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Obama Praises Controversial Free Trade Deal

April 15, 2012

CARTAGENA, Colombia — Exposing a rift with Israel, President Barack Obama on Sunday insisted that the United States has not “given anything away” in new talks with Iran as he defended his continued push for a diplomatic resolution to the dispute over Tehran’s nuclear ambitions. Obama said he refused to let the talks turn into a “stalling process,” but believed there was still time for diplomacy. His assessment, delivered at the close of a Latin American summit in Colombia, came after Israeli Prime Minister Benjamin Netanyahu on Sunday had said the U.S. and world powers gave Tehran a “freebie” by agreeing to hold more talks next month. Obama shot back: “The notion that somehow we’ve given something away or a `freebie’ would indicate Iran has gotten something. In fact, they’ve got some of the toughest sanctions that they’re going to be facing coming up in just a few months if they don’t take advantage of these talks.” Still, in a news conference here, Obama warned to Iran, “The clock’s ticking.” Winding down his three-day trip in the port city of Cartagena, Obama also sought to offer hope for fresh start with Cuba, saying the U.S. would welcome the communist-run island’s transition to democracy. There could be an opportunity for such a shift in the coming years, Obama said. Standing alongside Colombian President Juan Manuel Santos, Obama also proclaimed a free-trade agreement between their countries as a win all-around, even as labor leaders back home denounced it. Obama announced that the trade pact can be fully enforced next month, now that Colombia has enacted a series of protections for workers and labor unions. Obama had hoped to keep his role in the Summit of the Americas focused on the economy and the prospect of the region’s rapid economic rise as a growth opportunity for American businesses. But that message was quickly overshadowed by an alleged prostitution scandal involving Secret Service personnel who were in Colombia to set up security for Obama’s trip. The president said Sunday that he expected a full, rigorous investigation of the allegations, and said he would be angry if the accusations turn out to be true. As Obama met with Latin American leaders, negotiators from the U.S. and five other world powers were in Turkey for a fresh round of nuclear talks with Iran. While previous talks have done little to dissuade Iran from moving forward on its nuclear program, diplomats called the latest negotiations constructive and useful. Both sides agreed to hold more talks in Baghdad at the end of May. The Israeli prime minister balked at the announcement of more talks, saying the intervening five weeks would simply give Iran more time to continue enriching uranium without restrictions. Netanyahu has said Iran uses diplomatic negotiations as a diversion while it continues to pursue a nuclear weapon. Israel has raised the prospect of a preemptive military strike on Iran’s nuclear facilities. The Obama administration has urgently sought to hold off Israeli military action, which would probably result in the U.S. being pulled into a conflict as well. The U.S. believes a combination of diplomacy and crippling economic sanctions could push Iran to abandon its nuclear ambitions. Obama reaffirmed his commitment to that approach Sunday, saying it was “absolutely the right thing to do.” Iran insists its nuclear program is for peaceful purposes and says it does not seek a bomb. With his re-election campaign in full swing, Obama came to Colombia seeking to pitch an economic message that would appeal to voters back home. Implementation of the Colombian trade pact was a central part of that effort, and won Obama praise Sunday from the U.S. business community, which contends the pact will be an economic boon for American businesses. Labor union officials, however, said they were disappointed by the agreement, insisting that Colombia still has an abysmal record on union rights. Union workers are a core Obama constituency, but have opposed some of his efforts to expand free-trade deals, which they believe take jobs away from U.S. companies. Obama officials insisted they moved ahead only after Colombia took steps to halt deadly violence against labor unionists. AFL-CIO President Richard Trumka said the announcement was “deeply disappointing and troubling” and accused the administration of placing “commercial interests above the interests of workers and their trade unions.” Dan Kovalik, a lawyer with the United Steelworkers, said the announcement was “premature in light of the continued violence against unionists and human rights defenders in Colombia.” Under the terms of the trade pact, more than 80 percent of industrial and manufactured products exported from the U.S. and Colombia will immediately become duty-free, making it cheaper for American businesses to sell their goods to the South American country. The hemispheric summit wrapped up Sunday with few notable achievements. And much of the attention was on who wasn’t there – namely, Cuba. Some Central and South American leaders hoped to include language in the summit’s final declaration stipulating that Cuba be included in the next gathering. But with the U.S. staunchly opposed to that effort, leaders decided to end their meetings without a final communique. The U.S. insists that Cuba should not be allowed to attend the regional meetings until it enacts democratic reforms. Obama suggested Sunday that scenario may not be all that far away. “There may be an opportunity in the coming years as Cuba begins to look at where it needs to go in order to give its people the kind of prosperity and opportunity that it needs, that it starts loosening up some constraints within that country, and that’s something that we will welcome,” he said. Before departing, Obama had his only real encounter with the people of Cartagena, joining Santos in a celebration of the country’s efforts to recognize Afro-Colombian communities that have been historically marginalized. The ceremony gave these communities, descendants of slaves, formal title to their land, and it prompted Obama to reflect on his own ancestry and his 2009 trip to Ghana with his family. ___ Associated Press writers Jim Kuhnhenn and Frank Bajak in Colombia contributed to this report. ___ Follow Julie Pace at . http://twitter.com/jpaceDC

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Hayden Bixby: Family Bonding at Tax Time

April 15, 2012

I put my return (and not-insignificant check) in the mail to the IRS Friday, and I have to admit that I’m sad to see another tax season come to a close. I’m not saying I love paying taxes, but I am saying that I love doing taxes. Please tell me I’m not alone! For one thing, I enjoy the little moments of success when TurboTax prompts me to enter some information that I, miraculously, can locate in the file I keep throughout the year. This makes me feel organized and prepared — and even maybe a little smug, as I consider how much money I’m saving by not hiring someone to do this work for me. I’m pretty sure I get this personality quirk from my dad, who also does his own taxes and is a source of my most valuable and most inexpensive tax advice. I confess I don’t always follow his suggestions (yes, I know it makes more sense to keep the money in my bank account throughout the year than it does to try for a refund… but refunds are so much more fun!) — but I notice that I hear the wisdom of his words far more often as I get older. And I get to hear from other family members at tax time, too. The flurry of text messages from my brothers, asking and giving advice throughout the process, is a comical distraction, as is the friendly competition among us to see who can unravel a complicated question most efficiently, or get the best tax rate, or locate obscure but required information. I know: Nerd Alert. But the best connection I’ve found between family and taxes happened this year, when my usually-Facebook-averse cousin suddenly started posting images of Montana’s new Tax Gnome. She and her team at the Partnership for Montana’s Future came up with a “Thank Taxes” campaign that captures photos of a goofy-looking garden statue next to various buildings, services, and events that tax dollars support. That’s right: taxes are getting an image make-over with the help of an extra from Gnomeo and Juliet ! Because she’s my cousin, I think she’s a genius for even being part of a team that would come up with this. But a little more YouTube-driven exploration led me to other “Thank Taxes” campaigns from states as diverse as Minnesota and Arkansas . So maybe thanking taxes isn’t a completely original idea. Neither this fact nor the fact that I can’t look at the Montana photos without thinking about discount airfares diminishes my sense that she is on to something. In the political climate of my whole adulthood, we have been bombarded with criticisms of and challenges to our tax system: who is and isn’t taxed enough? how should or shouldn’t our tax dollars be allocated and managed? what social programs should or shouldn’t be shored up by tax revenue? should or shouldn’t inherited money be taxed a second time as it enters the hands of a new generation? These questions aren’t inherently bad, but the language in which the debate is conducted is polarizing and confrontational. As George Lakoff reminds us whenever he can, we have been linguistically and rhetorically hijacked, submitting to terminological conversions that affect us on an unconscious level. The move from the “estate tax” to the “death tax,” for example, equates taxes not with the “she’s gone to a better place” kind of death, but the “there’s a murderer on the loose and I’d better get a gun to defend myself” kind. This and other brainchildren of Conservative think-tanks have more or less successfully demonized taxes and social programs in the American popular consciousness. In this context, I’m heartened by the efforts to reflect on the daily benefits of programs that serve our whole society and, yes, are funded with taxes on our hard-earned pay. I like being reminded that the tax dollars I pay result in benefits to me and the people I care about… and even people I don’t know. Anyone who attends public school, appreciates roads that are pot-hole free, has ever checked out a library book or called 911, or likes that fact that there are limits set on how much “byproduct” can legally be included in his or her hot dog might like to engage in a moment of reflection during tax time, too. It is in this cheerful spirit that I’ll log back in to TurboTax, get my family’s phone numbers on speed dial, and sit down to file my amended 2011 return… My 1099 from PayPal just arrived in today’s mail. Yay!

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Geithner: ‘No Credible Basis’ For Argument That Buffett Rule Will Hurt Economy

April 15, 2012

WASHINGTON, April 15 (Reuters) – A proposal to impose at least 30 percent income tax on Americans making more than a million dollars a year will not hurt the economy by stifling investment and growth, U.S. Treasury Secretary Timothy Geithner said on Sunday. “No credible basis for that argument, in my judgment,” Geithner said on CBC’s “Face the Nation.” “I don’t think there is a plausible path to tax reform … that doesn’t recognize the reality that we cannot afford to extend these tax cuts for the most fortunate Americans,” he said.

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Dueling Tax Plans Spell Long Fight Ahead

April 15, 2012

WASHINGTON — Democrats and Republicans are forcing votes in Congress this coming week on competing tax plans that affect millionaires and smaller businesses, and they know the proposals are doomed from the start. But that doesn’t matter to either party. Their bills are more about pontificating than legislating, aimed at voters in November’s congressional and presidential elections. Neutral economists say neither bill would do much for the economy or job creation. Some political professionals are equally unimpressed with their potential impact on voters. Undaunted, congressional leaders hope to maximize public attention by timing both roll calls with an eye to Tuesday, the annual deadline for filing income taxes with the Internal Revenue Service. The upcoming votes probably are just a start. Senate Democrats later this year may hold votes tied to President Barack Obama’s “Buffett rule,” using his idea of a minimum 30 percent tax on the wealthiest to raise money for proposal to create jobs and keep student loan rates from rising. With trillions in tax cuts dating from President George W. Bush set to expire in January, House and Senate leaders also are considering campaign-season votes on extending popular parts of those reductions, such as preventing the $1,000 child tax credit from being cut in half. In addition, Obama and his all-but-certain GOP opponent, Mitt Romney, will spend much of the campaign promoting their tax blueprints as antidotes to an economy still struggling to generate jobs. Besides raising taxes on the wealthy, Obama would boost levies on many U.S. companies that do business overseas, and on the oil and gas industry. The new money would help lower individual and corporate rates and reduce federal deficits. Romney would continue all Bush tax cuts, including those for the richest people, while trimming rates and eliminating estate taxes. “If this were a heavyweight fight, we’re still in the first round where both sides are kind of feeling each other out,” Republican consultant Mike McKenna said about the votes in the week ahead. On Monday, as Congress returns from a two-week spring break, the Democratic-led Senate expect votes on a “Buffett rule” measure by Sen. Sheldon Whitehouse, D-R.I. It would slap a minimum 30 percent income tax on people making over $2 million yearly and phase in higher taxes for those earning at least $1 million. Republicans are sure to block the bill, nicknamed for billionaire Warren Buffett, who backs higher taxes on the rich. The GOP-run House plans a Thursday vote on legislation providing a 20 percent tax deduction for businesses that employ fewer than 500 workers, which covers 99.9 percent of all companies. The proposal, sponsored by House Majority Leader Eric Cantor, R-Va., seems certain to pass, but fail in the Senate. Those votes are set just as many Americans stare at their own tax returns. The Internal Revenue Service says that through April 6, it had received 99 million of 145 million expected returns. So far, 80 million refunds have been issued averaging $2,794, down $101 from last year. For political leaders looking ahead to the November elections, the demise of this week’s bills will matter little. Democrats think the Buffett rule vote will underscore their commitment to economic fairness and GOP favoritism for the rich, a prominent election theme. Hammering at it lets Obama shine a spotlight on Romney, a former private equity executive who has paid an income tax rate of about 15 percent on annual earnings of $21 million, which is a lower rate than many middle-class families pay. “In America, prosperity has never just trickled down from a wealthy few,” Obama said Wednesday during a week packed with events promoting his plan. “Prosperity has always been built from the bottom up and from the heart of the middle class outward. And so it’s time for Congress to stand up for the middle class and make our tax system fairer.” Republicans believe the business tax measure will spotlight their efforts to lower taxes and create jobs, contrasted with Democrats’ preference for higher taxes to finance ever-larger government. They believe they win the debate by keeping the focus on those subjects, not what the wealthy pay. “We want small-business people to have more money go to their pockets, not the government’s,” Cantor said recently at a Virginia high school. “And then they have more money to make decisions about hiring, about retaining jobs and about creating more jobs.” Democratic political consultant Alan Secrest said both measures might excite the most fervent partisans but do little for independents, who he said care more about jobs. “And neither party has a particular advantage on that right now,” Secrest said. The Buffett rule is clearly popular. An Associated Press-GfK poll in February showed that nearly 2 in 3 favor a 30 percent tax for those making $1 million annually, including most Democrats and independents and even 4 in 10 Republicans. Yet the measure would raise just $47 billion over a decade, a smidgen of the $7 trillion in federal deficits expected during that time. While a 20 percent tax deduction would be welcomed by any company, the $46 billion in lower taxes Cantor’s bill would provide over the next six years would barely register on the $100 trillion in U.S. economic activity projected for that period. There also are doubts that it would spur new jobs. “If they have more sales, they’ll hire,” said Maury Harris, chief U.S. economist for UBS, the investment bank. “If they don’t have the sales, they won’t hire. That’s what it’s all about.” Senate Democrats, who champion a narrower bill providing tax credits for firms hiring workers, call the GOP small-business cuts “a profit-padding tax giveaway.” Democrats have also criticized extending Bush’s tax cuts for being too costly at a time of big budget deficits, though most favor extending them for all but the highest earners. Rep. Dave Camp, chairman of the House Ways and Means Committee, said the business tax cut bill would show that Republicans are trying to spark job growth. He also said he would welcome Democratic opposition to any votes this year, should they occur, on renewing Bush’s tax cuts. “If the Democrats want to have all those taxes go up, let them,” said Camp, R-Mich.

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FCC Wants To Fine Google $25,000

April 15, 2012

In its investigation of whether Google’s Street View cars illegally collected personal data from WiFi networks, the Federal Communications Commission has reached a decision that seems like a mix of good news and bad news for the search giant.

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The 9 Most Damaged Brands In America

April 15, 2012

Highly recognizable brands can be invaluable, but they require constant attention. Their value can rise or fall because of management decisions, changes in the competitive environment, and the beliefs that a brand has aged beyond its useful lifetime. Often, though, the true causes of drops in brand value are folly and arrogance. 24/7 Wall St.’s review of nine brands that were badly damaged recently shows that even the most powerful brand cannot survive horrible decisions.

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Geithner: U.S. In A Better Position To Handle High Gas Prices

April 15, 2012

WASHINGTON, April 15 (Reuters) – The U.S. economy is in a better position to deal with high gasoline prices, Treasury Secretary Timothy Geithner said on Sunday, adding that unseasonably warm winter had lowered overall energy costs for consumers. Speaking on ABC’s “This Week” program, Geithner also dismissed suggestions that the country’s huge budget deficit put it at risk of being the next Greece.

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Mohamed A. El-Erian: What the Return of Market Volatility Tells Us

April 15, 2012

Four of last week’s five daily trading sessions saw the Dow move by more than a hundred points. The wide fluctuations of the index reminded investors of the unsettling market volatility of last year. In the process, and after a wonderfully strong first quarter, questions multiplied as to whether stocks would again be subject to a mid-year correction. By looking at the factors behind the recent volatility, including how it played out in different segments of the global markets, you will see that a big part of the answer depends on policymaking here and in Europe — a particularly uncomfortable situation for those who rightly believe that valuations and correlations should reflect underlying fundamentals. The renewed volatility in stocks was due to conflicting signs of additional central bank liquidity support, both in Europe and the US. By providing time (and hope) for economic and financial fundamentals to heal properly, such support is seen as critical to sustain the recent rally in risk assets. Yet, in listening to different voices here and across the Atlantic, equity investors come to different conclusions as to whether additional liquidity will indeed be forthcoming. Some officials seem committed to renewed unusual central bank activism. Others feel that this would only postpone the inevitable adjustments required on the part of governments, companies and individuals. And there seems to be no way, as yet, to get both groups on the same wavelength quickly. Market volatility has also been accentuated by competing narratives about the economic outlook. Last week, several companies’ quarterly earnings reports, led by Alcoa, were supportive. The problem is that they conflicted with the more worrisome macro data, including a Chinese growth slowdown (though 8.1 percent would be deemed great anywhere else in the world), the undershooting of a much-followed US sentiment indicator, and mounting signs of recession in Europe . These two narratives are, once more, finely balanced; and the tug of war will continue until one side asserts itself — either through a policy breakthrough or through a policy breakdown. No wonder so many analysts are warning that stock market volatility may be with us for a while. In understanding the implications, it is good to reflect on what other market segments are telling us — particularly global bonds where last week’s differentiation was both noteworthy and insightful. Compared to stocks, US Treasury bonds experienced less volatility (both in absolute and relative terms). This was partly due to a measurement issue: As only the bond market was open when the disappointing March employment number was released, yields reacted on that Friday while stocks had to wait for the following Monday. But even when adjusting for this by extending the comparison to two weeks, the contrast is still there. Investors in the Treasury segment appears less conflicted. This market segment signals a muted growth outlook, and one that may even trigger additional Federal Reserve intervention in the form of a new QE. Signals of a challenging outlook are much, much louder in European bond markets — and rightly so. Last week, yields on peripheral government securities went from flashing orange to again flashing red, with Spanish risk spreads near or at record levels (as measured by credit default swaps). All this speaks to the unsettling situation of markets that remain highly dependent on policymakers who, themselves, are stuck in the muddled middle: unable to deliver sustainable outcomes or to exit from their market interventions. This is the unfortunate reality of an “unusually uncertain” outlook, blunt policy tools, and a rather dysfunctional political context. Mohamed El-Erian is the co-CEO of Pimco, which oversees nearly $1.8 trillion in assets and runs the Pimco Total Return Fund, the largest bond fund in the world. Cross-posted from CNBC.com

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‘Suicide By Economic Crisis’

April 14, 2012

The economic downturn that has shaken Europe for the last three years has also swept away the foundations of once-sturdy lives, leading to an alarming spike in suicide rates. Especially in the most fragile nations like Greece, Ireland and Italy, small-business owners and entrepreneurs are increasingly taking their own lives in a phenomenon some European newspapers have started calling “suicide by economic crisis.”

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Eliot Spitzer: Obama ‘Has Been On Wall Street’s Side Since Day One’

April 14, 2012

When it comes to reforming Wall Street, President Obama is all talk, according to Eliot Spitzer. The former New York governor took to Reuters TV’s Fast Forward with Chrystia Freeland to slam the president for what he says is a talk-tough, act-weak approach to the financial industry, which less than five years ago brought the global economy to the brink of disaster. “I’m not persuaded that this President has really been a voice for reform when it comes to Wall Street,” he said. “Wall Street has pretended that it has taken its hits, but it really hasn’t.” Spitzer summarized Obama’s efforts as the “occasional speech” criticizing Wall Street practices, largely followed by little to no substantial legislative action. “When it has come to actually putting in place the reform-based structure that would actually have changed the way the banking system works, he has really been on Wall Street’s side since day one,” Spitzer said. Spitzer criticized the Obama administration for what he perceives as opposition to the Volcker Rule, a key piece of financial reform that aimed to curb banks’ high-risk bets with their own money. Such trading has been criticized for pitting banks against their own clients. The president first introduced the rule more than two years ago, calling it a “simple and common-sense reform” at the time. Spitzer also claims the White House did not fight to give judges the ability to reform mortgages in the wake of the housing collapse. “The White House and Treasury intervened to defeat that in the Senate, something that could have fundamentally altered the course of our mortgage crisis that still continues to this day,” he said.

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Why Executives Need To Be Prosecuted For Corporate Crime

April 14, 2012

BP held its annual meeting on Thursday, and, all things considered, the company’s shareholders had much to be happy about. Yes, a small percentage voted against the $6.8 million pay package that the board awarded Bob Dudley, the chief executive. And there were plenty of protesters in attendance, including angry Gulf Coast residents and climate change activists.

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President Obama: ‘For The Americas, This Is A Moment Of Great Promise’

April 14, 2012

By Laura MacInnis CARTAGENA, Colombia, April 14 (Reuters) – U.S. President Barack Obama stressed on Saturday the “great promise” for business growth in the Americas, seeking to play up the economic heft of the region he has paid little attention to in his first three years in office. In remarks prepared for a meeting of corporate chief executives in Cartagena, Colombia, where he is attending the 33-nation Summit of the Americas, Obama described U.S.-Latin American ties as “one of the world’s most dynamic trade relationships.” “With nearly a billion citizens – nearly a billion consumers – among us, there’s so much more we can do together,” according to excerpts of his speech released by the White House. “For the Americas, this is a moment of great promise. And I believe if we seize the opportunities before us, we’ll continue to be each other’s economic partners of choice,” he was set to tell the gathering of CEOs on Saturday morning, which precedes the formal start of the regional leaders’ summit. Among the companies represented at the CEO gathering were Pfizer Inc, Chevron, Pepsico and Cisco Systems Inc. Obama, a Democrat running for re-election in November, is under pressure in Colombia to show he is committed to engaging with Latin America and is addressing regional issues including drug trafficking and violence. His critics – including many pivotal Hispanic voters in the United States – have accused him of largely neglecting Washington’s neighbors to concentrate on crises in the Middle East and Afghanistan and on an effort to boost U.S. trade ties with fast-growing Asia. On his way to Colombia on Friday, Obama gave a speech at a shipping port in Tampa, Florida, on the ways U.S. businesses and workers can benefit from increased trade with Latin American countries like Mexico, Brazil and Argentina. Florida, with its large Hispanic population, is expected to be an electoral battleground on Nov. 6 and Latino voters could also make or break Obama’s re-election chances in swing states including Nevada, Colorado and Virginia. Polls show the president well ahead of Mitt Romney – the presumed Republican nominee for the White House race – among Latino voters despite concerns about his lack of attention to Latin American issues and disappointment about his failure to produce the broad immigration reform he promised in 2008.

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California’s Coastal Recovery Leaves The Landlocked Behind

April 14, 2012

SAN BERNARDINO, Calif. — For decades, California has been seen nationally and by its own residents as a state divided into north and south, urbane tree-huggers versus car-obsessed beach hoppers. But the more meaningful division, it turns out, may be between east and west.

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Wall Street Offered Better Deals 100 Years Ago

April 14, 2012

Wall Street is making more money than ever, but it’s that’s not because it’s getting the job done much better. The financial system of today is just as good at transferring money from savers to borrowers as it was in 1910, according to research from New York University economist Thomas Philippon . In fact, the Wall Street of 1900 was producing loans, bonds and stocks just as well as the finance industry of 2010 — and doing it more cheaply when considering cost per dollar of assets. Philippon notes that all of this inefficiency is true of today’s Wall Street “despite its fast computers and credit derivatives,” which might seem strange given how most other industries typically react to advancements in technology. Hint: they usually get more efficient, and their services cheaper. As Timothy Noah of the New Republic notes, citing Philippon’s data : “Wal-Mart uses technology to increase sales volume, but the more it does so the more it drives down profit margins — its own and everybody else’s.” So why has Wall Street gotten so inefficient, flying in the face of market theory? Philippon offers one possible reason: Technological advancements have actually increased trading activity , which makes more money for Wall Street, but doesn’t do anything for its efficiency. Philippon’s latest findings echo his earlier research. Wall Street wastes an estimated $280 billion per year , according to a paper from Philippon published last year. But despite the inefficiency, the industry doubled in size between 1980 and 2010. What’s more, the financial services sector is now bigger than it was before the financial crisis. Wall Street accounts for 8.4 percent of America’s gross domestic product, a greater share than in 2006 and one of the biggest percentages in history.

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The 10 States Taxing The Poor Most

April 14, 2012

24/7 Wall St.: In an effort to help families work their way out of poverty, most of the United States do not tax the incomes of working-poor families. A handful of states do, however. 24/7 Wall St. examined a new report from the Center on Budget and Policy Priorities to identify the states that tax the poor the most. Read The States Taxing the Poor Most The decision of these states to continue taxing the poor is notable because most states have stopped. Over the past two decades, there has been a widespread, bipartisan effort to roll back taxes on working-poor families. Today, only 15 states still tax families with incomes that are at, or below, the federal poverty line — currently $23,018. However, the effort to reduce taxes on the poor has stalled, according to the CBPP. In 2011, no new states exempted working-poor families of four — the benchmark family unit used in the study — from income taxes. Worst still, in almost all 15 states, these taxes have increased. The number of states that continue to tax poor, working families remains too high, Phil Oliff, policy analyst at the CBPP and coauthor of the report told 24/7 Wall St. “That makes it harder for those families to pay for basic necessities like food and clothing; it makes it more difficult for them to afford work related expenses like child care and transportation costs; and it’s bad for the state’s economy.” While the average median income of the residents of these states varies, a number are particularly poor relative to the rest of the country. States such as West Virginia, Georgia and Alabama have among the highest poverty rates in the country. As a result, a larger percentage of these states’ populations are affected by taxes on poor families. According to Oliff, “States should be helping poor families to work their way into the middle class, not taxing them deeper into poverty.” 24/7 Wall St. identified 10 states that tax two-parent families of four living at the poverty line at the highest rate, based on CBPP’s report, “The Impact of State Income Taxes on Low-Income Families in 2011.” All of these states also tax families with incomes that place them below the poverty line. For each state, we also included the income level below the poverty line where families would not be taxed. In addition to this, we included the poverty rate and median household income for each state, based on data from the U.S. Census Bureau. These 10 states tax the poor the most, according to 24/7 Wall St. :

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Nokia: We’ve Cured Our Flagship Phone’s Bug

April 14, 2012

By Tarmo Virki HELSINKI (Reuters) – Nokia said on Saturday it has fixed a software bug in its Lumia 900 smartphones which went on sale a week ago in the United States, its answer to Apple’s iPhone. Earlier this week Nokia said its first 4G phone, which it markets with the strapline “an amazingly fast way to connect”, can occasionally lose its data connection due to the bug. It promised to fix the problem around April 16. “The update is now available. Consumers now have the opportunity to update their AT&T version Nokia Lumia 900 software,” the firm said. Lumia 900 is the third Nokia phone to run Microsoft’s Windows operating system since it ditched its own Symbian system last year, and only went on sale in the United States through AT&T on April 8. It is due for a wider global launch this quarter. The model won several awards at the Consumer Electronics Show in Las Vegas when it was launched in January. Nokia is offering anyone who has bought a Lumia 900 phone, or who buys one by April 21, a $100 credit to their AT&T bill. The operator sells the phone for $99.99 with a 2-year contract. Nokia lost the top spot in the lucrative smartphone market last year to Apple and Google , and analysts said it lost overall top spot in cellphone sales volume in the last quarter to Samsung Electronics . This week Nokia also warned its phone business would post losses in the first two quarters of this year as it struggles to revamp its product line to compete with Apple and Samsung, sending its shares sharply lower. (Reporting By Tarmo Virki; Editing by Daniel Magnowski)

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Doomed Legislation May Decide Presidential Election

April 14, 2012

WASHINGTON — Pay attention, America. Democrats and Republicans in Congress each will launch heated, political debates next week on tax bills that will never pass. But they nevertheless could be the most illuminating, consequential showdowns all year. The tussles will start Monday over the so-called Buffet Rule in the Democratic-led Senate — a $47 billion tax hike on $1 million-plus earners. That bill will likely fail the next day. Then, over in the GOP-controlled House, will be a $46 billion business tax cut plan. Together, the two bills offer Americans one of the clearest contrasts in the two parties’ political platforms and ideologies likely to be seen before the November election. “Taxes and the debates around them often offer an extra-clear window into the politics of each party,” said Julian Zelizer, a political historian at Princeton University whose latest book looks at the recent rise in Americans’ awareness of political history. Zelizer noted that the arguments next week should have added resonance, as millions of Americans finish their taxes, and will give people a fresh chance to decide which party’s vision they like better. “The contrast here essentially gets to the philosophy of each party,” Zelizer said. “Democrats with the Buffett Rule see it as an issue of tax fairness. The wealthy should help more at a time when most people have less money. The other side believes you have to lower taxes to spur economic development.” Both positions are popular, at first glance. A Gallup Poll released Friday found 60 percent of Americans favor taxing people who earn more than $1 million at a rate of 30 percent, as the Buffett Rule proposes. The office of Majority Leader Eric Cantor (R-Va.), sponsor of the competing tax cut proposal, pointed to a survey commissioned by his office that found 80 percent of the public favors his break. Partisans on both sides have been plotting intense messaging efforts, especially Democrats — including President Barack Obama — who have held numerous events and press conferences to push the Buffett Rule, which aims to make sure millionaires pay a higher rate that someone like Warren Buffett’s secretary. Republicans have been more focused on blaming Obama for high gas prices and slow economic growth. But with Cantor’s small business tax cut coming at the same time as the Buffett debate, the parties’ competing visions will be on display directly opposite one another. Cantor’s bill proposes cutting taxes for all small businesses (defined as having fewer than 500 workers, not by income) by 20 percent for a year. The cut would be capped at 50 percent of payroll. It would push tax rates toward 15 percent, from 35 percent, for one year. It would be funded by slapping $46 billion on the nation’s debt. The Buffett Rule aims to prevent the extremely rich from paying around 15 percent income tax rates — as many do, including likely GOP presidential nominee Mitt Romney. It would cut the deficit by $47 billion over 10 years. “The contrast couldn’t be more clear,” said Cantor spokeswoman Laena Fallon.”While Democrats are busy formulating their latest tax hike that will do nothing to grow the economy or create jobs, House Republicans will pass a tax cut to help 22 million small business job creators keep more of their own money so they can grow and hire again.” According to Congress’ nonpartisan tax cruncher, the Joint Committee on Taxation, Cantor’s bill may benefit the 14.4 million small business entrepreneurs with an average break of about $6,500. From the GOP perspective, letting business owners keep more of their money will help them grow as they see fit. “We need to empower small business men and women,” Cantor said recently. But Democrats argue that the wealthy already have all they need to create jobs, and giving them more is just another giveaway. “It seems like in the Senate they’re keeping to the tune of job creation and deficit reduction,” said Rep. Xavier Becerra (D-Calif.), the vice chairman of the Democratic Caucus. “The Buffett Rule reduces the deficit. It has millionaires pay their fair share of taxes compared to their secretaries and middle class Americans. He called Cantor’s measure ” welfare for the wealthy ” and said it would give nothing to millions of sole proprietors and family-owned businesses that don’t have formal payrolls. Becerra said emphatically, “No,” when asked if either bill had a chance of hitting the president’s desk. “Republicans won’t support the Buffett Rule, it’s clear. And Democrats don’t believe we should be giving millionaires another tax break,” he said. “It really does crystallize where Republicans are on tax breaks, and I think with the Buffett Rule, it helps better define Democrats as truly trying to do everything possible to target our assistance and our efforts to create jobs at the middle class,” Becerra said. Democrats also have a proposal offered by Sen. Chuck Schumer of New York that would give small businesses tax breaks if they hire new workers or give raises. The GOP opposes it, saying the measure restricts businesses. “It really is a philosophical difference between, ‘We’re going to micromanage whether or not you’re entitled to tax relief and make it really complicated,’ versus, ‘You probably know what you’re business needs are, and we’re not going to try to figure all of that out from Washington,’” said a Republican leadership aide who was not cleared to speak publicly and asked who asked not to be identified. The Democrats’ Buffett Rule would clearly target very wealthy people. Both sides agree on that, though Republicans argue it would hurt “job-creators.” The impact of Cantor’s bill is less clear. His office touts it as a boon to all small business, but its largest beneficiaries will be businesses that are doing well, including celebrities, sports franchises, high-end medical operations and financial services. According to an analysis by the non-partisan Tax Policy Center, nearly 94 percent of the benefits would go to the top 20 percent of small businesses. Nearly 60 percent of the breaks would land in the monied laps of the ballyhooed 1 percent. Cantor’s office disputes those figures, and points to the Joint Committee on Taxation, which released its analysis Friday evening. Cantor spokeswoman Fallon said the new study examined the bill with a better methodology than the Tax Policy Center used. The Tax Policy Center study found that firms earning more than $200,000 a year would get nearly 84 percent of the breaks. Congress’ data found those businesses also would do disproportionately well. The Joint Committee on Taxation found that those $200,000-plus businesses would get more than 64 percent of the benefits, while they account for about 11 percent of the eligible firms. And the fraction of the top 1 percent of small businesses — the 125,000 that produce more than $1 million a year in adjusted gross income — would snag 18.3 percent of the tax break. The vast majority of small businesses — 9.2 million — would share about 15 percent of the break. Using either set of figures, it’s a large difference that highlights the ideological chasm like a radioactive-dyed X-ray. To Democrats, it’s the 1 percent getting even more. To Republicans, the Buffett Rule is a tax hike and the Cantor bill would let the job creators keep more of their money instead of giving it to the oppressive federal government. “Sadly, an administration that promised it would focus on jobs is wasting yet another day on a political event that won’t take a single person off the unemployment line,” Senate Minority Leader Mitch McConnell (R-Ky.) said this week while Obama touted the Buffett measure. The Tax Policy Center, sponsored by the Brookings Institution and the Urban Institute, sides with the Democrats. “It puts a lot of money in the high end,” said Roberton Williams, a Tax Policy Center analyst of Cantor’s bill. “There’s already tons of cash sitting on the sidelines earning very low interest that is not being invested. This will add to that pile.” The vital question for voters watching the debate next week will be whether to add that pile, or take away. Would giving the wealthy more to invest help? Or would it be better spent on deficit reduction or the middle class? The answer may decide the fall elections.

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A Forehead Tatoo Too Big To Fail

April 13, 2012

America has placed too much faith in the power of markets for the past 30 years, a belief not even the financial crisis could shake. The country risks losing its soul as a result. That’s the warning of Harvard political philosopher Michael J. Sandel, expressed in a new book, “What Money Can’t Buy: The Moral Limits of Markets.” “Over the past three decades, roughly, markets have been triumphant,” Sandel told The Huffington Post on Friday, referring to the ascension, which he said began with the political rise of Ronald Reagan and Margaret Thatcher in the 1980s, of “the idea that markets are the primary instrument for achieving the public good.” This belief in the power of markets to improve our lives was reinforced by Tony Blair and Bill Clinton and survived even the financial crisis, Sandel noted, “after all financial markets were utterly discredited, or so it seemed.” Sandel said American society is steadily changing from a market economy to what he calls a “market society, a way of life in which market values and market reasoning reach into every sphere of life,” including education, health care and military service. In an excerpt of his book published by The Atlantic , Sandel cites several specific and unnerving examples of the creeping reach of markets, including a woman who earned $10,000 for having a company’s Web address permanently tattooed on her forehead. She used the money to help pay for her son’s education. The problem with being able to buy and sell increasing numbers of things is that we devalue the things we are buying and selling — including our foreheads, our health, our children’s education, Sandel argues. Ultimately this corrodes the ties that bind Americans together. “The more things money can buy, the more the affluent can buy their way out,” Sandel said. “The affluent lose a stake in the public sphere, and increasingly we lead separate lives.” “That’s not good for democracy, and it’s not a satisfying way to live,” he added. Sandel said he had little hope that the financial reforms that followed the crisis would do much to change the dominance of markets. After all, they still arise from the belief that the market knows best and that corporations should be relatively unfettered. The Dodd-Frank financial regulations have left in place banks that are too big to fail and not accountable for creating the crisis, Sandel said. That has led to a festering anger on both sides of the political spectrum, manifested in the Tea Party and Occupy movements. Sandel said that really breaking the thrall of the markets would require overcoming “an allergy we have … to bringing ethics, morality and virtue into public discourse.” That could be a particular problem for the left, which is accustomed to those realms being the home turf of the religious right, on issues such as reproduction and sexuality. A potentially higher hurdle to changing attitudes is that the allure of free markets is closely tied to how Americans see themselves. “In our society especially, markets seem to embody a certain idea of freedom,” Sandel said. “It’s a narrow, limited, impoverished idea of freedom — the freedom to buy and trade goods, a consumerist idea of freedom. And it’s deeply held. “The allure of that narrow vision of freedom is not something to be underestimated,” he added. “That is why it’s hard to break the thrall of markets and market thinking.”

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What Are The Best Cities To Start A Business?

April 13, 2012

Where’s the best place to start a business? For the third straight year, the winner is Austin, Texas, according to The Business Journals’ On Numbers analysis. The list was good news for the southern United States overall, with Raleigh, N.C., Oklahoma City and Houston rounding out the top four rankings By region, Austin won the South, Pittsburgh took top rank in the East, Minneapolis-St. Paul took the Midwest and Salt Lake City was first in the West. The study looked at U.S. Census data from 2009 (the latest data available) for businesses with fewer than 100 employees. The Business Journals’ formula looks at six components to evaluate growth and opportunity including population growth, one-year private sector employment growth, concentration for small businesses per 1,000 residents, one-year change in that concentration and one-year growth in the number of small businesses. Notably, Austin added 170 small businesses in a year’s time during the heart of the recession, upping the tally to 39,350 small businesses. Of the 100 metro areas included in the analysis, 97 saw a loss in businesses.

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Obamas Claim Tax Break That Most Helps The Rich

April 13, 2012

President Barack Obama didn’t benefit last year from the huge break in the tax code that allows his presumptive rival, Mitt Romney, to pay taxes at a lower effective rate than most anyone who earns a regular middle-class salary. But the president and his wife did save more than $10,000 in 2011 by claiming a tax break that favors the wealthiest Americans. According to their tax returns released Friday by the White House, the president and the first lady claimed a $47,564 home mortgage interest deduction on their house in Chicago, which they bought in 2005 for $1.65 million. That equates to $13,318 in savings on their federal tax bill, according to an analysis by Michael Gillen, director of the tax group at the Philadelphia law firm Duane Morris. While most of the beneficiaries of the mortgage deduction are middle-class borrowers — about two-thirds of those who claim the deduction earn less than $200,000 — homeowners with larger, more expensive houses typically save much more on their tax bills. Average homeowners with incomes between $40,000 and $75,000 who claim the deduction save just $523 in taxes, economists at the University of Pennsylvania found . Average homeowners with incomes greater than $250,000 who claim the deduction save $5,459 on their tax bills. Renters, of course, save nothing. Nor do the millions of Americans in low-cost homes who pay mortgage interest each year, but don’t itemize their deductions because it is not worthwhile for them to do so. Just 1 in 4 Americans claimed the benefit on their taxes in 2010, the last year studied, according to the nonprofit Tax Foundation. The mortgage interest deduction, which allows borrowers to reduce their taxable income by the amount of interest paid on a loan (or loans) with a value of up to $1.1 million, has long been seen as an untouchable middle-class benefit. But many academic studies over the past few years have found it benefits the wealthy the most — and doesn’t really encourage homeownership. “Lots of middle-class people take the deduction and realize some savings on their tax bill, but they don’t understand that it is badly skewed,” said Seth Hanlon, director of fiscal reform at the liberal-leaning Center for American Progress. “A lot of people don’t realize that the benefit can be taken on vacation homes or even a boat.” Hanlon said his organization favors altering the deduction so that everyone receives the same level of tax benefit regardless of tax bracket. He said this change could be phased in slowly to avoid rattling an already depressed housing market. With the federal budget deficit careening out of control, some in Washington have proposed paring back the deduction. Most notably, the deficit reduction commission appointed by President Obama — and led by former Sen. Alan Simpson and onetime White House Chief of Staff Erskine Bowles — suggested reducing the limit on the deduction to $500,000 of a home’s value and eliminating the tax break for a second home. The bipartisan group of senators known as the Gang of Six that met last year in an effort to hammer out a deficit deal also reportedly embraced this plan. Would-be reformers face powerful opposition from groups like the National Association of Home Builders. An association spokesman did not return a message left Friday afternoon, but the group put out a press release earlier this week that called the interest deduction “a cornerstone of U.S. tax and housing policy.” “The mortgage interest deduction primarily helps middle class home owners and is consistent with the principles of a progressive income tax,” the April 11 release said. “Two-thirds of the benefits flow to working class American households who earn less than $200,000 annually and nearly all those who own a home of their own will claim the deduction at some point during their tenure as home owners.” Changing the rules would “penalize millions of baby boomers nearing retirement and seniors who own their homes outright,” said association Chairman Barry Rutenberg, according to the press release. “The collateral damage to the economy would be even more devastating, resulting in lower home values, which would leave more home owners underwater, trigger more foreclosures and prolong the housing slump for years to come.” The president and the first lady paid an effective tax rate of about 20.5 percent in 2011 on adjusted gross income of $789,674. The rate would have been higher if not for the mortgage interest deduction, but the largest tax saving came from charitable deductions. The Obamas gave $172,130 to charity in 2011, which was 22 percent of their income. In January, the Romney campaign released an estimated tax return for 2011 indicating he will likely pay an effective tax rate of 15.4 percent on $20.9 million in adjusted gross income. Romney also makes charitable donations, but his biggest tax benefit is due to how he makes money. Almost all of his earnings come from investments, which are taxed at a 15 percent rate. The White House did not return a request for comment on Friday. This story has been updated with a revised estimate of the Obamas’ tax savings from Michael Gillen.

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Romney Files Extension On 2011 Taxes

April 13, 2012

Mitt Romney’s campaign announced at 5:16 p.m. Friday that the presumptive GOP nominee has filed an extension for his 2011 tax return. “Sometime in the next six months, and prior to the election, Gov. Romney will file and release the 2011 return when there is sufficient information to provide an accurate return,” wrote Romney spokeswoman Andrea Saul in an email to reporters. Six months from now would be Oct. 13, weeks before the election. The Romneys estimate a total tax liability of $3,226,623 for 2011, according to Saul. They made payments of $3,434,411 in 2011. They made an estimated payment of $887,000 for 2012. The Obamas and the Bidens released their 2011 tax returns earlier Friday. Romney released his 2010 tax return in January after being criticized. The returns showed income of $21.7 million in 2010 and an effective tax rate of 13.9 percent, far lower than middle-class earners. The Romneys paid the lower rate because their income was entirely from investments, as opposed to wages. The Romneys have a net worth $190 million to $250 million. The deadline to file the 2011 federal tax return is April 17.

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Americans Buying Huge Number Of Electric, Hybrid Cars

April 13, 2012

— ___ Hybrid and electric cars see record sales in March DETROIT (AP) – Americans are buying record numbers of hybrid and electric cars as gas prices climb and new models arrive in showrooms, giving the vehicles their greatest share yet of the U.S. auto market. Consumers bought a record 52,000 gas-electric hybrids and all-electric cars in March, up from 34,000 during the same month last year. The two categories combined made up 3.64 percent of total U.S. sales, their highest monthly market share ever, according to Ward’s AutoInfoBank. The previous high was 3.56 percent in July 2009, when the Cash for Clunkers program encouraged people to trade in old gas guzzlers for more fuel-efficient cars. And while their share of the market remains small, it’s a big leap from the start of the year, when hybrids and electrics made up 2.38 percent of new car sales. ___ Bank reports point to a healing housing market NEW YORK (AP) – Earnings reports from two major banks Friday painted a picture of a healing housing market, with more Americans taking out mortgages, paying them on time and taking advantage of low interest rates to refinance. At JPMorgan Chase, the biggest bank in the United States, income from new home loans set a record from January through March. The bank issued 6 percent more mortgages than a year ago and got 33 percent more applications. Wells Fargo, which issues the most home loans, booked the most mortgage fees since 2009. It issued 54 percent more mortgages than a year ago and took 84 percent more applications. ___ JPMorgan Chase earns $5.4 billion in 1Q, beats Street NEW YORK (AP) – JPMorgan Chase, which holds the most assets of any bank in the country, said Friday that it issued more mortgage loans in the first three months of the year and turned a bigger profit than Wall Street expected. The bank said it earned $5.4 billion for the first quarter, or $1.31 per share. Analysts expected $1.16 per share. Revenue and profit declined at most of JPMorgan’s businesses, including investment banking. As the nation’s largest bank, JPMorgan is a barometer of the economy and the financial industry. It is also the first major bank to report its results for the quarter. ___ Wells Fargo beats earnings expectations NEW YORK (AP) – Wells Fargo’s profit jumped 13 percent in the first three months of the year, thanks to strong mortgage lending and a drop in delinquent loans, the bank said Friday. Net income available to common shareholders climbed to $4.02 billion from $3.57 billion a year ago. On a per-share basis, earnings were 75 cents, beating the 73 cents expected by analysts polled by FactSet. The bank also beat on revenue, bringing in $21.6 billion instead of the predicted $20.4 billion. The San Francisco-based bank, the country’s fourth-largest, has fared better than many of its peers throughout the global economic meltdown, muscling its way to become both the biggest mortgage lender and servicer as rival Bank of America dramatically scaled back its own mortgage business. Nearly a third of mortgages made in the U.S. now come from Wells, according to Guy Cecala of Inside Mortgage Finance. ___ US inflation mild as gas prices rise more slowly WASHINGTON (AP) – Rising gas prices slowed in March, keeping overall U.S. inflation mild. The consumer price index rose 0.3 percent in March, the Labor Department said Friday, compared with February’s 0.4 percent rise. Excluding food and gas, so-called “core” prices increased 0.2 percent in March. Inflation has eased since last fall and is expected to stay tame. In the 12 months that ended in March, prices rose 2.7 percent. That’s below last year’s peak year-over-year rate of 3.9 percent. Core prices have risen 2.3 percent in the past 12 months, close to the Federal Reserve’s inflation target of 2 percent. ___ China’s economic growth falls to near 3-year low BEIJING (AP) – China’s declining economic growth fell to its lowest level in nearly three years in the first quarter, but analysts said it should rebound in coming months. The world’s second-biggest economy grew by a still-robust 8.1 percent in the three months ending in March, down from the previous quarter’s 8.9 percent, data showed Friday. It was the weakest expansion since the second quarter of 2009 but above the government’s 7.5 percent target for the year. China’s rapid growth has fallen steadily since 2010 as a slump in global demand battered its exporters and Beijing tightened lending and investment curbs to cool an overheated economy and surging inflation. ___ Bernanke defends Fed response to financial crisis WASHINGTON (AP) – Chairman Ben Bernanke said Friday that the Federal Reserve was left with few good options when it stepped in to shore up the largest U.S. financial institutions during the 2008 crisis. Bernanke defended the central bank’s actions to support insurance giant American International Group and help with the sale of investment bank Bear Stearns, during a speech to a New York conference examining the crisis. While there were risks associated with that support, Bernanke said that the billions of dollars in loans the Fed provided were backed by adequate collateral and taxpayers did not lose money. And he noted that the Fed and other U.S. regulators are better positioned to deal with a crisis because Congress passed an overhaul of financial regulations in 2010. ___ Goldman Sachs CEO Blankfein paid $16.1 million NEW YORK (AP) – Goldman Sachs CEO Lloyd Blankfein received total compensation of $16.1 million in 2011, a 14 percent increase from the year before. In a regulatory filing posted Friday morning, the New York investment bank detailed Blankfein’s compensation for last year. Goldman paid its chairman and CEO a salary of $2 million, a bonus of $3 million and stock awards worth $10.7 million. Blankfein’s total pay included $9,800 in matching payments to his retirement plan, $51,467 for a car and driver and $258,701 for security services. The amount Goldman paid for his security more than doubled from the year before. ___ Gulf sheen smaller; source may be natural seepage NEW ORLEANS (AP) – A federal agency says natural seepage of oil and gas from the floor of the Gulf of Mexico may be the source of an oil sheen off the Louisiana coast. The Bureau of Safety and Environmental Enforcement said Friday that the sheen is near an area where seepage is known to occur. The bureau said an investigation by Royal Dutch Shell, which has operations in the area, indicates oil and gas are being released from the seep area. The sheen was initially measured as about 10 miles long and a mile wide when it was spotted Wednesday. The Coast Guard said that by Thursday night it was about five miles long and 100 yards wide and is breaking up, about 130 miles southeast of New Orleans. ___ Procter & Gamble raises dividend by 7 percent NEW YORK (AP) – Consumer products maker Procter & Gamble Co. is raising its quarterly dividend by 7 percent to 56.2 cents. The Cincinnati company had been paying a quarterly dividend of 52.5 cents. It pays dividends on common shares and certain preferred shares. Its next dividend is payable May 15 to shareholders of record as of April 27. Procter & Gamble makes Tide laundry detergent, Crest toothpaste, Pampers diapers, and other products. ___ By The Associated Press(equals) The Dow Jones industrial average lost 136.99 points to close at 12,849.59, a loss of 1.1 percent. The Standard & Poor’s 500 index fell 17.31 points, or 1.3 percent, to 1,370.26. The Nasdaq composite fell 44.22 points, 1.5 percent, to 3,011.33. Benchmark U.S. crude fell by 81 cents to end at $102.83 per barrel on Friday in New York. Brent crude lost 31 cents to end at $121.21 per barrel in London. In other energy trading, natural gas stayed near 10-year lows, nearly unchanged, to finish at $1.981 per 1,000 cubic feet. Heating oil was up less than a cent to finish at $3.1746 per gallon and gasoline futures lost 1.06 cents to end at $3.3461 per gallon.

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Ashton Kutcher’s Latest Startup Bet (VIDEO)

April 13, 2012

DES MOINES, Iowa — Actor Ashton Kutcher is among the early investors in Dwolla, an Iowa tech startup that lets users transfer money or pay for things through their smartphones or online for a flat fee of 25 cents per transaction. The “Two and a Half Men” star didn’t disclose the size of the investment his venture capital company made in Dwolla, which is hoping to lure customers seeking an alternative to the percentage-based fees typical of credit card purchases and other online payment methods. “I think this company could employ hundreds of people within the next couple of years,” he said. “The potential for Dwolla is to be the backbone for the global financial exchange. Because it’s built to do that. It’s built better than any system that currently exists.” Dwolla said in February that it had raised $5 million from five investment firms, but it kept Kutcher’s involvement secret until now. Kutcher’s company, A-Grade Investments, has invested in about 40 tech startups and tech companies, including popular services such as Foursquare, Zaarly and Skype. The Cedar Rapids native, who provided feedback to Dwolla’s 20 employees at its downtown headquarters on Monday, said he sees the company having a huge impact. Dwolla’s founder, Ben Milne, said he talks with Kutcher via Skype every month or so. Milne says Kutcher’s insights have “shown up in the product already in a million different ways.” Their relationship began when Bo Fishback, CEO of the digital marketplace Zaarly, told Kutcher he should meet Milne. They got together at Thanksgiving last year at Kutcher’s brother’s house and his father’s garage, he said. The two drew up ideas on whiteboards. Kutcher said he was impressed with Milne’s vision. Kutcher has won a reputation as a savvy tech investor and social media star, and entrepreneurs across the country compete to get time with him. It’s not just because of a fat paycheck. He has launched his own app and a social media production company and he brings a huge audience to any new company he chooses to invest in and talk about. He has more than 10 million followers on his Twitter account and 12.2 million “likes” on Facebook. ___

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Joanne Lang: Breaking Free From Fear of Failure

April 13, 2012

As a start-up founder, I’ve come to expect new and interesting experiences on a regular basis. It’s part of what makes being an entrepreneur so exciting. Not long ago, James Logan, Program Director for the Chester County Chamber of Business & Industry , asked me to be the keynote speaker at their Annual Small Business Dinner. I’d never given a keynote before, and like many people, I find public speaking a bit unsettling. However, another wonderful aspect of being an entrepreneur is the amazing support I regularly receive from those around me. After a lovely lunch with Nancy Keefer, the Chamber President, and James, I was so buoyed by their enthusiasm and encouragement that I accepted their invitation to speak. I decided to use this opportunity to reflect on my entrepreneurial experiences over the past year. I wanted to identify lessons learned that would be useful in both the corporate and start-up worlds and I realized that the most important and valuable lesson I had to share was breaking free from fear of failure and embracing the opportunity to learn from failure. Because I think these lessons are worth sharing with others, I’ve included excerpts from my keynote below. Several years ago, I had a big idea that originated from my direct experiences as a mom of 4 children: While I used LinkedIn to organize my career and Facebook to organize my social life, there was no single, private and secure application to help me quickly and easily organize my family and home life. At the time, I was a member of SAP’s original cloud technology team, and I was convinced that Software as a Service was the answer. However, in order to turn this idea into a reality, I had to take the plunge from a safe, senior position at SAP to the unknown waters of a bootstrapped start-up. Because I was the primary income earner in my home, this was a difficult and risky move to make. So what stopped me from pursuing my idea at that time? Fear of failure. Sharing my idea with naysayers just furthered this fear. I’ve heard Arianna Huffington refer to the obnoxious roommate in her head, and this was exactly how I felt. Everyone who discounted my idea fueled the obnoxious roommate in my head that made me doubt myself and fear failure — especially in regard to competing with large, well-established companies like Google. And of course, there was the state of the economy to consider. Then my son had a life-threatening medical emergency and I could not give the paramedic the information he needed. I thought my son was going to die and I felt like a failure as a parent. My son is fine now, but that experience taught me new way of thinking — a positive way of thinking. Instead of worrying about failure, I began to think, “What if this will work?” I put the perceived risks into a perspective that made sense to me: “What is the worst thing that can happen — will it hurt my children?” Once I kicked out that obnoxious roommate in my head, I achieved things that I would never have imagined. My idea, AboutOne, now has partnerships with Microsoft and Suze Orman. We’ve closed a Series A for $1.8M led by an amazing investment group called Golden Seeds , and I’m part of the 6% of women in tech who have received venture capital funding. I was featured in a documentary film about start-up life called CTRL+ALT+COMPETE . In order to find the repeatable models necessary for my start-up to grow quickly, I had to learn that if you are not failing you are not trying enough new things; I had to learn to encourage my team to celebrate and openly share failures so we could learn from those lessons. When I look back at my previous corporate job, I realize that I never failed and I now wonder if that was really a good thing. I wonder if CEOs of large companies should allow their teams to fail, and to celebrate those failures as opportunities to learn and improve. Entrepreneurial opportunities in the US are fabulous. Because of this, AboutOne has been able to help millions of people quickly and easily organize their family and home lives, even when they feel that they are too busy or don’t know how to get started. I’ve also been able to show my children that if they work hard and have faith in themselves, they really can live their dreams. As a mother, I feel these lessons about breaking free from fear of failure and embracing the opportunity to learn from failure are as important for my boys as they are for my company and myself. Originally posted on Joanne’s blog, Notes from the CEO

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Facebook Explains Support For Controversial Cybersecurity Bill

April 13, 2012

Facebook on Friday sought to explain its support for cybersecurity legislation that has come under fire from civil liberties groups who say the bill does not protect consumers from having their private data shared with the government. The Cyber Intelligence Sharing and Protection Act, or CISPA, seeks to give businesses and the federal government legal protection to share cyber threats with each other in an effort to thwart hackers. Currently, they do not share that data because the information is classified and companies fear violating anti-trust law. Facebook supports the bill because the social networking site needs timely information about cyber threats from the U.S. government to keep the site secure and protect the data of its 845 million users, Joel Kaplan, vice president of public Policy for Facebook, said in a statement Friday. “One challenge we and other companies have had is in our ability to share information with each other about cyber attacks,” Kaplan wrote. “When one company detects an attack, sharing information about that attack promptly with other companies can help protect those other companies and their users from being victimized by the same attack. Similarly, if the government learns of an intrusion or other attack, the more it can share about that attack with private companies (and the faster it can share the information), the better the protection for users and our systems.” Privacy and civil liberties groups, led by the ACLU, have criticized the bill, saying its definition of the consumer data that can be shared with the government is overly broad. And once the data is shared, the government could use that information for other purposes — such as investigating or prosecuting crimes — without needing to obtain a warrant, they say. They also criticize the legislation for not requiring companies to make customer information anonymous before sharing it with the government. Michelle Richardson, a legislative counsel at the American Civil Liberties Union, told the Huffington Post the bill was “a privacy disaster” and “a new backdoor around the Fourth Amendment.” Kaplan said Facebook was taking those concerns seriously. He said CISPA would “impose no new obligations on us to share data with anyone –- and ensures that if we do share data about specific cyber threats, we are able to continue to safeguard our users’ private information, just as we do today.” Facebook’s statement caps a week in which the bill’s authors and supporters have defended the legislation from a growing Internet backlash. Last weekend, the hacker group Anonymous claimed credit for cyberattacks that briefly crashed the websites of the USTelecom and TechAmerica in retaliation for the trade groups’ support of Rogers’ cybersecurity legislation. On Tuesday, CISPA’s authors, Reps. Mike Rogers (R-Mich.) and Dutch Ruppersberger (D-Md.), held a conference call with reporters seeking to rebut criticisms that the bill does not protect consumer privacy and refute what they said were misconceptions that the bill is similar to SOPA, a controversial anti-piracy bill that was scuttled earlier this year after widespread Internet protests. On Wednesday, the House Intelligence Committee also created a Twitter account that outlines what CISPA would and would not do. Rogers and Ruppersberger told reporters they were working with privacy and civil liberties groups to address concerns about the bill and said they were open to amending the legislation, which the House is expected to vote on during the week of April 23.

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Sheila Bair: ‘Look Out 1 Percent, Here We Come’

April 13, 2012

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore. For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them. So why not let everyone participate?

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Renting Out Foreclosed Homes Ready To Become Big Business

April 13, 2012

The business of turning foreclosed homes into rentals is set to boom. The practice could be a $100 billion industry this year, according to a report from real estate tracker CoreLogic . That’s equivalent to $125 for every Facebook user , the cost of halving global poverty for two years and 250,000 times the salary of the President of the United States, according to The Guardian . Why is the market for foreclosed properties-turned-rentals poised for a boom? In the aftermath of the housing bust, demand for owning homes has fallen, pushing rents up and home prices down . In response, everyone from big banks to smaller firms are increasingly taking advantage of the disparity by turning foreclosure properties into rental homes. Bank of America is currently running its own pilot program to rent homes to families that have been foreclosed on, called Mortgage to Lease . In addition, private equity firms and hedge funds are now spending hundreds of millions of investment dollars and racing to buy up foreclosed properties. In turn, Bank of America and government mortgage giants Fannie Mae and Freddie Mac are responding to the demand, selling off their holdings of foreclosed homes by the hundreds. Just this week, Bank of America announced a bulk offering of 500 foreclosed homes in six different states, following up on an offering of 200 properties late last year. Meanwhile, Fannie Mae and Freddie Mac have sparked a bidding war when it put up 2,500 of the 200,000 foreclosed homes it currently owns for sale. That’s because Wall Street firms say they’re interested in buying up the properties and renting them out. The practice of turning foreclosed homes into rentals is becoming so popular that the Federal Reserve issued guidelines earlier this month for banks to use when they’re flipping foreclosures into rentals. But the practice also faces criticism: Namely, some are concerned that the very banks and agencies responsible for the housing crisis in the first place will now benefit from their own questionable practices.

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More Good News On Main Street?

April 13, 2012

There’s more good news on Main Street, it seems. More than half (56 percent) of business owners feel good about their prospects for the next six months, up 8 points from the fall, according to the American Express OPEN Small Business Monitor . In the semi-annual survey, 35 percent of employers also said they plan to hire full or part-time workers during that time. Even though 44 percent still plan to freeze hiring or cut back, that represents 17-point drop since the fall. While 31 percent of those surveyed are most concerned with maintaining their current business, 29 percent are still focused on growing new customers and revenue. “While small-business owners are more optimistic about the economic recovery, they are not turning a blind eye to the uncertainty that lingers,” Susan Sobbott, president of American Express OPEN, said in a statement. “They are waiting for more proof that the recovery is real and sustainable before investing heavily in growth initiatives.” Most businesses plan to take a closer look at their customer service, as 46 percent said that keeping current clients and increasing customer demand is a top priority. In order to create a good working environment, 57 percent of business owners said they train their staff themselves, while others enlist senior staff members or outside training for the task. In order to keep employees happy, 59 percent of businesses are offering benefits, up from 49 percent last fall. While growth isn’t at the top of the priority list, more than half of business owners have invested in low-cost marketing methods like social media to help grow their business and stay in touch with customers. Some 38 percent are using Facebook, with Google+ and LinkedIn rounding out the top three. Still, most businesses don’t feel a social media presence is completely necessary for business success, with only 27 percent seeing the real value in it. In the current election year, business owners cited their greatest concerns, including tax cuts, access to capital and the ability to hire more staff. However, 33 percent felt that tax relief was the most pressing issue that President Obama and Congress need to address.

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Mother, Disabled Daughter Forced Out Of Home Even After BofA Modification

April 13, 2012

A Los Angeles-area woman and her severely disabled daughter were forced to flee their home of 25 years in a matter of minutes, allegedly in large part because of Bank of America. Dirma Rodriguez fell behind on her payments after taking out a loan to renovate her house, the Los Angeles Times reports. The reason for the renovation? Rodriguez’s daughter needed to better accomodate her daughter, who has cerebral palsy. BofA modified her loan, but then sold the house to a flipper at a foreclosure auction, who moved to evict her. There’s still hope though. After the Occupy Fights Foreclosure movement intervened, BofA said it’s considering giving Rodriguez a loan modification that would give her her home back. Though tragic, Rodriguez’s story isn’t that unusual for a variety of reasons. First of all, despite a pledge from President Obama in 2009 that his Home Affordable Modification Program would help 3 to 4 million struggling homeowners, there have only been 768,773 active permanent modifications as of last month. That means millions of homeowners are still having trouble paying off their loans with little hope in sight to stave off foreclosure. Secondly, Rodriguez isn’t the first homeowner that’s needed the intervention of the Occupy movement to keep her house. Helen Bailey, an elderly Civil Rights Era-activist , will now be able to stay in her Nashville, Tennessee home, thanks in larger part to Occupy Nashville and other organizations who started an online petition and ultimately convinced JPMorgan Chase not to foreclose on Bailey’s home. Finally, BofA has a history of foreclosing on homeowners under unusual circumstances. Earlier this week Atlanta homeowner Pamela Flores accused the bank of foreclosing on her home even after bank officials advised her to skip payments. Last year, BofA threatened to foreclose on an elderly Florida couple after they paid their bill too early. In addition, one Texas man was faced with the prospect last year that BofA would foreclose on his home, which was already destroyed in Hurricane Ike. But in what is perhaps one of the saddest cases, a quadriplegic man living in Oregon has been battling with banks , including BofA, to keep his home since 2003. Check out some of the biggest foreclosure fails in recent months:

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Don’t Show Up To A Closed Post Office On Tax Day

April 13, 2012

If you plan on mailing in your taxes minutes before midnight on Tuesday, you might want to reconsider your plans. Most post offices are not staying open late on Tax Day this year, according to the U.S. Postal Service website and news reports . While post offices have historically extended their hours on Tax Day, USPS officials say that staying open late is obsolete and too expensive . The USPS has been grappling with a budget shortfall and plans to close up to 3,700 post offices, according to NPR. No post offices in the New York City area, the Los Angeles area or the Houston area will be staying open later than usual on Tax Day, according to the USPS website . New York’s main post office will be open until 10 p.m. as usual. This is the first year that no central Ohio post offices will be open late on tax day this year, according to the Columbus Dispatch . A USPS spokesman told the Dispatch that “it’s not really cost effective” to keep post offices open late. This is also the first year that no post office in the Bay Area will be open until midnight on Tax Day, according to the San Francisco Chronicle . The main branches in San Jose and Oakland will close at 10:30 p.m., which is later than usual. Post offices in St. Louis will not stay open late on tax day, according to Fox 2 Now. Many people still use the post office to file their tax returns at the last minute. Deadly car crashes spike 6 percent on tax day , according to a study by the University of Toronto, perhaps due to drivers rushing to file their tax forms on time. Late tax filers will be charged 0.5 percent of unpaid taxes per month, plus interest, which is currently 3 percent per year, according to Reuters. If you’re filing your taxes online, you’ll have until midnight on Tuesday, April 17. You can submit your taxed online here .

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Bianca Bosker: Why A Picture Is Worth $1 Billion: Instagram Has Moments, While Facebook Has Memories

April 13, 2012

Facebook just spent $1 billion to acquire Instagram , the 554 day-old company behind an app that, at least on the surface, offers everything you can already get on Facebook, only with filters that make drab photographs look pretty. You can post photos, “like” the pictures other users have shared, or leave comments on friends’ images — just like you can on Facebook. So why would the Godzilla of social networks bother itself with this gnat of an app? Understanding Facebook’s Instagram affair means starting with the simple fact that the app mastered an activity that makes up the heart and soul of Facebook: sharing photos among friends. There’s a key difference between the two social services, however, and one that has made Instagram’s images worth a thousand words to its users and $1 billion to Facebook . While the images on Facebook are an archive, the images on Instagram are alive. Facebook showcases memories — last week’s wedding, dinner, birthday, vacation — while Instagram frames moments — the tulips you just passed, the sun hitting a building during your morning run, or the bizarre quote you saw on a talk show. Designed from the ground up for our phones, not our laptops, Instagram has, more gracefully than Facebook, leveraged the simple fact that we have a camera in our pockets more often than a pen to create an outlet for images that are intimate and immediate. It taps into our desire to share and be seen, but lets us do so exclusively via images, which require less thought than text to both post and process. There’s no fiddling around with a mini keyboard, no danger of typos, and less risk of offending. The barebones design — five clicks and you’re done — makes it blissfully simple to abide by Instagram’s unspoken manifesto: share now, share often, and share something lovely. And with the knowledge that there’ll be a new delicacy every time we check back, Instagram keeps us coming back regularly for more. Instagram is also a storytelling app, one that speaks to our fast click nation’s growing addiction to visual status updates that are beautiful and of the moment. Facebook understood early on that if you control how people share photos with each other, you control how people share stories with each other — and if you control that, then you control social. By bringing Instagram into the fold, Facebook is better positioned to tap into the photo sharing we do “in the moment” and safeguard its status as the web’s photo album and teller of stories about people. The Financial Times ‘ Duncan Robinson recently marveled that Facebook had spent $1 billion to buy an app “used mainly by hipsters to take photos of their lunch – in sepia.” Robinson’s jab actually helps explain what’s so compelling about the app, and it’s no coincidence that same critique was leveled at Twitter in its early days, when it was dismissed as a forum for chatter about meals and bathroom breaks. Like Twitter, Instagram offers real-time access to the lives of the people who matter to us, and next to their constantly updated feeds, the pace of new posts in Facebook’s News Feed appears positively glacial. Having missed its shot at snapping up Twitter, Facebook may be again trying to nail the insta-update with Instagram . The power of pretty can’t be ignored, either. On the whole, Facebook photos lack the dreaminess of Instagram’s snapshots, as well as the focus on our surroundings, rather than ourselves. Scrolling through my Instagram account reveals images of a lavendar bouquet, a dog lounging at the beach, and a metal subway panel reading “hope.” Instagram belongs to an increasingly popular cohort of sites, including Pinterest, Tumblr and Svpply, that provide a platform for us to share pictures that inspire and amuse — and, quite often, aren’t of us. What I wrote of Pinterest holds true for Instagram: It’s “look at this,” not “look at me.” On Facebook, that’s rarely been the case. Say what you will about filters — they deliver some delicious eye candy. And while perusing photos on Facebook inevitably makes me feel that I was left out of whatever get-together I see, Instagram just feels good. It offers an entry point into a world where everything is lovely and, quite frequently, seen through rose-colored glasses. In an age of information overload, it feels good to get a brain vacation from Facebook and see our friends’ “wish you were here” images. A professor at the University of California Berkeley recently found that even automated text messages reminding his patients to “reflect on positive interactions” could make them feel more cared for, connected and supported . Instagram, which largely showcases “positive interactions,” also stands to soothe the soul. It seems hard to put a price on that.

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Bernanke: Fed Responded To Crisis With ‘Best Of Bad Options’

April 13, 2012

WASHINGTON — Chairman Ben Bernanke said Friday that the Federal Reserve was left with few good options when it stepped in to shore up the largest U.S. financial institutions during the 2008 crisis. Bernanke defended the central bank’s actions to support insurance giant American International Group and help with the sale of investment bank Bear Stearns, during a speech to a New York conference examining the crisis. While there were risks associated with that support, Bernanke said that the billions of dollars in loans the Fed provided were backed by adequate collateral and taxpayers did not lose money. And he noted that the Fed and other U.S. regulators are better positioned to deal with a crisis because Congress passed an overhaul of financial regulations in 2010. “The Federal Reserve’s responses to the failure or near failure of a number of systemically critical firms reflected the best of bad options, given the absence of a legal framework for winding down such firms in an orderly way in the midst of a crisis – a framework we now have,” Bernanke said. Some have criticized the Fed for helping rescuing those institutions rather than letting them fail. They said the Fed sent a message: banks could expect the government to bail them out after taking extraordinary risks that threatened the larger financial system. In his speech, Bernanke disputed this view. And he said the regulatory overhaul gave the Fed new powers to wind down those institutions without threatening the larger financial system. In his speech, Bernanke made no comments about the current state of the economy or the Fed’s policies taken to boost growth. But he did emphasize that the Fed’s regulatory duties are just as important as that mission. “Going forward, for the Federal Reserve as well as other central banks, the promotion of financial stability must be on equal footing with the management of monetary policy as the most critical policy priorities,” Bernanke said.

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Jared Bernstein: A Debate on Inequality, Opportunity, and Politics

April 13, 2012

Had a rousing debate on inequality last night with Scott Winship from Brookings, moderated by Reihan Salam, both of whom lean conservative, and both of whom brought generally interesting and provocative views to the discussion. The conservative take on the issue tends to fluctuate from mild denial (Winship, not Salam), to which I strongly object, to “is it really that big a deal?” with which I disagree but find interesting and challenging. On the denial front, what you mostly get is the “if-you-just-adjust-it-this-way-or-that-way-it-all-goes-away.” Scott raises immigration, incarceration, family structure, employer-provided health insurance, deflators, to name just a few. Some of these don’t affect inequality, like deflators (although Scott cited research that finds prices grow more slowly for poor people); others cut “the other way” — incarceration disproportionately takes lower earners out of the mix, so putting them back in would widen the gap between lower and middle-wage earners. Most of these are dealt with in the CBO data shown in the figure below, including health care, family size, taxes and transfer payments. So, yeah, there’s a lot more inequality and forgive me if I won’t swim in de-Nile on this point. More interestingly, both Scott and Reihan raised questions about how much all this inequality matters. The first argument is that there’s nothing zero-sum about the rise in inequality. Romney’s or Buffett’s or Gates’ or Zuckerberg’s gains are not anyone else’s losses. That’s hard to accept, given that it’s not just that most people’s real incomes kept going up like they used to, just not as fast as those at the top. Income grew more slowly for middle- and low-income households and poverty rates were stickier (i.e., less responsive to growth) in times of rising inequality. The divergence of median compensation from productivity suggests that in the age of inequality, the typical worker is simply not capturing as much of their contribution to growth as was formerly the case. In economese, some of what these and other rich guys and gals capture are ” rents ,” which are not zero-sum. We see this most commonly in the growth of financial markets as a share of the American economy, an important factor in not just the growth of inequality but in the bubble-bust cycle that’s done so much damage of late. In the 2000s, the median income of working-age families stagnated and poverty went up, even as the economy grew and the capital-gains powered income of the top 1% soared (see figure). Since the current recovery began, profits have soared, inequality is back on the rise , and the pay of average workers has stagnated of late. My own longer-term analysis of the factors responsible for the diminished elasticity of poverty with respect to growth finds inequality to be the most important factor (see figure here ). The latter 1990s provides a very useful counterexample. With true full employment upon the land — my favorite inequality antidote — inequality actually diminished between the middle and bottom (the top continued to pull away — cap gains, again), low wages grew with productivity for a New York minute, and poverty rates fell sharply. Inequality, at least in the bottom half of the wage scale, compressed and a lot more growth reached a lot more people. Similarly, Scott doesn’t buy that inequality negatively affects opportunity, despite all the arguments here . From that post, I keep coming back to this anecdote, because I think it’s so emblematic of the problem: …once you start looking for these linkages between inequality and opportunity, they show up everywhere. Here’s a great example from this AM’s WaPo, where public schools facing budget cuts–the disinvestment in public goods noted above–turn to parents to raise funds, and not for one-off trips to Mount Vernon, but for science curriculum, guidance counselors, smaller class sizes, music classes, etc. Of course, the affluent parents can raise hundreds of thousands; the poor parents, barely hundreds. It’s a classic example of inequality reinforcing itself through educational opportunity. One of the problems, admittedly, is that, as noted, this is anecdotal. And most of the other evidence that inequality thwarts opportunity is too, showing that, for example, the inequality of enrichment expenditures on kids or college completion rates grew as income inequality grew. It’s evidence but it’s circumstantial. But it’s convincing to me, and to most others who’ve looked at this closely, so I don’t for a second buy the argument that inequality is economically benign. More challenging was their point that income concentration is a lot more politically benign then I’ve been thinking. As I argue in this deck (slides 16-18), hopefully well known to OTEers, while money in politics has long been a problem, it’s gotten a lot worse as there is so much more income at the top and so much more leeway for that income to “buy” the politics it wants. Read Hacker and Pierson’s book , and you find it awfully hard to avoid the conclusion that we’re stuck in a nasty feedback loop, where the increased concentration of money in politics locks and blocks–it’s locks in policies that perpetuate its growth, and blocks policies that would ameliorate it. An egregious example of late is that one person -Sheldon Adelson, whose net worth according to Forbes in $25 billion (yes, that’s with a ‘b’)-by dint of the Citizen’s United decision, was able to keep a candidate in a national primary for months on end. That strikes me as profoundly undemocratic, and is a potent symbol of how corrupt our political system has become. But Reihan and Scott argued that perhaps this was less portentous than all that. It was basically just a rich guy wasting some money, indulging a fantasy or something (hey, whatever turns you on, I guess). As Scott put it, if Gingrich wins the election, I’ll have a point. And of course he won’t. That’s interesting, although it’s a bit weird to contemplate that allegedly smart investors would make such foolish investment. But are they really that foolish? They’re using their unimaginable riches to steer the ideology, and they’re doing it throughout the system, from local school boards to national elections. This is scary and damaging to America. I’m open to good arguments from smart people like Scott and Reihan. But I simply don’t see how these extreme economic, social, and political imbalances are so benign. I fear they’re cancerous, and if we allow ourselves to be distracted by adjustments to deflators or we over-discount correlations because we haven’t yet determined causality, that cancer will metastasize and America will be in real trouble. Added bonus/penalty : here’s Scott and me debating this stuff on the radio yesterday.

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Matthew Kavanagh: Transformative Development: How Jim Yong Kim Might Change the World Bank

April 13, 2012

Since President Obama nominated Dr. Jim Yong Kim as President of the World Bank commentators have weighed in on his past writings, his nationality, his part in upholding an unjust U.S. domination of the Bank, and his qualifications. But at the heart of this presidential decision is a fundamental question of focus and mission for the World Bank. Jim Kim represents a break from the past — as both his supporters and detractors agree — and would surely steer the Bank in new directions. Interestingly, so too might Dr. Jose Antonio Ocampo, the Columbian economist and former UN official, leaving for the first time two heterodox candidates to head one of the World’s most fraught institutions. What seems to be unsaid in discussions of Dr. Kim, however, is that the new direction is likely toward a focus the stated mission of the bank: the elimination of poverty. A Focus on Delivering Development Dr. Kim’s career gives us a fairly clear understanding of what he would prioritize as World Bank president. He would be, without question, more expert and experienced in development than any World Bank president since its inception. He led the World Health Organization’s 3×5 initiative that, as the journal The Lancet notes , “helped change forever the way we thought about AIDS.” Most recently he’s run the Ivy League Dartmouth College. But it is in founding Partners in Health and more recently in pioneering the field of “delivery science” in global health that we see where Kim would take the bank and the fight against global poverty. At Partners In Health, he and the other pioneering physicians worked to break the mold on medical care in impoverished settings — bringing world-class medicine to people when the general wisdom said it was neither feasible nor “cost effective.” Again and again, Dr. Kim and PIH proved the dominant voices in the development community wrong — showing, for example, that anti-retroviral treatment of AIDS in Africa and the Caribbean could succeed when leading economic and development experts said it was not practical or did not meet the economic conditions ” test for action .” Now some of these same economists are campaigning against Dr. Kim. But to imply, as some have, that Kim’s experience is somehow limited to charity shows a willful misunderstanding of what is unique about Partners in Health. The group’s outlook is medical, but where Dr. Kim has worked in Rwanda, Haiti, Peru, and the former Soviet Union they have managed to transform communities: building and staffing schools, training and (against the development grain) paying community health workers through effective employment strategies, and building community-based research for development. Later Kim brought experts in business, economics, and health together to create the Global Health Delivery Project and the Dartmouth Center for Health Care Delivery Science to bring rigorous study to the actual delivery of health care to impoverished communities. It is in this work that we see what Dr. Kim is likely to do quite differently than other candidates as World Bank President: focus on community-level development in education, health care, infrastructure, and employment and take transformative practices to scale to change nations. And in doing so, he and others have shown that when people demand drugs or doctors or classrooms, well-done health and development can transform the relationship between people and government. To some observers this may seem obvious — isn’t this the raison d’etre of the World Bank today? And yet it is at the heart of a question about the Bank’s future. Challenging Bank Orthodoxy The stated mission of the World Bank is poverty reduction and achieving the millennium development goals on health, education, food, and sustainability. But at the heart of the fight over the future of the Bank has been the word “growth,” which appears nowhere in that mission or in its public description of itself. Long time Bank insiders and orthodox publications like the Economist have taken to challenging Kim’s credentials. Kim, they say, isn’t sufficiently focused on pure economic growth. They cite his suggestion that increases in Gross Domestic Product and corporate profits have often failed to trickle down to poor communities. But in 2012 is this really a question? Who but the most committed neoliberal economists believes that growth alone will end poverty? And to be fair, Dr. Kim has responded to his critics agreeing that, “Economic growth is vital to generate resources for investment in health, education and public goods.” But he clearly has a vision beyond GDP. Here we see the real decision in the 2012 World Bank Presidency race: a vision of the World Bank focused on community-level development results vs. a Bank focused primarily on GDP growth. Only for those who believe in the latter are folks like Larry Summers or PepsiCo’s CEO Indra Nooyi ” better qualified ” for the job than Dr. Jim Kim. For the GDP-purists, Dr. Ngozi Okonjo-Iweala is a better pick as a U.S.-trained free market, growth-oriented economist who spent over twenty years working at the World Bank. And yet during this time the Bank too often failed in exactly the areas the bank is supposed to be focused on: poverty reduction, health, and the Millennium Development Goals. For example: The most recent ten-year evaluation showed that three quarters of World Bank health programs in Africa failed by their own unambitious measures and a recent report suggest the Bank is remains focused on short-term domestic-only financing for health that undermines efforts to halt infectious disease. In the Bank’s education efforts “fewer than half of projects have succeeded in achieving education quality, labor force, management, learning, or efficiency objectives.” At the International Finance Corporation, the arm of the World Bank dedicated to the dubious mission of fighting poverty through financing “companies and other private sector partners” only 13% of IFC policies even had any objectives related to people in poverty. The majority (60 percent) of their advisory programs actually delivered no identifiable benefits to society, let alone to the poor. Why? Because despite rhetoric to the contrary, the Bank’s focus has often drifted from achieving development for people living in poverty. The World Bank’s failures have not been lack of focus on economic growth, but a lack of focus on delivering results to communities it claims to serve. What the Bank needs is someone willing to have audacious goals, to use the bully-pulpit of the World Bank to push for pro-poor policies, and to work to transform a massive institution into an effective institution for impoverished communities. The next Bank president will need to transform the agency’s ideology and practice and move the thousands of staff and consultants along with them. We need an expert in delivering development and cutting through policies that have failed in the past. Dr. Jim Yong Kim’s track record shows he can pull off exactly that. Regardless of the outcome this presidential decision will portend change at the Bank: a serious candidacy by Ocampo and Okonjo-Iweala challenging U.S. dominance is only positive. And hopefully a merit-based selection process will emerge in which the World Bank’s board actually debates the who and the how of delivering for communities. For many of us, though, the key question is who will actually challenge the ways of doing things at the Bank.

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Classic Toy Makers Get Creative In The Digital Age

April 13, 2012

For the toy industry, times have been tough. Sales at some of the biggest companies like Mattel and Hasbro have fallen as toy makers compete for the short attention spans of today’s tech-enamored children. The challenge has been equally tough for smaller, independent toy makers responsible for some of the classics kids have played with for generations. A study by Common Sense Media found that more than one-third of children eight years old and younger use mobile devices such as smartphones and tablets, and you can bet they’re not checking their email. In fact, one of the hottest toys this past holiday season was the LeapFrog LeapPad Explorer, a tablet computer for kids. With more than 500,000 apps in Apple’s app store, and a good number of them catering to kids, the market for tech-friendly toys has exploded. For classic companies like Topps, a leading manufacturer of baseball cards, the adjustment can be tricky, but necessary. Topps, along with many others, have begun to release app versions of their best products, from baseball cards to updates on classic arcade games. “We live in an increasingly digital world, so it’s important for brands with physical products to engage people digitally,” said John Criswick, CEO of Magmic, a mobile content developer. “We were excited to take an iconic toy like Rubik’s Cube and make the brand relevant to a whole new generation.” Here’s a look at a few companies that have re-imagined the classics.

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Debt Collectors Increasingly Using Abusive Threats, Insults, Lies: Report

April 13, 2012

It’s a debt collector’s job to be nasty. And lately, they’ve performing that task quite well. Debt collectors have been adopting increasingly unpleasant tactics , according to a recent report from the market research firm Marketdata Enterprises. Collectors are said to be cursing, threatening and insulting the people they’re trying to get money from. And in many cases, they’re telling lies that violate the law. The ramping up of negative tactics comes amid a climate of widespread hardship, when people are especially unwilling or unable to cough up cash on demand. Millions of Americans are out of work . Millions more aren’t getting raises . And huge swaths of the country are getting by with no significant savings , instead living paycheck to paycheck. Debt collectors have been becoming increasingly aggressive at a time when their revenues have been at a historic high. It’s true that the industry saw its revenues fall in 2008 and 2009, when the economy cratered. But that was the first time that had happened in over a decade, according to Marketdata . And in 2009, at the lowest point of that two-year plunge, debt collector revenues were still at $11.12 billion, Marketdata notes. That’s over a billion dollars more than the industry took in at any time between 1993 and 2003. The next year, in 2010, revenues were on their way back up, to $11.74 billion. Still, even with their revenues on the rise, profits are down at many companies. The collection field has become more crowded lately, since consumer technology is now at a point where it’s easy to run a debt-collection agency from your living room. And with so many Americans strapped for cash, collectors are often trying to squeeze blood from a stone. That’s part of the reason debt collectors have lately been so uncivil, with some companies making horrifying threats, like the firm that allegedly told a debtor they were going to dig up her dead daughter and hang her from a tree if she didn’t pay her bills. Others go on an all-out harassment campaign , calling early in the morning and late at night, and reaching out to the relatives and former romantic partners of debtors to try and apply indirect pressure. In some cases, collection agencies are said to be calling people who don’t even owe any money . At least one company has been accused of lying to the people it calls, saying things like “you’ll be arrested if you don’t clear your debts” — a tactic that happens to be against the law.

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Here’s What You Paid More For Last Month

April 13, 2012

WASHINGTON — Gas prices rose more slowly in March, keeping overall U.S. inflation mild. The consumer price index rose 0.3 percent in March, the Labor Department said Friday. That’s slower than February’s 0.4 percent rise. Excluding food and gas, so-called “core” prices increased 0.2 percent in March. Inflation has eased since last fall and is expected to stay tame. In 12 months that ended in March, prices rose 2.7 percent. That’s below last year’s peak year-over-year rate of 3.9 percent. Core prices have risen 2.3 percent in the past 12 months, close to the Federal Reserve’s inflation target of 2 percent. Prices are “benign and likely to stay that way for some time yet,” said Ian Shepherdson, an economist at High Frequency Economics. Mild price increases leave consumers with more money to spend, which boosts economic growth. Lower inflation also gives the Fed more leeway to keep interest rates low. Gas prices are high but have started to level off. In March, they gained 1.7 percent, slower than the 6 percent increase in February. And in the past week, the national average price per gallon fell 4 cents, to $3.90 on Friday. Despite more hiring, unemployment is still high and few workers are getting pay raises. So many retailers can’t charge more without risking the loss of some business. Food prices ticked up last month but are moderating after sharp increases last year. The cost of meat, poultry and some fruits rose. Chicken prices jumped by the most in four years. The price of used cars and trucks also increased and rents rose, driving up core prices. Americans also paid more for medical care, clothing and airline fares. A small amount of inflation can be good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value. Still, few workers are receiving pay raises, which makes even a small amount of inflation challenging for most Americans. Average hourly wages, adjusted for inflation, fell for the third month in a row, the department said Friday. Fed chairman Ben Bernanke has acknowledged that rising gas prices have boosted inflation. But he has maintained that the increases are likely temporary. Most economists expect the Fed won’t announce any new policy initiatives at its April 24-25 meeting. Policymakers appear less inclined to take further steps to boost growth. Minutes from their March 13 meeting showed only a couple members expressed support for purchasing more bonds as a way to drive down long-term interest rates and promote more borrowing and spending. A report Thursday indicated that inflation pressures aren’t increasing much at the wholesale level. The producer price index, which measures price changes before they reach the consumer, was unchanged in March. Rising costs for food and pickup trucks were offset by a drop in wholesale gas prices. In the past 12 months, wholesale prices rose 2.8 percent, the smallest year-over-year rise since June 2010. Excluding food and gas, core wholesale prices rose 0.3 percent and 2.9 percent in the past year.

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Video Game Sales PLUMMET

April 13, 2012

LOS ANGELES — U.S. retail sales of video game hardware, software and accessories fell 25 percent in March from a year earlier to $1.1 billion. It marked the fourth month of decline as Sony Corp.’s new PS Vita handheld failed to spark a turnaround. Market tracker NPD Group said Thursday that sales of console and portable software – the video games themselves – fell 26 percent to $585 million. That’s roughly in line with depressed estimates. Cowen & Co. analyst Doug Creutz forecast a 22 percent drop, while Sterne Agee analyst Arvind Bhatia expected a decline of 25 to 30 percent. Electronic Arts Inc.’s “Mass Effect 3″ was the top seller in the month. The only PS Vita game to break into the top 10 was “MLB 12: The Show,” which ranked third. Despite going on sale for the first time in North America in February, Sony’s next generation portable game-player did not unseat the most popular console for the last 15 months, Microsoft Corp.’s Xbox 360. Microsoft said that Xbox 360 sales accounted for 371,000 units, or 42 percent of current-generation console sales. Industrywide sales of hardware fell 35 percent to $324 million. Accessories sales fell 8 percent to $223 million. Wedbush analyst Michael Pachter said in a research note last week that he was “cautiously optimistic” that overall game sales would return to growth this year. He expects sales to be helped by the PS Vita and the introduction of Nintendo Co. Ltd.’s WiiU console, which is expected to go on sale by the end of the year. Sterne Agee’s Bhatia expects software sales to be lackluster until May, when a few hotly anticipated titles hit the market, including “Max Payne 3,” “Diablo III,” and “Tom Clancy’s Ghost Recon Future Soldier.”

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The Future Retail Wasteland

April 13, 2012

Brian Dunn was practically ebullient. “The one critical thing we offer the world is choice,” the Best Buy (BBY) chief executive officer said in a March phone interview with Bloomberg Businessweek. He was trumpeting in particular his company’s role in guiding customers through the expanding smartphone universe. “We provide the latest and greatest choice of all technology gear, from Apple (AAPL) products to Google (GOOG) products, and that brings more opportunity to help people put technology to use. That is a great place for us to be.” A week later, reality intruded. The consumer electronics retailer posted a $1.7 billion quarterly loss and announced it would close 50 stores nationwide. On April 10, Dunn resigned.

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Chinese Mystery: Why Was He Killed?

April 13, 2012

BEIJING — At St. Mary’s Church in London’s Thames-side Battersea district, mourners who gathered for Neil Heywood’s memorial service a few days before Christmas were perplexed by the instructions laid down beforehand by one of Mr. Heywood’s classmates from Britain’s elite Harrow boarding school. He asked them not to approach Lulu Heywood, Mr. Heywood’s Chinese wife, and to remain in the pews until she and their two children had left the church.

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Eviction Leads To Deadly Standoff, 2 Killed

April 13, 2012

MODESTO, Calif. — Officials have released the name of sheriff’s deputy who was one of two people killed while trying to serve an eviction notice at a Central California apartment complex Thursday. Stanislaus County sheriff’s officials say Deputy Robert Paris was killed when gunfire broke out around 11 a.m. The 53-year-old Paris was a 16-year veteran of the department. Officials say he is survived by his parents, a brother and two adult children. The name of the second person killed in the shooting has not yet been released. Meanwhile, the standoff continues with SWAT teams still surrounding the complex. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below. A sheriff’s deputy and a civilian were killed Thursday when gunfire broke out as authorities tried to serve an eviction notice at a Central California apartment complex, officials said. The shooting led to a standoff with a suspect who was believed to be holed up inside an apartment at the Whispering Woods development in Modesto. More than 100 law enforcement officers from the Central Valley arrived at the scene. FBI and SWAT teams surrounded the building and authorities evacuated nearby residents while others remained in their homes. Authorities later fired flash grenades and tear gas in the area where the shooting occurred. The incident began about 11 a.m., when two Stanislaus County deputies went to the north Modesto home to deliver the notice, said Sheriff Adam Christianson, who called the incident “another dark day” for law enforcement in California. “One of my valued members of my team is dead,” a distraught Christianson told reporters. “I am overwhelmingly frustrated that we don’t have the sufficient resources to protect the community.” Neighbors Levi Middleton and Jennifer Diaz told the Modesto Bee () they heard multiple gunshots in rapid succession, as if fired from a semi-automatic weapon. http://bit.ly/HxXK7j Christianson said he believed that his deputies did not return fire. The names of those killed were not immediately released. Sheriff’s officials did not release any details about the civilian fatality. Authorities told the Bee the suspect is in his mid-40s and may have had military training. Sgt. Anthony Bejaran would not confirm if authorities had been in contact with the suspect. “There’s not much more information I can give out,” said Bejaran, a sheriff’s spokesman. The Whispering Woods development opened in 2002 on the site of the former Prescott Estates, which was known for decades as one of the most crime-plagued and substandard housing areas in Modesto, according to the Bee. The city shut down Prescott Estates, and the property was cleaned and extensively remodeled. Officer Chris Adams, a Modesto police spokesman, said the area isn’t as crime-ridden as it was a few years ago. He said authorities would be at the scene for the long haul, if necessary. “At this point, it’s about containment, keeping the suspect within our perimeter and hoping for a safe and peaceful resolution,” Adams said.

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Oil Sheen Appears As Gulf Spill Anniversary Nears

April 12, 2012

* Shell says sheen is breaking up * Sheen near Shell’s Mars and Ursa oil platforms * Shell says sees no leaks from its operations * Regulator says sheen near a natural seabed seep * Shell shares pare earlier losses, close up By Kristen Hays HOUSTON, April 12 (Reuters) – Royal Dutch Shell said an oil sheen near two of its offshore Gulf of Mexico oil and natural gas platforms was dissipating Thursday, and it was “very confident” its installations were not to blame. The Hague-based company said the “orphan spill,” estimated to be about six barrels of oil, was breaking up. Shell said it would continue to monitor the sea floor with a pair of underwater robots. “Shell’s subsea surveillance today and tomorrow will continue to determine if there is a connection between natural seeps and this orphan sheen,” the company said. News of the sheen, first reported to U.S. regulators on Wednesday, came nearly two years after BP Plc’s deep sea Macondo well blew out on April 20, 2010, killing 11 workers and spewing more than 4 million barrels of oil into the Gulf of Mexico. The earlier drop in the company’s London-listed share price showed that investors remain anxious over potential oil accidents two years after the BP offshore spill, the worst ever in the United States. Shares of Shell traded on the New York Stock Exchange closed up 11 cents on Thursday at $67.86. The stock closed down less than 1 percent in London after falling as much as 5 percent earlier in the day, temporarily erasing roughly $12 billion in value from Europe’s largest oil company by market capitalization. The sheen, spotted about 50 miles away from the Macondo well, was estimated to be six barrels of oil stretched one mile by 10 miles before it began dissipating. “The sheen appears to be dissipating,” the Bureau of Safety and Environmental Enforcement (BSEE) said in a statement, after inspecting the area with helicopter overflights. “It does not appear to be expanding.” Shell’s robot surveillance, in addition to overflights at the scene by the U.S. Coast Guard, showed no signs of wellhead leaks, the company said. A source familiar with the incident told Reuters that Shell was nearly 100 percent sure that the sheen stemmed from a natural seep rather than an oil well. The BSEE, which regulates offshore oil and gas activity, said on Thursday that its personnel spotted the sheen on Wednesday near Shell’s Mars and Ursa platforms and notified the company. The BSEE said the ROVs were assessing permanently plugged wells in the surrounding area “and a known natural sea floor seep located in proximity of the sheen.” BSEE said it also directed pipeline companies with operations in the area to survey their lines. Shell said a Marine Spill Response Corp vessel with skimming and boom capability was deployed to the site, but was released by the Coast Guard Thursday afternoon to return to shore, a source familiar with the incident told Reuters. Shell spokeswoman Kelly Op de Weegh also told Reuters that the company took samples of the sheen to undergo testing at a laboratory to ascertain whether it came from a natural seep. The Mars platform can produce up to 160,000 barrels of oil and 121 million cubic feet of natural gas per day. Ursa can produce up to 150,000 barrels of oil and 400 million cubic feet of gas per day. Both are about 130 miles (209 km) southeast of New Orleans, and are about seven miles (11 km) apart. The Marine Spill Response Corp is a nonprofit organization created in 1990 by the oil and shipping industries to enable members to fulfill requirements of the U.S. Oil Pollution Act of 1990.

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Top 10 Energy Star Cities

April 12, 2012

This week, the EPA released its annual list of the 25 American cities with the highest number of Energy Star certified buildings. According to the EPA, 16,000 Energy Star certified buildings in the U.S. helped save “nearly $2.3 billion in annual utility bills and prevent greenhouse gas emissions equal to emissions from the annual energy use of more than 1.5 million homes” by the end of 2011. EPA Administrator Lisa Jackson said in a press release, “More and more organizations are discovering the value of Energy Star as they work to cut costs and reduce their energy use. This year marked the twentieth anniversary of the Energy Star program, and today Energy Star certified buildings in cities across America are helping to strengthen local economies and protect the planet for decades to come.” Jackson blogged for HuffPost in March , “After 20 years, our vast network of partners gives Americans a wide-array of innovative choices for saving energy and cutting costs every day.” Last month, the EPA helped established new regulations on power plant emissions . The rules, which will place limits on heat-trapping pollution from new power plants, are the first of their kind. In January, the U.S. Green Buildings council released its 2011 list of top states that have implemented their LEED certification program . LEED, which stands for “Leadership in Energy and Environmental Design,” is a system that “provides building owners and operators with a framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions,” according to the USGBC . Below, find the EPA’s top 10 cities with the most Energy Star certified buildings and see if your city made the list. For the full list of cities, click here . List and statistics courtesy of EPA.

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Daniel Burrus: Stop the Presses: The Future of Newspapers

April 12, 2012

According to the  Newspaper Association of America ,  2011 was not a good year for newspaper advertising , with total revenue down 7.3% — almost $2 billion, and a percentage point more than the previous year’s loss. To be blunt, that’s not surprising. In fact, what is surprising is that it was only down that much. Let’s face it, newspaper publishers still haven’t quite understood how to maximize and leverage the digital world, and thus increase their advertising revenue. The newspaper business is, unfortunately, focused on the second word, “paper,” instead of the first word, “news.” As a result, they are still making their online news static rather than dynamic, meaning that it is still one-dimensional. The online versions of most newspapers are nothing more than a piece of paper online. A better approach is for newspaper publishers to give us an online version that’s a two-dimensional experience. They could give us interactive maps, videos, audio interviews, and the ability to actually go to the news site and take a look with a live cam. For example, recently where I live in Southern California there were  several big boats that caught fire in a marina.  All I saw in the newspaper’s online reporting was a written article about the fire and a picture. What could they have done? They could have given me video footage. They could have set up a live feed and let me take a look at the fire in real time. They could have given me an audio feed to the reporter covering the fire so I could get off-the-cuff comments that were not a part of the written story. They could have given me some additional interviews. These are just a few suggestions for how newspapers can make their information truly dynamic so we can start thinking digital and stop thinking paper. Also, why isn’t the newspaper getting more social? Local newspapers are about local news. Yet I don’t see that social component appearing in most outlets. In the newspaper world, that could be very innovative, since so few of them are doing it currently. Am I saying that newspapers should stop doing a print version and focus solely on online? Of course not. You need both. The paper version is a way to hook people. People see it, pick it up, look it over, and get hooked. The online version is usually the option for long-term fans. So we still need both, but they don’t need to be identical copies of each other. So let’s finally get rid of that paper-based newspaper idea. It’s time to make the online newspaper more dynamic, more interactive, and more social. It’s time for newspaper publishers to shift into the communication age so they gain more readers and advertising dollars. Article first published as  Stop the Presses: The Future of Newspapers  on Technorati.

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White House Defends No Order Protecting Gay Workers

April 12, 2012

WASHINGTON — White House Press Secretary Jay Carney faced a barrage of questions on Thursday about why President Barack Obama won’t use his executive authority to ban some workplace discrimination against gay, lesbian, bisexual and transgender people — the only action likely to take on such discrimination anytime soon. LGBT activists met privately with senior administration officials on Wednesday to discuss the possibility of Obama signing an executive order that would prohibit workplace discrimination by any federal contractor on the basis of sexual orientation. The meeting ended with the officials saying that an order isn’t in the works and that the administration will continue pressing Congress to pass a law. During Thursday’s daily briefing, Carney maintained that Obama is committed to ensuring equal rights for the LGBT community but that, in this case, he prefers a legislative solution. “The president is committed to lasting and comprehensive nondiscrimination protections, and we plan to pursue a number of strategies to attain that goal,” Carney said. “Our hope is these efforts will result in the passage of ENDA, the Employment Non-Discrimination Act, which is a legislative solution to LGBT employment discrimination.” Asked why Obama wouldn’t just issue an executive order since he already supports ENDA, and since an order targeting federal contractors would affect a smaller pool of people than the congressional bill, Carney said the administration is taking a similar approach to the strategy it pursued with the Don’t Ask, Don’t Tell policy. In that case, the administration worked on building support among various coalitions to put pressure on Congress to finally repeal the law. “I think that the DADT repeal is instructive here in terms of the approach that we’re taking at this time,” Carney said. “While it is not our usual practice to discuss executive orders that may or may not be under consideration, we do not expect that an EO on LGBT nondiscrimination for federal contractors will be issued at this time.” The White House spokesman denied that Obama was steering clear of the issue for political reasons. “Absolutely not,” Carney said in response to a question about politics driving the president’s decision. He reiterated that the administration is “actively working with stakeholders” to build support for legislation that would be “far more comprehensive” than an executive order. The reality is that Congress is unlikely to pass ENDA in the next few years. Republicans control the House and Democrats barely control the Senate, which means that, particularly in an election year, legislation relating to gay rights isn’t moving. ENDA has been introduced in almost every Congress since 1994. It passed the House once in 2007, at a time when Democrats controlled both chambers, but died in the Senate shortly thereafter. Carney punted on other questions about when, if not now, Obama might issue an executive order on the matter and about there being differences between the administration’s approach to repealing DADT and its strategy for tackling workplace discrimination. “We are not approaching this at this time through executive authority,” Carney said repeatedly. “We are, however … aggressively pursuing passage of ENDA. And that requires working with stakeholders and building a body of persuasive evidence that this is the right thing to do. And that is what we’re committed to doing.” Some Democratic lawmakers lamented that Obama isn’t stepping up when he has the ability to make a change. “I’m disappointed that, at this time, the administration has decided not to issue an executive order prohibiting contractors from receiving federal funds unless they have sexual orientation and gender identity anti-discrimination policies in place,” Rep. Frank Pallone (D-N.J.) said in a statement. “Congress needs to work to pass the Employment Non-Discrimination Act; however, signing an executive order is a step that could be taken now to make sure that federal dollars do not go to contractors without strong policies prohibiting discrimination in the workplace. … I encourage the Administration to reconsider its position on signing an executive order to protect LGBT employees,” Pallone said.

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Is Spam A Threat To Your Business?

April 12, 2012

Is spam a fact of your daily life? You’re not alone. A survey of small and midsize companies by GFI Software found the spam problem isn’t going away. In fact, 52 percent of respondents report getting more spam in the past year , while 32 percent say it’s remained the same. And they’re not happy about it: 72 percent complain they get too much spam and 70 percent claim their current anti-spam solutions are marginally effective (60 percent) or completely ineffective (10 percent). Why it matters to your business: Spam isn’t just innocent junk email: Nearly half (44 percent) of respondents admit their companies’ security had been breached as a result of spam. Malicious links or files, as well as phishing attacks, are among the top security concerns of companies when it comes to spam. With 90 percent of companies already educating employees as to the risks of opening spam email, education clearly isn’t the only component to spam protection. GFI says the best way to stop spam is with a multilayered defense that includes both on-premise and cloud-based anti-spam software.

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Agency Backs Down In Fight To Limit Credit Card Fees

April 12, 2012

The government agency tasked with protecting consumers is backing down in its fight to limit credit card fees. The Consumer Financial Protection Bureau, the federal watchdog for all things that affect consumers’ wallets, has proposed doing away with an amendment to existing legislation that would limit the amount of fees a credit card company can charge a consumer when applying to open an account. “It’s a big deal for those consumers who end up getting one of these credit cards that charge extremely high fees up front,” said Chi Chi Wu, a staff attorney at the nonprofit National Consumer Law Center, in an interview with The Huffington Post. “Basically, it reopens a loophole that the Federal Reserve had closed.” Currently, federal law states that in the first year of an account, credit card companies cannot charge fees that exceed 25 percent of a consumer’s available credit limit. In other words, if a person opens a credit card with a $2,000 limit, the company cannot charge more than $500 in fees that first year. But the law doesn’t cover charges that a company imposes prior to an account’s opening, such as application fees. That’s where the loophole lies. In April 2011 the Federal Reserve Board adopted an amendment to make up-front fees subject to the same 25 percent cap as other first-year fees. The board acted after First Premier Bank, a credit company riddled with consumer complaints , issued a card with a $300 credit limit — and a $95 processing fee and a $75 annual fee. Last summer First Premier took the Federal Reserve and the Consumer Financial Protection Bureau to court, arguing that the government didn’t have the authority to cap the fees associated with opening an account. The judge ruled in favor of First Premier, effectively freezing the amendment. In response to the judge’s decision, on Thursday the consumer agency threw in the towel and proposed striking the amendment completely so that up-front fees would not be subject to any cap. The agency is advocating the change to “resolve the uncertainty” in light of the judge’s ruling, according to its filing with the Federal Register. The Consumer Financial Protection Bureau, which was created as part of the 2010 Dodd-Frank financial reform legislation, inherited responsibility for regulating credit card fees upon opening its doors last summer. Prior to that, the Federal Reserve Board oversaw the issue. The agency’s decision not to fight the judge’s ruling has frustrated Wu, who said the agency should have fought harder to maintain the cap. “The Federal Reserve always had a lot of authority” on credit card fees, Wu said. “The CFPB inherited this authority. It should have appealed the ruling.” The agency’s change of heart is a win for credit card companies, said Mark Williams, a former Federal Reserve examiner, in an interview with the Associated Press . “Just a year ago, the view was that this agency was going to be devastating for business,” he said, adding that Thursday’s action shows that the agency “could be very effective for consumers and also bridge the needs of business to make profits.” First Premier Bank declined to comment. The agency released a statement but declined to provide further comment. It asked that consumers share their opinion on the matter by filing a comment here .

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The IRS Has A Ton Of Money Waiting For You

April 12, 2012

Think you don’t need to file your tax returns because you don’t make enough money? Think again. Even though you may not owe the IRS anything this year, the IRS may owe you. And you’re not going to see one penny of that refund unless you file your personal income tax forms with the IRS. There a few reasons why you may be owed a refund. Perhaps your employer witheld too much in taxes from your paycheck or you qualified for credits or deductions, like the Earned Income Tax Credit. There’s good news: It’s not too late to claim the funds you think you might be entitled to! You actually have three years from the time your taxes are due to claim your refunds. That means that you can still claim your refunds going back to 2008–as long as you file a 2008 income tax form by Tuesday, April 17. Think you’re owed money? Check out TurboTax’s interactive graphic, which breaks down unclaimed tax refunds by state. Free Tax Filing, Efile Taxes, Income Tax Returns – TurboTax.com

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George Soros: European Crisis Has Entered ‘Potentially More Lethal Phase’

April 12, 2012

Belt-tightening in the Eurozone is putting the region on life support, at least according to one famous billionaire. The European debt crisis “has entered what may be a less volatile but potentially more lethal phase,” Billionaire investor George Soros wrote in an op-ed piece published on Project Syndicate Wednesday. Soros, who has been warning of the dangers of austerity in Europe for months, wrote that current European economic policies will likely lead to the breakup of the European Union . Soros recommended that the Eurozone become more deeply fiscally integrated and share its debt burden. This isn’t the first time that Soros has criticized the eurozone’s response to its government debt and financial crisis. He said in January at the World Economic Forum, located in Davos, Switzerland, that European leaders “had little understanding of how financial markets really work and did everything wrong.” He also said that Germany’s “tough fiscal discipline” would create tensions “that could destroy the European Union.” “The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system,” Soros told Newsweek in January . And in December, Soros said that developed countries are falling into a “deflationary debt trap” and the global financial system is in a “self-reinforcing process of disintegration.” Soros’ latest comments come as the crisis in Europe begins to again flare up. Although Italy and Spain have been paying more reasonable interest rates on government bonds over the past few months, those same interest rates have spiked over the past few days as investors panicked over the countries’ long-term economic and budget outlook, with the eurozone plunging into recession because of government budget cuts. Italy is currently paying a 5.42 percent interest rate on 10-year government bonds, and Spain is paying a 5.83 percent interest rate, according to Thomson Reuters. Spain and Italy need interest rates on their long-term government debt to fall to about 4 percent in order for reach sustainable debt level, according to a report released last year.

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The Business Of Bounce

April 12, 2012

Perhaps more than most entrepreneurs, the Platt family knows a thing or two about bouncing back. In 2004, Rick Platt used $2 million to recruit athletes and build a 17,000-square-foot arena in Las Vegas to make his sport Sky Zone a reality. The elaborate design involved trampolines, spinning hoops and acrobatics. It fizzled out. But the venue became popular among local skateboarders who wanted to bounce for themselves, and that sparked a new idea — open trampoline parks for the general public. After some renewed interest, Rick’s son Jeff eventually opened a second site in St. Louis in 2006, and since then business has been booming Bloomberg BusinessWeek reports . The initial flop has roared back into profits and a growing number of locations. From four corporate and 15 franchise locations in 2011, Sky Zone posted $15.7 million in revenue this year and have plans to add another 34 franchises. Their staff consists of 50 full-time and 500 part-time employees. It seems like this trampoline venture is well past getting its bounce back. On its website , Sky Zone emphasizes franchising a location to “leap into the future with an amazingly appealing and dynamic concept.” Results across America have shown that Sky Zone might be catching on with all ages. In Grimes, Iowa, a Sky Zone location is constantly filled with dozens of people looking to play arial variations of dodgeball and basketball according to the Des Moines Register . Three high schools have even scheduled their post-prom parties at the facility. In Indianapolis, “Skyrobics” classes have adults breaking a sweat, to the tune of up to 1,000 calories per hour according to USA Today . In South Bay, California, birthday parties and the expansive spin on their old trampoline connotations and nostalgia drive customer interest in Sky Zone. The Contra Costa Times notes that the supervision and safety measures taken by Sky Zone keep parents at ease that their child won’t end up as one of the 100,000 people that are sent to the emergency room yearly with injuries sustained from trampoline use. Sky Zone hopes that through diversifying the activities available and interacting with fans and customers plastering YouTube and social media with evidence of the fun they will be able to keep their revival running. With high costs for construction — to the tune of $1.1 to $1.5 million — and a sizable demand for real estate space, it may hard to court some investors or franchisees however. For Jeff Platt, it comes down to ensuring a customer experience that people want to relive. “As you grow a business and get different operators and franchisees, everyone has a different management and training style,” Platt told Bloomberg BusinessWeek . “It’s critically important to maintain consistency as you grow a brand, so we want to get our training the exact same way at every location. Your competitors can adopt what you have created and do similar marketing, but they can’t clone your people.”

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