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WATCH: Breitbart Explodes At Occupy Activists, Calls Them ‘Filthy Freaks’

by The Huffington Post on February 11, 2012

Huffington Post…

Andrew Breitbart is angry. On Friday night, the conservative muckraker accosted activists who were protesting the 2012 Conservative Political Action Conference. Emily Crockett of Camp Progress was on hand to capture the remarkable tirade on video. Breitbart screamed at the protesters to ‘behave yourself’ repeatedly. He also called the protesters freaks and animals and told them to ‘stop raping people.’ It’s pretty entertaining. Watch the full video below:

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WATCH: Breitbart Explodes At Occupy Activists, Calls Them ‘Filthy Freaks’

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The States With The Most Homes in Foreclosure

by Bonnie Kavoussi on February 11, 2012

Huffington Post…

While some of the states with high foreclosure rates have had substantial improvements in their economies, others continue to be hit hard. In Nevada and Florida, two states with the highest foreclosure rates, homes lost roughly half of their value over the past five years — and prices are still falling. Foreclosures that began several years ago and that are still active cannot be the only reason nearly 12% of Florida’s homes with mortgages were in foreclosure last year. Home prices in the state fell nearly 50% over the past five years, unemployment remains extremely high, and 17.4% of people with mortgages in the state were 90 days or more late on their mortgage payments.

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The States With The Most Homes in Foreclosure

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U.S. Calls Big Swiss Bank A ‘Fugitive’

February 11, 2012

NEW YORK — The U.S. Justice Department called Switzerland’s largest private bank a fugitive from justice on Friday after it didn’t send any representatives to a court hearing in New York, where it has been charged with conspired with American clients to hide $1.2 billion from the Internal Revenue Service. Wegelin & Co. is accused of helping at least 100 U.S. clients conceal huge sums of money from the IRS in overseas accounts. Federal prosecutors said the bank recruited American customers who were concerned about possible prosecution for tax violations at home, including some that had already pulled money out of other Swiss banks because of growing pressure from U.S. law enforcement. Three of the bank’s client advisers were indicted in January. The bank was added as a defendant in the case on Feb. 2 U.S. officials, however, have yet to find a way to move the case forward. The three Wegelin advisers charged in the case, Michael Berlinka, Urs Frei and Roger Keller, have not been arrested and the Justice Department has decided that any attempt to extradite them from Switzerland is unlikely to succeed. The bank was summoned to appear before a federal judge in New York on Friday at 3 p.m., but neither a bank officer nor a lawyer showed. In a statement issued in Switzerland after the court hearing, the bank said it had not been properly served with the criminal summons, and was therefore under no obligation to appear in court. As for the charges, the bank suggested that there was a conflict between US and Swiss law. “The circumstances create a clear dilemma for Wegelin & Co: If it were to adhere to current US legal practice aimed at Swiss banks, it would have to breach Swiss law,” the statement said. The bank added that it would “make every effort to resolve this matter within the boundaries of respectful cooperation.” It is unclear what prosecutors can do next. Wegelin doesn’t have an office in the U.S. Federal authorities have frozen $16 million that the bank had in a correspondent account in the U.S., but that amount is tiny compared to the large sums involved. U.S. District Judge Jed Rakoff, who is presiding over the case, asked prosecutors to make a proposal on how to move the prosecution forward, and suggested involving the State Department, but the hearing ended without any immediate resolution.

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Greece Nears Bailout Deal To Stave Off Disaster

February 11, 2012

ATHENS, Greece — The leaders of the two parties backing Greece’s coalition government made dramatic appeals to their deputies Saturday to back legislation that calls for harsh new austerity measures – essential if Greece is to get a new bailout deal worth euro130 billion ($171.6 billion) and stave off bankruptcy. Prime Minister Lucas Papademos is expected to give a televised address later Saturday to defend the deal. Debate on emergency legislation approving the new bailout and a debt-swapping deal with private creditors began in committee Saturday afternoon. A plenary session will debate and vote on it Sunday. Further legislation detailing the measures demanded by, and agreed with, Greece’s public creditors, the European Union and the International Monetary Fund, will be up for vote a few days later. The exact time has not yet been set. Both leaders – socialist George Papandreou and conservative Antonis Samaras – as well as Finance Minister Evangelos Venizelos, a socialist, used stark images of a country under bankruptcy to warn their respective parliamentary groups of the importance of their vote. “If we do not dare today, we will live a catastrophe,” Papandreou said. “What do you want, a country where food will be handed out with food stamps and where we will have no fuel?” Samaras angrily told a dissenting deputy. “The battle is now. The war is now. If we falter, nothing will be left standing…The real dilemma is between painful measures and crushingly painful ones,” Venizelos told socialist lawmakers. Deputies are wary of voting for the measures, which include wage and pension cuts and the prospect of more to come, along with the firing of several thousand civil servants and the shutdown of several state agencies, including welfare agencies. The demands of the EU and the IMF have caused one of the original coalition parties – the populist right-wing Popular Orthodox Party – to quit the government and withdraw its four members from the cabinet. Two more cabinet members – both socialist deputy ministers – have also quit, citing their disagreements with parts of the austerity package. Both Papandreou and Samaras made it clear that dissenters would have no place in the party. Samaras was more emphatic, threatening to expel those who did not vote in favor and exclude them from the lists of party candidates in the next election. “I want to make it absolutely clear … rebels or ‘bravehearts’ have no place in (the party’s) candidate lists,” he said. “I call on you to fall in line and vote for this difficult and painful deal that will help (the country) stand on its feet. Whoever has a conscience problem, can resign,” Papandreou told his lawmakers. Despite their leaders’ calls, at least four deputies from each party openly declared they would vote against, while two socialist deputies – both former ministers – hinted they might do so. None offered to resign. Together, the socialists and the conservatives have 236 deputies in the 300-member parliament. Samaras also called for an immediate election once the bond swap deal with Greece’s private creditors is over, saying he would not agree to the extension of the mandate of the coalition government beyond that date. Elections are normally due in October 2013. The bond swap deal with Greece’s private creditors is expected to help Greece get rid of some euro100 billion of its debt. The bond swap must be completed before March 20, the redemption date for euro14.5 billion worth of bonds. Elections could then be held about three weeks later than that, at the earliest. While the two parties met, union leaders staged a demonstration outside parliament that attracted about 4,000 protesters, according to the police – while 5-6,000 policemen patrolled the streets of Athens. The protest ended with some scuffles that left two people injured when police tried to clear the street in front of parliament. Authorities are bracing for a much larger, and possibly violent, one on Sunday evening. Another 4,000 turned out for a peaceful demonstration in Thessaloniki, Greece’s second city. ___ Costas Kantouris in Thessaloniki contributed to this report.

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They Live In Motels And On Friends’ Couches, But Are These Kids Homeless?

February 11, 2012

Homeless kids have the right to an education. That’s the basic rationale behind the McKinney-Vento Act of 1987, a law meant to ensure that homeless kids receive the same quality of schooling as everyone else. But with more families losing their homes as a result of the lingering effects of the recession, many homeless advocates say the law doesn’t go far enough to help them. Yet attempts by these advocates to change things have led to a bitter debate within the field of homelessness advocacy itself. At the center of the debate is the question of who qualifies for government-subsidized housing. As it stands, anyone defined as homeless by the Department of Housing and Urban Development can apply for housing aid from the government. The problem is that HUD’s definition leaves out thousands who lack permanent homes — people who sleep on the couches of friends and relatives, or many who live in cramped motel rooms. Before approving aid in these cases, HUD requires proof that their arrangements are very tentative: either documentation of a lack of funds to afford a hotel room for more two weeks, or confirmation from the friend offering the couch that this setup can not be permanent. Providing such documentation is often a difficult hurdle for people living under these circumstances. Families with children make up a large part of this population. As the fastest growing segment of the homeless population, homeless families have been especially affected by the recent recession. Since the economic downturn, according the Department of Education, the number of homeless children has increased by 38 percent, to almost 1 million (many experts consider this a low estimate). But by HUD’s definition, only about 30 percent of such children, about 300,000, are considered homeless. In December, six children testified at a congressional hearing on H.R. 32 , a bill aimed at expanding HUD’s homeless definition and introduced by Republican Judy Biggert (R-Ill.) The children talked about the hardships of sleeping four or five to a room in cheap motels and bouncing from one relative’s living room to the next. They said that the resulting stress had caused them to struggle in school. Yet because they fail to meet HUD’s criteria for homelessness, they and thousands of others like them aren’t eligible for housing help. On Tuesday, the bill made it out of a markup session of Biggert’s Financial Services Subcommittee on Insurance, Housing and Community Opportunity. If the legislation is passed this year, HUD would count these kids as homeless. The responsibility of identifying homeless children would fall to organizations that already track them for the public schools; this would bring the homeless children count closer to the Department of Education’s estimate of 1 million. Supporters of the bill include the National Association for the Education of Homeless Children and Youth. But not all advocates for the homeless are on board. The Corporation for Supportive Housing and the National Alliance to End Homelessness have opposed the bill, saying that it would expand the rolls of kids eligible for HUD aid without increasing the amount of funds. They worry that homeless people with the most pressing needs would suffer as a result. “Our understanding is that this would have a bad impact on the worse-off kids,” said Steve Berg, an executive for the National Alliance to End Homelessness, “kids who are living on the streets and in abandoned buildings and in backs of cars.” Homeless advocates should devote their energy to getting Congress to enlarge the budget of HUD and other agencies that help the homeless, Berg said. If Berg and his allies are now in the uncomfortable position of fighting a measure clearly intended to help homeless people, the same is true of several Democrats in the House. Representatives Maxine Waters, Mel Watt, and Luis Gutierrez — all established liberals — criticized the bill at the markup session. To make the bill more palatable, Waters offered an amendment that would provide more funding for homeless children. “Unless we add the Waters amendment with additional resources for those kids, someone who is currently getting services is going to end up on the street,” Gutierrez said. “This is not an easy issue, but the conversation we need to have isn’t about how to count homeless kids; it is about how we get resources to those kids.” Yet, many Republican who favor the measure, in part because they believe it could help streamline HUD’s bureaucracy, are unlikely to go for Waters’ proposal. Some ardent backers of the bill dismiss such Waters’ amendment as unrealistic. Even if Democrats regain control of the House, they say, politicians this year will never agree to spend more money on homeless people — unless they comprehend the full scope of the problem. And that won’t happen unless they get an accurate count of the country’s homeless families, they say. “Congress doesn’t really think it’s a problem,” said Diane Nilan, a prominent advocate for homeless families who attended the December hearing. “They don’t see the vulnerable families that are just hanging on.”

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Dennis Santiago: FDIC Shutters Banks in Illinois and Indiana

February 11, 2012

On Friday, February 10, 2012 the FDIC shifted bank closure activity from the South to the center of the country this week failing Charter National Bank and Trust in Hoffman Estates, Illinois and SCB Bank of Shelbyville, Indiana. SCB at $200B assets was the larger of the two and began to hemorrhage significantly in the 2nd quarter of 2011. It will reopen as part of First Merchants Bank, National Association on Monday. Charter National Bank and Trust was down to $98M in assets as of 3Q2011 and had been living with elevated stress indications from Institutional Risk Analytics (IRA) since March of 2009. Like SCB, Charter also experienced an increase in operating loss rates beginning around the 1st to 2nd quarter of 2011. Charter will reopen as part of Barrington Bank & Trust Company, National Association on Monday. Complete forensic reports can be found here, Charter National Bank and Trust – Hoffman Estates, IL SCB Bank – Shelbyville, IN

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Daniel Wagner: China-Bashing Is a Tiresome Sport in American Politics

February 11, 2012

China bashing has become as much a part of the modern American political tradition as criticizing foreign producers of oil, yet it seems few have actually stopped to think about whether it is justified. The American electorate has become accustomed to the predictable torrent of anti-Chinese rhetoric from politicians of a variety of political persuasions — in large part because of a subtle and uncomfortable recognition that China is beating the U.S. at its own game; Some would even say the Chinese are better capitalists than Americans will ever be. Indeed, China has made remarkable economic progress over the past twenty years — in large part because of its embrace of ‘socialism with Chinese characteristics’ — otherwise known elsewhere as capitalism. A decade ago, American politicians bashed China largely for political reasons. Today, it is for primarily economic reasons. With China having become the second largest economy in the world last year, and poised to overtake the U.S. in economic size in the next decade, it is no wonder American politicians are on the offensive. It should be no surprise that Americans may bristle at the notion that capitalism has helped China slowly dominate the global economy. China is, of course, not above criticism, just like any other country, and American politicians do raise some valid points in criticizing China. For example, the Chinese yuan is undoubtedly overvalued, given that it does not freely float in the foreign exchange markets. And the Chinese government does control large parts of the Chinese economy through state-owned enterprises, which distorts the domestic market and gives some Chinese companies unfair competitive advantages. But China must compete in the global marketplace like any other country and it pays a price for supporting companies that should otherwise fail as a result of being poorly run, inefficient, and bloated. If the U.S. does not like the way China does business, it is free to do business somewhere else. What goes left unsaid, however, is that China has become too important for the U.S. do that, and what U.S. politicians fail to acknowledge is that the U.S. is becoming increasingly irrelevant to the economies of Asia, while China has become the cornerstone of Asia’s fantastic economic growth. China’s trade with the ASEAN countries jumped six-fold between 2000 and 2009, to US$193 billion, surpassing that of the U.S. China’s share of Southeast Asia’s total commerce for the period increased to 11.3 percent from 4 percent, whereas the U.S.’s share of trade with the bloc fell to 10.6 percent from 15 percent. Another thing that gets left unsaid is how important China has become as a destination of U.S. exports. According to the U.S. Treasury’s own report, “in the second half of 2009, U.S. exports to China increased by 15 percent on a year-over-year basis, while U.S. exports to the rest of the world fell by 13 percent. In the first quarter of 2010, U.S. goods exports to China rose by more than 40 percent compared to the same period the year before, while U.S. exports to the rest of the world rose by less than 20 percent.” China’s rapidly growing middle class is the single most important factor for the success of President Obama’s Nation Export initiative. The U.S. not only needs to tap China’s vast foreign currency reserves ( in excess of $3 trillion — more than 10 times that of the U.S.) in order to finance its trade deficit and fiscal deficit, it also needs access to China’s vast market in order to sustain its economic recovery and create much needed jobs for American workers. When was the last time you heard a U.S. politician admit that? Of course, both countries have legitimate criticisms of the other, but they know they need each other, and neither country is going to disappear. So instead of following predictable (and boring) scripts, why not turn the page on Cold War-esque rhetoric and find ways to join hands with China so as to mutually benefit from each other’s comparative advantages? The fact is, China needs and wants the U.S. to succeed economically — as the largest holder of U.S. Treasury Bills — and the U.S. should want China to succeed, so that it has a long-term marketplace for its exports. We are not talking here about some starry-eyed vision of utopia, but rather, a realistic and sensible approach to future bilateral economic relations. Rather than bashing China, U.S. politicians would be well advised to forge a stronger relationship with China. President Obama gets it. Last year he said : “I believe there is much to be gained from a closer working relationship with China. Indeed there are very few global challenges, if any, we can address effectively without China’s active cooperation. They are a global economic power, and engagement with China’s government is an important step in stemming the financial crisis that has devastated economies around the world. Both of our nations seek to lay a foundation for sustainable growth and lasting prosperity. My Administration is also working with China on a number of security issues, including stopping North Korea’s nuclear program, rolling back the advance of extremists in Pakistan, and ending the humanitarian crisis in Dar fur. The United States and China share common interests on a host of issues — including energy security and climate change, food safety and public health, and nuclear non-proliferation and counter-terrorism. We want to work with them to address these issues in the years ahead. Improved relations with China will require candor and open discussion about those issues on which we may disagree. We must address human rights, democracy, and free speech. We must also work to ensure that our nations play by the rules in open and transparent economic competition. These important matters will be essential elements of our ongoing dialogue with China.” The only Republican candidate for president we heard that kind of approach from was John Huntsman, who unfortunately failed to connect with American voters. A sustainable economic recovery in the U.S. cannot be achieved by isolating China. The U.S. and China may seem like the odd couple: the leading proponent of democracy and most individually-oriented nation and the leading communist and most communal-oriented nation. But considering what we can achieve together and what we will lose if we are pitted against each other, forming a Sino-American strategic alliance is critical to the future economic viability of both nations. American politicians, and the American people, would be much better off recognizing this, rather than using demagoguery to sow divisiveness between China and the U.S. The 21st century has no place for tiresome dated Cold War rhetoric. President Obama has the right approach. * Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk consulting firm based in Connecticut (USA), Director of Global Strategy with the PRS Group, and author of the new book Managing Country Risk. Dee Woo is a lecturer in economics at the Beijing Royal School.

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Check Your Statement: Citibank Users Found iPad App Payments Made Twice

February 10, 2012

Customers who use Citibank’s iPad bill-paying app might want to pay closer attention to their bank statements: A technological glitch recently caused the app to charge an undisclosed number of customers twice for bank payments. As early as last summer, Citibank received anonymous complaints, sent to the Apple App Store, about the double charges, according to Andrew Brent, a Citi spokesman. Months later, in late December, the bank detected that its app was to blame for problem. Since then Citibank has alerted affected users and reimbursed them for extra charges and any fees incurred. Brent attributed the lag between when the company first found out about the issue (in July) and when officials began alerting customers (in December) to the small number of complaints involved. One user had anonymously reported in July that a charge was duplicated as a result of double tapping the screen, according to Brent. He added that there was nothing to suggest that the incidents were linked to the iPad app itself. Citi later discovered that the app had been programmed to reattempt any transaction disrupted by a network error on the first try. The bank launched an update to its iPad app on Jan. 31. The glitch was first reported by The New York Times on Thursday. The issue affected less than 2 percent of transactions made via the iPad app, according to Brent. He declined to disclose the number of customers who use the bank’s iPad app and how many people were affected by the glitch. “We take seriously the functionality of our products and services as well as the satisfaction of our clients,” Brent stated in an email. “Upon discovering a technical bug in our Citibank for iPad app had caused a limited number of clients to encounter duplicate payments and/or transfers, we immediately fixed the technical issue. Even more important, we have reached out to clients who were impacted to ensure their individual situations are resolved completely.” Citigroup — which aims to be “the world’s digital bank,” according to Bloomberg — has encountered a series of tech glitches in recent years. Two-hundred thousand Citibank credit card holders fell victim to a hacker attack last June that exposed customers’ personal data. In 2010, Citigroup admitted that the bank’s iPhone app stored users’ confidential information on their phones, making the data vulnerable, according to the Wall Street Journal . The bank subsequently released an updated version of the app that it said patched up the glitch. According to American Banker , 25 percent of all mobile banking apps earned a “fail” rating as a result of security flaws.

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Devon Swezey: Romer Misses the Mark on Manufacturing

February 10, 2012

A healthy manufacturing sector is essential to America’s economic prosperity in the 21st century. But you wouldn’t know that reading last Sunday’s New York Times , where former Obama Administration CEA Chair Christina Romer writes that there are no compelling reasons for U.S. manufacturing policy. According to Romer, the recent hubbub about manufacturing is due to the fact that people have a “feeling” that “making things” is important. In reality, she writes, consumers “value haircuts as much as hair dryers.” To be sure, all of us need haircuts, some of us more than others. But Romer ‘s argument that we should value all industries of the economy the same is just not true. It’s reminiscent of economist Michael Boskin, another former CEA chair, who said it doesn’t matter whether a country makes computer chips or potato chips. The fact is that some industries are characterized by high productivity and economies of scale that reduce costs and drive economic growth throughout the economy. As Clyde Prestowitz writes of Romer’s own example: Production of hair dryers can be done in large factories that produce economies of scale. Such scale economies lead to lower prices, lower inflation, higher productivity and thus higher wealth creation for the whole economy. In addition, producers of hair dryers invest in research and development to foster innovation of new, more efficient, less energy using, and easier to produce dryers. Investment in new product and process innovations is what drives economic growth over the long-term. And as we discuss in ” Manufacturing Growth: Advanced Manufacturing and the Future of the American Economy ,” manufacturing is absolutely central to innovation, something that many economists like Romer and economic commentators like Matt Yglesias don’t seem to understand. The manufacturing sector comprises two-thirds of the nation’s industry investment in research and development (R&D) and employs nearly 64 percent of the country’s scientists and engineers. But Romer doesn’t mention manufacturing’s importance to innovation in her article. Instead, she prefers to argue with what she sees as the common rationales for manufacturing policy — market failures, jobs and inequality — none of which she finds “completely convincing.” On the first issue, she writes that market failures in manufacturing — where positive spillovers mean that some benefits of a new manufacturing plant go to other companies in the area, thus providing a rationale for government investment — are small, citing two academic studies on the subject. But many other studies have found that manufacturing is a central component of regional industrial ecosystems, and that being near manufacturing can accelerate innovation and strengthen regional competitiveness. As President Bush’s Council of Advisors on Science and Technology wrote in 2004 , “design, product development, and process evolution all benefit from proximity to manufacturing, so that new ideas can be tested and discussed with those ‘working on the ground.’” Indeed, recent research suggests that losing high-tech manufacturing can imperil a nation’s capacity for future innovation. Harvard’s Carl Pisano and Willy Shih write that America’s “industrial commons” — the collective engineering, R&D and manufacturing capabilities that sustain innovation — are being hollowed out and the United States can no longer produce many high-tech products. Moreover, research and design are starting to follow high-tech manufacturing abroad, imperiling America’s historic advantages in innovation. Next, Romer writes that the impact of manufacturing on jobs relative to the employment needs of the economy is small and that we should focus on boosting aggregate demand instead: Unemployment today is high, but not because of a decline in manufacturing. That decline has been going on for 30 years — and for most of the 1990s and 2000s, the unemployment rate was less than 6 percent. Put aside that this obscures the fact that manufacturing employment generally followed the business cycle with only modest declines until 2000 when it fell off a cliff — declining by 5.5 million jobs from 2000 to 2008, or 32 percent. Romer understates the impact of manufacturing on jobs for two key reasons. First, she ignores the fact that manufacturing facilities have extensive backward linkages, generating output and employment throughout the economy. Indeed, manufacturing’s “multiplier effect” in terms of both output and employment is larger than any other sector of the economy. Specifically, studies demonstrate that every dollar in final sales of manufactured products supports $1.40 in output from other sectors of the economy. And the average job in manufacturing produces two to three spinoff jobs elsewhere in the economy. Even if employment on the factory floor never reaches levels of previous decades, when these effects are taken into account, manufacturing’s employment footprint is quite substantial. Second, Romer completely misses the connection between America’s persistent, massive trade deficits and our employment situation. In 2010 the trade deficit stood at nearly $500 billion, down from a record of $760 billion in 2006. With such large deficits, it’s difficult to see how more fiscal stimulus to boost aggregate demand, which Romer favors, will fill the jobs hole in the economy. It would certainly create some jobs, but much of that demand would be filled by imports, which creates jobs in other countries. Rather, eliminating the trade deficit would create millions of jobs in the United States. And the best way to close the trade deficit is by expanding manufactured exports. This is because the large majority of U.S. trade — nearly 70 percent of exports and 83 percent of imports — is still in goods. Manufactured goods in particular comprise 57 percent of U.S. exports. Can exporting services help reduce the trade deficit? Absolutely, and the United States enjoyed a $149 billion surplus in services in 2010. But it took 11 years for service exports to double to its 2010 level of $543 billion. The simple arithmetic shows that the current positive balance in services would need to quadruple to eliminate the deficit in goods. This is implausible, to say the least. What about inequality? Romer writes correctly that while manufacturing pays higher-than-average wages, it is no longer a source of high-paying jobs for less educated workers. Manufacturing is a technologically sophisticated enterprise and today’s manufacturing workers must have a wide array of abilities, including the production skills to set up and operate processes, design and development skills to continuously improve those processes, as well as proficiency in maintenance, repair and supply chain logistics. But then the policy response should not be to ignore manufacturing but ensure that workers have the skills for advanced manufacturing industries. Romer ends by implying that manufacturing policy is driven by economic nostalgia for an earlier age, writing, “public policy needs to go beyond sentiment and history.” To be sure, policy must account for the ways in which manufacturing has changed over previous decades. Some labor-intensive industries are likely gone for good, while the increasing use of information technology, robotics, and high-precision tools means that today’s factory workers must have much greater skills than previous generations. Fortunately, advanced manufacturing policy need not be about sentimentality or history, but about creating the next generation of advanced technologies that spur innovation, drive productivity, and power economic growth in the 21st century. It is about strengthening a sector that is a key catalyst of employment and economic growth. And it’s about ensuring the international competitiveness of the U.S. economy, closing the trade deficit and out-competing other nations whose governments rightly view high-tech manufacturing as a strategic industry. The good news is that the Obama administration has recently recognized that advanced manufacturing is critical for the future prosperity of the U.S. economy, even if its former chief economist does not. For more on the importance of advanced manufacturing to the U.S. economy, see ” Manufacturing Growth, ” a joint report by the Breakthrough Institute and Third Way.

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Hundreds Of Millions More Dollars Of MF Global’s Money Thought Missing

February 10, 2012

The trustee overseeing MF Global’s liquidation said Friday that the shortfall between the funds under his control and the amount customers of the failed brokerage are expected to claim is at least $1.6 billion. The gap estimated by the court-appointed trustee, James Giddens, compares with his previous estimate of $1.2 billion. Giddens said in a statement Friday that the new estimate is based on his investigation and it could change again. Giddens has been combing through the accounts of MF Global since it filed for bankruptcy protection on Oct. 31. The collapse of MF Global, which was headed by former New Jersey Gov. Jon Corzine, was the eighth-largest corporate bankruptcy in U.S. history. Most of the $1.2 billion previously reported missing has been traced to customer accounts and banks. Regulators are investigating whether MF Global tapped money from clients’ accounts as its financial condition worsened. That would violate securities laws. Brokerages are required to keep customer money separate from the firm’s money. Unlike the previous figure, the new estimate of $1.6 billion includes about $700 million in customer money located in Britain. Giddens is in a legal dispute over that money with the administrator in Britain overseeing the liquidation of MF Global’s division in London. The new estimate excludes some customer claims that haven’t been filed yet. It also takes into account some funds that have been recovered since the earlier estimate was made in November. Giddens said about 40 percent of the claims filed by U.S. commodities customers of MF Global came from five states: California, Florida, Illinois, New York and Texas. Around 91 percent of the claims are for less than $100,000, according to his statement. Much of the missing money belonged to farmers, ranchers and other business owners who used MF Global to reduce their risks from the fluctuating prices of commodities such as corn and wheat. Giddens has returned about $3.9 billion to customers.

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White House Proposes Tax The Rich, Chop Medicare, In Election-Year Budget

February 10, 2012

WASHINGTON — The White House will propose deep cuts and modest tax hikes Monday in a budget that aims to stick to last summer’s debt deal by trimming Medicare and other programs while making the well-off pay more. Senior administration officials said the spending blueprint would lower tax rates overall. But it would end the Bush-era tax cuts for the rich enacted in 2001 and 2003. It would do that by cutting tax loopholes — or tax expenditures, as they are called — for high earners and corporations. Part of that is implementing the Buffett rule, named for billionaire investor Warren Buffett, which would ensure that no one earning more than $1 million in a year pays less than 30 percent in taxes, as Buffett does now. Overall, the plan calls for $2.50 in spending cuts for every dollar raised in taxes on people making more than $250,000 a year. The proposal cuts the budget by $1 trillion over 10 years, and trims $4 trillion from the deficit. For the first time in five years, the deficit would fall below $1 trillion, at $901 billion in 2013, according to the proposal. The White House projects that by 2018, the deficit would drop to $575 billion, or 2.7 percent of the nation’s gross domestic product. A large chunk of the deficit reduction over the next decade — $1.5 trillion — would come from still-unspecified tax reforms, although the expiring Bush tax cuts would account for much. The largest cuts would come from the defense budget and Medicare. Defense spending would be slash some $487 billion from the Department of Defense’s projected budget, including savings from winding down wars in Iraq and Afghanistan. Health programs, primarily Medicare, would be targeted for $360 billion in savings, with most expected from cuts to providers, not beneficiaries. Another $278 billion in cuts would come from farm subsidies, federal worker retirement and other programs. The numbers in the White House blueprint would look a lot like the assessment unveiled in September. The budget is likely to get a cold reception from Republicans in an election year, and reads itself like the political message President Obama has been delivering since his speech in Kansas late last year. “We now face a make-or-break moment for the middle class and those trying to reach it,” says the introduction to the “fact sheet” summarizing the plans. “After decades of eroding middle-class security as those at the very top saw their incomes rise as never before and after a historic recession that plunged our economy into a crisis from which we are still fighting to recover, it is time to construct an economy that is built to last,” the document says, repeating the president’s State of the Union theme. Officials said the budget to be proposed on Monday was the third part of a three-act play that started with the Kansas speech and continued with the State of the Union address. “We must transform our economy from one focused on speculating, spending, and borrowing to one constructed on the solid foundation of educating, innovating, and building,” the budget introduction says. “That begins with putting the nation on a path to live within our means –- by cutting wasteful spending, asking all Americans to shoulder their fair share, and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs.” The plan calls for more than $350 billion in short-term spending to spur job growth, including extending the payroll tax cut that Congress is battling over now, $30 billion to modernize 35,000 schools, and $30 billion to help keep and hire new teachers, police and firefighters. There is also a commitment to building research, development and manufacturing, with $140.8 billion slated for research and development. Such spending is a sign the president is not backing off initiatives like the green-energy push that has been tarred by the failure of solar company Solyndra. The budget will recommend boosting spending for the National Science Foundation, the Department of Energy’s Office of Science, and the National Institute of Standards and Technology Laboratories. It also calls for a six-year, $476 billion transportation reauthorization bill that the administration says would “create thousands of new jobs and modernize a critical foundation of our economic growth.”

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S&P Downgrades Huge Number Of Italian Banks

February 10, 2012

MILAN, Feb 10 (Reuters) – Rating agency Standard & Poor’s downgraded 34 Italian banks on Friday, including heavyweights UniCredit and Intesa Sanpaolo, citing a reduced ability to roll over their wholesale debt and expected weak profitability. The move follows S&P’s downgrade of Italy’s sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries. In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 — out of 10 groups — reflecting its more negative view on Italy’s banking system. “Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt,” it said. “We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital. We believe this may be negative for the Italian banking industry’s stability.” Italian banks have borne the brunt of a sell-off in Italian assets since the euro zone’s third-largest economy was dragged into the single currency bloc’s debt crisis last summer. Because of their vast holdings of domestic government bonds, Italy’s top five banks have been asked to find some 15 billion euros by June to meet tougher capital requirements set by the European Bnaking Authority. Lenders have also been effectively shut out of wholesale debt markets and have increased their reliance on cheap funds from the European Central Bank. Italian banks tapped a whopping 116 billion euros of nearly 500 billion euros of three-year funds offered by the ECB last December, easing funding strains. A similar operation will be held at the end of February and analysts expect Italian banks to further increase their borrowing from the ECB. S&P said weak profitability and increased cost of capital could lead Italian banks to write down a large part of the goodwill they booked during a wave of industry consolidation over the past decade. Such writedowns forced UniCredit, Italy’s biggest bank by assets, to announce a 10.6 billion euro loss in the third quarter of 2011. Among the banks downgraded, Banca Monte dei Paschi di Siena and Banco Popolare had their rating cut below that of Italy’s sovereign debt. For a list of the banks affected by S&P’s downgrades, please click on

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White House: Energy Department Loan Oversight Needs Overhaul

February 10, 2012

* Struggling to fill key positions to manage loans * Did not evaluate failed loan to Solyndra * Chu: will review ideas, but program is working By Roberta Rampton WASHINGTON, Feb 10 (Reuters) – The U.S. Energy Department relies on too many consultants and committees for managing its loans and needs to beef up its management, concluded a review commissioned by the White House in the wake of publicity over failed solar panel maker Solyndra. Herb Allison, a former investment banker known for his work helping government agencies manage large, complex financing programs, reviewed the energy loan program, and recommended an overhaul in oversight of the $23.769 billion portfolio. He said the Energy Department has struggled to fill vacancies in key positions without success. “At least one manager is acting head of several departments,” he said in a 75-page report. Decisions should be made by individual managers with expertise, Allison said, instead of using a committee process “where collective responsibility can obscure individual accountability.” Allison did not review a $535 million loan guarantee to Solyndra, which filed for bankruptcy last year and has become a political sore spot leading into the 2012 election season. The loan was once held up by President Barack Obama as an example of how his administration was creating new jobs with “stimulus” funding while promoting renewable energy. It now is featured in at least two attack ads on television, and candidates for the Republican presidential nomination regularly invoke Solyndra as a symbol of what they say is government waste and misguided energy policy. Energy Secretary Steven Chu said he would review the recommendations to find ways to strengthen the program. But he said the program is working as it is intended, and noted that the review rated the overall risk of the loan portfolio as “slightly lower” than the department’s projections. “We have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed, but the vast majority of companies are expected to pay the loans back in full, on time, and with about $8 billion in interest,” Chu said in a statement.

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The Most HIlarious #FedValentines

February 10, 2012

Whoever said monetary policy isn’t sexy just doesn’t know what they’re talking about. In anticipation of Valentine’s Day, the twitterverse is abuzz with economics nerds tweeting sweet nothings using the hashtag #FedValentines , of course in reference to the Federal Reserve. You can’t blame them. With the Fed’s head, Ben Bernanke, constantly discussing stimulus tactics like quantitative easing, the urge for double entendre is hard to resist. The trend comes as Bernanke addressed the National Association of Homebuilders International Builders’ Show Friday, saying that the Fed’s efforts at spurring economic growth are being thwarted by obstacles to mortgage lending, according to Bloomberg. Tragically, the bearded, bald hearthrob didn’t offer his own #FedValentine during the speech, but rest assured we’ll update this post if that changes. That’s not to say the regional federal reserves themselves can’t have some fun on a Friday. According to its twitter feed , the San Francisco Federal Reserve is “going through extraordinary measures to increase your stimulus.” Check out some of our favorite #Fedvalentines, to get a sense of love in the time of near-record low interest rates:

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Mathias Terheggen: The Wealth Gap Challenge

February 10, 2012

Philanthropy and the wealth gap challenge Economic growth and the question of its “if and when” is a very popular topic these days. Analysts have been providing outlooks on 2012′s economic development. But in their attempts to foresee the future one thing is already clear: regardless of how the economies will develop, the outcome is going to be more positive for those who already have and earn a lot compared to the financially less fortunate. This phenomenon, the “wealth gap,” is not new and we have become used to the fact that, with few exceptions, particularly in developing countries the wealth disparity is growing steadily. What is new though is that within developed economies — among them are some of the strongest globally — the wealth gap is widening too. Countries as diverse as the U.S., Italy and Germany all have grown their Gini-coefficient, a measure of income inequality, over the last 30 years. And even Hong Kong, whose economy grew by over 6% at 3% unemployment last year, not only holds a global record for growing the number of millionaires but also, or maybe therefore, one for the highest income inequality ratio among developed economies. An ever-growing challenge This has given rise to substantial concern. While low levels of economic inequality are desirable to maintain an impetus for individual economic development, a large wealth gap is known to discourage individual economic efforts which, in turn, results in lessened economic power for large parts of the society. Public upheaval and political revolutions as seen during the Arab Spring are only the most blatant symptoms of the detrimental effect on societies caused by limited economic opportunity and unfair wealth distribution. With low-income households statistically producing a higher number of off-spring, strong income inequality virtually results in an increasing number of children slipping off into poverty, poor healthcare and education. The generation responsible for long-term economic growth is hence disengaged, and a society’s ability to innovate from within itself jeopardized. Ultimately, this will limit the future economic potential also of those on the more fortunate side of the wealth gap, too. Donating doesn’t do the trick The economic crisis of 2008 caused a tightening of public budgets which, in turn, has resulted in reductions of social welfare. This has led to a more critical public view on the financially successful, and so the wealthy nowadays have both an intrinsic and an extrinsic motivation to re-consider their role in dealing with the wealth gap and related social issues. It comes by no surprise that therefore the past years have seen many wealthy go public with their social engagement and openly demand more substantial measures to foster social equality from their peers. The public response has been very mixed with reactions reaching from friendly acknowledgement to acid accusations of fig-leaf efforts. A closer look at the role private philanthropy can play in closing the wealth gap might therefore be appropriate. One myth to make away with at the outset is that donations to the poor won’t solve the wealth gap challenge. While total global private giving is estimated to exceed USD 600 bn annually, this amount represented less than half of the wealth transferred from the bottom 80 to the top 20 percent of households in the US during the financial crisis from 2007 to 2009 alone. Hence, private philanthropy by wealthy individuals must play a different role if it means to prevent societies from getting destabilized. An entrepreneurial approach Indeed, philanthropy can have a catalytic role in encouraging and supporting social innovation: being liable to their own preferences and requirements only, as opposed to donors like most public fund-raising non-profit organisations, philanthropists can take higher risks like funding interventions and organizations in early stages of development. Philanthropists can afford the risk for a project to default, e.g., through a project owner’s unexpected death, knowing that the draw-back will be off- set by other successful initiatives within their portfolio. In addition, today’s private donors are increasingly seeking ways to make their social engagement not only more strategic and long-term in order to achieve systemic change, but they go far beyond their mere financial contributions. Building on their professional success they leverage their knowledge and network, engage non-financial capacities like companies and employees, and most importantly, they apply their mind-set and experience as an entrepreneurs and investors to their philanthropy. Addressing social issues with an entrepreneurial approach including the idea of revenue generation through the provision of social products and services has resulted in efficiency and scalability and triggered some of the most remarkable recent trends in the social sector. On the giving side Venture Philanthropy and Impact Investing have taken giving beyond grants towards actual investments that include the expectation of a financial return for the investor. The ratio of social versus financial return generated by the investment may vary depending on the social investor’s priorities. But the mere fact of making an investment, rather than giving money away, has a groundbreaking effect on the recipient’s commitment, not least as it is an explicit sign of trust in the recipient’s abilities. All these trends yield social interventions that often address social issues that weren’t addressable before. But in all cases they increase the efficiency and effectiveness thereby growing the social impact. Enabler and catalyser It is through this role as enabler, supporter and advocate of social innovation that private philanthropy addresses the wealth gap challenge: not only do they deliver new social interventions, but by using their extensive networks and acting as figures of public influence they promote what ultimately will be adopted by larger non-profit organisations and, increasingly, by governments. Especially the latter are turning towards private philanthropy on their search for social innovation that enables the public sector to fulfill its social mandate while minding the costs. The recent launch of a program by the German bank for economic development, KfW, that provides financing to social entrepreneurs under the condition that they can secure additional funding by private donors, is an apt example of governments trying to harness the innovative power of private philanthropists. These interventions will increase the ability of the less fortunate both in developed or developing countries to have access to appropriate healthcare and education. This will help lay the foundations for future economic growth and participation in it: by linking private philanthropy of the wealthy to the economic participation of the less wealthy, the social fabric that makes for a stable, fair society is strengthened. Transparency to gain momentum Private philanthropy will not balance societies that are otherwise challenged in their social cohesion through an overly inhomogeneous distribution of wealth and income. But it can, if done credibly, be a starting point for systemic change — all the while shaping the future of the wealthy, too. Transparency on individual efforts could create the desired momentum as it allows for discussions on objectives and priorities as well as for collaboration. However, given the reputational risk and the challenges of building a successful philanthropic track record, such transparency may at first only be acceptable within the peer group. Closed conferences, of which there aren’t too many yet, but where leading philanthropists, experts and social-sector professionals gather to exchange knowledge and further their philanthropy, have proven to be a very effective means. Very often such gatherings boost alliances around a shared theme of interest, they build scale and subsequently become visible to the broader public including private, public and civil sector organizations.

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Nathan Gardels: Democracy Is Not Self-Correcting

February 10, 2012

Recently, I wrote an article posted here about the protests in Italy against the “undemocratic” government of meritocrats in Italy led by Prime Minister Mario Monti. Many responders, following the German philosopher Jurgen Habermas, worry that Europe is entering a “post-democratic” phase, not just because of a government like Monti’s, but because European institutions, such as the appointed European Commission, are seen to be beyond the accountability of the public. Behind such sentiments is a suspicion of delegated authority of any kind in democratic societies. My response is to consider this: The argument against the delegated authority of meritocracy based on experience and expertise is that it can get it wrong without adequate feedback. Without the capacity to self-correct it can end up oppressing the people instead of serving them. The argument for one-person-one-vote democracy always is that it gets is right because, like the free market,it is self-correcting. But that is no truer for democracy than for the market, as we saw in the 2008-09 financial crisis. Democracy, both representative and direct, also has its rigidities (ideology, populism, self-interest of voters, money as free speech). Often the accumulation of individual choices produces unintended consequences against the public good. As I pointed out in my earlier article, after a series of direct democracy initiatives to curb property taxes and punish criminals, California now spends more on prisons than higher education, thus undermining the foundations of its future. What matters for good governance is an open society — freedom of expression and the rule of law to protect feedback — not whether the system is meritocratic, democratic or a hybrid. Is China’s “monitory webocracy,” where the Communist government is acutely responsive to the public clamor over weibo on everything from tainted milk or toys to train wrecks to pollution, any less self-correcting than American democracy where the Wall Street banks that precipitated the financial crisis and were bailed out because they were “too big to fail” are now even larger and remain unregulated?

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Elliott Negin: Monsanto’s Great Expectations (and Not-So-Great Results)

February 10, 2012

Photo: Russell Max Simon With apologies to Charles Dickens, whose 200th birthday was this week, it’s the best of times and the worst of times for Monsanto, the agribusiness giant that is aggressively marketing genetically engineered crops — and millions of tons of pesticides — worldwide. It’s the best of times because its stock is soaring. Sure, the St. Louis-based leviathan has been up before — and down. In 2009, Forbes magazine proclaimed it company of the year. The next year its stock tanked, and Mad Money TV host Jim Cramer proclaimed it the worst of 2010. Now its up again, and last month Forbes was hyperventilating over the fact Monsanto has outperformed most high-tech stocks over the last five years. But just like the plot in Charles Dickens’ Great Expectations , Forbes ‘ rosy scenario is not the whole story. You may vaguely remember the 19th century novel from high school English. According to a column in last Sunday’s Washington Post , its main lesson is: “You will never fully comprehend the most important events in your life while they are happening. Any plans you make will not work out — and you may grow up to be a jerk. If you are lucky, however, a series of traumatic events will wake you up and show you how insufferable you have become.” If you replace the book’s protagonist Pip with Monsanto and look at the company through the prism of science instead of its stock profile, my tortured analogy makes sense. Despite more than 20 years of research and 15 years of marketing, Monsanto’s great expectation that genetic engineering would dramatically increase food production and reduce pesticide use has been dashed. Unlike Pip, however, the company has not yet woken up to the fact that its products don’t perform as advertised. That’s why it’s also the worst of times. Doug Gurian-Sherman, a molecular biologist with the Union of Concerned Scientists (UCS), has spent quite a bit of time investigating Monsanto’s track record. In April 2009, he published ” Failure to Yield ,” the only comprehensive study to date that separates genetic engineering’s contribution from other factors that can increase yields. After reviewing two dozen academic studies of corn and soybeans — the two primary genetically engineered food and feed crops in the United States — he found that genetically engineered traits in herbicide-tolerant soybeans and herbicide-tolerant corn have not increased yields, and insect-resistant traits have improved corn yields only marginally. The substantial increase in yields for both crops over the previous 13 years was largely due to traditional breeding and better agricultural practices, not genetically engineered traits. More recently — just a few days ago, in fact — Gurian-Sherman and his colleagues in UCS’s Food and Environment Program posted a web feature, ” Eight Ways Monsanto Fails at Sustainable Agriculture ,” documenting how Monsanto has broadly failed to deliver on its promise to increase yields, safeguard the environment, and protect farmers’ livelihoods over the long run. “Monsanto talks about ‘producing more,’ ‘conserving more,’ and ‘improving lives,’ but it’s a PR fantasy,” said Gurian-Sherman. “In reality, the company is doing a great job selling more engineered seeds and herbicide and fattening its bottom line at the expense of the environment. To be sure, there are a lot of farmers who buy Monsanto seed, but they buy it mainly because it’s convenient, it saves them time, and it does kill some pests. That doesn’t mean that it’s better for the environment.” Besides the fact that Monsanto’s genetically engineered traits have failed to substantially increase yields, its heavy promotion of crops designed to be impervious to the company’s RoundUp herbicide has inadvertently created resistant “super” weeds, UCS experts report. That not only can make farming more difficult and costly, it forces farmers to use even more herbicides, which threatens the environment and public health. UCS also found that Monsanto’s focus on genetic engineering and chemical fixes thwarts research and development of cheaper, more effective solutions, including public sector classical crop breeding and environmentally friendly farming methods. Given the unvarnished facts, how has Monsanto been able to convince anyone that it is, according to its latest PR effort, “improving agriculture and improving lives”? In large part by spending tens of millions of dollars annually on advertising, lobbying and campaign contributions. In the fall of 2008, Monsanto launched an advertising campaign that continues to this day. An outgrowth of the company’s “sustainable yield initiative,” it has targeted opinion leaders and federal policymakers with full-page ads in the Atlantic Monthly , New Yorker , New Republic and other elite publications, as well as with posters in subway stations, on bus shelters, and on the sides of metro buses here in Washington. Last year, Monsanto spent $100 million on the ad campaign, down slightly from the $120 million it spent in 2010, according to Securities and Exchange Commission figures . The company also spent $6.37 million on lobbying –more than any other agricultural company or trade group–and so far has contributed more than $170,000 to political campaigns in the 2011-2012 election cycle, the third highest in the agricultural sector. Monsanto’s claims in earlier ads were more explicit than ones circulating now. For example, an ad on the New Yorker ‘s back cover that ran the same week Gurian-Sherman released his “Failure to Yield” report back in 2009 stated : “Providing abundant and accessible food means putting the latest science-based tools in farmers’ hands, including advanced hybrid and biotech seeds. Monsanto’s advanced seeds not only significantly increase crop yields, they use fewer key resources — like land and fuel — to do it. That’s a win-win for people, and the earth itself.” The company’s latest print ads , which all feature the headline “Improving agriculture, improving lives,” are toned down by comparison. They insinuate that Monsanto is accomplishing something grand and noble instead of making demonstrably false claims. For example, one ad states: “In the hands of farmers, better seeds can help protect resources and promote biodiversity.” Another one states: “In the hands of farmers, better seeds can help meet the needs of our rapidly growing population, while protecting the earth’s natural resources.” They all wrap up with: “That’s improving agriculture. That’s improving lives. And that’s what Monsanto is all about.” The best response to Monsanto’s misleading ad campaign? A well-worn quote from Great Expectations : “Take nothing on its looks; take everything on evidence. There’s no better rule.” Elliott Negin is the director of news and commentary at the Union of Concerned Scientists. For information on how to get involved with UCS’s effort to set the record straight on Monsanto, click here .

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Greek Police Union Threatens To Arrest EU, IMF Officials

February 10, 2012

Greece’s largest police union has threatened to issue arrest warrants for officials from the country’s European Union and International Monetary Fund lenders for demanding deeply unpopular austerity measures.

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Athens Burns As Eurozone Rejects Greece Bailout Deal

February 10, 2012

ATHENS, Greece (AP) — Thousands took to the streets of Athens as unions launched a two-day general strike against planned austerity measures on Friday, a day after Greece’s crucial international bailout was put in limbo by its partners in the 17-nation eurozone. Clashes broke out in Syntagma Square, outside Parliament, as dozens of hooded youths threw fire bombs and stones at police, who responded with tear gas. No arrests or injuries were reported. Police said some 7,000 people took part in the demonstration. Another 10,000 Communist supporters held a separate, peaceful march, chanting slogans against cutbacks that include reducing the minimum wage by 22 per cent and cutting one in five government jobs in a country which is in its fifth year of recession. Bailout creditors say Greece has not yet met demands for all the required austerity measures and, frustrated by days of dithering, have given political leaders in Athens until the middle of next week to do so. Otherwise, the country will lose its rescue loan lifeline, go bankrupt next month and likely leave the euro. “We are experiencing tragic moments,” Deputy Prime Minister Theodoros Pangalos told Parliament Friday. “These days are the last acts of a drama that we all hope will lead to a happy conclusion with a voluntary reduction in our public debt and implementation of a framework by 2015 that will allow the economy to stabilize.” The Greek coalition government, led by Prime Minister Lucas Papademos had hoped some of the heat had been taken out of the crisis after leaders agreed Thursday to a raft of austerity measures they hoped would pave the way for the €130 billion ($173 billion) bailout package. However, finance ministers from the other 16 eurozone states put up a roadblock later in the day by insisting that Greece had to save an extra €325 million ($430 million), pass the cuts through a restive parliament and guarantee in writing that they will be implemented even after planned elections in April. A Cabinet meeting has been called for the afternoon, while the majority Socialists and the conservatives were later to hold party meetings to discuss the cutbacks. The new hurdles Greece has to clear to avoid a default that could send shock waves around the global economy dented sentiment in the markets Friday. Stocks were down all over Europe, with the benchmark index in Athens 1.8 per cent lower in early afternoon trading. While facing intense pressure abroad, Greece is having to deal with another strike. The country’s two biggest labour unions stopped railway, ferry and public transport schedules, and hospitals worked on skeleton staff while most public services were disrupted. Unions were planning protests in Athens and other cities around midday. Prime Minister Papademos and heads of the three parties backing his government have already agreed to deep private sector wage cuts, civil service layoffs, and significant reductions in health, social security and military spending. But the party leaders balked at demands for more cuts to already depleted pensions, later issuing nebulous assurances that a solution had been found. “Unfortunately, the eurogroup did not take a final, positive decision,” Finance Minister Evangelos Venizelos said after Thursday’s talks in Brussels. “Many countries expressed objections, based on the fact that we did not fully complete the list of additional measures required to meet our targets for 2012.” “The choice we face is one of sacrifice or even greater sacrifice — on a scale that cannot be compared,” Venizelos added. Once all the demands have been fulfilled, the eurozone will give Greece the green light to start implementing a separate bond swap deal with banks and other private investors designed to slice some €100 billion ($132 billion) off Greece’s debt load. EU Commission President José Manuel Barroso on Friday offered hope a deal could still be struck. “I am confident that a solution will be reached next week as this is critically important for Greece and the Greek citizens first and foremost but also for the whole euro area,” he said during a visit to India. “I therefore call on the responsibility and the leadership of the Greek leaders and all members of the eurozone so that we can obtain this goal that is important for the euro area and indeed for the global economy.” France’s central bank chief Christian Noyer also urged Greece to accept the “reasonable and indispensable” austerity plan. “Greece needs to do what other countries are doing, countries that have been in difficulty but are completely in line with the recovery plans,” Noyer said on Europe-1 radio Friday. “Greece has to accept all of this.” But on the streets of Greece, the mood is grim, after two years of severe income losses, repeated tax hikes and retirement age increases that failed to signally improve the country’s finances. Unemployment is at a record high of 21 per cent — with more than a million people out of work — while the economy is in its fifth year of recession and is expected to contract up to 5 per cent in 2012. The country’s politicians have taken a lot of criticism for the situation, and polls show the majority Socialists, elected in a 2009 landslide are now languishing at around 8 per cent. A Greek Socialist lawmaker resigned his seat Friday to protest the new austerity, a day after the country’s deputy labour ministry stepped down from his position for the same reason. But the resignation of Pavlos Stasinos will not affect the party balance in Parliament, as he will be replaced by another Socialist deputy. “It is unacceptable that right now our politicians’ petty political and public relations manoeuvring should be leading the country to bankruptcy,” respected Kathimerini daily said in an editorial. “The country is tumbling towards a cliff-edge, and a tough European establishment is putting out the view that Greece cannot be saved and lacks credible politicians. Our politicians back that view with their carryings-on.” Ta Nea daily accused Greek politicians of “theatrics and shilly-shallying,” and urged lawmakers to back the new measures in the Parliamentary vote, tentatively planned for Sunday. “Nobody can happily back the painful agreement with the troika,” it said in an editorial. “But neither can anyone shoulder the burden of the consequences, if the agreement is not completed.”

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Critics Say New Hampshire’s Right-To-Work Legislation Would Not Net Jobs

February 9, 2012

The nationwide anti-union push is moving to New Hampshire, where the state legislature is considering right-to-work legislation once again. The proposed legislation would significantly curtail unions’ power in the Live Free or Die state. And proponents of the measure in the state, like their counterparts in Indiana and elsewhere, tout the bill as a way to promote economic growth and deal with the state’s jobs problem. Yet, many experts, business owners and promoters of economic development say that the proposed legislation would be unlikely to create jobs or persuade new businesses to open in New Hampshire. In fact, some say, it could hurt the state. Hampshire is tied for having the the nation’s fourth lowest unemployment rate, at 5.1 percent. On Thursday a new right-to-work bill sponsored by Republican Rep. William Smith and others was debated in a hearing. ” This is not an anti-union bill — it’s a pro-union member bill,” he said. “I’m sorry to see it come back,” said Peter Church, who has owned and operated a printing shop in Manchester, N.H., for 21 years. “It’s not something that New Hampshire needs. It’s certainly not something that anyone operating a business in New Hampshire wants.” Last December, New Hampshire conservatives failed to overturn Democratic Gov. John Lynch’s veto of similar legislation . State Republicans call the veto a failure for job growth. “The many companies who have expressed their interest in considering moving new jobs to New Hampshire if we are a right-to-work will not bring relief to the nearly 40,000 unemployed workers across the state,” William O’Brien, the Republican speaker of the state House, said at the time, in a statement. “We have missed an opportunity to grow our economy and help our citizens.” The proposed legislation would prevent union contracts at private sector workplaces from requiring employees to pay dues. A slew of related bills are in the works that also seek to curb union power in the state. Supporters frame the issue as one of “freedom of choice” — that workers should be allowed to choose whether they want to pay dues to a union. But in New Hampshire, some employers don’t want the government dictating how they interact with their employees. “I really resent the state government spending all this time trying to come up with rules and regulations that tell me how I can or cannot negotiate collective bargaining with my employees,” Church said. Church, who employs 13 unionized workers, said there is nothing in the legislation that might encourage him to hire more. The main thing that would promote hiring is an increase in demand for products, he said. Some economic experts have raised concerns that a right-to-work law might slow economic growth rather than speeding it up, in part by cutting into workers’ earnings. A recent study by the Economic Policy Institute, a labor-backed research center, found that for both union and nonunion employees in right-to-work states, wages were $1,500 less per worker each year, after considering cost-of-living and other factors. A working paper by economists from the University of Nevada and Claremont McKenna College concluded that average wages for nonunion workers dropped 4.3 percent as a result of right-to-work legislation. The study looked at a right-to-work law’s impact in Oklahoma , which enacted such legislation in 2001. Right-to-work activists say that lower wages — and weakened unions — are part of the appeal of the law. “The unions typically demand higher wages, so this would provide companies more cost-effective opportunities to bring employees on,” said Dan Duncanson, president of Technical Employment Services, a New Hampshire-based staffing firm. Studies in Oklahoma have shown that lower wages have not spurred employers to hire more. In Oklahoma, employment in manufacturing has declined , even as manufacturing productivity has improved, according to Oklahoma Council of Public Affairs, a conservative think tank. A separate council study concluded that Oklahoma has been losing more jobs to out-of-state migration than it has gained since the 1980s. Those involved with the daily business of economic development in New Hampshire say that right-to-work laws fall very low on the list of reasons an employer might consider when decided to relocate. George Bald, commissioner of New Hampshire’s Department of Resources and Economic Development, says in his scores of conversations with business owners over the years — many who have been considering moving to the state — right-to-work measures have simply not come up. “I just never have had a company ask me about it or tell me that the issue of right to work is a major factor in relocating,” Bald said. Factors that Bald cited as considerations by employers include a state’s education system, the availability of qualified employees, the digital infrastructure, the tax structure and the quality of life. “We’ve never seen evidence that passing right-to-work legislation has been a job creator, and this is why we really see this as an attempt to undermine unions in general,” said Zandra Rice-Hawkins, director of Granite State Progress, a progressive advocacy organization based in New Hampshire. “They’re doing this for ideological reasons alone, and it would roll back workplace protections that we have fought for for decades.” Alan Tonelson, a research fellow at the U.S. Business & Industrial Council Educational Foundation, a nonprofit research organization with nearly 2,000 members including small- and medium-size manufacturers, said that the right-to-work issue has yet to come up as a subject of concern. Rather, high taxation is a frequent source of complaints. “There are many factors that affect the attractiveness of a particular state as a location for manufacturing, and the existence of right-to-work laws can be one, but it’s not the only one.” Rep. Smith could not immediately be reached for comment.

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North Dakota Walmart Evicts Workers Living In Parking Lot

February 9, 2012

Apparently one Walmart isn’t cool with people squatting in its parking lot. Dozens of workers who have flocked to Williston, North Dakota to benefit from the region’s oil boom have been living in tents and trailers for months outside of a local Walmart, but last Monday, the retail chain’s management told the squatters to go or be towed, The Bismarck Tribune reports . Lines of RVs accommodated workers shoulder-to-shoulder but after receiving a variety of complaints, including from female customers who said they feared walking through the camp to shop, Walmart officials say they’ve had enough. “It’s just not appropriate for people to be living in our parking lot,” Walmart spokeswoman Kayla Whaling told The Bismarck Tribune . And it seems that the town’s residents agree. “Walmart is hell. You just don’t want to go there,” said one member of the Nehring family, a group of sisters who have been featured in a reality TV show Boomtown Girls that’s being shopped to networks like TLC and MTV. “You can’t find anything because it’s all cleared out,” another Nehring sister explains. The camp is just one result of a huge population influx into Williston, thanks to a promise of plentiful — and well-paid — work in the oil industry. North Dakota currently boasts the lowest unemployment rate in the nation at 3.3 percent. No doubt because of that, housing has become scarce in the town and the apartments that are available have seen huge jumps in rent , with prices sometimes increasing threefold. More than 1,000 longtime Williston residents have abandoned the town in the past two years due to crowding and the boost in living expenses. The oil rush has had other negative impacts as well. Drunken bar fights have become more common as workers try to blow off steam after long hours. Charges of Driving Under the Influence have also grown more typical, while instances of theft more than doubled in 2011 compared to the year before. Exotic dancing has also become a thriving industry in the town, with some strippers making up to $3,000 per night in tips alone . The popularity of the clubs may be due in part to the low ratio of women to men in the town, which may explain why some are “feeling like a piece of meat” in Walmart’s parking lot, as one Nehring sister put it.

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GOP Crafts Plan To Kill Obama Birth Control Rule

February 9, 2012

WASHINGTON — The Obama administration’s rule requiring most employers’ insurance plans to pay for birth control with no co-pay for employees has infuriated conservatives at the annual Conservative Political Action Conference, renewing the calls for repealing health care reform. Rep. Steve King (R-Iowa) told The Huffington Post that Congress needs to try to reverse Obama’s decision, which has caused a firestorm among many conservatives because religiously affiliated groups are not exempt from the rule. King suggested killing it by attaching a measure to a piece of must-pass legislation, such as the upcoming Surface Transportation Bill. “If the president vetoes it, then we’re back to square one,” he said. “So if it goes on a piece of must-pass legislation like maybe a Surface Transportation Bill, there’s a chance that the president will sign a bill like that. I’m going to let others push on that strategy — Surface Transportation Bill or some other must-pass piece of legislation.” The new rule stems from the Affordable Care Act. Most women employed in the U.S. will have the cost of their birth control covered with no co-pay , effective Aug. 1. The rule exempted employers, including churches and other places of worship whose primary purpose is imparting religious beliefs. But many religious groups argued it was too narrow and should apply to religious-affiliated organizations as well. The Obama administration disagreed, but gave these employers an extra year to comply with the new law. Ultimately, King added, Congress needs to push for the repeal of health care reform, where the new rule originated. “This is the president’s decision, made by Kathleen Sebelius,” said King, referring to the secretary of Health and Human Services. “This decision was not made at HHS. It was made in the White House. Barack Obama made this decision or approved this decision and the way to rectify it is to repeal Obamacare.” WATCH: Sen. Marco Rubio (R-Fla.) has already put forward a bill that would allow religiously affiliated hospitals, universities and other organizations that morally oppose contraception to refuse to cover it for their employees. He said no decision has been made on the timing of bringing legislation to the floor. Asked if he sees any middle ground with the White House, he proposed letting individual churches choose whether to pay for contraception for their employees. In the House, Speaker John Boehner (R-Ohio) said the House Energy and Commerce Committee is taking the lead “through appropriate legislative channels.” The Senate’s $109 billion Surface Transportation Bill moved to the floor on Thursday. It reauthorizes federal public transportation programs at current levels for two more fiscal years. The broader House bill would cover five years of transportation spending. The House GOP leadership has planned on a Feb. 17 vote . UPDATE — 7:54 p.m.: The Huffington Post’s Mike McAuliff reports that Senate Republicans did end up going with the strategy King mentioned, offering an amendment to the transportation bill aimed at countering birth control regulations under the health care law. They attempted to block the rule before it even took effect by amending the Surface Transportation Bill that the Senate had voted 85 to 11 to start debating. Senate Majority Leader Harry Reid (D-Nev.) took umbrage at the move, saying, “Here is a bipartisan bill to create and save jobs. Every state in the union is desperate for these dollars. But to show how the Republicans never lose an opportunity to mess up a good piece of legislation, listen to this: They’re talking about First Amendment rights, the Constitution.”

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The Greenest Car Of 2012 Is…

February 9, 2012

From Mother Nature Networks’ Melissa Hincha-Ownby: The American Council for an Energy-Efficient Economy (ACEEE) has published its 14th annual Greenest Cars List and for the first time an electric vehicle takes the number one spot. The new Mitsubishi i-MIEV bested the Honda Civic Natural Gas , which held the number one spot for eight straight years. A variety of environmental criteria are assessed when evaluating a vehicle’s green score, including the emissions created by the power plant used to provide electricity to the i-MIEV and other electric vehicles . The changing face of the eco-friendly automotive scene actually led to a few changes in the ACEEE’s methodology this year. “This year, a number of updates were made to the Green Book® methodology to more accurately estimate vehicles’ environmental impacts. These include improved emissions estimates for the vehicle manufacturing process, changes reflecting current natural gas extraction practices, and consideration of upcoming shifts in the generation mix for the electricity used to power electric cars.” Source: ACEEE One very prominent electrified vehicle is missing from this list, the Chevy Volt . According to CNNMoney.com , “That’s because the ACEEE uses vehicle weight as a criterion for scoring, under the assumption that a heavier vehicle causes more waste in production.” Unfortunately for General Motors, the Chevy Volt was their best chance for inclusion on the list. Instead, the Greenest Cars of 2012 list is dominated by Japanese imports. General Motors and other Detroit-based automakers are receiving unfavorable recognition on the Greenest List’s companion, the Meanest Vehicles for the Environment in 2012 . Both the Chevrolet G3500 Express Cargo van and its GMC cousin, the G3500 Savana tied with the Ford E-350 Wagon for the Meanest Vehicle of 2012 with a Green Score of 17. For those that cry foul, there are electric cargo vans on the market that are a viable alternative to these gas-hogging beasts. The 2012 Greenest List and each vehicle’s corresponding Green Score follows:

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Steve Blank: Two Giant Steps Forward for Entrepreneurs

February 9, 2012

While entrepreneurship is in the news fairly regularly, I seldom make news myself. Today, however there are two important updates for entrepreneurs everywhere. Let me be brief… The “Startup Owner’s Manual” goes On Press Tuesday 2/14 Two years in the making and literally ten years in development, I’m proud to announce that my new book, The Startup Owners Manual , goes onto the printing press next Tuesday. This 608-page work is, as its subtitle says, “the step-by-step guide for building a great company.” It’s the result of a decade of me learning from 1,000 of entrepreneurs, corporate partners, students and scientists the best practices of what wins in startups. I’ve spent the last two years cramming knowledge into this new book. In brief, The Startup Owners Manual is far more detailed and more readable than Four Steps to the Epiphany, (most of the sentences are even finished!). In fact, you could say that all that remains from my last book are the four steps of Customer Development. Briefly, the new book Integrates Alexander Osterwalders “Business Model Canvas” as the front-end and “scorecard” for the customer discovery process. Provides separate paths and advice for web/mobile products versus physical products Offers a ton of detail and great tips on how to get, keep, and grow customers, recognizing that this happens very differently between web and physical channels. and finally it teaches a “new math” for startups: “metrics that matter. While MBA’s have had a stack of texts to help them “execute” a business model, this book joins the growing library of books for practitioners in “search” of a business model. The Lean LaunchPad Online Class My online Lean LaunchPad class has created a lot of buzz this week. As you may have heard, I was deep into the production of the lectures when I realized I was producing the wrong class. The online class was originally based on my book The Four Steps to the Epiphany . Only when I held the draft of my latest book, The Startup Owner’s Manual , in my hands, did it dawn on me that my online students deserved all the latest best practices of entrepreneurship and Customer Development. Not the stuff I taught a decade ago, but all that I’ve learned teaching the Lean LaunchPad in front of students at Stanford, Berkeley, Columbia and the National Science Foundation in the last year. And I particularly wanted to incorporate I’ve spent two years integrating into The Startup Owner’s Manual . So apologies to all of you who were expecting the class this month. I hope to get the updated version online in the next 60 days. I’ll keep you updated on this blog as we record our lectures. In the meantime, if you want to prepare for the class…or get a jump on your startup competition, you can start reading the “recommended text” for the online class right now by ordering my new book. It is recommended–not required–reading for the free online course, and I believe it will be immensely helpful to the startup community at large. Lessons Learned Startups search for business models, exisitng companies execute them There are tons of texts about execution, but a paucity of practical ones for founders on how to search The Startup Owner’s Manual is the definitive reference book for founders, investors and everyone interested in startups The Lean Launchpad on-line class will be based on the new book Steve Blank’s blog: www.steveblank.com

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Who Does And Does Not Qualify For A Piece Of The $25 Billion Mortgage Settlement

February 9, 2012

The government’s $25 billion settlement with five of the nation’s largest banks could help up to one million homeowners . About $21.5 billion is earmarked for consumer relief, with the remainder going to state and federal governments. Distressed homeowners should not expect a check or aid tomorrow, however. According to the government’s National Mortgage Settlement website, it will take up to two months to select an administrator to oversee the process, identifying who is eligible to receive help, and six to nine months to start with the actual housing help. Help could come via partial loan forgiveness or “principal reduction,” refinancing or, cash payments of up to $2,000 for those who have already lost their home. The program only applies to homeowners who have or had mortgages serviced by Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial. Those with loans owned by housing giants Fannie Mae or Freddie Mac are not affected by settlement. Homeowners from Oklahoma, the only state to not sign the settlement agreement, are not eligible. Here’s more detail on who’s eligible for relief: Principal reductions Servicers are required to provide at least $17 billion worth of direct relief to current homeowners, most of which will go to provide help for principal reduction for first and second mortgages. Other money will be used to facilitate short sales–where the home is sold for less than the mortgage value. The funds also cover anti-blight measures, and enhanced homeowner transition programs. Principal reductions could be anywhere from $20,000 to $50,000 on average but the amount will depend on each homeowner’s market. Homeowners who think they qualify should contact their lender directly. Who is eligible? Homeowners who are still in their home, but are not current on their payments and are struggling to make them. Refinancing Servicers will have to provide up to $3 billion in refinancing relief nationwide to help homeowners get better interest rates on home loans to reduce monthly payments. Current rates for 30-year and 15-year fixed rate mortgages are under 4 percent. Who is eligible? Homeowners who owe more on their home than it is worth and are current on their mortgage payments. Cash Servicers will divvy up $1.5 billion among 750,000 homeowners who have already lost their homes to foreclosure. That comes out to $2,000 and checks will be mailed over the next six to nine months. Who is eligible? Homeowners who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. For homeowners who lost their house but are concerned it could be difficult for the administrator to track you down, please contact an Attorney General’s Office . For more information: Ally/GMAC : 800-766-4622 Bank of America : 877-488-7814 Citi : 866-272-4749 JPMorgan Chase : 866-372-6901 Wells Fargo : 800-288-3212

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National Mortgage Settlement All But Inevitable As California, New York Join Deal

February 9, 2012

New York Attorney General Eric Schneiderman and California Attorney General Kamala Harris are joining the national mortgage servicing settlement, making a deal that includes all 50 states all but inevitable, according to a source who spoke Wednesday evening on condition of anonymity. “It’s hard to see any state staying out of the deal if California is in,” said the source. The settlement resolves allegations that five of the nation’s largest banks forged documents and wrongfully foreclosed on borrowers in what has come to be known as the “robo-signing” scandal. Schneiderman and Harris have been outspoken in urging the Obama administration to hold the nation’s biggest banks accountable for their role in the housing crisis and have resisted signing on to the settlement until now over concerns that it would go too easy on the banks and provide too little homeowner relief. The two states’ participation had widely been seen as necessary to a successful deal. California has been one of the hardest hit states during the foreclosure crisis, and because of this was considered a key state when it came to securing a deal. The five banks participating in the settlement — Ally Financial, Citigroup, Bank of America, Wells Fargo and JP Morgan Chase — agreed to contribute a total of $25 billion to help struggling homeowners if California joined the deal. Without California, that figure would drop to $19 billion. The deal is being negotiated between the state attorneys general, the Obama administration and the banks. The majority of the settlement money is earmarked for helping homeowners change the terms of a mortgage or refinance it, or reduce the amount of principal owed. In this election year, the proposed deal has become a political lighting rod as some consumer advocates have criticized the Obama administration for what they perceive as terms that deliver too little help to desperate homeowners. “Even if the final settlement number is $25 billion, it pales in comparison to the scope of the problem,” said Margery Golant, a Florida-based attorney who represents homeowners and formerly served as assistant general counsel at subprime mortgage giant Ocwen Financial. “If you do the math, that’s a few hundred million per state. That’s not enough to change anything.” California and New York are joining more than 40 states that already have agreed to the settlement. Florida, Massachusetts, Nevada and Delaware have remained resistant to joining, though that will likely change now with California’s and New York’s participation, sources familiar with the negotiations said. Shaun Donovan, secretary of the Department of Housing and Urban Development, said last week that a deal “will be finalized, I would expect, in the coming days.” A final deal has not been announced.

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Al Norman: Life & a Cheap Death at Wal-Mart

February 9, 2012

Ten months ago, Sprawl-Busters first reported the death of a Brazilian immigrant worker during a botched renovation job by an unlicensed crew inside a Wal-Mart in Massachusetts. Romulo de Oliveira Santos died at the age of 47 on the floor of a Wal-Mart vision center in Walpole, Massachusetts. His muscles were charred, his skin was coagulated, and one-fifth of his body suffered second and third degree burns. There were bruises and cuts on his face, back, arms and hands. According to an autopsy, Santos had been electrocuted. This week, the Boston Globe picked up the Santos story in its Business section, noting a similar job site injury and death at Wal-Mart elsewhere in the country. On the night of September 8, 2008, Santos was working as part of an inexperienced, unsupervised subcontract crew on a remodeling project at Wal-Mart store #2103 on Providence Highway in Walpole. There was no properly licensed supervisor watching over crew members from Italo Masonries, for whom Santos worked. Italo had never done demolition work before. Wal-Mart hired a general contractor to oversee the reconstruction of its Vision Center, and that contractor has subbed out the interior demolition to Italo. Santos was working without licensed supervision. In 2000, Santos came to America on a work visa to pursue a dream. He wanted to become an electronic technician. Santos enrolled in ESL classes to learn English, and began working on a cleaning crew. Santos would send some of his earnings back to the city of Volta Redonda, Brazil, where his family lived. He was 39 years old when he first entered the U.S. Eight years later, he was inside the Walpole Wal-Mart working a late hour shift — his last. The construction scene inside the Vision Center was a tangle of unlabeled wires and cords. Wal-Mart had insisted that the remodeling job would proceed while the store remained open. On Santos’ last night, the general contractor, electrical contractor, and Italo Masonry all left no supervisors at the site. But several light circuits were left on, because the renovations could be done quicker and easier by leaving the area “hot.” One junction box at the top of a wall was left “hot.” Santos arrived at the site just before 10:30 pm — a time when most Wal-Mart shoppers were home in bed. Santos and his coworkers were not warned that a 227-volt circuit powering the overhead lights in the Vision Center had been left live. Santos had no reason to expect that wires behind the walls were hot. It was normal practice that live wires would be clearly marked and labeled, to avoid lethal danger. One of Santos’ coworkers began tearing down a wall that had been marked for demolition. The crew member, wielding a reciprocating saw, cut through the live wire at the top of the wall. The lights went out, leaving the whole crew in the darkened Vision Center. The crew began to exit the site, when Santos came in contact with the live wire. According to witnesses at the scene, Santos moaned in pain, and fell to the floor in between a scissors lift and the wall. A crew member rushed to his side, but Santos died within minutes — badly burned from the trauma. The federal Occupational Safety and Health Administration (OSHA) issued Wal-Mart an immediate stop work order, and listed numerous violations of federal safety regulations. “Workers were exposed to hazards of arc-flash and arc blast while working on energized parts of the circuit breaker panels without proper personal protective equipment,” OSHA wrote. “Employees were exposed to electric shock hazards while performing . . . tasks without de-energizing the circuits.” Attorney Brian A. Joyce of the Joyce Law Group, the firm that is handling a civil lawsuit against Wal-Mart on behalf of the Santos family, says that Romulo’s death could have been avoided if Wal-Mart had held its general contractor to its contractual obligation to permit only properly licensed and qualified subcontractors to demolish the Vision Center. Joyce notes that the general contractor has a rap sheet with OSHA for hiring unlicensed contractors. “Wal-Mart’s callous indifference to the safety of construction workers at the Walpole store is not an isolated incident,” Joyce told Sprawl-Busters. Similar construction-related deaths have occurred in Texas, Nebraska, and Indiana. OSHA has cited Wal-Mart in numerous other cases for its negligence in protecting workers. “In its ruthless quest to cut prices and maximize profits,” Joyce charges, “Wal-Mart allows cutting corners, especially when it comes to safety, and is willing to risk the lives of construction workers to save on costs. When the sadly predictable accidents occur, Wal-Mart remorselessly opposes attempts by the surviving family members to discover what happened, and to seek justice for their lost loved ones.” The family of Romulo de Oliveira Santos has waited for almost three and a half years to see justice done in this case. The sudden death of their son who traveled to America was tragic enough — but Wal-Mart’s response since the accident has made the family’s ordeal even harder to accept. On February 14, 2011, the Boston law firm hired by Wal-Mart acknowledged in a letter to the Joyce law firm that “an offer of $25,000 was made” to the Santos family by the retailer and its general contractor as compensation for Santos’ death. That was one year ago. There has been no movement by Wal-Mart since then. Attorney Joyce says Wal-Mart’s financial offer is a slap in the face to the Santos family: “If Mr. Santos — who was in excellent health when this tragedy occurred — had worked until his retirement age, he could have had another $1 million in salary alone. Apparently $25,000 is the value that Wal-Mart puts on this man’s life.” An everyday low price for a life — from the company that made its fortune on cheap imported products — like the labor of Romulo de Oliveira Santos. Al Norman is the founder of Sprawl-Busters. For almost twenty years he has been helping community groups defend themselves against big box development. His most recent book is The Case Against Wal-Mart.

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Clay Farris Naff: Jesus Concerned About The Poor? You Must Be Joking, Says The Christian Right

February 8, 2012

When President Obama used the occasion of the National Prayer Breakfast to say that for the fortunate to pay a little more to help the less fortunate “coincides” with Jesus’ teachings, he must have touched a nerve. How else to explain the volcanic eruption of hate that has spewed from the right in response? Exposure to the pyroclastic flow of rightwing political lava for more than a moment can cause severe brain tissue burns, so I’ll offer a few quick samples. Geoff Ross, a retired naval man and self-styled president of the Rogue Patriot Group, writes: I am correcting the record, Sir. You [are] a degenerate immoral hack that has no values or moral fiber or glue. … It is not your job to give Americans a fair shot at anything. It is up to us Americans to be able to go out and find prosperity and happiness and financial independence. It is you sir with your BOOT on the neck of this nations carotid artery that is shutting off blood flow to freedom and liberty we used to enjoy. When you remove your boot then we will prosper. … You stated Mr. President “Living by the principle that we are our brother’s keeper. Caring for the poor and those in need. These values are old. They can be found in many denominations and many faiths, among many believers and among many non-believers. And they are values that have always made this country great.” You make this statement yet you remove millions of dollars in federal aid from Catholic charities because they refuse to bow down to your demand that they send rape victims for mandatory abortions… Mandatory abortions? I guess they must have been authorized by the Obamacare Death Panels when we weren’t looking. Now, you might be tempted to dismiss the above drivel as just typical Internet raving. But that would be a mistake. For the fanatics of Old Time Religion, this is mainstream stuff. Here’s Fox News regular Steven Crowder: OK, you might say, this guy with his “Obama’s Burning Taxpayer-Funded Incense To Whatever Pagan, Foreign Deity He’s Worshiping” nonsense is just another attention-seeking rightwing rent-a-ranter. But it doesn’t stop there. On the floor of the Senate, Orrin Hatch of Utah took up the cudgels to berate the president about the Gospels. Short version: Hatch blasts the president for injecting a “tax-the-rich scheme” into the prayer breakfast, says the Gospels are concerned about “weightier matters,” and cautions him to remember that only one person ever walked on water. Apparently, in today’s GOP to even mention making a little financial sacrifice to help the poor is to compare yourself to the messiah. See for yourself. Why are the reactions so venomous? The answer, I think, lies in an asymmetry of belief. For mainstream believers across the political spectrum, religion is an important but limited dimension of their lives. It fosters altruism, a sense of community and a reassurance of meaning in their lives. The hotheads of the Christian Right have a completely different orientation to religion. Forget about charity, mercy or love. As far as they are concerned if Jesus said, “Blessed are the poor,” he must have meant in the afterlife. As they see it, this life is all about war. Theirs is a tribal god who bears a remarkable resemblance to the angry, vengeful and often merciless Yahweh of old. The defenders of Old Time Religion see themselves in an existential fight to the finish with Satanic enemies. And clearly they believe that Satan’s plan is to tax them into hell. It is a worldview strangely detached from the Gospels. Otherwise, you might think that when President Obama says , “if I’m willing to give something up as somebody who’s been extraordinarily blessed, and give up some of the tax breaks that I enjoy, I actually think that’s going to make economic sense. But for me as a Christian, it also coincides with Jesus’s teaching that ‘for unto whom much is given, much shall be required,’” it might ring true. But then again, maybe that would come uncomfortably close to reminding them of something else Jesus is quoted as saying, in the Gospel of Matthew: …for I was hungry, and ye gave me to eat; I was thirsty, and ye gave me drink; I was a stranger, and ye took me in … Verily I say unto you, Inasmuch as ye did it unto one of these my brethren, even these least, ye did it unto me. Or this: “…sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.” Or, worst of all, this: “Verily I say unto you, It is hard for a rich man to enter into the kingdom of heaven. And again I say unto you, It is easier for a camel to go through a needle’s eye, than for a rich man to enter into the kingdom of God.” No, that will never do. Better book some TV preacher on Fox News to explain it all away.

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House Dems: Drilling Fines Are ‘Pocket Change’ For Oil & Gas Companies

February 8, 2012

WASHINGTON (AP) — Federal policing of oil and natural gas drilling on public lands is lax and inconsistent, with only 6 percent of violations resulting in monetary fines over 13 years, House Democrats said in a report Wednesday. Fines over that time totaled less than $275,000, an amount that the Democratic staff of the House Natural Resources Committee characterized as little more than “pocket change” for oil and gas companies. The report said federal regulators issued no fines in the period studied, February 1998 to February 2011, in eight of the drilling states. The report, obtained by The Associated Press before its public release later Wednesday, said the government does little to ensure accountability or protect the environment, even as drilling on federal land has increased in recent years. The increase is driven in part by hydraulic fracturing, or “fracking,” a drilling technique that has allowed companies to extract oil and gas long locked underground. The report focuses on drilling activity that occurred on federal land in 17 states during three administrations, two Democratic and one Republican. A total of 2,025 citations for safety and drilling violations were issued to 335 companies, the report said, with 64 companies fined a total of $273,875 “It would be an overstatement to even call these fines a slap on the wrist. For oil and gas companies making billions from drilling on America’s public lands, this kind of inadequate oversight and enforcement is little more than a pin prick,” said Massachusetts Rep. Edward Markey, the committee’s top Democrat. Markey and Rep. Rush Holt, D-N.J., requested the report. “American citizens and workers should feel confident that oil and gas companies are conducting business in the safest manner possible, and when they don’t, that the U.S. government will step in and make sure they pay the price for their actions. This report indicates that confidence in the oversight of drilling on public lands should be limited, at best,” Markey said. The Obama administration is considering new rules for fracking at oil and gas wells on federal land. President Barack Obama said in his State of the Union speech last month that the Interior Department will require energy companies to publicly disclose chemicals used in drilling for natural gas on public lands. Federal rules for fracking on public lands are set to be released in a few weeks. Adam Fetcher, a spokesman for Interior Secretary Ken Salazar, said the department received the report Wednesday and will review it. At Obama’s direction, Interior is taking additional steps to ensure that domestic energy resources are developed safely and responsibly, “including measures to enhance public confidence in hydraulic fracturing on public lands, Fetcher said, referring to the new fracking rules expected in a few weeks. “It is essential that the public have full confidence that the right safety and environmental protections are in place,” Fetcher said. Officials said several large penalties have been assessed recently against drilling companies, including a $2.1 million civil settlement last year with Denver-based Berry Petroleum Co., after an employee disabled production gauges that could have affected royalty payments on more than 150 Utah oil wells. In fracking, millions of gallons of water, sand and chemicals are pumped into wells to break up underground rock formations, allowing oil and gas to escape. Energy companies have greatly expanded their use of fracking as they tap previously unreachable shale deposits, including the lucrative Marcellus Shale formation in Pennsylvania, New York and neighboring states. The drilling practice has also attracted increased attention from Congress and regulators, as private groups and government agencies research whether it poses a danger to drinking water. The report found that more than 2,000 violations were handed out by the Interior Department to oil and gas companies drilling on federal land. Of these, 549, or 27 percent, were classified by committee staff as a major environmental or safety violation. More than half the major violations stemmed from a nonfunctioning or missing blowout preventer, the same device that failed in the BP oil spill in the Gulf of Mexico, the report said. A total of 113 major violations cited inadequate well-casing or cementing, another problem that occurred in the BP spill. Onshore, well-casing and cementing are a key defense against groundwater contamination. On at least 54 occasions, oil and gas companies began drilling on federal land before receiving formal approval to do so, the report said. Despite those problems, monetary fines were rarely issued, the report said. In eight states — Alaska, Arkansas, Louisiana, North Dakota, Nevada, Ohio, South Dakota and West Virginia — no fines were issued for the period studied. Thirteen companies were cited for at least 30 violations over the period studied, topped by Oklahoma-based Williams Production RMT Co., which received 98 citations and seven fines totaling $6,000. Colorado-based Encana Oil & Gas Inc. received 63 citations and four fines totaling $11,000, while Texas-based Anadarko E & P Co. received 61 violations and one fine totaling $5,000. ___ Online: House Natural Resources Committee: http://naturalresources.house.gov/ ___ Follow Matthew Daly: Twitter.com/MatthewDalyWDC

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Is The Dow Jones Still Relevant?

February 8, 2012

One day in October 2006, my editor gave me the same assignment that hundreds of other editors were giving their business writers. He told me to go to a trading floor to witness the magical moment when the Dow Jones Industrial Average passed 12,000 points. He may have envisioned cheers, shouts, balloons, traders cutting one another’s ties and (this being 2006) dousing one another in Cristal. Instead, the traders obliviously entered orders into their computers while I stood around looking for the story. It got me thinking: Why do we still care so much about the Dow?

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Reid Hits Back Against GOP Measure Targeting Marginalized Group

February 8, 2012

By ANDREW TAYLOR, THE ASSOCIATED PRESS WASHINGTON — Republicans are looking to deny child tax credits to undocumented immigrants–refund checks averaging $1,800–in an effort that has roused anger among Hispanics and some Democratic lawmakers. The proposal, which would require people who claim the federal credit to have Social Security numbers to prove they’re legal workers, is being offered as a way to help pay for extending the Social Security tax cut for most American wage-earners. It would trim federal spending by about $10 billion over a decade. Senate Majority Leader Harry Reid of Nevada says the proposal unfairly goes after the children of poor Hispanic workers. Such kids often are U.S. citizens, even when their parents aren’t, because they were born in this country. Says Leticia Miranda, senior policy adviser of the National Council of La Raza: “People who are making close to the minimum wage and are raising children in this country – and we’re asking them to pay for the payroll tax cut?” She says, “It’s outrageous and it’s crazy.” On the other side, Republicans and some Democrats say what’s crazy is even having a debate over whether the government should be cutting checks to people who have sneaked into the country without documents. It’s hard to imagine there isn’t a healthy majority, even in the Democratic-controlled Senate, to stop the practice – if it’s actually brought to a vote. “We have rules about tax credits and benefits, and it seems to me they need to be applied fairly and across the board,” said Democrat Sen. Claire McCaskill, who is facing a difficult re-election bid in Missouri. “If there are rules, they need to be enforced. I think it’s just that simple. I don’t think it’s complicated.” Undocumented immigrants have been barred from other refundable tax credits, such as the earned income tax credit for lower-income workers. But a 1997 law enacting the child tax credit doesn’t specifically exclude them from collecting that separate benefit. It was significantly expanded in 2001 and 2009 so that many more people are eligible for refundable credits, though the expanded credit is slated to expire at the end of the year along with other Bush-era tax cuts. “Although the law prohibits aliens residing without authorization in the United States from receiving most federal public benefits, an increasing number of these individuals are filing tax returns claiming this refundable credit,” Rep. Sam Johnson, R-Texas, said when the House debated the payroll tax cut measure in December. “Illegal immigrants bilked $4.2 billion from the U.S. taxpayers (in 2010). I think that it’s time that we fixed it.” The situation has Democrats in a box. If they fight the GOP effort to cut back payments of the tax credit, they’ll be favoring the delivery of refunds to people who not only don’t owe income taxes but aren’t supposed to be in the country in the first place. What’s more, closing the loophole would raise real money – an estimated $10 billion over 10 years under the approach favored by House Republicans. The Treasury Department says that in the 2010 filing year more than $4 billion in child credit refunds went to 2.3 million people who filed tax returns but didn’t have Social Security numbers proving they were citizens or legal workers. That’s a four-fold increase over five years earlier. On the other side are politically influential Hispanic groups, a key Democratic-friendly constituency. Opponents of tightening eligibility for the child tax credit point out that six of every seven affected families are Hispanic, with an average household income of about $21,000. Tax credits averaging $1,800 per family make a huge difference at such income levels. Hispanics point out that in many instances the tax credit goes to wokers who aren’t citizens but whose children are – because they’ve been born in the country and therefore can have Social Security numbers of their own. They say such children should reap the benefit of the tax credit just like other children in comparable economic circumstances. “I just think the child tax credit is working just fine and there’s no need to punish children,” Sen. Reid said last week. “We’re supposed to try to be helping them.” One option under consideration is to require tax filers to supply a Social Security number for the child when claiming the tax credit instead of requiring that at least one of the parents possess one. That would respond to criticism that the GOP proposal is unfair to the citizen children of undocumented immigrants. “We’re not in favor of fraudulent payments or payments that shouldn’t be made, but we don’t want to create obstacles to supporting low-income families who are trying to care for their children,” said Sen. Dick Durbin, D-Ill. “Even though the parent doesn’t have a Social Security number, they could still be entitled under their tax return, for a child tax credit.” Congress needs to find about $160 billion between now and the end of the month to cover the costs of extending through Dec. 31 a Social Security tax cut averaging about $20 a week for 160 million workers, federal unemployment benefits for the long-term jobless and unreduced Medicare fees for doctors. All are now due to expire Feb. 29.

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GOP Is Looking To Deny Child Tax Break For Undocumented Immigrants

February 8, 2012

WASHINGTON — Republicans are looking to deny child tax credits to undocumented immigrants – refund checks averaging $1,800 – in an effort that has roused anger among Hispanics and some Democratic lawmakers. The proposal, which would require people who claim the federal credit to have Social Security numbers to prove they’re legal workers, is being offered as a way to help pay for extending the Social Security tax cut for most American wage-earners. It would trim federal spending by about $10 billion over a decade. Senate Majority Leader Harry Reid of Nevada says the proposal unfairly goes after the children of poor Hispanic workers. Such kids often are U.S. citizens, even when their parents aren’t, because they were born in this country. Says Leticia Miranda, senior policy adviser of the National Council of La Raza: “People who are making close to the minimum wage and are raising children in this country – and we’re asking them to pay for the payroll tax cut?” She says, “It’s outrageous and it’s crazy.” On the other side, Republicans and some Democrats say what’s crazy is even having a debate over whether the government should be cutting checks to people who have sneaked into the country illegally. It’s hard to imagine there isn’t a healthy majority, even in the Democratic-controlled Senate, to stop the practice – if it’s actually brought to a vote. “We have rules about tax credits and benefits, and it seems to me they need to be applied fairly and across the board,” said Democrat Sen. Claire McCaskill, who is facing a difficult re-election bid in Missouri. “If there are rules, they need to be enforced. I think it’s just that simple. I don’t think it’s complicated.” Undocumented immigrants have been barred from other refundable tax credits, such as the earned income tax credit for lower-income workers. But a 1997 law enacting the child tax credit doesn’t specifically exclude them from collecting that separate benefit. It was significantly expanded in 2001 and 2009 so that many more people are eligible for refundable credits, though the expanded credit is slated to expire at the end of the year along with other Bush-era tax cuts. “Although the law prohibits aliens residing without authorization in the United States from receiving most federal public benefits, an increasing number of these individuals are filing tax returns claiming this refundable credit,” Rep. Sam Johnson, R-Texas, said when the House debated the payroll tax cut measure in December. “Illegal immigrants bilked $4.2 billion from the U.S. taxpayers (in 2010). I think that it’s time that we fixed it.” The situation has Democrats in a box. If they fight the GOP effort to cut back payments of the tax credit, they’ll be favoring the delivery of refunds to people who not only don’t owe income taxes but aren’t supposed to be in the country in the first place. What’s more, closing the loophole would raise real money – an estimated $10 billion over 10 years under the approach favored by House Republicans. The Treasury Department says that in the 2010 filing year more than $4 billion in child credit refunds went to 2.3 million people who filed tax returns but didn’t have Social Security numbers proving they were citizens or legal workers. That’s a four-fold increase over five years earlier. On the other side are politically influential Hispanic groups, a key Democratic-friendly constituency. Opponents of tightening eligibility for the child tax credit point out that six of every seven affected families are Hispanic, with an average household income of about $21,000. Tax credits averaging $1,800 per family make a huge difference at such income levels. Hispanics point out that in many instances the tax credit goes to wokers who aren’t citizens but whose children are – because they’ve been born in the country and therefore can have Social Security numbers of their own. They say such children should reap the benefit of the tax credit just like other children in comparable economic circumstances. “I just think the child tax credit is working just fine and there’s no need to punish children,” Sen. Reid said last week. “We’re supposed to try to be helping them.” One option under consideration is to require tax filers to supply a Social Security number for the child when claiming the tax credit instead of requiring that at least one of the parents possess one. That would respond to criticism that the GOP proposal is unfair to the citizen children of undocumented immigrants. “We’re not in favor of fraudulent payments or payments that shouldn’t be made, but we don’t want to create obstacles to supporting low-income families who are trying to care for their children,” said Sen. Dick Durbin, D-Ill. “Even though the parent doesn’t have a Social Security number, they could still be entitled under their tax return, for a child tax credit.” Congress needs to find about $160 billion between now and the end of the month to cover the costs of extending through Dec. 31 a Social Security tax cut averaging about $20 a week for 160 million workers, federal unemployment benefits for the long-term jobless and unreduced Medicare fees for doctors. All are now due to expire Feb. 29.

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Barry Levinson: Don’t Know Much About Oil

February 8, 2012

I don’t know much about the business world, I don’t know much about economics. So you’ll have to take what I say with a grain of salt. It’s more about what I don’t know than what I do know. Here’s my question: why does the gasoline price at the pump vary from day to day? You see this change on the signs. Suddenly it’s up three cents. Up seven cents. Down four cents. It’s always in flux. Why? The answers we’re always hearing are, “Government upheavals in the Middle East,” or “Issues with super tankers.” Or, “Nervous about the economic health of the global economy.” All those issues may in fact be real, but why does the price of the oil at your nearby station suddenly jump at the first sign of oil company anxiety? The oil at the gas station is sitting under the pump. It’s been bought at a certain price. So why does it change daily, based on the fears of the oil company? If you went into a car dealership and you were interested in some Buick at a given price, the salesman doesn’t suddenly come in and say the Buick went up $36 today because they’re having difficulty with supplying enough grills to the front of the car. They bought the car at a certain price, therefore they sell it at a certain price. Sometimes at a lower price. But one thing is for certain, the price of the Buick does not go up and down throughout the course of the week. To take it one step further, the earthquake in Japan, which disrupted the entire Japanese auto industry, did not set off an uptick in the cost of a Nissan or Toyota or Honda. The oil industry doesn’t need a natural disaster to actually happen though. Just their anxiety over the possible disruption of the Straits of Hormuz can cause the gas to increase in your neighborhood by four or five cents overnight. Another analogy. You decide to go for a big purchase. You hear that art is a good investment. You gather your courage and you go to your local gallery. You see a painting, a Julian Schnabel that catches your attention. You’re interested in it. You see the price. You wonder if you could afford it. Suddenly the gallery gets a phone call. “Schnabel has sprained his thumb on the hand that holds the brush. He may or may not be able to paint full time.” Suddenly the gallerist quickly hangs up the phone, crosses the gallery, and increases the painting’s cost by $183. “Why?” asks the potential buyer. The gallery man responds, “We have anxiety over Julian Schnabel’s thumb.” And then the oil industry has the other gimmick they throw in there. Look carefully. Gas is $3.87.04. Or $3.87.05. It is the only commodity I know of that you pay a percentage of a penny on. You don’t go for a Big Mac and it costs $3.37.03. Whatever is happening in the cattle markets, cows coming down with diseases or what have you, does not shake the price of the Big Mac or the Big Whopper or whatever Wendy’s calls its beef patties on any given day. Same price. Every day. The fries do not fluctuate no matter what’s going on in the potato world. Coke and Pepsi hold the price line. Nothing fluctuates daily in price like oil. And for whatever reason, we have accepted it. One final thing: In your local area, why is all gasoline almost the exact same price? Exxon Mobil. BP. Shell. At the local pumps, almost identical price. Why is that? You would think one of them would be known as “The Low Price Oil Company.” Their slogan: “The highest performance gasoline at the lowest price.” As opposed to other types of companies, oil companies never have special sales. Never the “Winter Sell-Off.” Never the “Spring Clearance.” Never “The Back-to-School Sale.” All other businesses have some kind of sale celebrations going on periodically. Not when it comes to oil. Years ago there used to be price wars. One station undercutting another. But that’s when real people used to own the gas stations. That’s when hardworking men maintained their service station and provided services, like checking your tire pressure. Your oil. Cleaned your windows. Pumped your gas. And were happy to see you. And actually kept their toilets clean, just as a bonus. Just because they cared. That’s when gas was probably around 29 cents a gallon at the pump. Any way, these are just a few questions. Unfortunately, I have yet to find one intelligent answer. Or at least one that I can comprehend.

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In Minnesota, Missouri, Colorado, Economies Languish As GOP Candidates Vie For Votes

February 8, 2012

When Republicans in Minnesota, Missouri and Colorado cast their votes for presidential candidates Tuesday, many will no doubt have the economy on their minds. Tying the three economies together is government, among the top three employers in all three states. And in all three states, government employment is falling too. Missouri particularly struggled last year, losing jobs while nationwide employment grew. And nearly a third of Missouri’s mortgages are underwater — a larger share than the national average. The state is also less confident about the future of the economy than 35 states. Though Minnesota and Colorado’s economies are doing better than average, they are still far from healthy. Minnesota’s home prices plunged 20 percent over the past five years. And Minnesota’s unemployment rate is lower than the national average largely because of slow population growth, said Troy Walters, an economist at IHS Global Insight. Coloradans may feel a bit wealthier than the nation as a whole since the same housing bust has not been as severe there. Home prices have fallen just 5 percent over the past five years, and 16 percent of Colorado mortgages are underwater — far below the national average.

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Melissa Richer: How Millennials Are Shaping the Future of Social Entrepreneurship and Technology

February 7, 2012

In 2011, the terms ‘social entrepreneurship’ and ‘social business’ began to make weekly appearances in mainstream media (see recent Huffington Post coverage here , here , and here ). These startups are at the forefront of the ‘new economy.’ They make money by solving social and environmental problems, and they do not fit into the traditional nonprofit or for-profit mold. When I entered the workforce 5 years ago, I mostly heard that my generation was ‘difficult to work with,’ ‘savvy with that social media thing,’ and ‘free-spirited.’ Now people see us differently. In 2011, we were the entrepreneurs, survivors, and ‘ generation sell .’ Oftentimes people ask me about the future of social entrepreneurship. This is because I founded Ayllu , an organization that tracks social businesses in 80+ developing countries and reports on market trends. I tell them that right now social entrepreneurship is a hot trend and there are funders, conferences, university departments and newspaper sections devoted to it. I believe that in the not-too-distant future, social entrepreneurship will become so prevalent that it will no longer be a niche sector. It will simply be part of the new economy that emerges from today’s convalescent markets. In the years ahead, social entrepreneurs will take advantage of innovations in the technology sector. Here are technology-related trends that have major social change potential in 2012 and beyond: Crowd-based Models : Crowd-funding brings people together online, and pools their money to finance a project. It is a big social entrepreneurship trend, which Kiva made famous a few years ago. Now many social entrepreneurs have innovated on this concept. Solar Mosaic makes it possible for anyone to fund community solar installations in places like schools or hospitals. inVenture realized small businesses in developing countries need growth capital, so they created a crowd-investing platform. And One Percent Foundation innovated on the giving circle concept by pooling 1 percent of its members’ income and donating it to charities. In the future, as technology becomes cheaper and more prevalent, social entrepreneurs will move beyond crowd-funding. They will use other crowd-based models to create social change. This trend is already manifesting itself in the mobile technology space. Mobile Technology: Today, nearly 70 percent of people in developing countries have mobile phones. In just a few short years, more than 1 billion people who were formerly ‘off the map’ are on it. This market opportunity is tremendous in terms of size and scale, as are possibilities for social innovation. Social entrepreneurs are building new models: Labor Voices combats human trafficking with a ‘yelp model’ where migrant workers can rate and review their employers anonymously. In developing countries, Medic Mobile uses mobile technology to help rural health workers coordinate with clinics and patients. In Kenya, people use their cell phones like credit cards, and Kopo Kopo helps business owners accept mobile payments from customers. Health Technology: Healthcare is one of the most diverse areas for social entrepreneurship. Lumoback , a mobile healthcare startup, designed a smart phone-powered device that improves posture and chronic back pain. Embrace developed a low-cost baby incubator to save premature infants in the developing world. And BioSense created a device that tests pregnant women for anemia in rural India, and can save thousands of lives each year. These trends are part of the big data and collaborative consumption movements. With so much information at our fingertips, solutions are emerging to analyze and organize information (big data). And thanks to the Internet, online collaboration is creating new kinds of marketplaces (collaborative consumption). In the past 10 years, we humans have become dependent on technology and it’s difficult to navigate life without it. Sometimes it feels as if our devices are in control of us, and not vice versa. But, in the next 10 years technology will become ‘smarter.’ It will adapt to us and become more integrated with our daily activities. Millennials will play a large role in evolving technology to create social end environmental benefits. Social entrepreneurship is our way of addressing the immense global challenges we inherited (see here and here ). We will use it to shift the global economy in a positive direction.

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Key U.S. House Panel Advances Keystone Pipeline Plan

February 7, 2012

* House Energy and Commerce approves plan, 33-20 * Would give permit power to FERC * Next step for bill: vote in full House * Senate Finance won’t attach bill to highway bill By Roberta Rampton WASHINGTON, Feb 7 (Reuters) – A plan to fast-track the stalled Keystone XL oil pipeline was passed by a key committee in the U.S. House of Representatives, as Republicans made yet another attempt to spur approval of the project that has become a major issue in the 2012 elections. The bill would wrest decision-making on the pipeline from the Obama administration and hand it to the Federal Energy Regulatory Commission, which would be compelled to issue approval permits quickly on the Canada-to-Texas project. But the plan would need to clear several more congressional hurdles, including getting through Democratic opposition in the Senate, before it could land on President Barack Obama’s desk for approval. In a decision last month that pleased environmental groups, Obama blocked TransCanada’s $7 billion project, citing the need for further review of its route as the line would have traversed sensitive lands and an aquifer in Nebraska. Republicans have made the pipeline a symbol of what they believe are unnecessary regulations that are stifling job creation and energy production in the United States. On Tuesday, the House Energy and Commerce Committee voted 33-20 to send its Keystone bill to the full House, where it will likely become part of a highway and infrastructure funding bill that House Speaker John Boehner wants to see passed this month. Republicans also have not ruled out trying to attach a Keystone provision to must-pass payroll tax-cut legislation. “We’re going to use all options, so we’ll see,” said Fred Upton, the Republican chair of the energy committee, who is also part of a joint Senate-House conference panel working on the payroll tax-cut compromise. GLUT IN MIDWEST The latest Keystone debate comes as a glut of crude oil in the U.S. Midwest widens the discount between what refiners pay for oil around the key delivery point of Cushing, Oklahoma, compared to the price paid by refiners on U.S. coasts and the rest of the world. Meanwhile, Canadian production is surging on expanding output from the oilsands. With exports to the United States up 34 percent year-over-year, existing pipeline capacity is full. The lack of pipeline space has pushed the discount between Canadian crude and benchmark prices to multi-year lows, eating into the profits of the Canadian oil industry, including its two largest producers, Suncor Energy Inc and Canadian Natural Resources Ltd. Canadian oil producers are desperately looking for alternative markets in Asia and elsewhere, though it will be years before any new export lines can be built. Canada’s Prime Minister Stephen Harper is leading a large, high-level trade mission to Beijing this week, and told Reuters that Canada will focus on exporting oil to China even if the U.S. decision on Keystone is reversed. KEYSTONE ROUTE IN SENATE UNCLEAR Republicans in the Democratic-controlled Senate also are trying to resurrect a quick start for the pipeline, but have not yet determined a strategy for advancing legislation. On Tuesday, Republican Senator Orrin Hatch withdrew a proposal to link Keystone to the Senate’s highway funding bill. “It is absolutely tragic that the prime minister of Canada is now negotiating with the Chinese to take their oil because we’re too stupid to allow a pipeline to go through,” Hatch said at a Senate Finance Committee hearing. Max Baucus, the Democratic chairman of the powerful panel, convinced Hatch to withdraw his measure. “The inclusion of Keystone would take down the bill,” Baucus said, although he noted he strongly supports the pipeline. LAWSUITS AHEAD? On Tuesday, House Democrats tried but failed to amend the bill to block exports of oil and refined fuels from the pipeline, and to bar TransCanada from having the ability to expropriate land for the pipeline from private owners. Also defeated was a proposal to postpone action on the pipeline pending results of a study, expected sometime in 2013, on whether pipelines carrying petroleum from Canada’s oilsands are at greater risk for spills than those carrying other types of crude. John Dingell, a Democrat from Michigan who supports the pipeline, argued the authority to approve the line should remain with the president rather than being fast-tracked by Congress. Dingell said he worries environmental groups would tie up the pipeline with lawsuits if the Republican plan goes ahead. “It’s going to infuriate the environmentalists who are going to be on this like a duck on a June bug,” Dingell said. The Natural Resources Defense Council panned the bill, saying it attempted to “jam” the project ahead in a rush. “We hope the Senate will use common sense and avoid trying to undermine proper review using politically motivated legislative maneuvers,” said Frances Beinecke, president of the group, in a statement. But Lee Terry, a Republican from Nebraska, said the Obama administration has dragged out the process for too long, making it essential for Congress to take charge. “It is the president that made this a political football,” Terry said.

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Pregnant And Fired

February 7, 2012

Amy Zvovushe, 31, had a new job (as a senior program manager at a marketing company in Connecticut) and a new baby on the way. But instead of colleagues sending congratulatory cards and putting stork decorations on her desk, Zvovushe says that when she announced her pregnancy at work, she was asked to resign. The company didn’t offer her maternity leave because she had only worked there for four months, and the federal Family Medical Leave Act says employees must work for a full year to be eligible. After she got this news, Zvovushe had a later conversation with human resources. ABC News reports that she recorded this discussion without telling them, and caught several alarming statements on tape. For example, the executive said: “You don’t receive protection under FMLA so technically if you don’t come to work… it doesn’t matter whether you’re having you’re appendix out or you’re having a baby or you’re dealing with a sick person you didn’t show up for work on Monday.” Zvovushe’s attorney, Jack Tuckner, then contacted the company to straighten out the situation, and likely because Zvovushe had the HR rep’s harsh words recorded, they agreed to grant her leave to care for her baby. “Because they were able to fix it, they say no harm, no foul,” her attorney said to ABC. But Zvovushe is only one of many pregnant woman discriminated against at work. In the U.S., women are fired every day for being pregnant , Dina Bakst, a lawyer and founder/president of A Better Balance: The Work and Family Legal Center wrote in a recent Op-ed for the NY Times. She blames the gap between discrimination laws and disability laws for the injustice. Federal and state laws ban discrimination against pregnant women in the workplace. And amendments to the Americans With Disabilities Act require employers to provide reasonable accommodations to disabled employees (including most employees with medical complications arising from pregnancies) who need them to do their jobs. But because pregnancy itself is not considered a disability, employers are not obligated to accommodate most pregnant workers in any way. Considering three-quarters of the women who enter the work force will become pregnant, Bakst calls for action. She highlights New York State Senator Liz Krueger and Assemblywoman Aileen Gunther of Sullivan County who have introduced legislation that “would require employers to provide reasonable accommodations for pregnant women whose health care providers say they need them.” Some states have made significant progress. According to NY Times, “as of 2010, seven states, including California, had passed laws requiring private employers to provide at least some accommodations.” And many companies — including those on Working Mother Magazine’s list of top 100 companies for mothers — work to create flexible, supportive environments for pregnant women, even if the law doesn’t require them to. Jeannette Cox , a law professor at the University of Dayton, is also fighting for pregnant women’s rights in the workplace. She argues that pregnancy should be considered a disability. Though pregnant woman are covered under the 1978 Pregnancy Discrimination Act, some protections under the ADA don’t apply to pregnant women and Cox says it’s time for a change. The Equal Employment Opportunity Commission is scheduled to host a hearing about pregnancy discrimination this month, ABC news reports.

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Huge Shakeup At Yahoo

February 7, 2012

SUNNYVALE, Calif. — Yahoo Chairman Roy Bostock and three longtime board members are leaving the troubled Internet company. The shake-up announced Tuesday continues a drastic makeover of Yahoo’s leadership during the past month as the company tries to win back investors frustrated with years of broken turnaround promises. Yahoo Inc. ushered in a new era last month by hiring former PayPal executive Scott Thompson as its fourth CEO in less than five years. Then Yahoo co-founder Jerry Yang resigned from the board. Bostock is departing along with Vyomesh Joshi, Arthur Kern and Gary Wilson. Many Yahoo shareholders have been clamoring for Bostock to step down since the company balked a $47.5 billion takeover offer from Microsoft Corp. in 2008.

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Twitter, Facebook Are Least Used Sources Of Political News

February 7, 2012

WASHINGTON (AP) — In this campaign season, the social networks have nothing on the news networks. A new survey from the Pew Research Center for the People and the Press finds cable news most frequently cited as a regular source of political campaign news, followed by local TV news, network news, the Internet and finally local newspapers. Twitter, YouTube and Facebook were at the bottom of the list. But with only Republicans choosing a presidential nominee this time around, fewer people are interested in following campaign news in any medium. This year’s poll marks the first time that cable news topped the list of campaign news sources, with 36 percent of those surveyed reporting that they regularly learn something about the campaign or the candidates from pay TV news. Cable has not gained as a source since early in the 2008 cycle, when 38 percent identified it as a top source. But the share who said they regularly get news from other TV sources or newspapers has declined. Asked where they get most of their campaign news, 74 percent cited television, in keeping with findings over the past few election cycles. Thirty-six percent said the Internet is their main source, up 10 points from this point in 2008, and newspapers provided most of the news for 23 percent, down 7 points. Use of the Internet as a regular campaign news source has held steady at 25 percent, on par with the 24 percent who regularly turned to the web in 2008. Pew attributes the lack of growth to declining interest in campaign news overall, particularly among younger adults, the primary users of online news. In January 2008, 34 percent of adults said they followed election news very closely. But that dipped to 29 percent this year, with the steepest declines among those under age 30 and Democrats. The 2008 campaign saw a relatively slim, 8-point difference in strong election interest by age. This year, however, senior citizens are twice as likely as those aged 18-29 to say they are following campaign news very closely. Among older age groups, the share saying they turn to the Internet regularly for campaign news has held steady or climbed, but among those under age 30, that figure has dropped sharply, from 42 percent in December 2007 to 29 percent now. A majority of those surveyed said they use social networking sites like Facebook, but most do not use them for news. Just 6 percent regularly turn to Facebook for campaign updates, and 2 percent go on Twitter. But the low standing of social networking sites doesn’t mean they aren’t a news source with potential for broader appeal. In early 2000, just 6 percent of survey recipients said they got most of their campaign news from the Internet. That grew to 13 percent by the start of the 2004 campaign and has nearly tripled, to 36 percent, in the eight years since. Among current Twitter users, 41 percent said they turn to the site at least sometimes for news, among users of other social networking sites, 36 percent sometimes or regularly use Facebook for news. Those using online news sources this cycle are most likely to turn to traditional news sites, such as CNN and Yahoo News, and aggregators, such as Google, over the candidates’ websites or social networking sites. CNN (24 percent) and Yahoo News (22 percent) top the list of online sources, followed by Google (13 percent), Fox News (10 percent), MSN (9 percent) and MSNBC (8 percent). All other sites were named by 5 percent or less, including Facebook, Twitter, the Drudge Report and Huffington Post. Interaction with a candidate’s online campaign is generally not seen as a key source of information. Just 2 percent who use the Internet for campaign information say they turn to candidate websites for news, but many more have had online contact with a candidate. Among registered voters, 15 percent say they have visited a candidate’s website and 16 percent have received email from campaign or political groups. Six percent say they have followed a candidate on Twitter or Facebook, rising to 12 percent among those under age 30. But whether online, on TV or in print, few Americans find it fun to keep up with politics. Overall, just 23 percent said they deeply enjoy following campaign news. The number dips to 17 percent among political independents, and to 13 percent of those under age 30. The Pew Center’s campaign news survey was conducted Jan. 4-8 and included interviews with a random national sample of 1,507 adults contacted by landline and cellular telephone. Results from the full survey have a margin of sampling error of plus or minus 3.5 percentage points. ___ Online: Pew Research Center: http://www.people-press.org

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Meet The World’s Highest Paid Supermodels

February 7, 2012

They’ve worked hard to be called “the hottest and most desirable women in the world” — you try spending your days walking along runways in high heels and keeping svelte for photographers . But there’s more than meets the eye when it comes to these 20 supermodels. According to Extra , these knockouts are also savvy businesswomen — amassing a huge fortune thanks to not only modelling gigs, but also side businesses, like developing fashion, beauty or accessory lines. In fact, these ladies make almost as much (maybe even more!) than some of today’s hottest celebs . Whether you love them, hate them or just hate to love ‘em, here are the world’s 20 most wealthy supermodels.

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Chris Weigant: Romney’s "Very Poor" Choice of Words

February 7, 2012

I’m in this race because I care about Americans. I’m not concerned about the very poor — we have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich — they’re doing just fine. I’m concerned about the very heart of America, the 90 to 95 percent of Americans who right now are struggling. … I’m not concerned about the very poor that have a safety net, but if it has holes in it, then I will repair it. — Mitt Romney , in an interview with CNN’s Soledad O’Brien Mitt Romney’s gaffe last week (reproduced in full, above) is going to wind up the “gaffe that keeps on giving” for Barack Obama and the Democrats in this election cycle. Because the more Romney’s comment is examined and dissected, the worse it looks for him. This could, in fact, be the defining moment for Mitt Romney as a national political presence. That phrase is often bandied about in politics, but I use it here in the full literal sense of “defining moment” — a point in time which absolutely cements an image in the public mind of who you are and what you stand for as a politician. The image, quite obviously, is not a good one for Romney. The statement caused an initial media frenzy, which almost exclusively focused on the sound bite — “I’m not concerned about the very poor” — which was being spliced into Democratic ads before the sun had even set. Even Newt Gingrich piled on that part of Romney’s statement, fulminating that anyone running for president should have the good sense to be concerned with all Americans (or at least say so in public , for Pete’s sake). This is Politics 101, folks, and the fact that it took Newt Gingrich to point it out to Romney was highly amusing to Lefties everywhere. Romney desperately tried to spin his statement, and wound up floundering : “You’ve got to take the whole sentence, all right, as opposed to saying — and then change it just a little bit, because then it sounds very different.” Um, well, that would be true of just about any political gaffe, wouldn’t it? If you got to go back and re-edit your own words in such a manner, then gaffes wouldn’t even exist. Unfortunately for Mitt, they do. Romney, of course, is going to complain loudly when the “not concerned about the very poor” soundbite is used against him in ads, but he simply has no leg to stand on when it comes to “context.” He has no credibility on the subject, and no moral high road to take. He has already, in this election, run an ad of Barack Obama saying: “If we keep talking about the economy, we’re going to lose.” What Obama said — with context — was actually the exact opposite : “Senator McCain’s campaign actually said, and I quote, if we keep talking about the economy, we’re going to lose.” Romney’s campaign, when the ad came out, defended its use , saying “We used that quote intentionally.” So good luck begging for context in political ads now, guys. Even more unfortunately for Mitt, the out-of-touch and elitist image this gaffe conjures up is exactly the image a lot of folks already had of Romney. He appears to many as the type of guy who has no idea who the “very poor” are, or how they live. The only way a guy like Mitt Romney interacts with poor people — when not actually on the campaign trail — is either in an employer/employee relationship (as with the domestic help in his multiple houses) or a patron/servant relationship (the valet parking his car, the busboy clearing his table, or perhaps a ski lift operator). Neither breeds any sort of real understanding of what it is like to occupy this rung of the social ladder in Mitt — or, for that matter, the fears many middle-class folks have of being one financial emergency away from a dive headfirst into that safety net. The man has lived in a bubble for almost his entire life — and it shows. But while most of the attention so far has been focused on the “out of touch” nature of Mitt’s “very poor” choice of words, the real damage to Mitt as a Republican candidate stems from how he attempted to explain what he really meant. Ignore the soundbite/gaffe part of Mitt’s statement, and things get even worse for him among his party’s base. Chalk this one up as a victory for the Occupy Wall Street movement, because all of a sudden the Republican Party as a whole was having a debate about their party’s poverty policies . In a million years, I never could have imagined that happening without the outside force of the Occupiers changing the frame of the nation’s political debate. Think about it: when is the last time any Republican used the word “poor” in any political speech? For the life of me, I certainly can’t remember it, unless it was some part of George W. Bush’s “compassionate conservatism” flim-flam that my subconscious has just completely blocked out. Which brings me to my main point — Mitt’s explanation for his bad soundbite was extraordinary because it used the framing of Democrats . Mitt is arguing his point on a field created and defended by Democrats — not the usual Republican language. This is stunning, because Republicans are normally so adept at speaking of just about any issue in their own private terminology. It’s also stunning because it is such a losing position for Romney to take. First, the language. Republicans never say “poor” (as I’ve already mentioned) much less “very poor.” As far as conservatives are concerned, poor people either (1) deserve what they get in life because of their own bad choices, (2) are lazy and cheating the system to get a free ride through life, or (3) are budding conservative heroes, because we all live in a Horatio Alger novel and just need to grasp strongly on those bootstraps and pull. But Mitt’s bigger error wasn’t saying “very poor,” it was in fact using the term “safety net” — over and over again. And then doubling down on his error, by promising to “fix the holes” in the safety net, if it “needs repair.” This is where Mitt’s playing ball on a Democratic field, and not just because it fits in so perfectly with the campaign Barack Obama is teeing up to run, either. Republicans, as a general rule, never speak of the “safety net” unless in seriously derisive terms. They prefer, instead, to speak of the “culture of dependence” or people who use “entitlements” (Marc A. Thiessen has a good example of this over at the Washington Post today, for reference, complete with reverent Ronald Reagan genuflections). The weakness for Romney is that his statement — ignoring the gaffe, and giving him all the context he wants us to consider — is absolutely laughable, on the face of it. This is what comes from playing on the opposition’s turf. Because Republicans today are all about “entitlement reform” — which means, stripped of its own spin, “less money for the safety net.” This basic disconnect cannot be reconciled with Romney’s statement, no matter how much context we add. It is necessary to commit an act of doublethink to even try. Romney is for Paul Ryan’s budget. The Ryan budget shrinks the safety net. So how, exactly, is Romney going to “fix” the safety net? How will making seniors pay an extra $6,000 a year for health insurance do that? How will cutting funds to Medicaid fix things? How is giving the ultra-wealthy (which you also say you’re “not concerned with”) another round of tax breaks going to fix the safety net, Mitt? Please explain, with figures and budget projections to back your claims up. Anytime you’re ready…. These are the questions some intrepid reporter needs to ask Mitt Romney, and soon. Because talking about the “safety net” was Mitt’s real “very poor” choice of words. You want to talk about the safety net, Mitt? OK, then let’s talk about the safety net — and your proposals to fix the holes in it. That would, indeed be a conversation worth having. And if the media doesn’t ask Mitt, I’m sure Obama eventually will — the first time they face each other in a debate.   Chris Weigant blogs at: Follow Chris on Twitter: @ChrisWeigant Become a fan of Chris on The Huffington Post  

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As Minnesota, Missouri, Colorado Vote, Republicans Talk Cuts Not Investment

February 6, 2012

Most politicians would brush aside their mother if it meant scoring a photo-op with a Minnesota businessman like John Van Dine. His 22-year-old company, SAGE Electrochromics, is in the middle of a $150 million expansion to double its workforce to total 250, all in Fairbault, Minn., and pulling in a decent wage. SAGE, which makes glass plates with electronic sensors that turn lighter or darker depending on the time of day, is even exporting to Asia and the Middle East. But Van Dine isn’t look to share the stage with any politician; he’s just hoping for more government investment in infrastructure, education and health care, all needed for a sustained economic recovery, he said. But as voters head to the caucuses and primaries on Tuesday in Minnesota, Colorado and Missouri, those aren’t the kinds of initiatives making headlines. Instead, the leading Republican candidates are hammering home the idea that cuts to government spending and fewer regulations are key to an economic rebound. “It’s not that they are not aware of the problems; it is that they haven’t provided the leadership,” said Van Dine, adding that politicians in both parties are to blame for not having the courage to propose investing on a large scale to fuel economic growth. Minnesota is in better shape than most of the rest of the country, including Colorado and Missouri. Unemployment is relatively low, at 5.7 percent. The state’s manufacturing sector has seen 16 straight months of growth, according to the Minnesota Department of Economic Development. Yet, according to the Bureau of Labor Statistics, job growth in Minnesota is slow, just 1 percent in 2011 — slightly higher than the national average. The state’s manufacturers employ fewer workers than before the recession, and these types of jobs are unlikely to be fully restored to pre-2008 levels, said Troy Walters, an economist at IHS Global Insight. In addition, Minnesota is experiencing cutbacks in government spending. There were 1.4 percent fewer government workers in this state by the end of 2011, compared with the tally at the end of 2010, according to the Bureau of Labor Statistics. Local government layoffs have hurt economic growth in the state, said Thomas Stinson, an applied economics professor at the University of Minnesota and an economist for the state. When workers in the public or private sector are laid off, they spend less, which then reduces employers’ demand for workers — hurting consumer demand even more, Stinson said. “It really starts a vicious circle.” Missouri and Colorado also lost government jobs last year, and Republican presidential candidates have made government job cuts part of their platforms. Romney wrote in his economic plan that if elected, he would slice the size of the federal workforce 10 percent and cap federal spending at just 20 percent of the U.S. gross domestic product, which would mean trimming federal spending about 17 percent. Romney and Gingrich have both said they would slash regulations, corporate taxes and government spending as a means of addressing America’s economic woes. The campaigns did not immediately return requests for comment. The other Tuesday primary states would love to be in Minnesota’s position. The total number of jobs in Missouri declined 0.1 percent in 2011, according to the Bureau of Labor Statistics. And among all states, Missouri is the 15th most pessimistic about the economy, according to Gallup. Colorado’s economy is doing better than Missouri’s, but it is still not healthy. Many of its job gains last year came within the leisure and hospitality sectors, where positions tend to be low paying. Manufacturing in Missouri and Colorado is starting to rebound, however. Last year manufacturing in Missouri grew the most quickly of any sector — attaining a 3.1 percent job growth rate, according to the Bureau of Labor Statistics. In Colorado, jobs manufacturing, comprising less than 6 percent of its total, grew 0.7 percent last year. Despite of Minnesota’s improving economic situation, Minnesotans are still very concerned about jobs and the economy, Stinson said. “If you haven’t got a job, if you’re worried about your job, the national debt is not what you’re concerned about,” he said. While Republican candidates have mainly proposed cutting government spending and regulation, at a New Hampshire debate in January Gingrich mentioned that the United States should focus on developing its technological infrastructure. “You cannot compete with China in the long run if you have an inferior infrastructure. You’ve got to move to a 21st-century model. That means you’ve got to be technologically smart, and you have to make investments,” he said , according to the Daily Caller . For his part, President Barack Obama said during his Jan. 24 State of the Union address that he would like to cut taxes for high-tech manufacturing companies that hire in the United States while establishing a minimum corporate tax rate. But economists and labor leaders say rebuilding the economy takes more than incentives; it will require new investment. Damon Silvers, policy director at the AFL-CIO, estimated in January that the economy needs a $4 trillion public investment program over 10 years — with spending focused on education and infrastructure — to make the economy competitive enough to support the middle class.

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Sarah O’Leary: The Race for the Exits: How Komen Can Stop the Exodus

February 6, 2012

Drastic action is imperative if Race for the Cure hopes to stave off a catastrophic implosion. Now that Susan G. Komen has reversed its decision to stop funding breast cancer screenings for Planned Parenthood, it must take drastic, meaningful and very public measures to win back the hearts and minds of supports, consumers and corporate sponsors. One “mea culpa” apology will not be enough to shore up sponsors or win back consumers’ loyalty. As anyone working for Komen can attest, surviving a traumatic event doesn’t mean you’re healed. It’s an even odds bet that Komen, will remain highly toxic to promotional partners and their target audiences for months and years to come if it doesn’t make substantive change and voice it to the public immediately. When using borrowed equity to sell products or services, marketers seek out the best fit for their brand and their consumers. Susan G. Komen Race for the Cure was the Cinderella story of all charitable efforts, arguably the most popular nonprofit in history. Yoplait, General Mills, American Airlines, Evian and a host of other big players partnered with Komen to lift their brands among a coveted audience, Shopper Moms. Those of us marketers around at the beginning remember the truly groundbreaking arrival of Susan G. Komen Race for the Cure. Komen, singlehandedly, changed how marketers felt about what was, historically, a verboten subject. Before Susan G. Komen, the vast majority of marketers thought pairing cancer with their products or services was brand suicide. Marketing agencies bold enough to suggest Komen tie-ins heard in more than one corporate conference room, “You want us to do WHAT? Tie candy in with BREAST CANCER? It’ll ruin our BRAND!” Then came Race for the Cure. Pink ribbons began to show up everywhere, on everything. And Shopper Moms LOVED it. They were buying up Komen related products in droves, and corporate sponsors reaped the rich rewards. Shopper Moms were passionate in their support of women’s health, and their actions taught many in marketing a crucial lesson. An association with Breast Cancer and Susan G. Komen Race for the Cure didn’t harm a brand, it could skyrocket it. Sadly, today is a completely different day for Komen. Marketers need to be beyond certain that the pink ribbon and Susan G. Komen logo will make shoppers want to buy a box of corn flakes rather than avoid or (marketing gods forbid) intentionally boycott it. With all of passion on both sides of the issue, Komen has a long, uncharted and potentially perilous road ahead of it. If you’re a member of Yoplait’s marketing department, for example, the logical step would be to sever the relationship with Susan G. Komen as it exists today in support of another worthy breast cancer charity. As a multi-million dollar brand trying to sell more yogurt, Yoplait simply can’t risk shopper backlash. Susan G. Komen cannot, unfortunately, turn back the hands of time and erase their grievous error in judgment. However, doing nothing past issuing an apology will permanently damage what almost three decades of painstaking efforts have established. Komen must shore up marketing and consumer support by ridding itself of those whose thinking got Komen into this mess in the first place. The current board, President, CEO, CMO and Director of Public Policy should resign, effectively immediately. By eliminating the leaders who approved the Planned Parenthood grant debacle, it will send a loud and clear message that the Komen women knew, loved and trusted is back in business. When outraged consumers no longer fault Komen for its incompetency, supporters will return and partnerships with Komen will be viable for corporate sponsors. If Komen continues with the old guard that got them in the mess in the first place, consumers and marketers will have no assurances that such an error in judgment won’t happen again. In addition to replacing the leadership at Komen, the organization should consider inviting a respected voice from the breast cancer-screening arena at Planned Parenthood to sit on the Race for the Cure board. Also, Komen would be smart to partner with the breast cancer screening area of Planned Parenthood on a share promotional effort. The two could execute a cooperative campaign with one of Komen’s corporate sponsors. “Support Breast Cancer Screenings for Women in Need,” benefiting Susan G. Komen and Planned Parenthood’s breast cancer screening initiatives, would help a) put the focus back where it belongs — on breast cancer and women’s health and b) show consumers and marketers that Komen is serious about change that’s devoid of politics. Even if Susan G. Komen implemented the suggestions herein, there would still be a massive amount of repair that must take place. Consumers’ loyalty is a fascinating in regard to its potential benefits and liabilities. If you meet consumers’ wants, needs and desires, they will stay true. If you forget who your audience is, even for a couple of days, it can take a brand like Susan G. Komen Race for the Cure generations to recover. The mission of Komen is simply too important to women to wait that long. Sarah O’Leary is a 25-year marketing veteran and author of Brandwashed: Why the Shopper Matters More Than What You’re Selling”.

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Dead Man Found In Foreclosed Home Four Years Later

February 6, 2012

Abandoned homes have become an increasingly common sight amidst a national foreclosure crisis. Yet what may lurk forgotten behind closed doors may be much worse than nothing at all. A Milwaukee real estate agent entered one such house last month after it was repossessed due to tax foreclosure — the government can foreclose on a home if taxes and subsequent fees are not paid off within a designated time period — to find a sight he’s not likely to forget soon. The body of the owner David Carter was found on the stairs in a “nearly skeletonized” state after being left there undiscovered for what investigators believe to be up to four years, The Daily Mail reports . Carter, whose friends and acquaintances described as “smart and generous,” even “funny,” quit his job as a nuisance control officer for the City of Milwaukee in 2007, telling co-workers that he planned to move to New Mexico, according to the Milwaukee-Wisconsin Journal Sentinel . Instead, it appears that Carter committed suicide. He was found with a bullet wound through his head and a handgun on his chest the day that he would have turned 45 years old. Sadly, Carter’s isn’t the first body to be discovered after a seemingly unfathomable amount of time. In England, creditors looking for unpaid bills found the body of a 38-year-old London woman in her rented room in 2006 nearly three years after she’s believed to have died . The episode is the subject of a forthcoming film, Dreams of Life , the research for which revealed that the woman was acquaintances with many influential members of London’s 80s and 90s pop music scene. In addition, police last year found an elderly woman’s body in a home in Sydney, Australia after she was believed to have died sometime around 2003 . Though Carter and others were found in their homes years after their deaths, the opposite situation — declaring someone dead prematurely — has also occurred. A Florida woman is currently suing her lender, JPMorgan Chase, after the bank mistakenly declared her deceased in 2010 , which she claimed ruined her credit score. Similarly, a veteran has had to prove his existence four times over in the past two years after the U.S. Department of Veterans Affairs stopped paying him his pension benefits on the grounds that he’s no longer living . One in every 627 Wisconsin housing units received a foreclosure filing in December 2011, according to RealtyTrac. In total, the state had the tenth most foreclosure activity of any state.

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Dana Radcliffe: A Glaring Omission in the Senate’s Insider Trading Bill: Fair Disclosure

February 6, 2012

Poor Raj Rajaratnam. He’s the billionaire hedge-fund manager who in October was sentenced to 11 years in prison for trading stocks on nonpublic information obtained from corporate insiders. If only his sources had been members of Congress or their staff and the nonpublic information had concerned pending legislation likely to affect certain stock prices, he would still be in business. For it is perfectly legal for lawmakers and other federal officials to divulge information that, if made public, would be market-moving and thus gives anyone who trades on it a lucrative advantage over other investors. In fact, large hedge funds — important donors to political campaigns — aggressively seek such information, with some success, in private meetings with legislators and other officeholders. For example, the Wall Street Journal recently reported that, in a December 2009 meeting with key lawmakers, a small group of hedge funds learned — hours before it was announced — that Senate Democrats had eliminated a proposed government-run insurance plan from the health-care reform bill. Although the hedge funds would not say how they used the information, the Journal notes that the news “was potentially worth millions of dollars to the investors,” since it would boost shares of major health insurers, with whom the government plan would have competed. Similarly, in January 2010, as the Senate debated the Dodd-Frank bill, which tightened financial services regulation, several hedge-fund managers met with Senator Dodd and discovered that, contrary to prevailing opinion, he did not favor capping fees on debit-card purchases. The expectation of a fee cap had been a drag on shares of Visa and Mastercard, since it would hurt their revenues. This material (or market-moving) news of Senator Dodd’s position garnered by the hedge funds remained nonpublic for weeks. Even though such activities are legal, it’s hard to see them as ethical. From a moral point of view, they are no different from a kind of insider trading prohibited by law. In both cases, people whose positions in economically significant organizations give them access to market-moving, nonpublic information selectively pass it on to others who then carry out unfair market trades with counterparties ignorant of the traders’ covert advantage. The legal difference is that, unlike government officials, when corporate executives give inside information to others who trade on it, they violate a fiduciary duty to serve the best interests of their companies’ shareholders. It is the breach of that legal duty that makes both the disclosure and the use of inside information criminal acts. Congress appears ready to address this disparity. Last week, the Senate passed the Stop Trading on Congressional Knowledge (STOCK) Act, which declares that members of Congress and thousands of other federal workers are legal fiduciaries. Whereas corporate managers’ fiduciary duty is to their stockholders, these government officials would have an analogous duty to Congress, the government, and all U.S. citizens. Ostensibly, if this provision becomes law, it will be illegal for covered officials to share material, nonpublic information with others they know are likely to trade on it. But even if the bill is enacted in its current form, it almost certainly will not keep members of Congress and their aides from disclosing high-value information to hedge funds in private conversations. For one thing, what prosecutor could plausibly argue that a government official has the very same duty of “trust and loyalty” that a corporate manager has? The nature of federal officials’ relationships with their institutions and fellow citizens is radically different — in numerous ways — from that of a business executive to her firm’s shareholders. In any event, it is preposterous to think it would ever be Congress’s intent that a law it passed prevent its members from consulting with investors for fear of revealing nonpublic information on which the investors might trade. If there is an ethical disconnect here, what can be done about it? In the late 1990s, the Securities and Exchange Commission came under pressure from “Main Street” investors and shareholder advocates to stop public corporations from giving advance releases of earnings forecasts and other material information to favored investors before making it public. The SEC responded by adopting Regulation Fair Disclosure (Reg FD), which stipulates that, when a corporation provides market-moving information to any investors, it must make it available to all investors at the same time. In approving Reg FD, the SEC argued that it is inherently unfair for only a few investors to receive material information and that the practice undermines the public trust in the fairness of financial markets. Clearly, if these arguments justify Reg FD, then they warrant a parallel requirement on government officials. Of course, legislators and regulators need to discuss public policy matters with investors, including hedge funds. But why should members of Congress and other federal insiders be excepted from the same demand for fair disclosure the government has imposed on corporate officials? Perhaps that’s a question voters should be asking Senate and House candidates.

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BofA Investor Lawsuit Wins Class-Action Status

February 6, 2012

Feb 6 (Reuters) – Shareholders suing Bank of America Corp on Monday won class-action status for their lawsuit accusing the bank and various executives and directors of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co and size of Merrill’s losses and bonus payouts. U.S. District Judge P. Kevin Castel in Manhattan on Monday rejected Bank of America’s effort to deny certification, after the lender claimed that investors could not prove they suffered losses after relying on materially misleading statements or omissions. Bank of America had no immediate comment. Investors had faulted Bank of America for not timely disclosing the scope of Merrill’s soaring losses, which reached $15.84 billion in the fourth quarter of 2008, and for letting Merrill pay $3.6 billion of bonuses at the time. The case covers a variety of investors who owned Bank of America stock or call options between September 2008 and January 2009. Class certification lets plaintiffs pursue their case as a group, which can cut costs, and can lead to larger recoveries than if plaintiffs were to sue individually.

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Crucial Reform Seen As ‘Ferociously Difficult’

February 6, 2012

WASHINGTON — Tax reform sounds like a good idea to lots of people, but where to start? Eliminate the popular deduction for home mortgages? End the write-off for charitable contributions? How about expanding the Social Security payroll tax? Not likely. Politicians of all stripes in this presidential election year are clamoring for simplifying the tax code and closing loopholes. But that would mean Americans would lose some of their prized deductions. Not that Congress actually is likely to end tax breaks for home loans or religious and charitable contributions anytime soon. President Barack Obama and his chief Republican challengers – Mitt Romney and Newt Gingrich – certainly aren’t advocating that. In fact, recommendations to trim the mortgage deduction made in 2005 by a tax-overhaul panel convened by then President George W. Bush and again in 2010 by a deficit-reduction committee set up by Obama were ignored by both those presidents. Overhauling the complex U.S. tax code could mean that for everyone who would pay less someone else would pay more. And every existing provision in the code has its advocates. “Tax reform is ferociously difficult. If you tackle it straight up, the likelihood of success is rather small,” said Henry Aaron, a senior fellow in economic studies at the Brookings Institution. “Whenever you try to take money away from somebody, they will fight harder to keep it than will those who stand to gain.” And if deficit reduction is also a goal, it makes the job even harder. Most recently, a bipartisan deficit-reduction congressional “supercommittee” failed to meet a Thanksgiving 2011 deadline and had to disband when it could not find common ground on tax changes. None of the major tax overhaul proposals now on the table seems likely to be enacted given the current political rancor in Washington. Of course, a lot could depend on the outcome of the November elections. For now, the urgency for both parties is focused on the Bush-era tax cuts, scheduled to expire at year’s end. Republicans generally want to make them permanent. Democrats would like to raise taxes on the wealthy but keep them at present levels for all others. The income tax as we now know it has been around for nearly 100 years, and it’s had only a few major overhauls. The last major restructuring came in 1986, when Republican President Ronald Reagan and Democratic House Speaker Thomas P. O’Neill were able to put aside their political differences to strike a grand deal that both simplified the tax code and lowered rates on most individuals. “To get comprehensive tax reform, you have to have tremendous presidential leadership. There’s no way around that to be successful,” said Douglas Holtz-Eakin, who was the director of the Congressional Budget Office from 2003 to 2005 and now heads the American Action Forum, a conservative public policy institute. In addition to being a hot issue on the campaign trail, tax reform is also being closely studied by congressional leaders who oversee tax-writing, Holtz-Eakin said. “So with all the key players all saying `Let’s do it,’ I think that’s promising.” “Now the next issue is, what is `it’?” There, we don’t have a consensus,” he added. Obama has proposed ending tax breaks for U.S. companies moving jobs or profits to foreign countries. He also would create a minimum tax on their overseas earnings. And he has suggested new tax breaks for businesses that move jobs back to the U.S., for domestic manufacturing and for companies that invest in towns that have suffered major job losses. But getting most attention is his plan to tax personal incomes above $1 million – including investment income – at a rate of at least 30 percent. “Washington should stop subsidizing millionaires,” Obama said in his State of the Union address. “Send me these tax reforms, and I’ll sign them right away.” Obama also wants to see corporate taxes lowered but hasn’t said by how much. The White House has signaled he’ll unveil details on Feb. 13 when he submits his budget for the fiscal year that begins Sept. 1. The nominal corporate tax rate is 35 percent, the highest in the world after Japan. However, few companies pay that much after taking various deductions. Because of recent special deductions in the government’s stimulus programs, including the ability to write off the full cost of purchases of new equipment, corporations last year paid just over 12 percent on average. That is expected to rise to about 26 percent this year, according to Congressional Budget Office calculations. Romney would make permanent most Bush-era tax cuts and would eliminate taxes on interest, dividends and capital gains for those earning under $200,000. He would lower the corporate tax rate to 25 percent. Jobs and tax reform have been leading issues in the GOP primaries so far. Most Americans believe that the tax system is unfair and would like to see it changed, recent polls suggest. The polls show a majority believe upper-income Americans pay less than their fair share, although far more Democrats believe this than Republicans. There is also a big political divide over whether to keep the current system of taxing investment income – such as dividends and capital gains – at lower rates than wages. Far fewer Democrats than Republicans want to keep things the way they are, polls show. Romney, one of the richest presidential candidates ever, recently disclosed that he paid federal taxes at an effective rate of around 15 percent because most of his income came from investments that are taxed at that rate, compared to a top rate of 35 percent for wages. That disclosure has helped fuel the recent surge of interest in tax reform. Gingrich would let people choose whether to file under the current system or pay a 15 percent “flat” tax while preserving the mortgage interest and charitable deductions. He would eliminate the capital gains and estate taxes and would cut the corporate tax rate to 12.5 percent. Former Sen. Rick Santorum, R-Pa., would reduce the number of tax brackets to two – 10 percent and 28 percent, exempt domestic manufacturers from the corporate tax and halve the top rate for other businesses. He would triple the personal exemption for dependent children. Rep. Ron Paul, R-Texas, would eliminate the federal income tax altogether. Also the Internal Revenue Service. He would vote for a national sales tax, and he supports certain excise taxes and certain tariffs. The nonpartisan Tax Policy Center has said that the wealthy would be the biggest beneficiaries of the Romney, Gingrich and Santorum tax plans. The center did not evaluate Paul’s plan The Tax Reform Act of 1986 backed by Reagan and O’Neill reduced the number of tax brackets and lowered the top marginal tax rate to 28 percent from 50 percent (it’s now 35 percent). The reduction in individual taxes was in large part paid for by repeal of the investment tax credit, which effectively raised corporate tax payments to the Treasury by 25 percent, or about $100 billion a year in today’s terms. But the political climate was far difference in 1986. Reagan was a popular second-term president with a good working relationship with Congress. The deficit was under control and the economy was growing, not limping like now. Economist Bruce Bartlett, author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take,” is not optimistic for major tax reform no matter who wins the election. “I think the most we can hope for is a modest improvement to fix some glaring problems in the code,” he said. As to those calling for starting from scratch with a whole new tax system such as the so-called fair tax or flat tax, “I don’t believe that’s going to happen,” Bartlett said. “I think that’s just a political non-starter.” ___

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Executive Accused Of Fraud: Ponzi Scheme Was Costing Him His Health

February 6, 2012

HOUSTON — Attempts to cover up a massive Ponzi scheme alleged to have taken billions from depositors at Texas tycoon R. Allen Stanford’s Caribbean bank grew increasingly frantic as federal authorities closed in on the fraud, the financier’s top money man testified Monday. Ultimately, all of the efforts to hide the more than 20-year fraud were futile, James M. Davis, the former chief financial officer for Stanford’s companies, told jurors during his third day of questioning by prosecutors in Stanford’s fraud trial. “The writing was on the wall,” said Davis, who has pleaded guilty in the case. Prosecutors claim Stanford bilked investors out of more than $7 billion in a massive Ponzi scheme centered on the sales of certificates of deposit, or CDs, from the bank on the island nation of Antigua. Stanford’s attorneys contend the financier was a savvy businessman whose financial empire, headquartered in Houston, was legitimate. They have suggested Davis, who worked 21 years for Stanford, is behind the fraud. Davis, the prosecution’s star witness who began testifying last week, told jurors Monday that by 2007, he wanted to quit working for Stanford, unable to handle the stress. “The fraud that I was participating in was killing me,” he said. Authorities allege Stanford used depositors’ money to operate his businesses, pay for his lavish lifestyle and bribe regulators and auditors. They also say he lied to depositors by telling them their money was being safely invested. Stanford is on trial for 14 counts, including mail and wire fraud, and faces up to 20 years in prison if convicted. At the end of 2007, the bank owed depositors $6.6 billion, Davis said, but it had only enough funds to pay back $1.5 billion. New sales of CDs had for years been able to cover withdrawals. In 2008, sales dramatically dropped and customers were withdrawing their CDs in droves, sparked by the Great Recession, he said. By December 2008, the bank had only $88 million in cash. Even as the bank was crashing, Davis said, Stanford was telling the holders of CDs in a December 2008 monthly report that he had put in more than $541 million of his own money into the bank to increase its value to more than $1 billion. He reassured investors that the bank was “strong, safe and fiscally sound,” Davis testified. “How concerned were you becoming?” asked prosecutor William Stellmach. “I was very concerned, probably near emotional and mental extreme stress level concerns,” Davis said. In an effort to hide the fraud, Stanford resorted to creative bookkeeping, Davis testified. Stanford spent $63.5 million for land in Antigua for an ultra-exclusive island resort he had been proposing, Davis said. The financier then inflated the land’s value to $3.2 billion as a part of a proposal to include that with the bank’s assets, he said. By January 2009, the U.S. Securities and Exchange Commission wanted proof of all of the bank’s assets and investments. Davis said by February he falsified documents that showed the bank had $6.3 billion in assets related to real estate and investments in private companies. “It was a lie,” he said. Davis testified that later that month, he threw a computer and thumb drive into a lake at his home in Mississippi in an attempt to destroy incriminating evidence. The evidence was later recovered by authorities. Stanford’s bank and other companies were seized by authorities later in February. Davis pleaded guilty to three fraud and conspiracy charges in 2009 as part of a deal he made with prosecutors in exchange for a possible reduced sentence. Stanford was once considered one of the United States’ wealthiest people, with an estimated net worth of more than $2 billion. He’s been jailed without bond since being indicted in 2009. ___ Follow Juan A. Lozano at http://www.twitter.com/juanlozano70

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Colleen Murphy-Dunning: Green Jobs for Ex-Cons: Fixing Broken Systems

February 6, 2012

Reports by the Labor Department last Friday of an 8.3 percent unemployment rate, the lowest it’s been in nearly three years, signal hope of economic recovery. Almost two million jobs were added in the last year. Though warning of fluctuation, President Obama announced that “the recovery is speeding up.” But as they inevitably must, gross national statistics veil those boats not lifted on the rising tide. It is believed that the unemployment rate among ex-offenders exceeds fifty percent. (National statistics are not available, but estimates from state agencies of unemployment among the formerly incarcerated range from about 35 to more than 60 percent.) Our country, a promised land of opportunity, needs a national green jobs program that targets ex-offenders. The United States maintains 25 percent of the world’s incarcerated population, locking up one in every hundred adults. More than half of all black men without a high school diploma will go to prison. Our extensively privatized corrections system generates the perverse incentive by which high incarceration rates buoy corporate profits. The 2005 annual report of the Corrections Corporation of America advises its investors that: Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities… [A]ny changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them. More than 650,000 ex-offenders are released every year with little more than fifty dollars in pocket and a bus pass. Amid fitful economic recovery and the fierce competition of over-qualified job applicants, prospects appear grim. It’s no wonder recidivism rates top 60 percent in some states. Our country also faces immense environmental challenges spanning across the next few decades. The American Society of Civil Engineers recently gave a grade of D+ to the aging U.S. electric grid, which is inefficient, ill-equipped to manage intermittent energy technologies, and incapable of adapting to smart grid innovations. Our drinking and wastewater infrastructure both received grades of D-, and budgets allocated to upgrading these systems fall far short of what is required. The confluence of these challenges affords a clear and profound opportunity. The Urban Resources Initiative , through its GreenSkills program, works with small crews of ex-offenders every year, merging prison reentry with job training in urban forestry and environmental stewardship. We are part of a growing group of organizations across the country testing the premise that horticultural work can restore urban ecosystems, environmental value, and vulnerable populations. The recent installation of a solar panel array at two correctional facilities in Merced County, Illinois, to defray operational costs opens the possibility of not simply a transitional green jobs training program, but of a green jobs pipeline that runs from inside prisons to prisoner release and fulltime employment. Rather than contract Siemens to install the panels, as was done, could Merced County have created an internal job corps trained in solar installation and efficiency retrofits? In a short article last year, The Wall Street Journal cited a report on the “top 10 thriving industries” of 2011. Correctional facilities made the list with a haul of $35 billion in revenue during 2010. Wind and solar power also made the list. In 2011, Corrections and Medicaid were the only two areas of state budgets that saw a percentage increase over the previous year. Transportation, public assistance, and education all lost a share of their budgets, with public universities taking the biggest hit. Jacob Lew, President Obama’s budget director and Chief of Staff, has written that, “The budget is not just a collection of numbers, but an expression of our values and aspirations.” It seems Mr. Lew could hardly have uttered a more damning indictment of U.S. values. It’s time we did better.

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Ex-Lehman Brothers Trader: Only On Wall Street Could You ‘Get Paid So Much For Doing So Little’

February 6, 2012

The fallout from the financial crisis has already changed the way much of America views Wall Street. It may also be changing the way the financial industry views itself. After years of huge paychecks and bonuses, financial industry workers are seeing their compensation capped and cut thanks to anxiety surrounding the global economy and oncoming regulations. But when a salary or bonus can serve as evidence of an accomplishment, it’s disappearance can also amount to an erosion of self-worth. “There’s no other industry where you could get paid so much for doing so little,” an ex-trader for Lehman Brothers told New York Magazine as part of a piece about the changing dynamics of Wall Street. You can read New York ‘s entire Wall Street piece here. Though the former Lehman trader may be one of the first Wall Street workers to express that sentiment in print, he’s echoing the views of others. The head of Britain’s top financial watchdog has said that what takes place on Wall Street is largely a “socially useless activity,” according to a 2010 New Yorker report. Some have argued that such high levels of pay create an incentive for bankers to prioritize short-term profits over a firm’s long-term health. Such is the reason for a Dodd-Frank financial reform law that requires firms to “claw back” pay in certain circumstances , like if the deal on which a bonus is predicated turns into a loss in a certain number of years. Paul Volcker, the former chairman of the Federal Reserve and the author of one of the more controversial measures in the Dodd-Frank financial reform law, told New York that Wall Street turned into a place that constantly needed to prove its greater utility . “Finance became a self-justification” he said. Paul Woolley, who founded a center at the London School of Economics that studies “capital market dysfunctionality,” put it even more bluntly to the New Yorker in 2010. “Why on earth should finance be the biggest and most highly paid industry when it’s just a utility, like sewage or gas?” he said. May the jig finally be up? Morgan Stanley capped its cash bonuses at $125,000 for 2011 and its top executives didn’t net any cash bonuses at all, according to The New York Times . At Goldman Sachs, bonus day was like a “bloodbath” one mid-level executive told CNBC; some bankers and traders learned they would be taking home no bonuses at all, while the firm halved the pay of some of its highest-level employees. Yet Wall Street will likely remain a top draw for America’s best and brightest for the foreseeable future. At Bank of America, a company that has struggled since the financial crisis , average overall compensation for an investment banking associate will likely remain in six-figure territory , even after preparations for pay packages an average of 25 percent smaller than last year. And they’ll still likely be making more than workers in many other high-paying professions with more tangible societal benefits. After 10 years of deal-making, a banker will have taken home more than ten times that of a cancer researcher during the same period, according to Bloomberg. Still, James Gorman, the CEO of Morgan Stanley , said earlier this month that employees upset with the drop in their pay need to have a reality check. “If you put your compensation in a one year context to define your overall level of happiness, you’ve got a problem that is bigger than the job,” Gorman told Bloomberg TV.

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