infrastructure

Atlas Iron Limited (ASX:AGO) Enters Into Infrastructure Memorandum of Understanding with BHP Billiton (ASX:BHP)

November 17, 2010

Atlas Iron Limited (ASX:AGO) Enters Into Infrastructure Memorandum of Understanding with BHP Billiton (ASX:BHP)

Read the full article →

Astreya Partners Continues Key Investments in Outsourced IT Services, With Executive Appointments and Increased Infrastructure Services Initiatives

November 10, 2010

IT Services Leader Rebecca McCartney Promoted to VP Infrastructure Services as Company Increases Strategic Focus and Business Expansion

Read the full article →

Raymond J. Learsy: Food — The American Midwest at the Cusp of an Economic Renaissance

November 7, 2010

“The Midwest has lost a manufacturing empire but has not yet found another role.” Words that were written by the New York Times ‘ incisive Op-ed page contributor David Brooks in Friday’s Op-ed “Midwest at Dusk.” He cites the vast American expanse from central New York and Pennsylvania out through Ohio, Indiana spreading to include Wisconsin and Arkansas. Here, Brooks proffers, is the place where the trajectory of American politics is being determined. “If America can figure out how to build a decent future for the working-class people in this region, then the U.S. will remain a predominant power. If it can’t, it won’t.” And yet, here, as hardly elsewhere in this nation, something is stirring that has the potential of becoming a game changer, a uniquely American game changer. This summer past an event took place that has begun to alter the equilibrium of economic trends and influence. In July the Russian government, responding to a disastrous drought, embargoed the export of wheat — unilaterally breaking sales commitments to national buyers throughout the world. The price of wheat and other grains such as corn, soybeans etc. exploded as reserve stocks of grain were being drawn down worldwide. Yet, the underlying thrust of what took place has been barely touched upon. The world, with its steeply growing population and rapidly changing dietary habits (especially in the emerging economies) is on the precipice of food shortage. If not immediately, it will be very soon. It is generally understood that with expanding populations world calorie production will have to double by 2050, but no one quite knows how to achieve this given that the major impact of the “green revolution” (intense application of fertilizers, herbicides and improved seeds) has already reached dangerously diminishing returns. In this coming crisis, America — and the American Midwest — will play a crucial and salutary role. It will become the most crucial provider of food grains to the world, building on an already leading, but barely heralded position of leadership. The United States is now the largest grower and exporter of corn, vital as feed to the food chain, the largest exporter of wheat, and after Brazil the second largest exporter of soybeans. And as supplies of foodstuffs get tighter this position of preeminence will become more and more significant. Now is the moment for a government with vision to lay the groundwork and prepare the breadbasket of America to renew itself and prepare for the destiny that will be thrust upon it. Instead of more overbuilt highways, now is the moment to improve the infrastructure servicing this sector such as refurbishing and extending our inland waterways system over which most of our grain is transported, improving port facilities and refurbishing and adding to our grain storage capabilities both inland and at ports of export loading. Further, that we now initiate a policy of extending to farmers and the agribusiness the kind of government financial support we stood ready to give to Wall Street, the finance industry, and the automobile industry, so that the ground work can be prepared to meet the demand that is verging on the horizon. The Midwest is blessed with vast expanse of fertile land and great human talent as nowhere else in the world, coupled with an extensive inland waterway system permitting crop production to reach world markets. With proper policies in place going well beyond the current US Department of Agriculture assistance programs, now is the moment to extend to our agricultural sector the means to ready itself for the responsibilities and opportunities to come. The Midwest has the potential of becoming in importance, the Saudi Arabia of food — a commodity that will clearly surpass oil in economic, social and political significance. If proper policies are initiated now our Midwest will become the most important real estate in the world. And it will be an economic sector that cannot be outsourced!

Read the full article →

Parsons Appoints Loose as Senior Vice President and Installations & Environment Division Manager

October 25, 2010

PASADENA, CA–(Marketwire – October 25, 2010) –  Parsons announces the appointment of Vice Admiral (VADM) Michael K. “Mike” Loose, United States Navy (ret.), as Senior Vice President and Manager of the Installations & Environment (I&E) Division for its Infrastructure & Technology group. In this role, Mr. Loose will be responsible for overseeing Parsons’ work with federal government clients, including the Department of Defense and all military services, the General Services Administration, and other agencies at cabinet level and below. I&E’s markets and services encompass the full life cycle of natural and built environments.

Read the full article →

Droga5: POPTECH 2010: How Not To Save The World

October 22, 2010

PopTech kicked off Thursday with with a recount of the disastrous campaign in the 1970s to bring clean water to Bangladesh. It’s an ominous story about how millions of tube wells were dug into shallow layers of ground that had naturally occurring arsenic, which contaminated the water. What resulted was what the World Health Organization later dubbed “the largest mass poisoning of a population in history.” Ned Breslin, from Water For People , echoed this theme through his speech in which he spoke about the kind of quick fix solutions that are thrown at the water crisis in developing nations. Quick fixes like hand pumps for wells that fail and eventually lead to broken water access points. In providing this infrastructure, what we are doing is scaling failure. There are many lessons that you can extrapolate from these stories, but what hit me the hardest was that sometimes our best intentions to do good can actually cause catastrophic harm exacerbating the original problem. It’s sobering to put these insights into context when you consider the growing mandate among global brands to do more good in this world. It’s become fashionable in business to embrace a cause and have a go at fixing it. In thinking about the role these companies want to play in this capacity, two questions immediately come to mind: Are businesses suited for the task? And what are the boundaries for the problems that companies should be allowed to tackle? I think the answer lies between what Kathryn Schulz , author of the bestselling book, Being Wrong: Adventures in the Margin of Error, and what Kevin Dunbar , a psychologist who studies the impact of failure on our brains both had to say. Dunbar talked about risk aversion and how a lack of diversity of thought held research scientists back from explaining unexpected findings. From Schulz we learned about error blindness and that believing that we are right can be dangerous in how we approach problem solving. Arriving at solutions that have real impact, but more importantly, don’t spawn new problems requires a profound commitment to getting it right. For corporations, this means a number of things. First, it requires that they step outside of their systems, networks and even category to embrace the approaches of some the remarkable leaders that are pioneering solutions today. It means that in order to make significant impact, brands have to force themselves to prioritize solutions that have longevity. Lastly, any endeavor that a corporation endeavors has to seek out wide perspective embracing even skeptics to challenge their thinking. In doing so, I believe that any brand that wants to do good in this world will have laid the foundation for arriving at a solution that wont go awry. Harry Roman, Strategist at Droga5

Read the full article →

Dave Johnson: Erie, PA Town Hall: "No Country Ever Went Broke Investing in Its Own People"

October 19, 2010

Last night’s “Keep It Made In America” Town Hall meeting was at the Bayfront Convention Center in Erie, Pennsylvania. Kyle Foust, Chairman of the Erie County Council welcomed the attendees and led off the Town Hall meeting, quoting Hubert Humphrey: “No country ever went broke by investing in its own people.” I recently spoke with a Tea Party member who did not know that it is government that builds the roads, airports, sewer systems, etc. that make up the infrastructure that is the foundation of our country’s ability to have companies at all. He actually thought that private companies do this, and that “government spending” just “takes money out of the economy.” Maybe this is why so many candidates in this election say that “government spending” is bad but will not say, no matter how hard they are pressed , what spending they plan to cut in their quest for “smaller government.” The Town Hall Following a Unitarian invocation by Rev Steve Aschmann, Scott Paul of the Alliance for American Manufacturing (AAM) — the organization that is putting on these “Keep It Made In America” Town Hall events — explained what AAM is about, strengthening manufacturing in this country. Scott gave the audience several facts about manufacturing: 74% of Tea Party supporters support more manufacturing, as do 82% of union members. 563,500 in Pennsylvania work in the manufacturing sector This is down from 864,000 in 2000 And represents a 35% cut in manufacturing jobs. Candidates Speak Two local House candidates spoke at this meeting. Mike Kelley, Republican candidate for Congress spoke first. “We can’t control unfair competition. Just make it fair, that’s all, make it fair. Enforce the rules. We play by the rules, other people don’t. Chinese currency.” Q: “Will you support buy American policies?” A: Who would not? Especially in taxpayer-funded projects. Q: “Hold China accountable?” A: The world has been waiting for America to take the lead. China has to be held accountable when they break the rules. Q: “Policies?” Competition, we never back away from competition. We need to get a national strategy in place. Taxes — need a VAT. Others all do it. (Note, Kelley’s answer is good for manufacturing. Short explanation: Other countries use a VAT to boost their manufacturing sector. Their manufacturers get a VAT rebate, but goods imported from the US do not, so in effect a VAT is a either a subsidy of their companies or a tariff on imports from us.) Next up was his opponent in the race, Congresswoman Kathy Dahlkemper: We need to get back to a manufacturing economy, to provide that good family-sustaining wage. How to keep it made in America, three points: 1) Close the loopholes, Republicans’s did not vote with us on this. My opponent has pledged, signed a pledge no to remove the tax advantages given to companies for moving factories out of the country and outsourcing American jobs. (Note see my post on this today.) 2) Stop China’s cheating. Everyone knows China cheats. The currency bill, voted for it, the Chamber of Commerce — that’s the national Chamber which is a very different thing from the local Chambers — is against it. We also have to stop China’s illegal trade practices and dumping (selling below cost to capture markets). 3) Invest in our domestic manufacturing base. The COMPETES act has passed the House, but Senate… Education. Raw materials — rare earth elements, China is saying they can get these IF they bring manufacturing to their country. We can produce them here, but don’t. Because China subsidizes, it is not profitable to start production here. The Panel This Town Hall’s panel of local experts: • Kenneth Boothe Jr., General Manager, Donjon Ship Builders • Reverend Jeffery Priscaro, St. Ann’s church • Ron Oliver, Community Labor Leader • Tim Ryan President, Apex Offshore Wind. • David J. Rosenberg, Head of Marketing, North America Gamesa Energy • Hillary Bright, Blue/Green Alliance Field Organizer. Priscaro — When people make things It create sjobsm, revenue, they buy houses, participate in economy. Ryan — Windmills, local wind turbines on old steel mill site, made in the US. Sun Ray project in Texas used GE wind turbines, GE Transport made the gearboxes. Gemasa, of Sain, has set up manufacturing near here. The Export/Import bank financing requires high local content. We need a national Renewable Energy Standard , then there is a tremendous opportunity for American manufacturing in wind energy. Oliver — the effect on people of losing job, moving, move in with mom, manufacturing is the heartbeat of America. Boothe — Donjon has recently gone from 13 employees, in 10 months have 118. 125 by end of year, 150 then up to 250. Bright — Labor and environmentalists share common goals Hadn’t recognized how intertwined manufacturing is with a healthy community, environment, wages, families, healthy communities. And healthy environment. The way we see America in future generations, manufacturing is key to recognizing that. Q: “Where are we going to get jobs? We need the infrastructure rebuilt, everything reconstructed. How?” Bright — AAM, others have recognized that one of the largest opportunities is in clean energy. The stimulus was a down payment. Opportunity at federal policy level like Renewable Energy Standard to create the market and the demand to get it going, otherwise we lose the race to countries like China. Oliver — We need to create the jobs here, the stimulus was using money to buy windmills made in China. Ryan — We need new power plants as well as wind energy power plants. National policy has been up and down up and down, industry can’t survive on federal programs that last 6 months or a year, we need national policy that looks at the next 20 years or so. Priest, we lost jobs because of legislation, we can gina jobs by legislation. Q: “What can we do to stop the leak of jobs from US?” Scott Paul: Stop tax breaks to ship jobs overseas. (Note — All pictures by Ike Gittlen, USW, with permission. Click any pic for enlargement, see the entire collection here .) This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. Sign up here for the CAF daily summary .

Read the full article →

Kozlov Joins Parsons’ Infrastructure & Technology Group

October 19, 2010

PASADENA, CA–(Marketwire – October 19, 2010) –  Parsons announced today that Brigadier General Alexander Kozlov, US Army Reserve (USAR), joined its Infrastructure & Technology group as Vice President. In this role, Mr. Kozlov will support Parsons’ projects in the Pacific Rim.

Read the full article →

Dave Johnson: It’s The Lack Of Demand, Stupid!

October 7, 2010

In the 1992 campaign the Clinton War Room had a famous sign that read, “It’s the economy, stupid!” This meant that the central theme of the campaign was the economy. President Obama’s downturn-fighting war room needs a sign, too. The sign should read, “It’s the demand, stupid.” And what that means is: businesses want customers, not tax cuts. The stimulus was supposed to help make up for the lack of demand in the economy caused by Bush’s financial crisis. The stimulus worked, but was not enough. And tomorrow’s job numbers are likely to reflect that. Here are some (slightly out of date, new numbers come out tomorrow) job charts that show the effect of the stimulus as it kicked in, and now as it fades. First, the overall jobs picture: The manufacturing jobs picture: The lesson from these charts is obvious, and right in front of your face : The stimulus worked, but was not enough. People need jobs, not tax cuts. Jobs create demand and demand creates jobs. Tax cuts just create the massive deficits and concentration of wealth at the top that kills demand and jobs as we are seeing now. When neither jobs nor demand is happening the government needs to step in and create jobs to get things moving, as well as just to keep people employed so they can get by. At a time when our economic competitiveness is hampered by an aging infrastructure that has to be fixed up sooner or later anyway, combined with the ability of the government to borrow money at record-low interests rates, it seems obvious that government should be directly employing people to modernize our infrastructure. Here is a chart of the “output gap.” That big dipper at the top right is the current Bush-caused gap. Government needs to step in and fill that gap by creating demand. We need fiscal stimulus. The stimulus worked, but was not enough. Businesses Want Customers Not Tax Cuts Businesses want customers. Hand a businessperson a check and that businessperson will smile and say, “Thank you!” But the businessperson will not hire a single person more than is needed to meet demand. That check is going in the bank. If it is a tax cut, it is going in the bank. If it is a direct payment it is going in the bank. “Thank you,” bank. There is no other path that money will take except, “Thank you,” bank . But a businessperson with customers coming through the door will do whatever it takes to make sure there are enough employees to serve those customers . Businesspeople understand opportunity. A businessperson with an overdrawn bank account will hire employees to meet demand, and will find a way to get the money to pay for it . He or she might sell a car, run up the credit cards or even pawn jewelry or sell the first-born, but the employee will be hired because customers are coming in the door. (I know this, I’ve been there.) Economist Joseph Stiglitz spoke up on Tuesday about the Federal Reserve’s loose monetary policies, which are intended to help banks, and get businesses to borrow and expand, “The irony is that the Fed is creating all this liquidity with the hope that it will revive the American economy,” Stiglitz said. “It’s doing nothing for the American economy, but it’s causing chaos over the rest of the world. It’s a very strange policy that they are pursuing.” [. . .] But additional monetary stimulus will “clearly” not solve the problems caused by lack of global aggregate demand, Stiglitz said. “Lowering the interest rates may help a little bit, but that’s much too weak to address the problems facing the United States and Europe,” Stiglitz said. “We need fiscal stimulus.” What he is saying there is that making it easy to borrow is not creating jobs or demand. We need “fiscal stimulus” which is government directly stimulating demand, which is what makes businesses hire. So, once again, the answer is so clear and obvious that it is exactly the kind of thing that the elites in DC will miss: The stimulus worked, but was not enough. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. Sign up here for the CAF daily summary .

Read the full article →

Craig K. Comstock: When the Market Fails

October 5, 2010

The market does some crucial jobs so well that we’re tempted to make a quasi-religion of it. But at other jobs it fails: for example, at giving a timely signal to prepare for “peak oil.” In their new book , analyst Robert Hirsch and his colleagues take on the coming decline in global oil production, or as they put it, “the impending world energy mess.” They estimate that a decline will start in 2-5 years, following the present “fluctuating plateau” on a graph of production. The kicker is their conclusion that, once we start a “crash program,” shifting our fleet of vehicles will take “more than a decade”; and building the infrastructure for new fuels, 10-20 years. Starting the transition when? Well, we could have begun when the same authors, in a report to the U.S. Department of Energy, made clear in 2005 that the transition would probably take that long. But apart from enough spread of ecological consciousness to elicit some “greenwashing,” this transition of infrastructure has hardly begun, and according to an interview with Hirsch, probably will not start until after the decline actually begins or, as an economist would say, when we get the market signal. If we say the decline will begin by around 2014 and use a duration of just 15 years for the transition, that would bring us to 2029. After then, life could be less turbulent, at least as far as energy is concerned; we can look forward to celebrating. Until then, trouble. But we can still lessen the trouble. While Hirsh in passing indicates some skepticism about global warming (praise to him for focusing on at least one crisis), people who take warming seriously describe it, in the phrase of Nicholas Stern in a U.K. report, as “the greatest market failure in history.” Ideally, we would explore what each mechanism (such as “the market”) is good for, in order to discover its sweet spot, and avoid making an ideology out of something of great but definitely limited usefulness. If so, we’d honor the market for what it does well, and reject any claims that it will necessarily help us to adjust, in a timely way, to situations such as climate change (Stern) or the peak of global oil production (Hirsch). Governing by quasi-religious beliefs has led humanity down some strange roads. Then mechanisms that do yield huge benefits may get driven into the scrapyard when a grandiose ideological extension gets us into trouble. Meanwhile, Hirsh and his colleagues deserves a Cassandra medal, named after the Greek princess who could foretell the future but was fated not to be believed. To the medal we could, for Hirsh, attach a Sisyphus ribbon in honor of the chap sentenced to push a stone up a mountain, only to watch it roll down again, then start pushing again. In 2005, also with coauthors Roger H. Bezdek and Robert M. Wendling, Hirsch declared that it would take “more than a decade” to “achieve significant overall fuel efficiency” and that “world-scale” efforts to replace conventional liquid fuels for transportation “will require 10-20 years of accelerated effort.” The starting line for a a crash program keeps being pushed forward, but in Hirsh’s present view, the decline will begin no later than 2015, possibly as soon as 2012. In a recent video interview , Hirsh displays the controlled demeanor of a careful, well-informed analyst, though the mask slips when he speaks of critics of the Canadian oil sands project: They look at the environmental effects, he says, “from the point of view of being fat and happy,” and assume that “these wonderful renewables [such as windmills and solar panels] are going to take care of everything. That’s just plain wrong.” What is their basic problem? Growing a bit hyperbolic, Hirsh says “they don’t understand how it is to have nothing.” Hirsch and his team merit our thanks for their basic message is that conventional liquid fuels are soon going to become increasingly scarce and expensive; that mitigation will take a long time; and that the alternatives can’t make up for the oil we are going to start losing. The model T arrived in 1908, and of course oil was a major factor in the Second World War, but the major expansion in petroleum use came within about the last half century. Much of what almost anyone under 60 years old regards as normal depends on an ample supply of cheap oil. This fuels our transportation system for people and goods, allows globalization, facilitates industrial agriculture, serves as feedstock for plastics, pesticides, and many other products. If the supply begins to fall off in just a few years, and especially if demand for fuel increases, we will get a severe shock, in the form of price volatility that will drag down the whole economy, even if the economy has meanwhile returned to what we regard as normal. If the public has absorbed what is likely to happen and begun responding to it, we can still gain 2-5 years of transition time. In any case, Hirsh has some tips for individuals wanting to prepare. What’s the lesson about the market? The market did not prevent the recent economic breakdown. According to Alan Greenspan in recent testimony , his paradigm for what the market could accomplish was mistaken. And the market did not jolt us into preparing, in time, for at least two major crises soon to become obvious. Given that we can’t invest trillions on the basis of mere speculation, and that we are accustomed to responding to market signals, where are we going to get the data on the basis of which to prepare in time? How is this data to be taken seriously when vested economic interests would be upset by the data and have learned techniques for casting doubt on it? And when our only model for shared sacrifice is a war or an economic collapse? Some say that easy oil isn’t running out; the planet isn’t warming up; species aren’t dying; it doesn’t matter that corporations have shipped so much of our industrial base abroad; the economy is recovering or would if only we shrank the government; and we can always count on the market to signal when something needs to be done. I wish any part of this were supported by the weight of the evidence. But thanks to some analysts, there’s still time.

Read the full article →

U.S. Infrastructure Investment Plan Is Too Modest: Ezra Klein

October 4, 2010

People say that the government should be run more like a business. So imagine you are CEO of the government. Your bridges are crumbling. Your schools are falling apart. Your air traffic control system doesn’t even use GPS. The Society of Civil Engineers gave your infrastructure a D grade and estimated that you need to make more than $2 trillion in repairs and upgrades. Sorry, chief. No one said being CEO was easy. But there’s good news, too. Because of the recession, construction materials are cheap. So, too, is the labor. And your borrowing costs? They’ve never been lower. That means a dollar of investment today will go much further than it would have five years ago — or is likely to go five years from now. So what do you do?

Read the full article →

Video: Ghosn Sees Strong Demand for Leaf Electric Car in U.S.: Video

September 30, 2010

Sept. 30 (Bloomberg) — Carlos Ghosn, chief executive officer of Renault SA and Nissan Motor Co., talks about the demand outlook for the Leaf electric car. Ghosn, speaking at the Paris Motor Show, also discusses the infrastructure needed to support the electric-car industry and the outlook for auto sales. He speaks with Ryan Chilcote on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

Read the full article →

Robert Zevin: Addiction

September 28, 2010

Addiction Corrupt regulatory oversight, cutting corners to save costs, plus citizens and politicians chanting “Drill, baby, drill” — is the BP Deepwater Horizon catastrophe really any surprise? The spill in the Gulf of Mexico, the worst man-made environmental disaster in the U.S., is a consequence of our addiction to oil. Like an addict resorting to riskier and riskier behavior to get a “fix”, we have adopted riskier and more desperate measures to feed our addiction to oil such as drilling in deeper water and extracting oil from sand. Some of us have the luxury of saying we weren’t completely aware of the effect of our lifestyles on the environment; certainly prior to the BP spill we could hop into our cars and drive to the store and buy cheap goods and eat strawberries during a snowstorm without seeing the images of the impact of our collective actions. In fact, it is only fairly recently that we have irrefutable data that shows the environmental and health impacts from smog, carbon dioxide and other byproducts of our oil consumption. While BP project managers who cut corners and regulators who didn’t do their job are directly to blame for this spill, our collective hands are not clean. It is our addiction to oil that led to an environment in which this spill could happen. Talk is cheap In a June speech President Obama paid lip service to reducing our dependence on oil. Starting with Richard Nixon, U.S. presidents have talked about the need to reduce our reliance on oil. The most effective way to curb our appetite for oil would be to cut the subsidies to oil companies and implement a carbon tax which would more accurately reflect the cost to society of the “collateral damage” associated with oil production. In addition, politicians should materially increase subsidies to alternative energy, and make these subsidies reliable and consistent without short-term expiration and renewal concerns. Taking these steps has always been difficult because of massive vested interests in the economic status quo. Critics of alternative energy subsidies complain that alternative energy will never be as cheap as coal, oil and natural gas, however, in the United States, no source of energy was developed without subsidies; between 1973 and 2003, the federal government spent $74 billion subsidizing nuclear power and fossil fuels, during this same time frame renewable energy and spending on energy efficiency research received $26 billion from the federal government. It is easy to point the finger at politicians, to say they have not done enough to help us conquer our addiction to oil, and certainly they haven’t. Politicians have acted as enablers, allowing us to continue our addiction, and making it cheaper and easier to do so. Watching Al Gore’s movie, An Inconvenient Truth , reading about ground water contamination from natural gas drilling, or looking at pictures of oil spills; it’s easy to get angry and point fingers at the deepwater oil drillers, the natural gas drillers, or the executives at car companies that pushed SUVs. However, if Americans are asked to drive less, buy smaller cars, or turn down their thermostats, few are willing to do so. The roots of our addiction are deep Over 150 million years ago, marine plants blanketed the sea floor and sedimentation created sufficient pressure to convert the unoxidized carbon into oil. Over the past 150 years oil products have fueled the fastest growth in material wellbeing in human history. Especially with the invention of the gasoline-fueled car in 1901 and the incredible mobility it provided, oil became our drug of choice. The cost of our addiction has escalated, driving us literally to the ends of the earth to uncover more. Estimating the economic cost of our addiction is difficult; direct subsidies to oil and oil using systems are often complex and artfully concealed but estimates calculate the subsidy at around $20 per barrel of oil; but what “cost” should we add for a child who develops asthma from breathing in smog? What percent of the hundreds of billions of dollars we spend on defense is indirectly or directly a result of our oil addiction? What is the cost of the environmental damage from the BP spill and from the thousands of spills prior? We do not need to come up with an absolute number to know that the true cost of the gas we fill our tanks with is much, much higher than the $3 per gallon we pay at the pump. How do we finally break this addiction? The first step for addicts going through a recovery program is to admit that they are powerless over the substance they are addicted to and their lives have become unmanageable as a result of their addiction. We can talk objectively about the problems we face as a result of our oil addiction but without the realization that our lives have become unmanageable we cannot begin the process of recovery. We are engaged in a counter-productive war in Iraq whose real purpose is apparently to control more oil, we are facing increasing global warming, and we are assaulted by an immense environmental disaster with far reaching ecological implications. Our lives have become unmanageable. After this first step we need to begin to take concrete action to break our addiction. There is no shortage of energy in the world beyond oil, gas and coal. From the sun and the wind to biomass, geothermal and ocean currents, energy and the means to capture it exist; what we lack is the infrastructure and scale to support the economics of alternatives. We need to demand change. Automakers made SUVs because consumers wanted them. Ask for (and buy) hybrid cars, electric cars and fuel-efficient vehicles and the auto industry will make them. Conserve energy. Realize the implications of driving a few blocks and change ingrained habits. Speak up — tell lawmakers you do not want cheap gas, you want money spent on viable alternatives and efficiency improvements. The BP spill is no longer front page news and now we are left with a choice: move this disaster to the back of our minds and continue on as before, albeit slightly wiser about the negative consequences of our addiction, or choose to let the BP spill be the proverbial “hitting bottom” that propels us to finally break our addiction to oil.

Read the full article →

Inder Sidhu: Take Two: Following Up on Better Place, Dyson and David Cameron

September 28, 2010

Last month, I wrote a blog extolling the benefits of taking time to recharge over summer vacation. Now, the lazy days of summer seem like a faded memory. Kids are back in school. Networks have new fall shows and businesspeople are again working at a feverish pace. Speaking of recharging, I want to provide you updates on three topics that I wrote about previously. This includes Better Place , which I profiled last month. Better Place is trying to create the infrastructure that is needed for the electric vehicle market to thrive. The brainchild of software entrepreneur Shai Agassi, the company envisions a world in which motorists can locate an electric vehicle service station as easily as they now can find a gas station. What I like about Better Place is not only what it was doing but how. Better Place is trying to leverage the best thinking from the established world with the latest ingenuity from the emerging one. This month, CNET reports on another way the company is expanding its business–via partnerships. Better Place recently signed a deal with GE that will enable its customers to use GE’s WattStation charging service ports. In addition, the deal calls for the two companies to collaborate to build new service stations. By hooking up with GE, Better Place is marrying its breakthrough thinking with GE’s proven track record in project management and operational excellence. That’s a winning formula in any market. On winning formulas, The New Yorker recently profiled British inventor and entrepreneur, James Dyson, who conquered the American vacuum market with a device three rimes more expensive than his rivals’ products. I showcased Dyson in June. My focus was on his ability to consistently leverage disruptive and sustaining innovation to grow his company. John Seabrook’s new profile touches on another aspect of Dyson success: the ability to build a better product, and then create a compelling narrative around it. This is very hard to do. Consider: Many companies have came up with superior ideas only to see them languish afterwards. Sony (video recorders) and Xerox (graphical user-interface software) are two famous examples. Contrast these companies to Dyson. To persuade consumers that his vacuums were worth a 300 percent premium over ordinary vacuums, Dyson needed more than a slogan–he needed a story. So he told the world what was wrong with competing designs (they lost suction) and then explained how his technology worked better. He even included a visual with his narrative in the form of a clear, plastic canister that reveals exactly how much dust and debris a Dyson vacuum can collect. Genius. “Dyson had grasped what the companies trying to make hundred-dollar vacuum cleaners had forgotten: that a lot of people get their kicks from buying appliances, and are willing to pay a premium for a machine that will deliver an emotional experience,” writes Seabrook in his June 20 profile. You could replace “Dyson” in that sentence with “Apple,” “BMW,” “Nordstrom” or any number of other companies that understand success requires getting two things right–your product and your story. The New Yorker article wraps with a look at Dyson’s association with British PM, David Cameron. Among his many pursuits, Dyson is serving as a technology advisor to Cameron, whom I showcased last month . Cameron is trying to revive British engineering, which has been in decline since World War II. For all the ingenuity and gadgetry displayed in James Bond movies, the British have not been able to match the Americans, Japanese and Germans in technology prowess in recent decades. But Cameron is dauntless. He’s set a goal to make the U.K. the leading high-tech exporter in Europe. So what does he know about technology? Well, it turns out that the PM is somewhat of a geek. Recently, he made headlines for disclosing that he likes to play Angry Birds, a wildly popular game for the iPhone and iPad. Before that, he suggested the world governing soccer body, FIFA, could better serve its fans by embracing video replay technology. Cameron, of course, is a man with ambitious visions. He not only believes it is possible for Britain to vault past France and Germany in terms of technology prowess, but while restructuring its economy. That’s quite a lot considering that government deficits hit a record in August. This month, Foreign Policy raises an interesting question over the future of the U.K.: can it address its economic difficulties at home and still play a role on the world stage? “Britain as a nation is undergoing a traumatic yet healthy debate about the proper size and scope of government,” the magazine notes. “Here the divides are not between small and big government advocates, but between different visions for the Britain’s role in the world.” The vision preferred by the ruling government will come into focus next month when a comprehensive spending review outlining cuts for each ministry is expected. If previous experience serves as a guide, watch for Cameron to devise the best “product” he can for British voters, and then sell it with a compelling narrative that would make even Dyson proud. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

Read the full article →

Small Business Bill To Be Sent By Congress To Obama’s Desk

September 23, 2010

WASHINGTON — The Democratic-controlled Congress on Thursday sent President Barack Obama a long-delayed bill to help struggling small businesses with easier credit and other incentives to expand and hire new workers. The $40 billion-plus bill is the last vestige of the heralded jobs agenda that Obama and Democrats promoted early this year. They ended up delivering only a fraction of what they promised after emboldened Senate Republicans blocked most of the agenda with filibusters. The Senate passed the measure last week. The 237-187 House vote Thursday that sent the bill to the president split along party lines as Democrats praised the measure for creating a $30 billion federal fund to help smaller banks issue loans to small businesses and for cutting taxes by $12 billion over the coming decade. “It combines … tax relief with increased access to critical financing so that our nation’s small businesses can move forward on new or delayed expansion plans,” said Rep. Chellie Pingree, D-Maine.”Small-business growth means job creation.” Republicans, poised for big gains in midterm elections just six weeks away, said the new loan fund is just a smaller version of the unpopular 2008 bailout of the financial system. “What we have today before us is junior TARP,” said Rep. Lincoln Diaz-Balart, R-Fla. While community bankers enthusiastically support the measure, it’s getting only tepid support from GOP-leaning small-business groups, which are more focused on expiring tax cuts. “There’s some OK stuff in it, but the impact’s going to be minimal,” said Bill Rys, tax counsel for the National Federation of Independent Business. The vote gives Obama and his Democratic allies on Capitol Hill a much-needed, but minor, victory as midterm elections approach. “The small business jobs bill passed today will help provide loans and cut taxes for millions of small business owners,” Obama said in a statement. “After months of partisan obstruction and needless delay, I’m grateful that Democrats and a few Republicans came together to support this commonsense plan to put Americans back to work.” Earlier this year, Democrats had ambitious designs to boost “green jobs,” provide new funding for roads, bridges and other infrastructure projects, pay for a summer jobs program for disadvantaged young people and renew health insurance subsidies for the jobless. What was actually enacted was far smaller: more unemployment checks for the jobless; relief from payroll taxes for companies that hire new workers; and billions of dollars in aid for states and local schools. The new loan fund would be available to community banks to encourage lending to small businesses. Supporters say banks should be able to use the fund to leverage up to $300 billion in loans. Republicans said that banks have plenty of money to lend but that loan demand is way down. “It won’t do any good. Business doesn’t need credit – business needs customers,” said Jade West, a lobbyist for the GOP-leaning National Association of Wholesaler-Distributors. “If they don’t have a customer base because demand is down, they’re not going to borrow because there is nothing for them to borrow for.” Democrats counter that it’s undeniable that small businesses are confronted with a credit crunch that worsened dramatically after the financial crisis two years ago. “More capital for business means they can expand and create new jobs,” said Rep. Kathy Dahlkemper, D-Pa. “Helping businesses grow is essential to our economic recovery and getting people back to work.” The legislation would also aid lending by lowering Small Business Administration loan program fees and raising loan guarantee and lending limits. Loan caps under the Small Business Administration’s chief lending program would be significantly raised. The small business tax cuts in the bill include breaks for restaurant owners and retailers who remodel their stores or build new ones. Long-term investors in some small business startups would be exempt from paying capital gains taxes. But much of the tax relief would actually go to larger businesses for write-offs of facilities and equipment such as computers, trucks and machinery. The measure also would allow small business owners to deduct the costs of health insurance for themselves and their families from self-employment taxes, but only for the 2010 tax year. And, for the first time, tens of thousands of businesses who pay the alternative minimum tax will be eligible to claim the research and development tax credit and other write-offs such as a credit for hiring the disadvantaged. “It’s going to mean another $100,000 or $200,000 to some of our key small and medium-sized businesses,” said Dean Zerbe of alliantgroup, a tax consulting firm.

Read the full article →

Small Business Bill To Be Sent By Congress To Obama’s Desk

September 23, 2010

WASHINGTON — The Democratic-controlled Congress on Thursday sent President Barack Obama a long-delayed bill to help struggling small businesses with easier credit and other incentives to expand and hire new workers. The $40 billion-plus bill is the last vestige of the heralded jobs agenda that Obama and Democrats promoted early this year. They ended up delivering only a fraction of what they promised after emboldened Senate Republicans blocked most of the agenda with filibusters. The Senate passed the measure last week. The 237-187 House vote Thursday that sent the bill to the president split along party lines as Democrats praised the measure for creating a $30 billion federal fund to help smaller banks issue loans to small businesses and for cutting taxes by $12 billion over the coming decade. “It combines … tax relief with increased access to critical financing so that our nation’s small businesses can move forward on new or delayed expansion plans,” said Rep. Chellie Pingree, D-Maine.”Small-business growth means job creation.” Republicans, poised for big gains in midterm elections just six weeks away, said the new loan fund is just a smaller version of the unpopular 2008 bailout of the financial system. “What we have today before us is junior TARP,” said Rep. Lincoln Diaz-Balart, R-Fla. While community bankers enthusiastically support the measure, it’s getting only tepid support from GOP-leaning small-business groups, which are more focused on expiring tax cuts. “There’s some OK stuff in it, but the impact’s going to be minimal,” said Bill Rys, tax counsel for the National Federation of Independent Business. The vote gives Obama and his Democratic allies on Capitol Hill a much-needed, but minor, victory as midterm elections approach. “The small business jobs bill passed today will help provide loans and cut taxes for millions of small business owners,” Obama said in a statement. “After months of partisan obstruction and needless delay, I’m grateful that Democrats and a few Republicans came together to support this commonsense plan to put Americans back to work.” Earlier this year, Democrats had ambitious designs to boost “green jobs,” provide new funding for roads, bridges and other infrastructure projects, pay for a summer jobs program for disadvantaged young people and renew health insurance subsidies for the jobless. What was actually enacted was far smaller: more unemployment checks for the jobless; relief from payroll taxes for companies that hire new workers; and billions of dollars in aid for states and local schools. The new loan fund would be available to community banks to encourage lending to small businesses. Supporters say banks should be able to use the fund to leverage up to $300 billion in loans. Republicans said that banks have plenty of money to lend but that loan demand is way down. “It won’t do any good. Business doesn’t need credit – business needs customers,” said Jade West, a lobbyist for the GOP-leaning National Association of Wholesaler-Distributors. “If they don’t have a customer base because demand is down, they’re not going to borrow because there is nothing for them to borrow for.” Democrats counter that it’s undeniable that small businesses are confronted with a credit crunch that worsened dramatically after the financial crisis two years ago. “More capital for business means they can expand and create new jobs,” said Rep. Kathy Dahlkemper, D-Pa. “Helping businesses grow is essential to our economic recovery and getting people back to work.” The legislation would also aid lending by lowering Small Business Administration loan program fees and raising loan guarantee and lending limits. Loan caps under the Small Business Administration’s chief lending program would be significantly raised. The small business tax cuts in the bill include breaks for restaurant owners and retailers who remodel their stores or build new ones. Long-term investors in some small business startups would be exempt from paying capital gains taxes. But much of the tax relief would actually go to larger businesses for write-offs of facilities and equipment such as computers, trucks and machinery. The measure also would allow small business owners to deduct the costs of health insurance for themselves and their families from self-employment taxes, but only for the 2010 tax year. And, for the first time, tens of thousands of businesses who pay the alternative minimum tax will be eligible to claim the research and development tax credit and other write-offs such as a credit for hiring the disadvantaged. “It’s going to mean another $100,000 or $200,000 to some of our key small and medium-sized businesses,” said Dean Zerbe of alliantgroup, a tax consulting firm.

Read the full article →

Dan Smith: Better Transportation Investment Creates More Jobs

September 16, 2010

With almost one in ten American workers currently unemployed, smart investment in infrastructure is an efficient way to create jobs right now. The job creation potential of infrastructure has been well-documented. Economists Mark Zandi and Alan Blinder, for example, explain in a report they coauthored that every dollar spent on infrastructure yields $1.57 in economic growth. To generate the most jobs, every study has shown that it is important to prioritize investments in public transportation. Academic analysis concludes that public transit generates 31 percent more jobs per billion dollars invested than similar spending on highways. Models developed with the Federal Highway Administration likewise show transit investments generate 19 percent more jobs. Similarly, an analysis of U.S. Department of Transportation data shows that 2008 stimulus dollars spent on public transportation projects created up to twice as many jobs as highway spending for the same amount of money. The consistent finding is clear: to create jobs, invest in public transportation. For spending on highways, it is important that money be directed to repair and maintenance rather than the construction of new highways. Too many roads and bridges across America remain in a state of disrepair that pose dangers and cause costly delays. Although investment in highway repair does not create as many jobs as public transit, it creates 9 percent more jobs per billion dollars than building new highway miles, according to the same studies. Additionally, the long-term development of a national high-speed rail network could be critical to rebuilding America’s declining manufacturing sector. Auto factories that were shut down during the last decade could be reopened and repurposed to manufacture the new railcars and bullet trains of the future. Better Transportation Investment Reduces our Dependence on Oil Our transportation system consumes more oil than the entire economy of any other country in the world, other than China, according to Department of Energy data. The disastrous consequences of our oil addiction were on full display last spring when billions of gallons of oil spilled into the Gulf. Our over-reliance on oil is also a national security concern, as it forces our nation to rely on foreign regimes which are often hostile or unstable. Investing in more and better public transportation is critical to reducing America’s oil dependence because it provides more energy-efficient ways to travel. Existing public transit reduced the amount of gasoline America used in 2006 by 3.4 billion gallons, according to an analysis of EPA data. The U.S. PIRG Education Fund calculated that this saved us over $9 billion in gas costs. Not surprisingly, metropolitan areas with better public transit systems accounted for most of these oil savings. To partially pay for the proposed investment, President Obama rightly calls for cutting government subsidies for oil companies. There is no reason why corporations, like Exxon-Mobil and BP, that make billions in profits should receive public handouts and tax subsidies. These unnecessary tax breaks and subsidies should be eliminated, and the savings should be used to pay for cleaner, more efficient transportation projects. Better Transportation Investment Reduces Congestion and Pollution In addition to creating jobs and reducing our oil dependence, investment in public transportation and high-speed rail would reduce traffic congestion and global-warming pollution. For instance, the Texas Transportation Institute’s 2007 Annual Urban Mobility Report calculated that public transit prevented over 500 million hours of delays in 2005, saving the country more than $10 billion. Also, our transportation system accounts for a full third of the country’s global warming pollution. The U.S. PIRG Education Fund calculated that public transit reduced emissions of harmful global warming pollution by 26 million metric tons in 2006. That is equivalent to taking almost 5 million cars off the road. Better Transportation Investment Means Less Earmarks, and More Results In addition to providing much needed funding for more public transportation, President Obama’s plan seeks to spend our transportation dollars more efficiently. Over 100 federal programs would be consolidated under the proposal, similar to a 2009 proposal by U.S. House Transportation and Infrastructure Committee Chairman James Oberstar. President Obama also proposes to allocate money based on performance, rather than earmark-driven politics. Such reforms are essential to ensuring that we get the biggest bang for our buck. With the economic recovery slow to pick up steam, President Obama’s call for a new transportation bill is a timely opportunity to spur job growth now while making crucial investments in America’s future. We strongly encourage you to write an editorial urging Congress to move forward with President Obama’s proposal for comprehensive reform and the reauthorization of the surface transportation bill.

Read the full article →

Rev. Jesse Jackson: GOP Still Putting Wall Street First

September 14, 2010

Voters are angry, and for good reason. Jobs are gone; poverty is up; one in four homes, the leading source of savings for Americans, is underwater, worth less than the mortgage. Many who voted for Obama are discouraged; some argue there isn’t a whit of difference between the parties. An increasing percentage say they will vote against the incumbents simply to protest what is going on. But there is a great difference between the two parties. It’s personified by the contrast between the positions of President Obama and House Minority Leader John Boehner. On taking office, faced with an economy losing 750,000 jobs a month, President Obama called for a bold recovery program, a package of tax cuts, infrastructure spending, support for education and renewable energy, and extended unemployment benefits, food stamps and health care support for those who lost their jobs through no fault of their own. Although he supported bailing out the banks, Boehner said no to helping out Main Street, with zero Republicans voting for the plan in the House. In the Senate, Republicans worked to weaken the plan, making it smaller and stuffing in upper-end tax breaks like the alternative minimum tax that have little jobs impact. In the end, the Recovery Act spending, according to any independent economist, helped to stave off a far worse collapse, but wasn’t big enough to create the jobs we need. Now President Obama calls for adding $50 billion in investment in roads, runways and rail, for creating an infrastructure bank to mobilize private capital to rebuild America, for a range of tax breaks for small business owners. Boehner’s plan is to keep tax rates where they are — and to cut $100 billion from domestic spending next year — a folly that would add hundreds of thousands to the ranks of the unemployed. President Obama is for ending the deduction for Wall Street managers that enables them to pay a lower rate of taxes than their chauffeurs. Boehner is for protecting the tax break, as well as the Bush tax cuts for millionaires earning more than $250,000 a year that would add $700 billion to the deficits over the next decade. President Obama is for investing in renewable energy, increasing fuel standards and driving the U.S. to recapture a lead in the new green industrial revolution that is sweeping the world. Boehner mobilized oil and gas interests to help dilute and stop energy legislation. President Obama pushed to regulate the big banks, and establish a Consumer Financial Protection Bureau that would protect consumers from abuse by banks, insurers and credit card agencies. Boehner mobilized the bank lobby to oppose reforms, and calls for repeal of the consumer bureau. President Obama pushed to extend unemployment insurance; Boehner opposed. President Obama pushed health care reform, not only to extend coverage to all, but also to end abusive insurance company practices of denying those with pre-existing conditions, or setting a cap on what is insured each year. Boehner joined the insurance lobby in opposition. Obama says we need a new foundation for the economy, with investment in education and training, in research and development and in modernizing our infrastructure. Boehner is opposed. Obama would repeal the tax break that rewards companies that move jobs overseas. Boehner defends the tax break, and calls for more of the same trade treaties that helped lose one in three manufacturing jobs over the last decade and left the U.S. borrowing more than $2 billion a day from abroad. And this is only on economic questions. For those thinking of staying home or casting protest votes, take another look. Boehner recently opened a Boehner for Speaker Fund, raising millions from corporate political action committees and lobbyists for Republican congressional candidates. The first big check came from a Wall Street bank.

Read the full article →

Rev. Jesse Jackson: GOP Still Putting Wall Street First

September 14, 2010

Voters are angry, and for good reason. Jobs are gone; poverty is up; one in four homes, the leading source of savings for Americans, is underwater, worth less than the mortgage. Many who voted for Obama are discouraged; some argue there isn’t a whit of difference between the parties. An increasing percentage say they will vote against the incumbents simply to protest what is going on. But there is a great difference between the two parties. It’s personified by the contrast between the positions of President Obama and House Minority Leader John Boehner. On taking office, faced with an economy losing 750,000 jobs a month, President Obama called for a bold recovery program, a package of tax cuts, infrastructure spending, support for education and renewable energy, and extended unemployment benefits, food stamps and health care support for those who lost their jobs through no fault of their own. Although he supported bailing out the banks, Boehner said no to helping out Main Street, with zero Republicans voting for the plan in the House. In the Senate, Republicans worked to weaken the plan, making it smaller and stuffing in upper-end tax breaks like the alternative minimum tax that have little jobs impact. In the end, the Recovery Act spending, according to any independent economist, helped to stave off a far worse collapse, but wasn’t big enough to create the jobs we need. Now President Obama calls for adding $50 billion in investment in roads, runways and rail, for creating an infrastructure bank to mobilize private capital to rebuild America, for a range of tax breaks for small business owners. Boehner’s plan is to keep tax rates where they are — and to cut $100 billion from domestic spending next year — a folly that would add hundreds of thousands to the ranks of the unemployed. President Obama is for ending the deduction for Wall Street managers that enables them to pay a lower rate of taxes than their chauffeurs. Boehner is for protecting the tax break, as well as the Bush tax cuts for millionaires earning more than $250,000 a year that would add $700 billion to the deficits over the next decade. President Obama is for investing in renewable energy, increasing fuel standards and driving the U.S. to recapture a lead in the new green industrial revolution that is sweeping the world. Boehner mobilized oil and gas interests to help dilute and stop energy legislation. President Obama pushed to regulate the big banks, and establish a Consumer Financial Protection Bureau that would protect consumers from abuse by banks, insurers and credit card agencies. Boehner mobilized the bank lobby to oppose reforms, and calls for repeal of the consumer bureau. President Obama pushed to extend unemployment insurance; Boehner opposed. President Obama pushed health care reform, not only to extend coverage to all, but also to end abusive insurance company practices of denying those with pre-existing conditions, or setting a cap on what is insured each year. Boehner joined the insurance lobby in opposition. Obama says we need a new foundation for the economy, with investment in education and training, in research and development and in modernizing our infrastructure. Boehner is opposed. Obama would repeal the tax break that rewards companies that move jobs overseas. Boehner defends the tax break, and calls for more of the same trade treaties that helped lose one in three manufacturing jobs over the last decade and left the U.S. borrowing more than $2 billion a day from abroad. And this is only on economic questions. For those thinking of staying home or casting protest votes, take another look. Boehner recently opened a Boehner for Speaker Fund, raising millions from corporate political action committees and lobbyists for Republican congressional candidates. The first big check came from a Wall Street bank.

Read the full article →

Obama Blasts Bush Tax Cuts, Calls Out John Boehner In Ohio Economic Speech

September 8, 2010

CLEVELAND — Politically weakened but refusing to bend, President Barack Obama insisted Wednesday that Bush-era tax cuts be cut off for the wealthiest Americans, joining battle with Republicans – and some fellow Democrats – just two months before bruising midterm elections. Singling out House GOP leader John Boehner in his home state, Obama delivered a searing attack on Republicans for advocating “the same philosophy that led to this mess in the first place: cut more taxes for millionaires and cut more rules for corporations.” Obama rolled out a trio of new plans to help spur job growth and invigorate the sluggish national economic recovery. They would expand and permanently extend a research and development tax credit that lapsed in 2009, allow businesses to write off 100 percent of their investments in equipment and plants through 2011 and pump $50 billion into highway, rail, airport and other infrastructure projects. The package was assembled by the president’s economic team after it became clear that the recovery was running out of steam. There was a political component, too: With Democrats in danger of losing control of the House in November, Obama is under heavy pressure to show voters that he and his party are ready to do more to get the economy moving and get millions of jobless Americans back to work. However, none of Wednesday’s proposals, nor Obama’s call for allowing tax rates to rise for the wealthiest Americans, seems likely to be acted on by Congress before the elections, reflecting the battering Obama and congressional Democrats have taken in public opinion polls. Obama made one of his strongest appeals yet to allow the tax cuts passed under President George W. Bush – in 2001 and 2003 – to expire at the end of the year on schedule, but just for individuals earning more than $200,000 annually or joint filers earning over $250,000. The changes would affect dividend and capital gains rates and various other tax benefits as well as income from wages and salaries. The president’s strategy – pushing for legislation to save some tax cuts but not all – carries its own risks. Since all the tax breaks would expire automatically at the end of the year if Congress failed to act, that could result in sweeping increases for taxpayers at every income level – a major blow to recovery hopes and a colossal dose of blame for voters to parcel out to lawmakers and the White House. Some influential Democrats, and Obama’s own former budget director, Peter Orszag, have suggested a compromise might be necessary – one to temporarily extend all the tax cuts, perhaps for a year or two – given the current election-year animosity between the two parties. But in his remarks in Cleveland, Obama strongly signaled he wasn’t about to sign off on any such deal. “Let me be clear to Mr. Boehner and everyone else. We should not hold middle class tax cuts hostage any longer,” the president said. The administration “is ready this week to give tax cuts to every American making $250,000 or less,” he said. It was a slight misstatement of his own position, since the $250,000 would apply to household income. The threshold for individuals would be $200,000 White House officials said Cleveland was picked as the speech site expressly because Boehner, who probably would become House speaker if Republicans take back control of the chamber in November, laid out his party’s economic agenda here in a fiery Aug. 24 speech. At that time, the Ohio Republican called for Obama to fire key economic advisers and to support an extension of all the Bush tax cuts. Boehner kept up the attack on Wednesday. “If the president is really serious about focusing on jobs, a good start would be taking the advice of his recently departed budget director and freezing all tax rates, coupled with cutting of federal spending to where it was before all the bailouts, government takeovers and `stimulus’ spending sprees,” he said after Obama spoke. Earlier, Boehner was even more specific on ABC’s “Good Morning America,” saying Congress should freeze all tax rates for two years and pare back federal spending to 2008 levels. The deep recession began in December 2007. White House press secretary Robert Gibbs noted that keeping the Bush tax cuts in effect just for two more years would represent a change from past calls by Boehner to keep them in place permanently. “My question for him is: Are they abandoning the permanent or are they going with the two-year plan? I’ve seen him saying permanent so many times that I tend to believe that,” Gibbs told reporters aboard Air Force One. “That’s his plan and I think that continues to be his plan.” Republicans, and some Democrats, argue that the fragile state of the economy makes this a poor time to raise taxes on anyone – and that increases could stifle wealthier people’s appetite for spending. Obama argued that the rich are more likely to save additional money than spend it. And he said the struggling U.S. economy can’t afford to spend $700 billion to keep lower tax rates in place for the nation’s highest earners. That $700 billion is what the nonpartisan congressional Joint Committee on Taxation estimates it would cost the Treasury to continue tax cuts for top earners over 10 years. What Obama wants to do would cost just over $3 trillion over the same period, the panel estimates. The debate over the Bush tax cuts is an unwelcome one for dozens of vulnerable Democratic incumbents just weeks before Election Day. Already, a handful of Democrats in conservative or swing districts, such as Reps. Gerry Connolly in the northern Virginia suburbs of Washington, D.C., and Bobby Bright in southeastern Alabama, have come out publicly for extending all the cuts – at least temporarily. Sen. Michael Bennet, D-Colo., engaged in a tight re-election battle, said he “would not support additional spending in a second stimulus package” and that any new initiatives such as Obama’s infrastructure package should be paid for with leftover funds in the $814 billion stimulus package passed last year. Still other embattled Democrats, wary of alienating middle-class voters, are siding with Obama. In central Ohio, for example, Rep. Mary Jo Kilroy has said the tax cuts for higher earners should be repealed but middle-income people should see no tax increases. Obama acknowledged recovery had slowed noticeably, with unemployment hovering just under 10 percent. “The middle class is still treading water, while those aspiring to reach the middle class are doing everything they can to keep from drowning,” he said. Polls have shown a steady slippage in Obama’s approval ratings and an accompanying rise in Republican prospects for winning House and Senate seats in November. That has chipped away at Obama’s leverage to get things done in Congress. Obama has sought to frame the election as a choice between continuing his policies or reinstating those pursued by Bush. He acknowledged in an interview with ABC after his speech that “if the election is a referendum on are people satisfied about the economy as it currently is, then we’re not going to do well, because I think everybody feels like this economy needs to better than it’s been doing.” The excerpt was aired Wednesday on ABC’s evening news. Fuller portions of the interview were airing Thursday morning on “Good Morning America.” ___ Tom Raum reported from Washington. Associated Press writers Stephen Ohlemacher and Erica Werner in Washington contributed to this report.

Read the full article →

Eve Tahmincioglu: Dumb Labor Day advice to workers: Roll over

September 6, 2010

The headline in my local newspaper today reads: “Jobless must set sights lower.” I wouldn’t be surprised if your local newspaper or radio station has a similar story today. This is the kind of sensational angle the media loves to focus on during all types of holidays. For example, a Christmas day massacre or a Halloween candy poisoning will get endless attention by editors, especially in this Internet age where all most media care about is how many times you guys click on a story. But on this Labor Day , a time when we’re supposed to be celebrating the advances workers have achieved in the workplace, let’s not just roll over and accept what has become the standard employer line — you have to take less money for more work — and let’s concentrate on what needs to be done to bring back a job market with better quality jobs for the working stiff. Today, President Obama is expected to announce a series of steps to stimulate the economy. Yes, the pundits will be tearing him apart today, saying it’s just a government bailout and the free market needs to do its thing. But if we look back in history, these types of measures the administration is touting are what brought workers back from the brink during another bad economic down turn, the Great Depression. During that time there was a segment of society doing quite well while the regular guys and gals suffered, and during this recession many of those telling workers to accept less and do more are also doing quite well. This from a great opinion piece in the New York Times last week called “How to End the Great Recession,” by Robert Reich , the former labor secretary under Clinton: Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income. It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle. Reich has some suggestions how to make things better: THE Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures — Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage — leveled the playing field. In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as America’s middle class shared more of the economy’s gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs. By contrast, little has been done since 2008 to widen the circle of prosperity. Health-care reform is an important step forward but it’s not nearly enough. That’s where Obama’s proposals may come in. This news alert just in from Politico.com , according to a White House spokesman: “The president will work with Congress to enact a new up-front investment in our nation’s infrastructure – an investment that would help jump-start additional job creation, while also laying the foundation for future growth. This initial investment would fund improvements in the nation’s surface transportation, as well as our airports and air traffic control system.” The measures include the “establishment of an Infrastructure Bank to leverage federal dollars, and focus on investments of national and regional significance that often fall through the cracks in the current siloed transportation programs,” and “the integration of high-speed rail on an equal footing into the surface transportation program.” It’s hard to tell whether such measures will be enough, and a lot of smart and dumb people will surely be debating this today. But the bottom line is, just encouraging workers to accept a worse lot in life will not reinvigorate the middle class, and it won’t help the economy at large, right? The answer could lie in renewed organizing efforts. Amy B. Dean , co-Author of “A New New Deal: How Regional Activism Will Reshape the American Labor Movement,” in a Huffington Post piece today outlines how unions can help: It takes the organized efforts of working people to reverse these trends toward exclusion and to ensure that each new epoch will bring a shared prosperity. During the transition to the industrial economy, it was not preordained that the auto, steel, or textile industries would provide living wages, health care, pensions, and other benefits that allowed for a stable, thriving middle class in this country. Rather, employees needed to use the institution of collective bargaining to come together, negotiate with their employers, and demand the conditions that would provide a healthy quality of life for working people. Clearly the quality of work life is suffering. The story telling workers to shoot low in my local paper today quoted a worker, Sue Fritz, 49, who works at a state facility helping care for people who have developmental disabilities. “We’re working shorter with less people, and more is being expected of us. It’s a very strenuous day. To have to get up and go back in every morning…you have no choice.” There are choices, and things do change if workers want them to. Let’s go back in time to the first Labor Day. Washington Post blogger Valerie Strauss offers a history lesson : It was first celebrated in this country in the 1880s — at a time when people commonly worked 12-hour days. The first Labor Day rally, in 1882, was in support of an eight-hour workday.

Read the full article →

Les Leopold: Why the Big Lie About the Job Crisis?

September 3, 2010

The August unemployment numbers are ugly, yet again. Nearly 30 million Americans are still jobless or forced into part-time jobs. The Bureau of Labor Statistics official unemployment rate is 9.6%. It’s borader and more telling jobless rate (U6) of 16.7% confirms that we’re stuck in our own version of the Great Depression. We’ll need more than 22 million new jobs to bring us back to full-employment. Happy Labor Day. To get out of this quagmire we’ll have to face up to two fundamental facts: 1. We really are in the midst of a horrific jobs crisis. All the happy talk about the economy being on the road to recovery is just plain old denial. We’ll never find jobs for all the people who desperately need them until we recognize that this employment crisis poses a clear and present danger to our republic. Modern capitalist societies require full employment. When we don’t have it for long periods of time, chaos ensues. What’s missing in Washington is a sense of urgency. Denial is dangerous — and an insult to the unemployed. 2. We must face up to the real causes of this mess. Unfortunately, a lot of Americans are succumbing to a wrong-headed narrative that has been pushed into our heads: “We Americans sank ourselves in debt. We consumed more than we produced. We bought homes we couldn’t afford and used them as ATMs. Of course Wall Street did its part by offering us mortgages they knew we couldn’t really afford. The government also contributed mightily by pushing Fannie and Freddie, the giant housing agencies, to underwrite “politically correct” loans to low-income residents who shouldn’t have been buying homes at all. In short, we all are to blame.” From a flawed narrative always comes a flawed policy prescription: “The era of excess is over. We need to cut back on spending and borrowing. We need to reduce government debt by raising the Social Security retirement age and cutting social programs We’ve got to streamline our public sector by laying off public employees and cutting back their lavish pensions. And all workers will have to adjust to an era of intense foreign competition: We’ve got to reduce our wage and benefit demands if our companies are going to compete globally. We have to live within our means.” In short, we gorged ourselves until the economy crashed. Now we’ve got to tighten our belts and accept less to get it going again. It’s simple and logical and…..dead wrong. Collective guilt is always seductive. It may even be programmed into our genes. It’s possible that prehistoric homo sapiens survived by sharing blame in difficult times. But that soothing instinct does not serve us well today. We need to know the truth behind this crisis if we’re going to come close to solving it. For starters, “we” didn’t create this mess. Wall Street did, with the help of politicians who pushed through financial deregulation and an increasingly regressive tax structure that put outrageous sums of money in the hands of a few. Freed from regulations and flooded with money, Wall Street bankers went crazy. And before long, our economy crashed. It really is that simple. Starting in the late 1970s our country embarked on a grand real-time experiment to “unleash” the economy from government rules and oversight. The theory was that to end the era of “stagflation,” we had to cut taxes on the super-rich, freeing them to lead a gargantuan investment boom that would of course lift all boats. At the same time, the financial sector was liberated from its New Deal-era shackles. Yes, those constraints had prevented a financial crash for more than 40 years. But now, argued the best and the brightest, the new world order required a more nimble financial sector. Naturally, the markets could police themselves. In retrospect it seems like a very bad joke. Actually, the plan did work beautifully for the top one percent of us. In fact, these excessively wealthy people laughed all the way to the bank. America’s distribution of income, which had been reasonably equitable during the post WWII era, flew apart. In 1970 the top 100 CEOs earned about $45 for every dollar earned by the average worker. By 2008 it was $1,081 to one. With so much wealth in hand, the super-rich literally ran out of tangible goods and service industries to invest in. There simply was too much capital seeking too few real investments. And what a honey pot that proved to be for Wall Street’s financial engineers! Freed from any limits on constructing complex new financial products, hedge funds and too-big-to-fail banks and investment houses created an alphabet soup of new securities with the sky-high yields the super-rich craved. The rating agencies abetted the crime by blessing these flimsy products with AA and AAA ratings. Wall Street built this flim-flam of finance out of junk debt — like sub-prime mortgages — which it could pool, slice, and resell for enormous profits. In fact, selling these bogus securities was the most profitable enterprise in the history of Wall Street. Wall Street wrapped credit default swaps and collateralized debt obligations into pretty packages so that they could literally sell the same underlying junk assets again and again. It was through these marvelous feats of financial engineering that a $300 billion sub-prime crisis turned into a multi-trillion dollar catastrophe. (Check out The Looting of America for all the gory details.) And that’s how, the big bankers — not us — pumped up the biggest housing bubble in history. Wall Street didn’t need Fannie or Freddie or low-income homebuyers. It just needed deregulation, a lot of super-rich people with money to burn, and junk debt it could spin into AAA gold. The whole scheme worked just fine as long as the underlying collateral (our homes) appreciated year after year. But as soon as housing prices peaked, it was game over. The upside-down pyramid of debt and junk financial instruments came crashing down. The entire credit system froze, tearing a gaping hole in the real economy. Eight million jobs were destroyed in a matter of months. The cause of the crash is no mystery. The Great Depression happened the same way: a skewed distribution of income combined with a deregulated financial sector created a big bubble, and it burst. The only way to break the cycle is to attack those fundamental causes — we need to move money from the very top of the income ladder to the middle and the bottom, and we need to tie Wall Street up in regulatory knots. Through steep progressive taxes on the super-wealthy, fair income taxes on hedge funds and transaction fees on Wall Street’s proprietary trading, we can keep that bubble from reinflating — and in the process raise the money we need to put America back to work. With the revenue we collect, we can hire millions of people to weatherize homes and buildings and rebuild our infrastructure. Instead of laying off teachers we can hire more, and provide them with better training and support. We can expand universities and colleges too, and allow people to go to college for free, which will improve our peoples’ skills — and keep young people off the unemployment rolls. Of course all this would be costly in the short run. But progressive taxes on the super-rich and a windfall tax on Wall Street profits and bonuses would pay for it all, and then some. The American people would understand that it’s only fair to require the super-rich (whom we just bailed out) to fund the jobs they helped destroy through their reckless financial gambling. And in the long run, investing in infrastructure and education will make our country richer. Just look at the GI Bill: Giving returning WWII vets a free college education was expensive — but Congress later found that every dollar spent on the program yielded a return to our economy of $6.90. Are we really justified in reclaiming this wealth from Wall Street? Well, it’s our wealth, isn’t it? We just gave it to them. I’m talking about the nearly $10 trillion (not a typo) we shelled out to financial institutions in loans, asset guarantees, market supports, low-interest loans and a myriad of other forms of assistance as part of our rescue of the financial system. Now, thanks to our largess, the bankers are back to making record profits and bonuses again. Even President Obama, who helped engineer the whole deal, is apparently aghast. In his new book Capital Offense , Michael Hirsch quotes Obama at a White House meeting in December 2009: “Wait, let me get this straight. These guys are reserving record bonuses because they’re profitable, and they’re profitable only because we rescued them.” During 2009, the worst economic year since the Depression, the top ten hedge fund honchos averaged $900,000 an hour (that’s $1.8 billion each per year). And they did it only because we saved their butts from total collapse. Now it’s payback time. The bankers owe the American people hard cold cash, not just the promise of a great trickle down in the distant future. Incredibly, Wall Street executives are howling over every proposal to limit their profits or, god forbid, stick them with part of the bill for all the damage they’ve caused. They refuse to admit that they’ve done anything wrong. In fact they feel victimized. They seem to believe that skimming billions from our financial system via taxpayer bailouts is a good thing for everyone. Can they really believe that if we just left them alone, new jobs would flow like wine? Wall Street billionaire Steve Schwarzman got apoplectic when someone suggested that we close his favorite tax loophole (carried interest which allows him to pay a much lower tax rate than the rest of us). That would be “like when Hitler invaded Poland in 1939,” he fumed. Let’s stay with his regrettable analogy. Surely Schwarzman knows that Hitler rode to power in 1932 on the back of Germany’s massive unemployment crisis. And surely he knows that a massive jobs programs funded by taxes on the ultra-rich is a far better alternative. It’s time to say “the end” to the “We’re all to blame” fairytale. Let’s start a new story this Labor Day. It’s called, “Put our people back to work.” Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

Read the full article →

David Isenberg: Veterans 1, KBR 0

August 31, 2010

It is time once again to tune in to the latest epsiode, oops, I mean development, of the long running farce, oops, I mean legal case, involving KBR and Oregon National Guard soldiers. Yeterday there was significant pro-veteran ruling in the Oregon KBR Qarmat Ali litigation. I have previously written about this and open air burn pits KBR ran on dozens of U.S. bases in Iraq and Afghanistan in February , April and June . In a 29-page ruling the federal district court in Oregon considered the motion by KBR and co-defendants Overseas Administration Services, Ltd. and Service Employees International, Inc. to dismiss the suit for lack of subject-matter jurisdiction and rejected it. U.S. Magistate Judge Paul Papak wrote that on March 3, 2003 – before combat operations began in Iraq – the U.S. Army Corps of Engineers entered into a “Restore Iraqi Oil” (RIO) contract) with KBR. Under it, KBR and its subsidiaries agreed to provide services to the U.S. military in connection with efforts to restore the infrastructure underlying the Iraqi oil industry. Also under the RIO contract, the U.S. Army Corps of Engineers issued various “task orders” for KBR to perform. Combat operations in Iraq began on March 19, 2003. On March 20, 2003, the Corps of Engineers issued “Task Order 3,” which governed the services to be provided by KBR and its subsidiaries at Qarmat Ali and other facilities. Under Task Order 3, the U.S. military would declare a given worksite to be “benign” before KBR would begin operations there. A lot depends on what you mean by “benign.” In a footnote the judge wrote: The parties dispute the meaning of the term “benign” for purposes of Task Order 3. According to the deposition testimony of Robert Crear (retired Brigadier General of the U.S. Army Corps of Engineers) and of Gordon Sumner (retired U.S. Army Corps of Engineers Contracting Officer and regional director of contracting), “benign” referred to freedom from combatant activity and from nuclear or chemical weapons, and did not foreclose the possibility of environmental hazards, including hazardous (but not weaponized) chemicals. Support for this interpretation can be found in the provisions of Task Order 3, which suggest that pronouncement of a site as “benign” did not, for example, foreclose the need for environmental assessment. Nevertheless, defendants take the position that a “benign” designation necessarily meant freedom from known hazards, including environmental hazards, and support for defendants’ position may also be found in the language of Task Order 3, which indicates that a facility must be cleared of environmental and industrial hazards before it may be pronounced “benign.” Because I do not find this issue to be material to the analyses I am called upon to undertake in connection with the political question doctrine, the government contractor defense, or the combatant activities exception, the parties’ dispute over the definition of “benign” need not be resolved at this stage of these proceedings. In the underlying facts portion of his ruling the judge wrote: Task Order 3 provides that KBR was responsible for providing the Corps of Engineers with an environmental assessment of any facility in which it undertook operations. The obligation to provide such assessments included the obligation to report and evaluate any environmental hazards. According to Sumner’s and Gen. Crear’s deposition testimony, KBR was not merely permitted but required under Task Order 3 and the RIO contract to take all necessary precautions to safeguard personnel who might potentially be exposed to environmental hazards at worksites, including the wearing of protective gear and/or the closing down of operations at any unsafe site. In his analysis the judge noted that the defendants argue that this court lacks subject-matter jurisdiction by operation of the political question doctrine, by operation of the so-called “government contractor defense,” and by operation of the combat activities exception to the Federal Tort Claims Act. For background on this see my January post . The judge proceeded to detail other cases where district courts have found the political question doctrine inapplicable to tort actions brought against government contractors in the military context. In regard to KBR’s claims that various legal tests argue in favor of applying the political question doctrine he wrote that he found their arguments unpersuasive. He wrote, “the matter fundamentally at issue here is defendants’ performance of its contractual obligations to the government and to the plaintiffs rather than the advisability of any governmental policy-related decision.” But the guts of the decision, which is undoubtedly giving all PMC legal counsels’ nighmares, is this: Defendants here assert that their “provision of engineering and logistical support services at Qarmat Ali” took place pursuant to the specifications of a contract with the government, and that they did not exceed their authority under those specifications. On this basis, defendants argue that they were merely “executing the will of the United States” and are entitled to the benefits of derivative sovereign immunity. The evidentiary record belies both of defendants’ assertions. The rationale underlying the government contractor defense is easy to understand. Where the government hires a contractor to perform a given task, and specifies the manner in which the task is to be performed, and the contractor is later haled into court to answer for a harm that was caused by the contractor’s compliance with the government’s specifications, the contractor is entitled to the same immunity the government would enjoy, because the contractor is, under those circumstances, effectively acting as an organ of government, without independent discretion. Where, however, the contractor is hired to perform the same task, but is allowed to exercise, discretion in determining how the task should be accomplished, if the manner of performing the task ultimately causes actionable harm to a third party the contractor is not entitled to derivative sovereign immunity, because the harm can be traced, not to the government’s actions or decisions, but to the contractor’s independent decision to perform the task in an unsafe manner. Similarly, where the contractor is hired to perform the task according to precise specifications but fails to comply with those specifications, and the contractor’s deviation from the government specifications actionably harms a third party, the contractor is not entitled to immunity because, again, the harm was not caused by the government’s insistence on a specified manner of performance but rather by the contractor’s failure to act in accordance with the government’s directives. Assuming without deciding that the Ninth Circuit would apply the government contractor defense to the provision of the kinds of services KBR contracted to provide in Iraq under RIO and Task Order 3 – analysis of the RIO contract and of Task Order 3 fails to establish that the defendants’ actions alleged to have caused plaintiffs’ injuries were taken in direct compliance with any “reasonably precise” government directive. Quite to the contrary, defendants were contractually obliged to perform an environmental assessment of Qarmat Ali and to report any environmental hazards to the Army Corps of Engineers. Defendants were under no contractual obligation to put their employees or third parties providing security in connection with defendants’ operations into situations involving the risk of environmental harm, to refrain from requiring employees or third parties to use appropriate protective gear and clothing when placed into such situations, or to withhold material information regarding such risk from persons placed into such situations. Moreover, assuming arguendo that the government’s specifications regarding defendants’ obligations in connection with operations to be performed in an environmentally contaminated worksite were sufficiently precise to trigger the defense, plaintiffs have offered evidence tending to establish that the defendants violated those contractual duties, by failing to report the contamination at Qarmat Ali and by permitting the Oregon National Guard to perform duties at the site without appropriate protective gear. Because defendants did not conduct operations at Qarmat Ali in accordance with precise government specifications and without independent discretion as to the manner in which the operations were to be performed, defendants are not entitled to the government contractor defense. See Hanford Nuclear, 534 F.3d at 1000. Defendants’ motion to dismiss is therefore denied to the extent premised on the government contractor defense. In other words, the “we were just following orders” defense is looking even lamer than ever.

Read the full article →

McGonagle Joins Parsons’ Infrastructure & Technology Group

August 30, 2010

PASADENA, CA–(Marketwire – August 30, 2010) –  Parsons announced today that Joseph P. McGonagle joined its Infrastructure & Technology Group.

Read the full article →

Parsons Appoints Leketa as President of Its Water & Infrastructure Group

August 30, 2010

PASADENA, CA–(Marketwire – August 30, 2010) –  Parsons announces the appointment of Anthony “Tony” F. Leketa as President of Parsons Water & Infrastructure Inc. (PWI). PWI, a primary business unit of Parsons Corporation, provides customers worldwide with full-service engineering, construction, and management services in water, wastewater, and infrastructure development. In his new role, Mr. Leketa will be responsible for the business unit’s global operations.

Read the full article →

Kathleen Reardon: The Precarious Genius of the Middle Class

August 27, 2010

What will America become if we have to rely solely on the wealthy to provide medical, scientific, engineering, manufacturing, art and social inventions? Genius is not confined to any socio-economic group. It can emerge anywhere. Yet poverty closes most doors to the development of genius. Shut down the American middle class and where would genius arise? What route would it take to its fruition? Genius would need to come largely from the wealthy. The upshot of a two-tier America – the wealthy and everyone else scraping by – will be the death of American genius. If this had been the case during Jonas Salk’s childhood, where would we be? The son of Russian immigrants lacking formal education, he was encouraged to become the first of his family to attend college? The rest is history and polio became a disease of the past. What about Thomas Edison , the seventh child of middle-class parents? His educator mother saw in him a talent that others considered mere oddity, and she was able to foster that talent with home schooling. During Edison’s life, necessity became the mother of invention as he in turn sought to support his ailing parents. His genius, enabled by a middle-class upbringing, combined to change the course of mankind. If we had to rely solely on wealthy families for those who have shaped America, would we not be much less a nation than we are today? Georgia O’Keefe, Leonard Bernstein, Maya Angelou, President Obama, President Clinton, Secretary of State Hillary Clinton, Betty Friedan, Bella Abzug, General David Petraeus, Supreme Court Justice Sonia Sortomayor, Michael J. Fox, Steve Jobs, Ken Burns, Margaret Mead and so many others would not have influenced art, music, law, society, human behavior research, and technology to the extent they did were it not for the ability of those without great wealth to change the world. It is difficult to precisely define the parameters of the middle class. And certainly the upper echelons of the American middle class offer a greater boost to the flowering of genius. But without this range and the dreams it enables, this nation can only suffer. Why then would we stand by idly while the very wealthy and their big-business entities buy off our senators and congressmen, as they manipulate and dumb down mass media to keep Americans out of touch, and their shills call for “deficit reduction” efforts to cut Medicare and Social Security while keeping extraordinary tax breaks and loopholes for the very rich intact? How do we justify turning a blind eye to how the U.S. economy remains managed by the very people who brought us the catastrophic and continuing failure of the financial and mortgage markets? How can we allow the “too-big-to fail” banking-bailout slights of hand to continue? Can we afford to passively watch efforts to keep a politics-averse champion like Elizabeth Warren from actually protecting “consumers”? Why do we listen to propagandistic pundits warn against redistribution of wealth when the real redistribution over the last 30 years has been the transfer of middle-class American dollars into the pockets of the very, very rich? What benefit is there to remaining quiet while the quality of public education deteriorates? While alternate forms of energy barely blip the surface of our energy policies and are actively opposed? While the infrastructure of the U.S. not only fails to lead the world or even advance competitively, but is overburdened and crumbling? As if surreptitious forms of destroying the middle class weren’t enough, in Third World America Arianna Huffington describes another egregious way that the depletion of wealth for all but the few happens in broad daylight: The corporate class games the system — making sure its license to break the rules is built into the rules themselves. One of the most glaring examples of this continues to be the ability of corporations to cheat the public out of tens of billions of dollars a year by suing offshore tax havens. Indeed, it’s estimated that companies and wealthy individuals funneling money through offshore tax havens are evading around $100 billion a year in taxes — leaving the rest of us to pick up the tab. And yet, government initiatives that benefit people whose lives are shattered or in danger of being so is labeled “socialism.” Apparently it’s okay in America today to make the rich richer, but don’t dare give a hand up to hard working people who are barely getting by. Unless we heed the signs of increasing greed and inhumanity among the most powerful entities in America, and fight it at every turn, America is heading toward a day when it will no longer be the land of opportunity for those with little money, nor the protector of life, liberty and the pursuit of happiness, nor a place where dreams can come true for even the poorest of children. Rather it will become the killing fields of its own native genius, the dismantler of hope and the enemy of its own promise. Dr. Reardon also blogs at bardscove .

Read the full article →

Dave Johnson: China Springs The Trap

August 13, 2010

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. China has a national economic/industrial policy and we don’t. They create the conditions for key industries to thrive and we don’t. They make sure all of the infrastructure, finance, supply chain, educational, legal, technical and policy elements are in place for an industry to take hold and take off and we don’t. If they don’t have an industry or a technology they want, they build it or get it. And they make sure that they get it. They invite a company in to their potentially huge market, they require that company share a technology with one of theirs, they make sure that their companies learn how to build what they need to build with the processes they need to do it, they make sure their designers know how to design what they need to design, they make sure that the parts are made there, the materials are made there, the people are trained there. The policy is called ” indigenous innovation .” And when everything is in place, they spring the trap: they don’t need the outside partners anymore. Thanks for the help, now go away. (But don’t try to do anything about it, that would be “protectionism.”) This is not “China bashing” by any means. It is not “bashing” to say they’re being smart, and we’re being stupid. It is not “bashing” to understand that they’re moving into the future, we’re mired in conservative ideology that is holding us back. They’re making sure they take care of their people, we aren’t. Their industries are moving ahead, ours are falling behind. They’re winning, we’re losing. In March , Business Week looked at China, in China: Closing for Business? (turn your sound off before clicking) Nearly a decade after China’s entry into the World Trade Organization, many foreign companies say the warm reception they once received has turned frosty. … A new government procurement program known as “indigenous innovation” features rules favoring local firms: It could block sales worth billions of dollars a year. … Beijing has written strict standards for everything from cell phones to cars, often couching them in a way that gives an advantage to domestic producers. Summary, China used the promise of access to its huge market to grab control of much of the world’s manufacturing. “You want to sell to us, you have to build your factories here.” Now that they have it they are no longer as interested in sharing. And while they subsidize manufacturing in various ways – including currency manipulation – to lure companies to move factories and jobs to China, they are not letting those companies sell inside China. In today’s Washington Post, Solar plan in China’s Inner Mongolia highlights pitfalls for U.S. firms , an American solar power company What happened to the Mongolian solar farm project reads like a cautionary tale on the pitfalls facing U.S. firms trying to enter the Chinese market, particularly in a sector such as alternative energy, which has many indigenous competitors. It also underscores what U.S. business executives here say is a lack of reciprocity in access to China’s markets. If we want to bring back jobs, grow the economy, balance the budget, pay off the debt and move into the future we have to break from the conservative ideology that has been holding us back. We have to make our government serve We, the People again. We have to start competing with China and other countries. To do that we have to invest in our future and that means a lot of spending. We have to rebuild our country’s infrastructure. We have to rebuild our education system. We have to restore control over our financial companies and make them serve our economy again by investing in American manufacturing and innovation. And we need to develop a national economic/industrial strategy. Sign up here for the CAF daily summary .

Read the full article →

Mark H. Ayers: There is No Tomorrow…America Needs Job Growth Now!

August 13, 2010

By any objective measure, our national economy is not in recovery, but rather is still in serious trouble. The latest July figures from the U.S. Department of Labor show that unemployment remains at a very high 9.5%, while in the construction industry the jobless rate continues to hover at or near 20% nationwide and many of the unemployed have been without a job for over 6 months. The skilled construction workers who have built this great country are growing increasingly desperate, and yet, politicians of both parties and the mainstream media are ignoring their suffering. People like Andrew Fonger. Andrew is in his mid-30s, and lives and works in the Washington, DC area as a member of Local 10 of the International Union of Elevator Constructors. He is married and the father of a 1 year old daughter. While the media likes to say that Washington, D.C. is recession proof because lobbyists and lawyers are fully employed, try telling that to Andrew. He has been unemployed since January, and like millions of other Americans, Andrew is facing excruciatingly painful decisions. He and his wife have already had to eliminate any notion of putting money aside for their daughter’s college education, because what little savings they have, combined with what Andrew collects from unemployment insurance goes exclusively to make the payments on their home and to meet the $1,100 per month payment required for Andrew to retain his health benefits under COBRA. And like far too many Americans these days, Andrew is facing the prospect that “when the savings are gone, the next thing is the house.” Or take Jackie Partridge, a member of the Bricklayers and Allied Craftworkers Local 7 from Colorado, who has also been unemployed for over seven months. Her skills and hard work used to earn her a weekly paycheck over $800. Now she is on her second extension of unemployment benefits with two teenagers to support. She says: I thought about maybe getting two $10 jobs somewhere, and I can’t. I’ve got two kids that aren’t over 18, and I’m the only caretaker. And I can’t afford to be away from them for 20 hours a day… And even my son, he’s 15, and he wants to get a job, and there’s not even anything for him to try to help out. Both Andrew and Jackie are skilled construction professionals, who have completed extensive multi-year apprenticeship programs and have years of on-the-job experience. Unfortunately, those skills are sitting idle while our infrastructure and schools crumble. They both are even looking for work outside the construction industry, despite their skills which normally make them highly desirable to many employers. It breaks my heart to hear their stories and hundreds of thousands just like them, when I know that there isn’t a community in this country that doesn’t have a bridge, school, or power plant that needs retooling. We all know that during these past several months Jackie and Andrew could have been gainfully employed, growing the wealth of the U.S.A. Not only would their work add value on its own, but it would benefit the small businesses that overwhelmingly make up the construction industry, generate revenue for manufacturers, and increase tax receipts for state, local and the federal governments. Furthermore, as they continue to remain unemployed, there is a corresponding decline in income and consumer demand. In a recession, that kind of decline can degenerate into a vicious downward spiral, as those who are still employed, seeing the threat of unemployment looming, choose to save rather than spend. As a result, demand is further reduced, more people are laid off, and the downward spiral continues. Our nation can no longer to ignore the suffering of the unemployed who so desperately want to get back to productive work. Nor can we afford to indulge our leaders’ penchant for delay and political posturing, which comes at the expense of millions of working American families who are hurting. What we need now are bold approaches to economic recovery that will produce jobs. Our economy needs job-creating investments, because tax breaks won’t cut it. Why would they, when U.S. corporations are already sitting on $1.8 trillion in cash. In fact, corporate profits today are greater than they were at the height of the most recent bubble, and yet job creation is virtually at a standstill. With statistics like these staring them in the face, the time is now for policymakers in Washington to develop initiatives that will put America’s skilled construction workers back on the job. Businesses are sitting on their mountains of cash, because they do not foresee sustained demand for their goods and services. Extending the Bush tax cuts for the wealthy will not solve this problem. What we need are investments that will boost demand and create long-term economic growth – investments like re-building our nation’s infrastructure for the 21st century and transforming the way our nation develops and uses energy. Tax breaks for the wealthy never built a bridge or an airport. They never increased American productivity by reducing traffic congestion, increasing broadband service, or creating a modern energy grid. The most fundamental step in boosting our economy is to get American workers back on the job. Getting people back to work affects the momentum of the economy, which ultimately creates the cycle of private-sector job creation that we need. It’s impossible to overstate the threat that this crisis of unemployment poses to the well-being of the United States. Entire communities – both rural and metropolitan – are going under. We need to immediately build on the successes of the American Recovery and Reinvestment Act and use scarce federal dollars in the most efficient way to boost demand and get the unemployed back to work. You can find Andrew and Jackie’s stories and others just like them, whose struggles during this recession have gone ignored on BackOnTheJob.org. Until we simultaneously tackle the jobs crisis facing the construction industry and our dilapidated infrastructure, our nation will not get back on track, nor will we be able to build the shining, hopeful, 21st century vision of America that President Obama was elected to build. And that, brothers and sisters, would be a tragedy for all the Andrews and Jackies waiting and hoping to get back on the job. Mark H. Ayers is the President of the Building and Construction Trades Department, AFL-CIO – an alliance of 13 national and international unions that collectively represent over 2 million skilled craft professionals in the United States and Canada.

Read the full article →

Sara Robinson: Tax Cuts Are Theft: An Amplification

August 11, 2010

Dave Johnson’s post on the broken contract that’s allowed private interests to siphon off our public wealth for the past 30 years is incredibly important. His basic argument is this: We, the People built our democracy and the empowerment and protections it bestows. We built the infrastructure, schools and all of the public structures, laws, courts, monetary system, etc. that enable enterprise to prosper. That prosperity is the bounty of our democracy and by contract it is supposed to be shared and reinvested. That is the contract. Our system enables some people to become wealthy but all of us are supposed to benefit from this system. Why else would We, the People have set up this system, if not for the benefit of We, the People? Dave points to the practical effects of a piece of conservative theology that deserves a bit of deeper drilling. It’s this: Conservatives believe that only private individuals should hold wealth. They do not believe in commonly-held public wealth of any kind. And that’s why they feel perfectly free to raid the vast legacy that our ancestors have accumulated and stewarded for us over the past 230 years. It is a legacy — the biggest one ever amassed in history, in fact — and we do need to be thinking about it that way. What they’ve stolen from us and arbitraged away isn’t just our own money; it’s the vast accumulation of civilizational wealth that was bought with the blood, sweat, tears, endless sacrifice, earnest planning, and bold dreaming of a dozen generations of American ancestors, and then bequeathed to us to ensure our own futures. Each of those generations received it in trust from the one that came before, added its own unique contributions to it, and then passed it on as an endowment to the next. As time compounded the gift, the legacy got richer; and our sense of who was entitled to share in the bounty got broader. By the time we got our hands on it, the American legacy was, quite simply, the biggest trust fund of physical, social, and cultural capital on earth. To understand the magnitude of the gift, consider how things work in the great aristocratic houses, both in Europe and the US. If you are a Mountbatten or a Rothschild or a Morgan or a Bush, your clan has a deep well of resources, built up over many centuries of careful investment, that ensures that you will never go without. There’s always a family-owned house somewhere to stay in, an income stream to support you, and connections that will open any doors you might want to pass through. There’s a villa, chalet, or yacht where you can vacation. There’s a fleet of cars standing by to take you wherever you need to go. There are trusted family retainers to advise you on matters of money and law. If you need anything at all, ask around: there’s undoubtedly someone in the extended clan who already has it to share, or knows how to get it for you. It’s impossible to underestimate or overstate the lifelong advantages that come with being born into a family like this. At every turn, throughout your life, you’ll have every opportunity to make good — and no excuses not to. For the first 200 years of our existence, being born American was not unlike being born into the richest, most powerful family on the planet. By the middle of the 20th century, generations of sound investment and careful stewardship had built our collective trust fund to the point where we, too, began to believe that the shame would be on us if any member of our great household ever had to go without. If you needed decent housing or a monthly remittance to get by, we could cover that. If you needed doors opened for you in other countries, we had friends all over the world who were glad to deal with Americans. If you wanted a world-class education or the vacation of a lifetime, no problem: the family ran the best schools and universities in the world, and owned breathtaking national parks for your pleasure. If you needed to get around, we provided safe transportation networks. If you needed advice or help with a plan, there were trusted public servants on retainer. Our attitude toward the proper role of government was that, at our best, America was a big, powerful clan that had a moral duty (however imperfectly and selectively met in practice) to take care of its own, and maximize the opportunties availble to its members. It’s only when you think about our common wealth the way the world’s richest families do — as a bequest from a long line of distinguished ancestors, as a vast common resource base that provides us with extraordinary material comfort today, and as a sacred trust that we must manage and multiply on behalf of generations yet to come — that you can really begin to understand the sheer magnitude of everything they took from us. The thieves didn’t just steal our houses, our retirement funds, our careers, or our tax money. It went far beyond that. They also stole the family jewels — the vast infrastructure that’s been built up for centuries by generations of foresighted Americans, now collapsing into uselessness. They defunded the great universities, crowded our kids into classrooms like factory farmed chickens, and are shutting down the magnificent state and national parks. And they’re also stealing our future, committing us to endless debt, sucking the marrow out of our international standing, foreclosing our opportunities, making it impossible to solve looming problems, and forcing us to hand off to our children a far more meager legacy than the one we received. They’re not just cheating us. They’re stealing from all those hardworking generations that sacrificed to bring us here; and all the generations still yet to come, who will be so much poorer because we let them loot us blind. Here’s the irony: the people who did this to us did it precisely because they also understand wealth in these generational terms. In many cases, the thieves were themselves from wealthy families that have operated exactly this same way for a very long time, and who have personally benefited from the private wealth accumulated by their ancestors. In other cases, they were “self-made” billionaires who may not have wealth in their past, but were determined to capitalize a dynasty in the future. So, if they understand this, where’s the disconnect? Why couldn’t they respect the public’s need to manage our common wealth the same way they manage their own private wealth? The disconnect is this: In the conservative worldview, it’s right and legitimate for private families and corporations to accrue generational wealth, and build great dynasties. But it’s absolutely wrong for the democratic masses to accumulate wealth that way; or to collaborate, via the government, to ensure that all of their children will have a birthright sufficient to open the doors to their dreams. Maggie Thatcher told us outright: “There is no such thing as society. There are only individuals and families, and their interests.” And if there’s no such thing as society, then society has no right to accumulate wealth — via taxes, investment, or any other means. Viewed this way, a conservative might even think it’s a virtuous thing to defund and defraud the public out of any capital it does manage to acquire. In the view of these economic royalists, the bottom line is this: it’s OK to steal from their American brothers and sisters because they don’t really believe that the family is legitimate in the first place. Being bastards — heirs only to a social contract they insist never existed in the first place — the rest of us were never entitled to the blessings of a birthright, any more than we’re entitled to any other rights, including the right to govern ourselves.

Read the full article →

Richard (RJ) Eskow: Fareed Zakaria’s "Greedy Consumers" & Hive Mind CEOs

July 7, 2010

Fareed Zakaria is an interesting writer who says some sensible things, as when he called the intensity of the war in Afghanistan ” disproportionate ” to the threat. But he also reflects the biases and distorted perceptions of a punditocratic subculture that continues to paint average citizens as reckless children and business executives as Delphic sages. Zakaria all but blamed the Great Recession on greedy consumers a while back: “If we wanted a bigger house, a better TV or a faster car, and we didn’t actually have the money to pay for it, no problem. We put it on a credit card, took out a massive mortgage and financed our fantasies.” Now he says that corporations are sitting on $1.8 trillion in unused cash, money that could stimulate the economy, in part because business leaders are frightened of the President. How does he know? He says he spoke to a “series” of non-randomly-selected CEOs (he doesn’t say how many) and, like hive-mind children in a Village of the Damned sequel, they spoke the same words and thought the same thoughts: “They still admire him,” Zakaria writes, but they “all think that he is, at his core, anti-business.” He is not of our kind … The Hive Mind unanimity of these proclamations are cause for skepticism in themselves. And I haven’t read Zakaria’s interview transcripts, but trust me: If these CEOs could safely make money by spending that cash today, Leon Trotsky could be in the White House painting it red and they’d still get busy writing checks. The Great Recession was created in boardrooms and not living rooms. Bankers’ decisions are tying these non-bank CEOs’ hands. And if you take the ” greedy consumer ” idea to its logical conclusion we would be a society that imprison the marks and bails out the con men. Oh, wait … Zakaria insists, based on his secret conversations with CEOs “who did not want to be quoted by name,” that they’re not just hoarding cash because of economic uncertainty (although he acknowledges that as the “primary cause”). What makes it worse, he says, is that they all think Obama’s too much of a lefty. Zakaria also adds that while “there is a strong case” (albeit a lefty one) for “a temporary and targeted stimulus,” it looks “politically impossible.” If enough people in his position repeat that idea, of course, it becomes a self-fulfilling prophecy. And if a stimulus is proclaimed impossible and these CEOs are sitting only the only remaining big chunk of cash, what’s the only remaining conclusion? We better give them what they want. Zakaria’s CEOs chant in unison about the evils of regulation, but for a hive mind they’re surprisingly vague on specifics. Zakaria mentions health reform, although essentially all of the “top 500″ nonfinancial companies already provide coverage; cap-and-trade, whose future is uncertain; and financial reform, which is likely to help these nonfinancial companies obtain credit (while retaining their access to the kinds of derivatives they use for risk management purposes.) The CEOs are uniformly polite, as such collective entities usually are in sci-fi movies. “Many … voted for Barack Obama.” “They still admire him.” It’s the “politics,” and their (eerily unanimous) perception that he’s “anti-business,” that adds an additional brake on their desire to spend. Here’s the bottom line: Any executive of a publicly-traded who failed to spend the money needed to serve a ready-to-buy customer base would be violating her or his duty to stockholders and would probably be fired immediately. Their problem isn’t politics – it’s customers . As in, they don’t have any. Business isn’t spending because consumers aren’t spending. Consumer expenditures are flat and savings rates are up . Households have the same concerns about the economy that CEOs have, and they’re reacting the same way: by spending less and hoarding cash. Granted, they don’t have to answer phone calls from Fareed Zakaria while they’re doing it, which simplifies their day somewhat, but otherwise the reaction is strikingly similar. Greedy consumers: Where are they when you really need ‘em? Then there are the problems that banks have created for these CEOs. (Remember, they run non-financial corporations.) One of their greatest problems is that they can’t trust their banks to be there when they need them. As the Wall Street Journal reported: ” In the darkest days of late 2008, even large companies faced the threat that they wouldn’t be able to do the everyday, short-term borrowing needed to make payrolls and purchase inventory.” One of the reasons companies keep cash on hand is out of fear that could happen again. And, as we’ve discussed before , banks have slashed lending to the small businesses that represent a large customer base for these companies. Banks aren’t lending to consumers, either, or they’re lending at inflated rates. And thanks in part to the “Greedy Consumer” folktale, there is no political will to pressure banks to write off some of the inflated value of the mortgages on their books. That would free up more money for other spending while potentially reducing the foreclosure rate, and it would distribute the “moral hazard” of greedy behavior a little more fairly. But we’re inevitably going to be told it’s “politically impossible.” To be fair, Zakaria never specifically endorses the purported views of these CEOs as his own. He just lets the impression drift into the ether: An anti-business Obama is frustrating business and stifling growth. His piece is especially frustrating because all the right information and conclusions are there. But like a Blair Witch inscription or a backward-looped message on a rock song, the message has to be decoded and the real information extracted: “There is a strong case for a temporary and targeted government stimulus.” “Big government spending can only be a bridge …” (Nobody denies that.) “Economic uncertainty was the primary cause of (business) caution.” The commentariat subculture which sees these facts yet still repeats the myths does so, I suspect, because it is determined to be bravely “centrist” – no matter where the facts may lead. Make no mistake. Zakaria is absolutely right when he says that “Obama needs to outline a growth and competitiveness agenda that is compelling to the (nonfinancial) business community.” But that agenda must include returning the financial business community to sound and productive lending practices. It must give customers the wherewithal needed to buy the products these businesses make – which means jobs. It must rebuild our infrastructure. Then these businesses will undoubtedly free up more of their $1.8 trillion, knowing that it can be used to create products for a market that’s able to buy them. Which all sounds great, except that according to Fareed Zakaria it’s “politically impossible.” Apparently there’s more than one Hive Mind on the loose these days. _______________________________________________________________ Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America’s Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light . He can be reached at “rjeskow@ourfuture.org.” Website: Eskow and Associates

Read the full article →

Halleman Joins Parsons as Vice President, Business Development Water & Infrastructure

July 6, 2010

PASADENA, CA–(Marketwire – July 6, 2010) –  Parsons is pleased to announce that Mark A. Halleman has joined the company as Vice President, Business Development, for its Water & Infrastructure group. In this capacity, he will be responsible for not only developing the East Division’s project and program leads but will oversee the pursuit of large water projects.

Read the full article →

JPMorgan Sends Mining Team To Afghanistan

June 18, 2010

WASHINGTON — Mining companies around the world are eager to exploit Afghanistan’s newly discovered mineral wealth, but executives of Western firms caution that war, corruption and lack of roads and other infrastructure are likely to delay exploration for years. A few high-risk investors are sufficiently intrigued by the country’s potential to take an early look. JP Morgan, for instance, has just sent a team of mining experts to Afghanistan to examine possible projects to develop.

Read the full article →

JPMorgan Sends Mining Team To Afghanistan

June 18, 2010

WASHINGTON — Mining companies around the world are eager to exploit Afghanistan’s newly discovered mineral wealth, but executives of Western firms caution that war, corruption and lack of roads and other infrastructure are likely to delay exploration for years. A few high-risk investors are sufficiently intrigued by the country’s potential to take an early look. JP Morgan, for instance, has just sent a team of mining experts to Afghanistan to examine possible projects to develop.

Read the full article →

JPMorgan Sends Mining Team To Afghanistan

June 18, 2010

WASHINGTON — Mining companies around the world are eager to exploit Afghanistan’s newly discovered mineral wealth, but executives of Western firms caution that war, corruption and lack of roads and other infrastructure are likely to delay exploration for years. A few high-risk investors are sufficiently intrigued by the country’s potential to take an early look. JP Morgan, for instance, has just sent a team of mining experts to Afghanistan to examine possible projects to develop.

Read the full article →

Brett King: Mobile Data Plans are wrong…

June 15, 2010

The greatest competitive differentiation a mobile operator can give me today is an always on data plan across devices. Right now I have an iPhone, a Blackberry, an iPad and a Mac and I effectively have to manage different data plans for each device. This sucks. I also maintain a broadband connection at home, although I would abandon that gladly if my wireless data deal were better. Not only does multi-device connectivity cost me more than I believe it should, but I actually have different plans with different providers for different devices. Some are monthly WiFi deals, others are mobile data deals that actually limit my downloads on a monthly basis, and others are pre-paid deals that I pick up when I am visiting other countries. My best deal is a great 3.5G solution through CSL in Hong Kong, where I pay around US$50 a month for 21Mbps access speeds and unlimited downloads. Unfortunately when I am working in the United States, UK and Australia on my iPhone or iPad, I can’t get a deal even remotely close to this sort of value for money. Firstly, 21Mbps isn’t available on AT&T, Telstra or many of the UK providers.  Secondly, unless you are Sprint 4G in the US, there’s not one provider who gives an unlimited download deal. In the US, UK and Australia on my mobile plans I am restricted to downloading between 6 Gb and 10 Gb per month. You might think that sounds like a lot, but I’ve recently been conducting webinars and Skype teleconferences frequently, and I can chew through 1 Gb of data in a single day. If you exceed the monthly download limit, then that’s where you start to singlehandedly make an sizeable direct contribution to the profits of the telco themselves. Normally this manifests itself as overage charges that resemble the budget of a mid-size multinational. Plans need to be for access, not data I understand the need and right of an operator to make margin from their business. To some extent with fixed line business I understand the cost of running cable and the fact that as a user of the infrastructure I must pay a penalty. But let’s face it, when it’s wireless data of the 3G or 4G network, essentially the operator is providing this over cell tower infrastructure that was installed in most cases over 10 years ago, and has just undergone successive upgrades of antenna and firmware to operate at the new frequencies. Unless you are a VNO (Virtual Network Operator) the data is costing you nothing. In any case, the cost of the infrastructure is a sunk cost, and regardless of how much data I suck down the pipe, I should be paying for the size of the pipe, not for the data because the operator most certainly isn’t paying for the data. To illustrate the great digital divide let’s compare the more progressive countries with US, UK and Australia based on 12 month contracts. The great digital divide Pricing plans should get cheaper a lot faster than they do You’ve heard of Moore’s Law right? Well there’s a law for the telecoms sector in respect to bandwidth too. It’s called Gilder’s law . Gilder’s law effectively states that the capacity of a pipe to carry data will increase by at least 3 times Moore’s law. Moore’s law says that computing capacity/power will increase at 200% per 2 years, so that means bandwidth will increase 600% in carrying capacity every 2 years. So the cost of data over a 7Mb Next-G modem, if it is $50 today, should be $8 in 2 years time for the same deal. From my experience, this is extremely unlikely. So what is happening is operators are getting increasingly cheaper pipes, and are maximizing the profit of those pipes over more years than they need to. If South Korea can provide 1 Gbps broadband in the home for the same price as Australia charges for a 2.5Mbps connection, you know something has to give eventually. So what is the great equalizer? 4G – Herein lies the problem The next generation of mobile standards (4G) allows for much faster download speeds, infact, when 4G taps out the upper end will allow 1 Gbps download speeds. The problem is that when Australian, UK and US providers move to the next generation of technology, capping downloads with limits just won’t make any sense whatsoever. What would you cap it at? 100 Gb? It gets a little ridiculous. I could download a DVD quality movie every day and still not exceed my download limit. But more importantly, once in place, the whole benefit in 4G is the fact that I become permanently unwired as a consumer. To understand where we are going means that we will move from one device to another seamlessly. This is already happening with the iPad, iPhone and your HD TV. I am looking for a data provider that allows me access to connectivity as a bundle, not by Mb. Conclusion In a Wired article back in 1993 George Gilder predicted that Bandwidth would eventually be free. I believe that bandwidth will eventually be so cheap that it is effectively free, but right now operators need to understand that charging for the pipe, and not the data is how they can both enable business and future revenue.

Read the full article →

Amy Traub: Could Rising Wages in China Boost American Cities?

June 11, 2010

The minimum wage in Beijing is up 20 percent this year. In export giant Shenzhen the minimum just climbed 15.8 percent. And 18 other cities and provinces across China have hiked their base wage as well . To stave off strikes and a highly publicized spate of workplace suicides , foreign manufacturers have increased pay and improved working conditions. Rising wages represent long-overdue good news for the overworked and poorly paid employees who make the consumer products Americans use every day. But could it be positive for American workers – and the economies of our hometowns – as well? Consider the American jobs lost and U.S. wages suppressed by unfair trade with a country that – before what appears to be a recent policy shift – regularly used the power of the state to repress workers and keep wages down. In March, economist Robert Scott at the Economic Policy Institute issued a report concluding that 2.4 million jobs were lost or displaced as a result of U.S. trade with China between 2001 and 2008. (This is a net figure, representing the job lost even after accounting for the new jobs that were created as a result of China trade.) Cities like Los Angeles, Austin, and San Diego saw the most employment disappear, and job losses were also steep in the Chicago metro area (18,000-plus jobs lost) and the Denver and Portland regions. Most of the lost jobs were manufacturing positions, middle-class jobs with good benefits to support families. What’s more, Scott argues: Competition with low-wage workers from less-developed countries has also driven down wages for other workers in manufacturing and reduced the wages and bargaining power of similar workers throughout the economy. The impact has affected essentially all production workers with less than a four-year college degree–roughly 70% of the private-sector workforce, or about 100 million workers. For a typical full-time median-wage earner in 2006, these indirect losses totaled approximately $1,400 per worker (Bivens 2008). China is the most important source of downward pressure from trade with less-developed countries, because it pays very low wages and because it was responsible for nearly 40% of U.S. non-oil imports from less-developed countries in 2008. Could an increase in Chinese wages begin to reverse the trend? It’s important to note that Chinese wages remain very low – in Beijing, for example, the new minimum wage amounts to no more than $140 a month – so it’s not as if American labor is about to become competitive on the basis of cost alone anytime soon. Yet analysts are already speculating that rising wages in China could push up the price of Chinese imports to the United States. If that happens, Americans would find it relatively more affordable to buy to buy domestically produced goods and American exports might see a boost as well, all helping to bolster American manufacturing and create jobs. Ultimately, better-off Chinese consumers could even provide a market for American-made goods. While other low-wage countries are no doubt eager to grab their share of footloose factories, it’s unclear whether they have the infrastructure to quickly support a shift in manufacturing big enough to change this dynamic. Today, the U.S. trade deficit with China is still growing and China has yet to revalue its artificially low currency , a step that would magnify the impact of rising wages on U.S.-China trade. It’s going to take more than a bump in China’s legendarily low pay to create a real boom in U.S. manufacturing that could bring good jobs back to American cities. But increasing wages in China represent a step toward more balanced world trade. It’s a good thing for Chinese workers and their American counterparts.

Read the full article →

World Cup Marks Climax of FIFA Chief Blatter’s $1.2 Billion African Gamble

June 10, 2010

By Tariq Panja June 11 (Bloomberg) — FIFA President Sepp Blatter’s 35 years with soccer’s governing body have included nine World Cups on five different continents. The event starting in South Africa today will define his career more than any other. Since visiting Ethiopia in 1976, a year after he got a job as a FIFA technical officer, Blatter talked about a World Cup in Africa. Now that it’s happening, the 74-year-old Swiss still isn’t ready to retire, rebuffing calls for him to step down. He said yesterday he hadn’t finished his “mission.” “This World Cup for him, it’s like a mother with a baby,” Walter Gagg , a 68-year-old aide who has known Blatter for four decades, said in an interview at FIFA’s headquarters near Zurich. “For him, this will be his legacy for all his life.” Blatter has made South Africa 2010 the pillar of his presidency with matches stretching from Nelspruit to Cape Town over the next month. The $1.2 billion that FIFA has spent on South Africa is more than for any World Cup in history. “He took a major risk,” said Danny Jordaan , head of the country’s World Cup organizing committee, in a telephone interview. “Should that experiment fail, of course he would have had to bear that cross.” Blatter hasn’t given his personal endorsement to any of the bids vying to host the World Cup in 2018 or 2022. Global Event As president of FIFA, the French acronym for Federation Internationale de Football Association , Blatter controls an organization that generated a record $1 billion of revenue last year, and holds the same amount in its reserves. Almost all the income is derived from selling commercial and broadcasting rights to the World Cup, sport’s most-watched event. A first World Cup in Africa was a theme Blatter repeated as he crossed the continent in a private jet provided by Qatari billionaire Mohamed Bin Hammam , Asia’s top soccer official, during his campaign to assume the top job at FIFA in 1998. After missing out on the 2006 World Cup to Germany by a single vote, South Africa was awarded this year’s event in 2004 after a proposal by Blatter to rotate the competition across different continents, starting with Africa. FIFA scrapped the plan once South Africa and then Brazil were chosen to host the next two editions. “If it works well, it will be the masterpiece of Blatter,” said Roland Zorn , a journalist with German daily Frankfurter Allgemeine Zeitung who’s followed FIFA since 1986. “If it’s a disaster, it will be the end of his presidency.” FIFA said Blatter’s schedule meant he was unable to be interviewed for this article. ‘My Mission’ Blatter said at a press briefing yesterday that he intended to stand for a fourth four-year presidential term if backed by enough of the 208 soccer associations that make up FIFA. He must seek re-election in 2011. He stood unopposed in 2007. “We shall work for the next generation, and when we say we work for the youth, that’s what we want to do,” Blatter said. “This is my mission. The congress next year will say ‘yes’ or ‘no,’ and somebody else will take it up or I will go on.” Bin Hammam said in February the time had come for a change of leadership at the top of the world game. Preparations for the 2010 competition haven’t always been smooth. Construction costs for new stadiums have overrun, while workers at several sites went on strike. Organizers also have had to allay security concerns. More than 5,700 incidents of serious crime are reported in South Africa each day, including 50 homicides, among the highest rates in the world. Wrong Venue Uli Hoeness , a World Cup winner with Germany in 1974, the last tournament before Blatter joined FIFA, said in February this year’s choice of host was “the biggest wrong decision.” Blatter has said it would have been “immoral” to ignore Africa’s claims to stage the tournament, arguing the world owed something to the continent after “taking so much.” The champions of the English, Italian and Spanish soccer leagues each had at least two Africans on their teams this season. “His vision was to go to Africa and then not end in North Africa but in black Africa,” said Horst Schmidt , chief executive officer of the 2006 World Cup and a consultant to the 2010 event. “He’s been emotionally involved in this World Cup from the beginning and his expectation was always to convince the world that Africa can be the right place.” FIFA sold the marketing and television rights to this year’s event for $3.2 billion, 30 percent more than it did for the 2006 tournament. Local organizers probably won’t approach the 150 million-euro profit the German hosts did, Schmidt said. Controversial Statements Blatter’s tenure has been punctuated with controversial comments, allegations of corruption, and bitter battles for the top FIFA job, first in 1998 and then in 2002. Blatter, whose salary isn’t disclosed, was cleared when 11 members of FIFA’s 24-member executive made a complaint to Swiss prosecutors in 2001. They accused him of financial mismanagement linked to the collapse of marketing partner ISL and buying votes, according to court papers. In 2004, Blatter said public interest in women’s soccer would grow if players started to wear “tighter shorts.” Four years later he provoked an angry response from Alex Ferguson when he likened the Manchester United manager’s refusal to allow star Cristiano Ronaldo to join Real Madrid to slavery. “From a position of great power, he has uttered so many ridiculous statements that he is in danger of seriously damaging his credibility,” Ferguson said at the time. The world of soccer has been enriched during Blatter’s 12 years as FIFA president. Rousing Ovation The organization’s affiliated national governing bodies and six confederations would share a $56 million bonus after record sales of $1 billion in 2009, Blatter said. He received a rousing ovation from delegates at FIFA’s 60th Congress in Johannesburg yesterday when he told them about the bonus payments. Blatter’s “Goal” program has $120 million in funding to distribute to poorer associations for playing fields, training centers and other infrastructure. African soccer will show its support for Blatter, said Jordaan, the World Cup organizer. “When it comes to 2011 we certainly will not forget his commitment, not only to our country but to our continent,” he said. To contact the reporter on this story: Tariq Panja in Johannesburg at tpanja@bloomberg.net

Read the full article →

Robert Reich: "Green Jobs" Proposal: Put the Young and Unemployed to Work Cleaning BP’s Mess, Then Send BP the Bill

June 6, 2010

Friday’s job report was awful. For most new high school and college grads finding a job is harder than ever. Meanwhile, states are cutting summer jobs for disadvantaged young people. What to do with this army of young unemployed? Send them to the Gulf to clean up beaches and wetlands, and send the bill to BP. Florida’s panhandle beaches are already marred with sticky brown globs of oil. Workers with blue rubber gloves and plastic bags are already losing the battle to keep them clean. Pelicans and other wildlife coated in oil tar are dying by the droves. It will get far worse. Most of the oil hasn’t hit land yet. When it does, hundreds of thousands of workers will be needed to clean beaches, siphon off oil from wetlands, and rescue stranded wildlife. Tens of thousands more will have to bring in new landfill, replace tarred sea walls, and rebuild shoreline infrastructure. Yet we’ve got hundreds of thousands of young people sitting on their hands right now because they can’t find jobs. Many are from affected coastal areas, where the tourist and fishing industries have been decimated by the spill. The President should order BP to establish a $5 billion clean-up fund, and immediately put America’s army of unemployed young people to work saving the Gulf coast. Call it the new Civilian Conservation Corps. (The old CCC — created by FDR at another time of massive unemployment and environmental stress — gave millions of young Americans jobs and training to reforest lands that had been degraded, provide emergency flood relief in the Ohio and Mississippi valleys, and build the infrastructure for our national parks.) This post originally appeared at RobertReich.org

Read the full article →

Wright Joins Parsons as East Division Proposal Manager Water & Infrastructure

May 17, 2010

PASADENA, CA–(Marketwire – May 17, 2010) –  Parsons is pleased to announce that John D. Wright has joined the company as East Division Proposal Manager for its Water & Infrastructure group. In this capacity, he will lead major proposals, manage the division’s sales and marketing team, assist in training and development, and work closely with business development and division management to promote Parsons’ core values and strategic objectives.

Read the full article →

Hunger Feeds Philippine Rebellions as Candidates Play Food Card for Votes

May 7, 2010

By Luzi Ann Javier May 7 (Bloomberg) — Ricardo Istacion said he had the best meal of his life on April 19, feasting on fish, chicken and pork at a party thrown by Philippine presidential candidate Joseph Estrada to celebrate his 73rd birthday. “Most days, we just have rice porridge,” said Istacion, a 54-year-old widower and father of two who collects recyclable waste at the garbage mountain in the Payatas district of Manila. Estrada “really loves Payatas, and for that I will vote for him.” While filling empty bellies helps win votes, politicians have failed to keep them full once in power. Whoever wins in the May 10 election will inherit hunger and unemployment that is fueling communist and Muslim insurgencies, perpetuating the Philippines’ status as a perennial economic underachiever. “If things are really deteriorating then it’s a risk that investors will move on to more attractive destinations,” said Tim Condon , Singapore-based chief Asia economist at ING Groep NV. “Patience isn’t unlimited.” The Jakarta Composite Index has risen more than 160 percent in the past five years, while the Philippine benchmark gained less than 70 percent. Moody’s Investors Service rates Indonesia, which was bailed out by the International Monetary Fund in 1998, one level higher at Ba2 than the Philippines. Corruption, mismanagement and a threefold jump in the population have eaten away at an economy that was Southeast Asia’s biggest in the 1960s. It has now been outstripped by Indonesia, Malaysia, Thailand and Singapore. Corruption Index Corruption means money for roads and other infrastructure goes missing. An average of 20 percent to 30 percent of every contract is lost to graft or inefficiency, the World Bank said in a 2008 study . The Philippines slipped in last year’s Transparency International Corruption Perceptions Index to 139th place from 131st in 2007. Indonesia rose to 111th from 143rd, according to the Berlin-based watchdog’s website. Estrada, who was convicted of corruption in 2007 and later freed by a presidential pardon, was vying for second place with Senator Manuel Villar , 60, in a poll published today by BusinessWorld newspaper. Estrada had 20 percent and Villar 19 percent, while Benigno Aquino , son of a former president, led with 42 percent, according to the survey of 2,400 adults. It was conducted May 2 to May 3 and had a margin of error of 2 percentage points. Feeding Itself One of the biggest challenges facing the winner is the nation’s inability to feed itself. The Philippines has gone from being an occasional net exporter of rice before 1988 to become the world’s biggest importer as yields stagnated, according to U.S. Department of Agriculture data. Indonesia is now self- sufficient in rice, after importing 5.77 million tons in 1998. Philippine farmers are forecast to produce on average 3.6 tons of rice a hectare, compared with 5 tons per hectare in Indonesia, the USDA website shows. The government of outgoing President Gloria Arroyo , 63, says it spent almost all of the 12 billion pesos ($268 million) it budgeted to fix irrigation systems and boost harvests. Jimmy Tadeo, Manila-based head of a 20,000-strong farmers’ group, said he had seen no evidence of this work on recent tours of rice- growing regions. ‘Romancing the Data’ “The government is romancing the data,” Tadeo said. “If they had actually spent all that 12 billion pesos in irrigation, we would be self-sufficient in rice.” The country’s lowest rice yields are in the southern island of Mindanao, where U.S. Special Forces are helping fight Muslim and communist insurgencies. Mindanao is home to the al-Qaeda- linked Abu Sayyaf and the communist New People’s Army, both branded terror organizations by the U.S. The 2.9 tons a hectare eked out by the island’s farmers helps explain per capita income of less than $1 a day. The Philippine regions most vulnerable to armed conflict were those with the lowest incomes and poorest education, the United Nations said in a 2005 report . Failure to deliver more rapid economic growth means the country’s new president will face a growing wave of unemployment. The working-age population is forecast to jump 52 percent between 2005 and 2030, according to Jesus Felipe , principal economist at the Asian Development Bank in Manila. Jobless Rate While the official jobless rate rose to 7.3 percent in January from 7.1 percent in October, the National Statistics Office estimated that only 64.5 percent of the people of working age are actually employed. That puts even the government’s subsidized rice beyond the means of many, increasing the value of a free meal from a politician. The number of Filipino households who had nothing to eat at least one day in a quarter rose to a record 24 percent, according to a survey released Jan. 12 by Social Weather Stations , a Manila-based researcher. Demand for rice from government stockpiles jumps in the run-up to elections, data from the National Food Authority show. In the five months to May 1998, when Estrada won the presidency, rice releases from state supplies jumped almost five-fold. The 207,125 tons of rice released in March this year were the highest for that month since at least 1991. “When you have a situation where people really have nothing, they become easy prey to these kinds of tactics,” said Rey Trillana , a fellow at the Center for Civic Education and Democracy in Manila. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

Read the full article →

Dave Johnson: Reagan Revolution Home To Roost: America Is Crumbling

May 5, 2010

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. The conservative argument of the last 30-40 years boils down to this: “Hey look at this big pile of seed corn. Let’s eat it!” Almost 30 years after the “Reagan Revolution” our infrastructure is crumbling around us. Since the Reagan-era tax cuts we have been deferring maintenance of (and never mind modernizing) our infrastructure, and as a result have become less competitive in the world economy. Meanwhile our economic competitors, countries like China and India, have been building infrastructure like crazy. Other countries are investing, educating, improving public services because they know these things make the economy explode later . A major component of China’s stimulus was infrastructure and public services – including public welfare – because of the economic benefits that come later. Now for those countries it is later, while for us it’s just becoming too late. Their investment is paying off while we’re having trouble paying off the accumulated Reagan/Bush tax-cut debt. How did we get here? Public infrastructure is the roads, courts, education, etc. that enable an economy to prosper. We got ourselves out of the Great Depression with a big investment in public infrastructure. The government taxed the wealthy and built or improved modern roads, bridges, post offices, courthouses, shipyards, schools and other public structures that enabled business to take off. And then business took off. The idea was, of course, that business would give back some of the returns to keep that process going. But instead the big companies and wealthy families funded a conservative propaganda machine that convinced people to let them just keep it. Look at this chart from 14 Ways A 90 Percent Top Tax Rate Fixes Our Economy And Our Country : You can clearly see that the money that should have been invested in maintaining and modernizing our infrastructure instead has gone to a few wealthy people at the top of the food chain. (We’re the food.) And of course, we all can clearly see the results of this in today’s economy. They ate the seed corn, America is crumbling. Now, here we are later and we are seeing the result of the Reagan Revolution. The American Society of Civil Engineers (ASCE) Infrastructure Report Card estimates that we are $2.2 trillion behind just on maintaining the existing infrastructure, never mind modernizing. Please click through and explore what ASCE is saying there. (Conservatives — there are lots of pictures!) What do we do? The answer is obvious. It is called public investment. Ask the big companies, the banks and the wealthy to pay back some of the incredible amounts of money they have been piling up as a result of the past investment that We, the People made in building that infrastructure that enabled the economy to boom. Use that money to invest in maintaining and modernizing the infrastructure so that the economy can again thrive for all of us . We can employ the unemployed and bring our infrastructure up to par at the same time. There is a lot of work that needs doing and we have a lot of people out of work. The payback will be enormous. The economy will explode. And we can build sustainability into the process this time. What is in the way? The problem now is that the corporate/conservative propaganda machine has gone way past talking people into cutting taxes for the rich and cutting back on public spending for infrastructure and our people. Now they have become very extreme, convincing a number of people that government spending – We, the People spending on the common good – and government itself – We, the People making the decisions for ourselves – is the wrong approach. They believe that any government at all is “socialism” — run for the benefit of all of us — and that all public services must be “privatized” — meaning run for the benefit of a few. They believe it is wrong, even immoral to have public schools, public transit, public health care, regulations that restrict what companies can do to consumers or the environment, etc. They have the megaphone because they have the money. We have to confront this head on. More to come! This is another story of a wealthy few selling off the country’s people and future. This is another story of gains for a few at the expense of the rest of us. These stories are becoming all too common. This is the Reagan Revolution coming home to roost, and I will continue to write about the terrible price we are paying and will be paying for a long time for the failed experiment in conservative ideology. Sign up here for the CAF daily summary .

Read the full article →

Greenland Oil Rush Looms as Exxon Eyes Cairn’s $400 Million Arctic Wager

May 5, 2010

By Marianne Stigset May 5 (Bloomberg) — Cairn Energy Plc is betting $400 million this year on striking oil off Greenland, a campaign that will be closely watched by producers such as Exxon Mobil Corp. and Chevron Corp. that hold rights off the island. The potential rewards may justify the cost of Arctic drilling: Greenland’s waters could hold 50 billion barrels of crude and gas, the U.S. Geological Survey estimates, enough to meet Europe’s energy demand for almost two years. More companies are on the way. Royal Dutch Shell Plc and Statoil ASA were among bidders in this week’s auction of offshore drilling rights. After six failed attempts by explorers in Greenland over the past 30 years the rush is on as global warming eases Arctic exploration and because of dwindling resources in areas such as the North Sea. For Greenland’s 56,000 inhabitants, largely dependent on shrimp exports, petroleum may also bring wealth and allow more independence from Denmark, which has held sway over the world’s largest island since 1721. “It’s an enormous acreage area and you’ve got to have stamina to see this through properly,” Simon Thomson , legal and commercial director at Cairn, which holds eight Greenland licenses, said in an interview. “Obviously we’re hoping for success, but the blocks are 10,000 square kilometers each.” ‘Serious Threats’ The far north’s potential is spurring exploration from Russia to Alaska. The Arctic may hold 27 percent of the world’s undiscovered gas and 13 percent of the oil, the USGS said in 2008. Areas off Greenland, including some shared with Canada, may hold 17 billion barrels of oil, 148 trillion cubic feet of gas and 9.3 billion barrels of gas liquids, the USGS said. Highlighted by the unfolding disaster in the U.S. Gulf of Mexico from a BP Plc oil spill, exploring in untouched , environmentally fragile waters home to whales and walruses isn’t without risk. According to the WWF , development and transport are “already serious threats” to the Arctic and has met opposition and kept areas off limits from Alaska to Norway. “Oil exploration in Greenland is very closely tied to independence, so there’s enormous local support,” said Truls Gullowsen, head of Greenpeace in Norway. “The area of the 2010 licensing round is very complicated, it’s very far up north, there’s lots of ice, lots of natural resources and very far away from any form of support should things go wrong.” Fishing, Hunting Greenland will in August announce the winners of 14 blocks in a 150,000-square-kilometer area in Baffin Bay, more than doubling its available acreage after holding regular rounds since 2002. The areas are north of the 67th parallel, where oil has been seen seeping out of rocks along the shoreline. The government has financed seismic surveys to attract explorers. It has handed out 13 licenses since 2002 to Cairn, Exxon, Chevron, Encana Corp., Husky Energy Inc., Dong Energy A/S, PA Resources AB and Nunaoil A/S, the state-owned company. There was “fierce” competition in the latest round, Greenland’s Bureau of Minerals and Petroleum said in a statement on May 3. “We’re a fishing and hunting economy, just like Norway used to be,” Oil Minister Ove Karl Berthelsen said by phone from Nuuk, drawing a comparison with the world’s sixth-biggest crude exporter. “We want our industry to stand on several legs and oil is very important. The next 20 years will be vital.” Greenland gets about $600 million a year, or $10,700 a person, from Denmark. It was granted home rule in 1979 and increased local powers in 2009. The island’s $2 billion economy derives about half its exports from shrimp, according to Greenland’s statistics agency . With planned taxes and royalties, and the 12.5 percent stake held in each license by Nunaoil, the government will get about 59 percent of the revenue, according to Joern Skov Nielsen , head of the petroleum agency. Oil Seeps In November, seven companies including Chevron, Exxon and Dong Energy A/S formed the Greenland Oil Industry Association, to share data and hold talks with the local government on environmental and safety issues. For companies like Norwegian Energy Co., the licensing round this year and in 2012 may be the right time to get a share of the potential windfall, Chief Executive Officer Scott Kerr said in an interview. “A small company like us we need to go in now, because if someone goes in and a discovery is made, we immediately get priced out of the market If Cairn has success, there are going to be a lot of people looking at Greenland,” he said. Statoil Returns Spokespeople at Statoil, Shell, Norwegian Energy and Cairn confirmed that they had applied for licenses in this year’s round. Of companies with current licenses, Exxon and PA Resources decided not to bid, according to spokespeople. “We’re still considering other Greenland opportunities,” said Patrick McGinn , an Exxon spokesman. Spokespeople at Chevron, Dong, Husky and Encana weren’t immediately available for a comment. For Statoil it will be a comeback to Greenland after drilling a dry well off Nuuk in 2000, the first for any explorer since the late 1970s. “Arctic projects are very close to the capabilities of Statoil,” Helge Lund , chief executive of Norway’s largest oil company, said on April 26. “We are interested in Greenland and the prospects there.” Cairn, based in Edinburgh, is preparing to drill as many as four wells off Disko Island, a whaling and hunting community where icebergs and humpback whales can be spotted offshore. The company expects to invest $1 billion over three years. Cairn acquired “a large amount of seismic data” in the past two years and plans four more wells next year, Thomson said. Cairn is assuming a 10 percent chance of success. Investments Needed As many as 20 wells may be drilled in the next 10 years with potential production in a decade, said Skov Nielsen. Exxon, Chevron and Dong must decide on drilling in their licenses off Disko over the next four years. The costs per well is about $100 million and eventual production facilities may need investments of $5 billion to $6 billion, he said. “The first discovery has to be at least 250-300 million barrels but any subsequent discoveries could be smaller because then you have the infrastructure,” he said. Companies drilling in the area will be able to build upon experience from other Arctic exploration, said Cairn’s Thomson. Still, icebergs, water depths that reach 1,500 meters toward the sea border with Canada, and months of darkness are challenges, said Hans Kristian Olsen , chief executive at Nunaoil. The island will also need to build up the industry, said Olsen. “We are starting from scratch in terms of developing an exploration and production industry.” To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net .

Read the full article →

Greenland Oil Rush Looms as Exxon Eyes Cairn’s $400 Million Arctic Wager

May 5, 2010

By Marianne Stigset May 5 (Bloomberg) — Cairn Energy Plc is betting $400 million this year on striking oil off Greenland, a campaign that will be closely watched by producers such as Exxon Mobil Corp. and Chevron Corp. that hold rights off the island. The potential rewards may justify the cost of Arctic drilling: Greenland’s waters could hold 50 billion barrels of crude and gas, the U.S. Geological Survey estimates, enough to meet Europe’s energy demand for almost two years. More companies are on the way. Royal Dutch Shell Plc and Statoil ASA were among bidders in this week’s auction of offshore drilling rights. After six failed attempts by explorers in Greenland over the past 30 years the rush is on as global warming eases Arctic exploration and because of dwindling resources in areas such as the North Sea. For Greenland’s 56,000 inhabitants, largely dependent on shrimp exports, petroleum may also bring wealth and allow more independence from Denmark, which has held sway over the world’s largest island since 1721. “It’s an enormous acreage area and you’ve got to have stamina to see this through properly,” Simon Thomson , legal and commercial director at Cairn, which holds eight Greenland licenses, said in an interview. “Obviously we’re hoping for success, but the blocks are 10,000 square kilometers each.” ‘Serious Threats’ The far north’s potential is spurring exploration from Russia to Alaska. The Arctic may hold 27 percent of the world’s undiscovered gas and 13 percent of the oil, the USGS said in 2008. Areas off Greenland, including some shared with Canada, may hold 17 billion barrels of oil, 148 trillion cubic feet of gas and 9.3 billion barrels of gas liquids, the USGS said. Highlighted by the unfolding disaster in the U.S. Gulf of Mexico from a BP Plc oil spill, exploring in untouched , environmentally fragile waters home to whales and walruses isn’t without risk. According to the WWF , development and transport are “already serious threats” to the Arctic and has met opposition and kept areas off limits from Alaska to Norway. “Oil exploration in Greenland is very closely tied to independence, so there’s enormous local support,” said Truls Gullowsen, head of Greenpeace in Norway. “The area of the 2010 licensing round is very complicated, it’s very far up north, there’s lots of ice, lots of natural resources and very far away from any form of support should things go wrong.” Fishing, Hunting Greenland will in August announce the winners of 14 blocks in a 150,000-square-kilometer area in Baffin Bay, more than doubling its available acreage after holding regular rounds since 2002. The areas are north of the 67th parallel, where oil has been seen seeping out of rocks along the shoreline. The government has financed seismic surveys to attract explorers. It has handed out 13 licenses since 2002 to Cairn, Exxon, Chevron, Encana Corp., Husky Energy Inc., Dong Energy A/S, PA Resources AB and Nunaoil A/S, the state-owned company. There was “fierce” competition in the latest round, Greenland’s Bureau of Minerals and Petroleum said in a statement on May 3. “We’re a fishing and hunting economy, just like Norway used to be,” Oil Minister Ove Karl Berthelsen said by phone from Nuuk, drawing a comparison with the world’s sixth-biggest crude exporter. “We want our industry to stand on several legs and oil is very important. The next 20 years will be vital.” Greenland gets about $600 million a year, or $10,700 a person, from Denmark. It was granted home rule in 1979 and increased local powers in 2009. The island’s $2 billion economy derives about half its exports from shrimp, according to Greenland’s statistics agency . With planned taxes and royalties, and the 12.5 percent stake held in each license by Nunaoil, the government will get about 59 percent of the revenue, according to Joern Skov Nielsen , head of the petroleum agency. Oil Seeps In November, seven companies including Chevron, Exxon and Dong Energy A/S formed the Greenland Oil Industry Association, to share data and hold talks with the local government on environmental and safety issues. For companies like Norwegian Energy Co., the licensing round this year and in 2012 may be the right time to get a share of the potential windfall, Chief Executive Officer Scott Kerr said in an interview. “A small company like us we need to go in now, because if someone goes in and a discovery is made, we immediately get priced out of the market If Cairn has success, there are going to be a lot of people looking at Greenland,” he said. Statoil Returns Spokespeople at Statoil, Shell, Norwegian Energy and Cairn confirmed that they had applied for licenses in this year’s round. Of companies with current licenses, Exxon and PA Resources decided not to bid, according to spokespeople. “We’re still considering other Greenland opportunities,” said Patrick McGinn , an Exxon spokesman. Spokespeople at Chevron, Dong, Husky and Encana weren’t immediately available for a comment. For Statoil it will be a comeback to Greenland after drilling a dry well off Nuuk in 2000, the first for any explorer since the late 1970s. “Arctic projects are very close to the capabilities of Statoil,” Helge Lund , chief executive of Norway’s largest oil company, said on April 26. “We are interested in Greenland and the prospects there.” Cairn, based in Edinburgh, is preparing to drill as many as four wells off Disko Island, a whaling and hunting community where icebergs and humpback whales can be spotted offshore. The company expects to invest $1 billion over three years. Cairn acquired “a large amount of seismic data” in the past two years and plans four more wells next year, Thomson said. Cairn is assuming a 10 percent chance of success. Investments Needed As many as 20 wells may be drilled in the next 10 years with potential production in a decade, said Skov Nielsen. Exxon, Chevron and Dong must decide on drilling in their licenses off Disko over the next four years. The costs per well is about $100 million and eventual production facilities may need investments of $5 billion to $6 billion, he said. “The first discovery has to be at least 250-300 million barrels but any subsequent discoveries could be smaller because then you have the infrastructure,” he said. Companies drilling in the area will be able to build upon experience from other Arctic exploration, said Cairn’s Thomson. Still, icebergs, water depths that reach 1,500 meters toward the sea border with Canada, and months of darkness are challenges, said Hans Kristian Olsen , chief executive at Nunaoil. The island will also need to build up the industry, said Olsen. “We are starting from scratch in terms of developing an exploration and production industry.” To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net .

Read the full article →

Stop Robert Rubin Before He Kills Again

April 30, 2010

Robert Rubin is poisoning Washington again. The former Treasury Secretary who presided over the nearly-fatal deregulation of the financial industry — then made $126 million nearly killing Citigroup — had been keeping an appropriately low profile in the nation’s capital ever since everything he wrought went pear-shaped. But now he’s back, and once again trying to influence public policy. On Friday he made his third major (and apology-free) Washington appearance in two weeks, delivering opening remarks at a conference that his pet think tank, the Hamilton Project, co-sponsored with the liberal Center for American Progress. But the last thing Washington needs right now is another infusion of Rubinomics — by which I mean the combination of deregulatory zeal, deficit obsession, free tradeism and general coziness with fat-cat Wall Street bankers that Rubin epitomizes. It’s long been troubling that so many of Obama’s top economic advisers are former Rubin proteges, but the return and rehabilitation of the man himself is particularly unwelcome right now. Mild signs of recovery aside, we remain very much in the midst of an unemployment crisis that is devastating American families and that requires active, urgent government intervention — not hand-wringing about the federal budget deficit. Financial regulation, to be effective, needs to limit what Rubin and his friends want to be able to do. The Rubin effect could be felt at Friday’s event, which was ostensibly about ” The Future of American Jobs ,” but which — with a few notable exceptions — lacked a sense of urgency about the current unemployment crisis, focusing instead on long-terms “structural problems.” Asked by feisty moderator Chrystia Freeland of Reuters to explain why, if our capital markets are the best in the world, job creation is so weak, panelist and Berkeley economics professor Alan Auerbach instead launched into a disquisition on tax policy and the need to reduce corporate income taxes. The centerpiece of Friday’s event, a new report by MIT economist David Autor, did a commendable job of relating the polarization of job opportunities and contraction of the middle class to the feeble state of the America’s public education system, but it glossed over the key role played by rapacious financial titans. Panelist Ron Blackwell, chief economist for the AFL-CIO, was almost alone in giving more than lip service to the current jobs crisis. Blackwell said he had never seen a labor market “in worse condition than exists at present.” He pointed out that the U.S. is an outlier country — “No other country is experiencing anything like this,” he said. He decried the way “globalization and financialization” has “changed the balance of power between workers and employers.” And generally speaking, he made no bones about the government’s essential role in both creating and fixing America’s unique economic problems. What’s needed, he said, is nothing less than a “sustained public-investment led recovery that rebuilds the capacity of the American economy.” His cause was not taken up by his fellow speakers, however — including Larry Summers, President Obama’s chief economic adviser, and one of the event’s two headliners (along with New York Mayor Michael Bloomberg.) Summers began his remarks with an acknowledgment of the terrible trauma being caused by high unemployment. Then he pivoted. “This is a profoundly important problem for our society, but it’s the task of economists to analyze it in a more bloodless way.” And bloodless he was. For the next several years, he said, “What I think is safe to say is that even on optimistic assumptions, there is going to be substantial unused capacity in this economy,” measured by, among other things, the unemployment rate. Asked when that high unemployment would abate, he explained that it would depend upon “the pace of the economic recovery in terms of GDP” [Gross Domestic Product] and whether the formula that economists have historically used to predict job growth based on GDP would continue to be skewed by unusually high productivity. “Make your judgment about the GDP forecast over the next several years. Take your guess about whether the formula is going to snap back, or continue to be off, and you can form a view about the unemployment rate,” he suggested. “Maybe things will restore to normal,” he said — in which case job growth would actually outpace GDP. “That would be my guess, though not one I would hold confidently.” Summers did endorse some new government measures to spur job growth. “I don’t see how anyone can look at the wholesale destruction of construction jobs [and] the state of our infrastructure in many spheres and not think that something ought to be done to increase the extent of our national effort around public investment,” he said. But asked if the country needs another stimulus, he replied: “I don’t think framing the question in terms of a ‘stimulus’ is very helpful.” He said he favored continuing unemployment insurance, new funding for local governments and investments in energy efficiency — three major progressive goals. But beyond that, he said: “Is this the moment for some major new experiment in Keynesian pump-priming? Absolutely no.” Rubin’s public rehabilitation tour started last week, with a Hamilton Project event devoted to the principal that “it is vital that we begin to confront the challenges that pose a greater risk to our long-run prosperity than the Great Recession.” Vice President Joe Biden was the keynoter at that event, but, in a turnabout, used the occasion to challenge the Wall-Street friendly Democrats Rubin had assembled to join President Obama in making sure that this economic recovery, unlike the last one, actually benefits the middle class. Rubin’s second major appearance was on Wednesday, at a gala “Fiscal Summit” organized by fellow deficit hawk (and fellow Wall Street mogul) Peter Peterson. (The two men even joked onstage about their relative net worths.) That was a lovefest — and a deeply disturbing one at that. Although Biden didn’t play along, Rubin has some highly placed enablers in his rehabilitation. The deficit summit’s keynoter, former President Bill Clinton, had warm words for Rubin. “He’s taken a few licks lately, like all of us have,” Clinton said. But “I think he’s the finest Treasury Secretary since Alexander Hamilton, and I still believe that.” At Friday’s event, I asked Center for American Progress head John Podesta, who is close to the Obama White House, if he was concerned about enabling Rubin. He responded: “I think he has a track record, much of which is successful, some of which is not successful.” At last week’s event, I asked Rubin about his role in deregulating derivatives — one of the critical steps in the series of events that led to the country’s financial meltdown. He replied that he had always favored regulating them. I wrote that even were this the case, his claim to fame remains that he killed the one serious attempt to regulate them . Jumping to his defense Friday afternoon in Newsweek was Jacob Weisberg , the Washington Post Co. executive who co-authored Rubin’s 2003 autobiography (talk about intimate relationships between journalists and their sources). Weisberg insists that Rubin supported regulation, but was just powerless to do so given the opposition from Wall Street and other members of the Clinton administration. Similarly, Weisberg argues, despite multiple reports to the contrary, that Rubin wasn’t involved in the decisions that led to Citigroup needing a massive federal bailout to survive. Is anything disqualifying from public life these days? Given the chance to weigh in, the voters evidently think so — consider the parable of soon-to-be-former Sen. Chris Dodd . In Washington public policy circles, however, the answer is apparently not — certainly not if you’re rich and well connected. But as Rubin’s literally disastrous track record so clearly suggests, Washington would be better off shorting Rubinomics than investing in it. ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

Read the full article →

Thailand’s Army Warns Protesters That `Time Is Running Out’ to End Protest

April 21, 2010

By Daniel Ten Kate and Supunnabul Suwannakij April 22 (Bloomberg) — Thailand’s army warned anti- government protesters camped in central Bangkok that soldiers plan to disperse them soon, raising tensions after a failed crackdown earlier this month left 25 dead. “I would like to warn protesters at the Ratchaprasong area that your time is running out,” Army spokesman Sansern Kaewkamnerd told reporters in Bangkok, referring to the area of luxury shopping malls and hotels. “We are waiting for an appropriate time to take back the area.” About 14,000 opponents of Prime Minister Abhisit Vejjajiva joined the demonstration last night and about 6,000 remained this morning, Sansern said. Anyone found inside the encampment will be subject to legal action, he said. The fresh threat comes days after soldiers with assault rifles took up positions in a business district adjacent to the demonstrators, prompting them to erect walls of bamboo sticks and rubber tires in defense. An attempt to disperse the group near Government House on April 10 left more than 800 injured in addition to the fatalities. The army is also negotiating with protesters after they blocked a train carrying weapons and soldiers yesterday in northeastern Thailand, Sansern said. Authorities are stepping up security at oil refineries, power plants and other infrastructure after an affiliate of PTT Plc , Thailand’s biggest energy company, was struck with grenades, Energy Minister Wannarat Charnnukul said. Resume Talks Rally organizers in Bangkok say they are willing to resume talks with the government provided troops vacate areas surrounding their base. Signs that crowds were dwindling after a canceled march on April 20 helped stocks surge the most in 15 months. The SET index advanced 0.7 percent as of 11:37 a.m. “First take away the gun and then we can talk,” Weng Tojirakarn , a protest leader who participated in televised negotiations with the prime minister last month, said in an interview yesterday. He plans to lead 2,000 protesters today to the United Nations building in Bangkok to submit a letter to Secretary-General Ban Ki-moon requesting a peacekeeping force to protect them. Immediate Election Abhisit has rejected demands from the mostly lower-class protesters to call an immediate election and pledged to enforce the law. Demonstrators who largely support fugitive ex-leader Thaksin Shinawatra have defied emergency rule since April 7 and ignored previous government warnings to avoid certain areas. Abhisit said yesterday the protesters are armed with “war weapons,” a charge organizers deny. The prime minister has blamed “terrorists” within the rallies for violence and said the movement wants to “change the country’s political system.” Such allegations suggesting that demonstrators are disloyal to King Bhumibol Adulyadej are being used as a justification to break up the protest, another leader, Jaran Ditapichai , said April 20. Abhisit backers clashed with his opponents in the early morning today, with both sides hurling bottles, marbles, rocks and small bits of metal. A pro-government group that plans to gather at a separate location in Bangkok this afternoon is pushing for 100,000 supporters to join them at a rally tomorrow, organizer Tul Sittisomwong said by phone. “Those protesters don’t want democracy, they are only trying to destroy our king,” said Suwit Aroonwejkul, 43, an Abhisit supporter who scuffled with his opponents. “We can’t compromise on this. It may be a civil war.” To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

Read the full article →

AMP Capital to Set Up Fund in Australia to Invest in Global Infrastructure

April 8, 2010

By Nichola Saminather April 9 (Bloomberg) — AMP Capital Investors , which manages about $90 billion, plans a fund investing in assets such as satellite communications and airports to profit from demand for global infrastructure and diversify its securities portfolio. The unlisted AMP Capital Global Infrastructure Securities Fund will invest in publicly traded securities and will be open for investments from the third quarter, Trevor Cooke, senior investment specialist for listed property securities, said in an interview in Sydney. He declined to specify the size. “Developed economies are looking at renewal of ageing infrastructure and in the developing world, first generation infrastructure is going in for the first time,” he said. “There’s significant worldwide savings that are looking for long, steady, stable cash flows, and that’s exactly what we think listed infrastructure brings to the table.” An expected surge in the global population to more than 9 billion by 2050, according to U.S. Census Bureau data, along with an increase in building as governments commission projects to boost their economies, are expected to drive demand for infrastructure financing. JPMorgan Chase & Co. said in February it raised $858.6 million for an infrastructure fund that will invest directly in assets in Asia, while India’s MBL Infrastructure Ltd. ’s initial share sale received demand for nearly double the shares on offer in December. ‘Unfairly Punished’ AMP Capital will target pension funds and retail investors seeking access to large infrastructure projects while still desiring the liquidity of a securities-based fund, Cooke said. Along with investments providing the stable cash flow typical of infrastructure securities, AMP also will seek higher returns from companies that have been “unfairly punished.” Cooke said global infrastructure companies have on-the- whole fared better than Babcock & Brown Ltd. and Allco Finance Group in Australia, which took on cheap loans to invest in infrastructure then saw that backfire when credit markets seized up and bankers forced them to sell assets as prices slumped. The structures of those companies enabled them to take on larger amounts of debt compared with global counterparts, which are subject to more stringent borrowing rules, Cooke said. “If you look at the global infrastructure market through the lens of the Australian experience, you get a very distorted picture,” he said. Asian Operations AMP Capital Brookfield , formed in October when Sydney-based AMP Capital and New York-based Brookfield Investment Management Inc. created a A$6 billion ($5.6 billion) global real estate and infrastructure group, is expanding its operation in Asia as countries including China and the Philippines move to introduce property trusts. The group is in the process of moving its Asian headquarters to Hong Kong from Singapore to position itself closer to China, and is doubling the team to six, Cooke said. China’s central bank said Jan. 6 it plans to introduce real estate investment trusts under a trial program. Philippine lawmakers in December passed a law that provides benefits including tax breaks to property companies listing as trusts, according to the Philippine Star newspaper. “These are the sort of opportunities we like to look at,” Cooke, who is also chief operating officer of AMP Capital Brookfield, said. Asian investors are not as exposed to property securities in the region as they could be, which provides AMP Capital room to grow, he said. “Asian investors are significantly underweight Asian real estate,” he said. “If Asian investors went market-weight Asian real estate, you’d probably see double the allocation you have right now. That’s a compelling story.” To contact the reporter on this story: Nichola Saminather in Sydney at Nsaminather1@bloomberg.net

Read the full article →

Zero Fees From India Has Investment Bankers Relying on Private Share Sales

April 6, 2010

By Ruth David April 6 (Bloomberg) — India’s best quarter for stock sales in at least six years was accompanied by a slump in fees as investment banks competed to take state-owned companies public in deals that netted them almost no revenue. Companies led by NMDC Ltd. raised 441 billion rupees ($9.8 billion) through March 31, the most for a single quarter since Bloomberg began compiling data in 2004. While the value of sales doubled from the previous three months, fees slumped by half to 2 billion rupees, according to Bloomberg data. More than half of sales were by state-owned companies that paid near-zero fees and crowded out private firms, putting pressure on banking revenues. JPMorgan Chase & Co. and ICICI Securities Ltd. are among underwriters predicting a rebound in charges this year as more private companies tap stock markets for capital and the government overhauls the way it pays banks. “The private-sector IPO pipeline is very strong and those deals will result in lucrative fees for the banks,” said Jagannadham Thunuguntla , head of equity at SMC Capitals Ltd., the investment banking arm of New Delhi-based SMC Group. At least 55 private companies are awaiting approval from the securities regulator to sell shares, according to the Securities and Exchange Board of India ’s Web site. Indian state-owned companies that sold shares last quarter paid an average 0.05 percent of what they raised as fees, according to a study by SMC Capitals released March 30. That compared with 2.88 percent for private enterprises. Wrong Approach State-run United Bank of India , a lender in the country’s northern and eastern parts, paid 0.56 percent fees for its 3.25 billion rupee initial public offering in February, managed by Edelweiss Capital Ltd., Enam Securities Pvt. and SBI Capital Markets Ltd., according to data compiled by Bloomberg. A similar-sized IPO by Jubilant Foodworks Ltd. , which is controlled by brothers Shyam and Hari Bhartia and runs the Domino’s Pizza chain in India, netted 2.72 percent fees for the sole bookrunner Kotak Mahindra Capital Co. A price war between investment banks seeking league-table credit isn’t necessarily in the government’s interest, the official in charge of selling state assets said last month. “We had some cases where the banks bid at zero fees and the department was more than unhappy with that kind of approach,” Sumit Bose , secretary of the department for disinvestment, said in a March 6 interview in New Delhi. “We are looking at tweaking the rules to ensure that we continue to make a good selection” without putting too much emphasis on fees, he said. Dominant Force As part of the new regulations, “the weight will be given to technical, including their experience, what sort of experience they have had internationally, nationally,” along with how competitive fees are, Bose said. The government will remain a dominant force in India’s equity capital market. It plans to raise $8.9 billion selling shares in state-owned companies in the fiscal year through March 2011 — more than half the total value of last year’s offerings in India. Investment banks are willing to sacrifice fees for the cachet of having been picked to manage large sales, said Indraneil Borkakoty , head of equity capital markets at Kotak Investment Banking, a unit of Kotak Mahindra. “The state transactions are global in terms of scale and size. There’s a huge visibility factor,” Mumbai-based Borkakoty said in an interview. “Doing these deals helps us get league table credit and build relationships with investors across geographies” that the bank can tap into for future deals. Raft of Sales Kotak ranked second after Citigroup Inc. in arranging stock sales in the first quarter, after helping state companies NMDC, India’s biggest iron-ore producer, and Rural Electrification Corp. issue shares, according to Bloomberg data. Vedika Bhandarkar , head of India investment banking at JPMorgan in Mumbai, said several private companies that had planned to sell stock in the first quarter delayed offerings on concerns state firms would soak up investors’ money. As those companies revive offerings, fees will improve, she said. Since March 22, nine private companies — including Avantha Power & Infrastructure Ltd., Electrosteel Integrated Ltd. and SKS Microfinance Ltd. filed documents with the regulator for IPOs. Fees for IPOs of private firms average 2 percent to 3 percent in India, about 0.5 percentage point more than secondary offerings, Bhandarkar said. JPMorgan ranked eighth in local equity sales in the quarter, advising on a share sale by National Thermal Power Corp. “Most of the issuance this quarter has been from government companies,” Bhandarkar said in a March 30 interview. “If you take state companies out of the list, the fee numbers will be different.” To contact the reporter on this story: Ruth David in Mumbai at rdavid9@bloomberg.net

Read the full article →

Les Leopold: Are Bailouts for the Super-Rich Inevitable? Ask Paul Krugman

April 2, 2010

” There’s every reason to believe that this will be the rule from now on: when push comes to shove, no matter who is in power, the financial sector will be bailed out. ” Paul Krugman , 3/29/10 ” The recovery of big banks not only benefited bankers. It also created huge paydays for hedge fund managers, with the top 25 taking home an average of $1 billion in 2009. ” New York Times , 4/1/10 Paul Krugman, the Nobel Prize-winning economist and influential New York Times columnist, says Wall Street institutions have become so big and powerful that they will never be allowed to fail. The only hope he sees is to regulate them thoroughly. He greatly prefers the stricter rules now being offered by Barney Frank in the House to the softer ones coming from Chris Dodd in the Senate. (Neither bill truly tackles the derivatives casino.) Krugman criticizes Senate Republican leaders who portray proposed bank regulations as just another Wall Street bailout. In fact these hypocritical leaders are doing all they can to thwart the Obama administration’s modest reforms and befriend Wall Street, hoping to net some cold, hard political cash from the bankers. Unfortunately, when Krugman says bailouts are inevitable, he’s handing the government haters another round of ammunition. “See, the liberal/pinkos are going to just keep on bailing out Wall Street,” they piously intone. But, why isn’t Krugman calling for an end to all financial bailouts for the wealthy, instead of announcing that they will go on forever? One reason is that he doesn’t think breaking up the big banks will work: “I don’t have any love for financial giants,” he writes , but I just don’t believe that breaking them up solves the key problem.” He argues that a run on thousands of little banks, as in the 1930s, would also require bailouts to avoid another Great Depression. Krugman’s sad fatalism is particularly worrisome to those of us who usually welcome his insightful commentaries. We expect thinkers like Krugman to imagine a better financial system — even if it’s not politically attainable right now. And that vision shouldn’t involve bailing out the richest, most reckless financiers, no matter what. Why should we ever accept or justify plutocracy? Just think about the implications of Krugman’s stance. Wall Street remains in firm control of our nation’s economy since they know they’ll always get bailed out of trouble. The inevitability of bailouts encourages bankers to find yet more ways to gamble with investor and taxpayer money. How long do you think it will take our ingenious financial engineers and tax lawyers to “innovate” around Congress’s new rules (especially the Senate’s extra-weak ones)? With everyone going so easy on the bankers who just sank our economy, Wall Street is using our bailout funds to reward its executives with bonuses that have no relationship to any real value they create for our economy. Just look at what is going on in the world of shadow banking. In 2009, the worst economic year for working people since the Great Depression (29 million Americans unemployed or forced into part-time jobs — with the BLS March 2010 jobless rate at 17.5 percent), the top 25 hedge fund managers “earned” on average $1 billion each! And that money is taxed only at 15 percent since it’s counted as capital gains. I defy anyone to show how those “earnings” can be justified in terms of job creation, contribution to our economy or social utility. And where did all that money come from? From us! If we hadn’t bailed out the big banks, these hedge fund managers would have earned nothing at all. Because the financial pay scales are so outlandish and unconnected to the production of real value, it makes effective regulation even more difficult. Can we really expect government regulators with civil service salaries not to cast their eyes on the sweet sinecures they might snag in the financial sector after they’ve finished their grubby tour of duty in the government? How hard are they really going to press their future employers? (Any bets on where Chris Dodd will end up?) Krugman has focused some much needed attention on the deregulation of finance since the 1980s and the rise of the shadow banking system, which evolved into a crazy unregulated casino of finance. But that’s only half the story. Why isn’t he — and why aren’t we all — talking about the gutting of progressive taxation, which also started in the 1980s? We didn’t just deregulate Wall Street back in the disco era. We threw out the whole idea of significantly taxing the super-rich. The marginal tax rate on those who earned more than $3 million (in today’s dollars) dropped from 91 percent during the Eisenhower years to 28 percent by 1990. Now the richest 400 people in the US are effectively taxed at only 16 percent, according to the latest IRS report . And that doesn’t even include the money these stupendously wealthy people didn’t declare and the resulting taxes they didn’t pay. In fact, we are losing $100 billion in taxes from the super-rich each year because they are hiding their money in overseas accounts. They’ve stashed it there for one purpose only — to avoid taxes that they are legally required to pay. (We lose another $30 billion a year in corporate profits taxes hidden in the same ways.). If we forced those tax cheats to pay what they owe, we could fund free tuition for every student in America who was admitted to a public college or university. And if we had even more nerve and reinstituted progressive taxation, we could put America back to work, rebuild our infrastructure and build a new green economy — without going further into debt. Let’s also talk about how deregulated finance and tax cuts for the super-rich destabilized our economy. We created the perfect conditions for big-time financial gambling. The super-rich had amassed so much money that they literally ran out of decent investments in the real economy of goods and services. And so shadow banking was born. Investors started chasing after fantasy finance securities like synthetic CDOs. Those were the casino chips that financed the savings and loan fiasco, the dot.com bubble and the housing explosion. Too much money in the hands of the few is the root cause of financial speculation and crashes — same as it ever was. Along the way much of our economy was financialized. By the 1990s, a lot of people thought the future was in hybrid financial securities, not hybrid cars. Shortly before the crash nearly 40 percent of all corporate profits came from financial corporations producing little of real value. Wall Street wasn’t serving Main Street. Rather, Main Street — and all of us — were serving the Wall Street bankers. The result: a financial crash and an obscene distribution of wealth. Allow me to share again with you the one factoid that says it all: It 1970 the ratio of compensation between the top 100 CEOs and the average worker in the US was 45 to 1. By 2008 it was 1,071 to one. No one can justify that gap on the basis of talent, knowledge or effort. So here we are in our new billionaire bailout society. Its features include a collapsing infrastructure, chronic high unemployment, a gutted public sector, a hollowed out middle class and a depleted environment. It’s a place where the super-rich keep on getting richer, not because they are creating new jobs for Americans, but because they are gambling yet again, knowing we will bail them out. Yes, regulation is critically important. But it’s not enough. If financial institutions truly are too big and too interconnected too fail, then we have only two choices: Bust them up so that they are small enough to fail, or turn all the major banks and their large shadows into public utilities. It’s just not right or sane to let private bankers and investors walk off again and again with billions of taxpayer dollars for what amounts to wrecking our way of life. But alas, this is the nightmare we’re going to keep having until our best thinkers put forth a compelling vision to end the insanity. Come on, Mr. Krugman — let ‘er rip! We know you’re not ready to make peace with our pampered and grossly overpaid financial elites. Americans are looking for a way out of our billionaire bailout society. Lead the way! Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

Read the full article →

Dell Says India May Be Poised to Become New Technology Manufacturing Hub

March 25, 2010

By Mehul Srivastava, Connie Guglielmo, and Mary Childs March 26 (Bloomberg) — Dell Inc. Chief Executive Officer Michael Dell said in a conversation with Indian Prime Minister Manmohan Singh that the south Asian nation is poised to become a technology manufacturing center. The remarks came this week during a discussion with Singh about ways to boost hardware manufacturing in India, Dell spokesman David Frink said in an interview. The company denied an account of the discussion by Singh, who said Dell may be looking for a “safer environment” than China. “With the right kind of progress, Mr. Dell said that he believes India also has an opportunity to become a hardware manufacturing hub, generating employment and adding to that country’s impressive growth,” Frink said. India, Asia’s third-largest economy, needs to spend $1 trillion on roads, ports, power and other infrastructure between 2012 and 2017 to help accelerate economic growth to 10 percent and cut poverty, Singh said this week. Getting computer makers like Dell to invest in India rather than China is “an area where there are immense opportunities,” Singh said in a March 23 speech to members of India’s Planning Commission. Singh and Dell met a day after Google Inc. started routing China-based users to an unfiltered search service on its Hong Kong site. The move capped a standoff between China and Google, which in January said hackers in China stole data and targeted the e-mail accounts of human-rights activists. ‘Safer Environment’ Singh later said Dell was considering shifting purchasing of components from China to a “safer environment,” according to the text of the Indian official’s speech released by India’s Press Information Bureau . Dell denied that account and the Web site for the Press Information Bureau, where releases of Singh’s speeches are posted, no longer has a copy of the remarks. “There was no discussion concerning any change in how or from where Dell will source component parts for the computers it manufactures in Asia,” Minari Shah, a Dell spokeswoman, said in an e-mailed statement. Harish Khare, a media adviser to Singh, declined to comment. Dell said it has no plans to abandon its partners in China. The company currently spends about $25 billion a year on components from suppliers there. Companies besides Google have been reluctant to publicly criticize China, the world’s third-largest economy, over the country’s Internet policies and alleged human rights violations. Biggest, Fastest China accounted for more than 60 percent of all PCs shipped in the Asia-Pacific region last quarter, according to Gartner Inc. Shipments in that area climbed 44 percent, the fastest rate among the regions surveyed, according to the Stamford, Connecticut-based researcher. Still, India has lured technology investments as companies tap into its well-educated workforce. Dell has a design center in Bangalore. In 2007, the company opened a manufacturing and distribution hub in Chennai, according to the company’s Web site . Rival Hewlett-Packard Co. also operates a research lab in Bangalore, as does Microsoft Corp., which opened a research lab and software development center there in 2004. Cisco Systems Inc. , the biggest network-equipment maker, said earlier this month that it plans to boost its workforce in India faster than anywhere else to meet surging data traffic. CEO John Chambers said the number of employees is projected to rise to 10,000 from about 6,000 today, though he didn’t specify a timeframe for the expansion. Not Zero-Sum Dell should consider expanding manufacturing in India since it is a key market for its products, said Ashok Kumar, an analyst at Northeast Securities Inc. in New York. He doesn’t own any Dell shares. “India and China both see themselves as competitors for this economic opportunity, so it doesn’t have to be a zero-sum game,” Kumar said. “By sourcing and having larger manufacturing in India, they’re better positioned to service the local market.” Dell, based in Round Rock, Texas, fell 12 cents to $14.87 in Nasdaq Stock Market trading yesterday. The shares have climbed 3.6 percent this year. India and China are two of the fastest-growing markets for Dell , which has been working to revive sales and profit after losing top rankings in the PC market to Hewlett-Packard and Acer Inc. over the past three years. Sales in India were about $1 billion, or 2 percent of Dell’s total revenue. Dell is No. 2 in that market with a 13.6 percent share in the fourth quarter, according to researcher IDC, compared with Hewlett-Packard’s 16.2 percent. To contact the reporters on this story: Mehul Srivastava at msrivastava6@bloomberg.net ; Connie Guglielmo at cguglielmo@bloomberg.net

Read the full article →

Dave Johnson: Ten Million Jobs Needed – Ten Million Jobs That Need Doing

March 22, 2010

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. Dot: No net job gains since 2000. 8 million jobs lost in the recession. Never mind jobs for the 86,000 new people entering the labor force every month… Dot: According to the American Society of Civil Engineers (ASCE) “congested highways, overflowing sewers, and corroding bridges” were creating a “looming crisis that jeopardizes our nation’s prosperity and our quality of life.” Dot: From a recent NY Times story on our country’s water systems, Today, a significant water line bursts on average every two minutes somewhere in the country, according to a New York Times analysis of Environmental Protection Agency data. . . . State and federal studies indicate that thousands of water and sewer systems may be too old to function properly. [. . .] “There’s a lot of evidence that people are getting sick,” he added. “But because everything is out of sight, no one really understands how bad things have become.” Connect the dots . Ten million jobs needed. Ten million jobs that need doing. It’s called the infrastructure deficit. Right around 1981 we stopped improving the country’s infrastructure and even started to defer maintaining it. We started “living off the seed corn.” Now it is all catching up to us. I’ll be writing about infrastructure. Boring. Until it isn’t. Workers were repairing corroded joints on Minnesota’s busiest bridge when it collapsed into the Mississippi River yesterday, killing at least four people and leaving more than 20 missing, state officials said. … As many as 50 cars plunged into the river along with the six-story structure, authorities and eyewitnesses said. Sign up here for the CAF daily summary .

Read the full article →

← Previous Entries

Next Entries →