Lo Island, Tiger baseball and the 1968 World Series, the Detroit Pistons, cruising Woodward Avenue in the summer with the windows down and the music blaring, Hudson’s Thanksgiving Parade, Freedom Festival fireworks, summer nights at Pine Knob open air music theater, Pontiac Trans-Am, the “mile” roads, short humid summers and long snowy winters. This is my Detroit ! For 20 years now, I have been living my life, working in NYC and raising my own children in metropolitan NYC. I have never much thought of myself as an “ex-pat” or what it meant to leave Detroit. Until now.There was something about seeing that commercial that triggered a flood of great memories and nostalgia for my Detroit. I realize that my Detroit lives on in my memory and that the future city will be a newfangled version of what I remember, perhaps even unrecognizable to a former hometown girl. Although they can change the physical borders and the types of industries that support the state, I think that the soul of Detroit will remain. Cue the Temptations’ “I’ll be Doggone” and bring on the Coneys! Let’s sit back and watch Detroit, like its own Tiger baseball team, come roaring back.

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Ian Fletcher: In Praise of Mercantilism (or Why Economic History Isn’t Boring)

February 26, 2011

Does economic history hold a giant clue for getting America out of its present trade mess? Yes, because it debunks the idea that free trade is how nations become prosperous. Instead, it shows that nations win at international trade by playing a 400-year-old game called mercantilism. Let’s look at England, for example. The great Adam Smith, founder of modern economics, published his epoch-making free-trade tract The Wealth of Nations , the origin of endless subsequent delusions, in 1776. But he was a hypocrite, for Britain in 1776 was not a blank slate upon which free markets and free trade could work their magic. It was instead the beneficiary of several prior centuries of protectionism and industrial policy. In the words of British economist William Cunningham: For a period of two hundred years [c. 1600-1800], the English nation knew very clearly what it wanted. Under all changes of dynasty and circumstances the object of building up national power was kept in view; and economics, though not yet admitted to the circle of the sciences, proved an excellent servant, and gave admirable suggestions as to the manner in which this aim might be accomplished. England in this era was, in fact, a classic authoritarian (this is long before English democracy) developmentalist state: a Renaissance South Korea , with kings rather than the military dictators who ruled South Korea for most of the Cold War period. English industrialization must actually be traced 300 years prior to Adam Smith, to events like Henry VII’s imposition of a tariff on woolen goods in 1489. King Henry’s aim was to wrest the wool weaving trade, then the most technologically advanced major industry in Europe, away from Flanders (the Dutch half of present-day Belgium), where it had been thriving upon exports of English wool. Flemish producers were entrenched behind huge capital investments, which gave them economies of scale sufficient to outcompete fledgling entrants into the industry. So only government action could get England a toehold. Even in the 15th century, there was an awareness that being an exporter of agricultural raw materials was a dead end–a problem impoverished African and Latin American nations wrestle with to this day. And there was an awareness that free trade will not lift a nation out of this predicament: you need some well-chosen protectionism. Henry VII created, in fact, the first national industrial policy of the modern era, long before the Industrial Revolution introduced artificial energy sources like steam power. A whole interlocking series of now-forgotten policy moves underlay the rise of English industry; what all these measures had in common was that protectionism was essential to making them work . In the words of economist John Culbertson of the University of Wisconsin and the Federal Reserve Board of Governors: Step after step in the cumulative economic rise of England was directly caused by government action or depended upon supportive government action: the prohibition of importation of Spanish wool by Henry I, the revision of land-tenure arrangements to permit the development of large-scale sheep raising, Edward III’s attracting of Flemish weavers to England and then prohibiting of the wearing of foreign cloth, the termination of the privileges in London of the Hanseatic League under Edward VI, the near-war between England under Elizabeth I and the Hanseatic League, which supported the rise of English shipping. And then there was the prohibition of export of English wool (which damaged the Flemish textile industry and stimulated that of England), the encouragement of production of dyed and finished cloth in England, the use of England’s dominance in textile manufacture to push the Hanseatic League out of foreign markets for other products… The aim of English policy was what would today be called “climbing the value chain”: deliberately leveraging existing economic activity to break into more-sophisticated related activities. Henry VII’s advisors got their economic ideas ultimately from the city-states of Renaissance Italy, where economics had been born as a component of Civic Humanism, their now-forgotten governing ideology. The name for this forgotten developmentalist wisdom of early modern Europe that has stuck is “mercantilism.” One of the great myths of contemporary economics is that mercantilism was an analytically vacuous bundle of gold-hoarding prejudices. It was, in fact, a remarkably sophisticated attempt, given the limited conceptual apparatus of the time, to advance national economic development by means that would be familiar and congenial to the technocrats of 21st-century Tokyo, Beijing, or Seoul. (And believe me, they’re still using these techniques against us.) For 400 years, this is how former Third-World nations have become former Third World nations. Mercantilists invented many economic concepts still in use today, such as the balance of payments, value added, and the embodied labor content of imports and exports. They championed the economic interests of the nation as a whole at a time when special interests (notably royal monopolies) were an even bigger problem than today. They began with obvious ideas like taxing foreign luxury goods. They progressed to the idea that exporting raw materials for foreigners to process was bad if the nation could process them itself. They understood that nations rose economically by imitating the industries of already rich nations (first the more primitive industries, then the more sophisticated) and that low relative wages were the key advantage of underdeveloped nations in this game. How little has changed! Mercantilists saw free markets as a useful tool in economics, but not the sum total of economic wisdom. Even their much-mocked obsession with the accumulation of bullion was not as irrational as it is usually depicted as being, given that under a monetary system based on gold, accumulating it is the only way to expand the money supply and drive down interest rates, a boon to investment then as now. Mercantilism, in fact, created the modern European economy and thus made possible the colonial power that economically shaped much of the rest of the world. It is thus the foundation of modern capitalism itself. Anyhow: Britain functioned on a mercantilist basis for centuries before its much misunderstood experiment with free trade began. Even as late as the beginning of the 19th century, Britain’s average tariff on manufactured goods was roughly 50 percent–the highest of any major nation in Europe. And even after Britain embraced free trade in most goods, it continued to tightly regulate trade in strategic capital goods, such as the machinery for the mass production of textiles, in order to forestall its rivals. This was rational, as the win-win logic of free trade starts to break down if productive capital is mobile between nations or if free trade induces productivity growth abroad. After Britain embraced free trade in the mid-19th century, its long economic decline , of course, began. Today, the United States is making the same mistake, having mistaken the temporary tactical advantages of free trade for a nation at the peak of its economic power for a fundamental strategic truth. Meanwhile, our rivals, especially but not only in the Far East, hold firm to the mercantilist principles that we ourselves employed for 150 years. Mercantilism has somewhat different application in developed, rather than developing, nations, but its fundamentals still hold good. At the very least, we need to defend ourselves against mercantilist aggression against us, something we are not doing .

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Randall Kempner: Entrepreneurs Are Transforming The Developing World

February 18, 2011

At least once a day at work (and all too often at cocktail parties), I have the opportunity to explain to a newcomer in my field why I think small and growing businesses (SGBs) are key to long-term poverty eradication in developing countries. “If you look at the economic pyramid of a developing country, like the U.S.,” I tell them, “at least 50 percent of jobs and GDP come from small businesses.” Even as I write this, I’m eating Chinese take-out from Mei Wah, the second culinary venture of D.C. restaurateur Larry La. Outside of my office, I hear the vacuum of the nightly cleaning crew, managed by a local company that provides janitorial services to D.C. area businesses. Throughout my day I interact in a variety of ways with small businesses that are the fabric of the U.S. economy. But what does this have to do with poverty in the developing world? It turns out, quite a lot. Because while formal small businesses make up the backbone of “developed” nations, they contribute to only 16 percent of GDP and 18 percent of total employment in the “developing” world. That’s a big difference — and one that we at the Aspen Network of Development Entrepreneurs (ANDE) think can and should be overcome. Small businesses are essential because they create jobs, generate income and take a stake in the communities in which they operate. They also generate goods and services for local communities. When led by the right kind of managers, they grow — and create more jobs, more services and more wealth. And increasingly more often, they tackle social and environmental issues as well. Take, for example, Servals Automation Private Limited in Chennai, India. Servals’ flagship product is a Venus kerosene burner, which reduces kerosene consumption by 30 percent due to an innovative design that uses a single part in place of multiple tubes. Use of the stove reduces harmful emissions and saves the end consumer money. But that’s not all. Servals has also taken the next step to “de-engineer” the production process — breaking it up into a series of small pieces. They then created a manufacturing base in a village 50 miles from Chennai and worked with local self-help groups to train rural women to make the components. The women earn income, without having to leave their families and travel to the city. Servals is a prime example of the many positive impacts that SGBs have in developing countries. However, there are just as many obstacles standing in the way of their success. We believe that entrepreneurs need three key things to succeed: access to talented staff, access to markets and information, and access to capital. The members in our network support SGBs in accessing these resources, and are working together to build up the entrepreneurial ecosystems in over 140 developing countries. In the case of Servals, they received support from Villgro Innovations Foundation which included mentoring and business consulting, as well as help with its R&D, patent processing and fundraising. For the impact investing community, and even the broader investment community — SGBs provide a valuable channel and opportunity. More and more investors are realizing that they can reap financial rewards as well as social and environmental impacts by investing in these types of businesses. Our upcoming Impact Report will share research that demonstrates that in 2010 alone, 31 new funds targeting SGBs were launched. Peter Shrimpton of Heart Capital likens this new interest in SGBs to his experience surfing in his native South Africa. “For a long time it felt to us that we were standing on the beach with our wetsuits on, with our boards waxed up and looking at the ocean and the ocean was flat and people would ask us what we were doing. We would tell them that there was a tidal wave of social transformation coming, but they looked at the ocean and only saw poverty, despair and struggle at the grassroots level. In the past few years we’ve seen this global movement begin to take form, and we are beginning to recognize that we are not all standing on the beach alone with our surfboards, but in fact there is genuinely this global movement of social change and each one of us plays a very key role in terms of bringing about this change.” Which is not to say that we can all sit back and enjoy the ride. There is still much work to be done in this sector to enable us to grow the sector in emerging markets and truly measure the impact of these types of investments. We need to provide more support to entrepreneurs. We need to find more investment dollars. But as both the entrepreneurs behind Mei Wah in D.C. and Servals in India can tell you, a thriving small-business community is key to economic prosperity anywhere.

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