military

Huffington Post…

The common assumption is that charitable giving trends parallel economic activity. But in the case of 2011, it’s a good thing this wasn’t the case. Giving nationwide rose 7.5 percent in 2011 compared to 2010, a new Atlas of Giving report says. What’s more, charity outpaced economic growth in 2011, which climbed just 1.7 percent, according to the Bureau of Economic Analysis . The Atlas of Giving study cites strong stock market performance from January through July, low interest rates, moderate inflation and increased fundraising efforts by nonprofits as reasons for the increase. The area in which giving grew the most was education, up 9.8 percent. The report states higher education received a boost in donations in the second quarter. Donor advised fund contributions — which receive the highest tax deduction available — and grants to nonprofits were at record levels during 2011. The breakdown of 2011 giving was 75 percent individuals, 13 percent from foundations and just 5 percent from corporations, the report says. So which nonprofit earned the lion’s share of these funds? United Way is the largest U.S. charity in terms of giving. The rankings are based on the amount of private donations, with United Way earning $3.9 billion, according to Forbes . Beyond the stats, the psychometrics of giving indicate that the top reason donors give is because of a connection to a cause, according to Blackbaud , a nonprofit fundraising software company. Knowing this, organizations should encourage donors to share their stories, giving experts say. Check out the slideshow of the states that gave the most in 2011 below.

See the article here:
Charity Outpaced Economic Growth In 2011: Which States Gave Most?

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

{ 0 comments }

Huffington Post…

The Sandbox Global Summit kicked off this year’s summit season for me. The Summit Series had their 500 person-strong Basecamp gig in Squaw Valley, which will be followed by Kairos Global Summit in New York. The Sandbox event was live for just 72 hours between the 20th and 22nd of January, but for many of us, it’s been going on for much longer. Sandbox co-founder Antoine Verdon has spent most of the last six months building this event. I have been on Portuguese soil for five weeks prior the event; Alicia Sully, my colleague at What Took You So Long (WTYSL), was there for three weeks. This year, the Sandbox Summit’s working title was “Lisbox” — a fusion word of Lisbon and Sandbox. Time stood still during these 72 hours of constant action. We were free of trouble and open for collaboration. But there were no over-the-top DJ performances or live bands like at last year’s Summit at Sea , instead the whole gathering was crowd sourced from within the Sandbox network. Anarchy ruled in this open space. The sharing sessions were hierarchy-less in that anyone was invited to host one, and those that chose to, did so from how to dance the Merengue to the art of pouring a perfect Guinness. The session hosts — all unpaid — shared straight-up information based on their own experience of success and failure. It was an accelerated and practical learning curve experience for most participants. Someone summarized the whole thing as, “a major love fest.” Before the summit started, Nairobi-based Sandboxer Jonathan Kalan broke it down to the world in his HuffPo blog . He describes Sandboxers as, “geographically loose yet an extremely tight-knit group of individuals, held together by the fabric of social networking, constant couch surfing, and a slew of global networks.”As Sandbox co-founder Fabian Pfortmuller beautifully articulates in Jonathan Olinger’s Sandbox Transamerica video : The strongest bond one can have is your family. “The world is going to change. Technology’s going to change. Politics are going to change. But what’s going to stay the same are relationships. It’s going to allow us to make amazing things happen together.” The family he refers to is the Sandbox family and the emphasis at the summit was on building bonds between the 150+ Sandboxers that participated in this global gathering. Sandbox is a global network of selected innovators under 30, a community of over 600 people in 48 countries and 23 hub cities. We have hubs everywhere from San Francisco to Shanghai; our latest expansion is the Cairo-hub. We all came to the summit because we believe in the collective power of Sandboxers. “If we didn’t think we were going to change the world, we wouldn’t be here.” I love to work together with Sandboxers to make shit happen. I find my fellow “boxers” online/offline/side ways and straight ahead. I would argue that most of us are knowmads — I know I am. What’s epic is that people help each other out without asking for anything back. I once had a dream that we would build a big sandbox inside the event space, MUDE . I got blocked by one of the museum staff to materialize my dream. Anger infiltrated my body but I quickly converted that into my fallback plan — let’s build a Sandbox in the sand on the beach! We secured timber. All we needed was the following of a few to manifest this creation. Inspired by the idea to build an actual Sandbox we launched an attack on the beach just across the square from MUDE. Thirty noble men and women with timber in their hands overran the nonexistent defense line of the beach. I put Joe Amoros Moya a Spanish Sandbox ambassador in charge of making the physical sand box. He quickly took charge and with the support of a local homeless person, without the ability to speak English or Portuguese, he turned the beach into a love-haven for collaborators. An hour and a half later our bodies were sun-soaked and the physical sand box was erected in front of moving cameras and time-lapse go-pros. The Sandbox world will never forget Persian think-tanker Manoucher’s inaugural speech marking the completion of our 3D sand box cube, or New York-based Sandbox ambassador Niamh’s heroic workmanship and leadership to involve more females in the previously male-dominated building process. We will never be able to replicate the energy that we created on the beach. During the Sandbox Summit, our currently stationary nomad photographer and surfer friend Antonio Gamito took 8,000 portraits of the 200 participants. I took these photos and made it into a movie: Lisbox12: The Art of Faces from What Took You So Long? on Vimeo . I chose the “Opposite Of Adults” theme song by Chiddy Bang because the lyrics capture the feeling that youth is a continuous journey: “Hey yo, I once was a kid, all I had was a dream.” On the final day of the summit, Sandboxers were asked to write down their take on life to be compiled into an playbook , a manifesto of sorts that will be available to the world in collaboration with Bloomberg Businessweek . Over the course of an hour or so, small groups of sleep-deprived Sandboxers gathered with blank sheets of paper to fulfill the request to draw and design the pages of the e-book capturing the philosophy that we, as Sandboxers, engage the world. The summit is over and now I’m transitioning back to Kenya. I feel mixed emotions all around because my continuous travel and inability to stop moving makes it difficult to step away and reflect. But even though the summit is over, it’s really never over. So what is everyone doing right now? Follow the Twitter list of the participants! On Twitter you can use the hashtag #lisbox12. Check out Sandboxer Rahaf’s totally amazing blog on the summit and the Barbara Streisand-inspired thoughts of Pakistani Sandboxer Kalsom! So, what’s next for Sandbox ? Incubation, funding and growth! Part of the reason this will happen is that now that Sandbox’s management is centered in Zurich (as opposed to being spread out as it was before). Here Sandbox’s official way forward blog. I’m in love. It happened in Sweden of all places (my first home, but one that I have not lived in for nine years) during Christmas. Inspired by falling for this woman I felt a desire to share it non-verbally through graffiti imprints on Sandboxers’ arms. With the help of a thick black marker I wrote “LOVE” on the forearms of 10 people. Ten turned into 20, 30, 40 — even in the middle of a Portuguese night club I was busy spreading the LOVE. Day two of my quest and people come up to me requesting to get tagged. Day three people come up to me for refills because their love was fading away. Love will throw you off the camel and back up again. Don’t give up on love. Embrace it. Let’s embrace the unknown more often, never stop moving, and know that love will set you free. This was my message.

Read more:
Sebastian Lindstrom: Sandbox 2012: Why 200 Trailblazers Gathered in Lisbon

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

{ 0 comments }

GOP Candidates Decry Extended Unemployment Benefits

January 17, 2012

Republican presidential candidates sharply criticized extended unemployment insurance during Monday evening’s debate in South Carolina, where the unemployment rate is 9.9 percent. “I think we have to look at having a reasonable time for people to be able to come back, get a job and then turn their lives around,” former Sen. Rick Santorum said in response to a question from Brett Baier of Fox News. “But what we’ve seen in the past under this administration is extending benefits up to 99 weeks. I don’t support that. I think if you have people who are out of work that long a period of time, it’s without question, it makes it harder to find work when you come back.” Congress has given the long-term jobless additional weeks of unemployment benefits in every recession since the 1950s. In 2009 lawmakers increased the duration of federal benefits to 73 weeks in hard-hit states. The compensation kicks in for workers who use up 26 weeks of state-funded benefits. Research has shown that the longer people are out of work, the more trouble they have finding new jobs. But the latest research has not shown that the current regimen of extended benefits is significantly increasing long-term unemployment. Former House Speaker Newt Gingrich suggested the unemployed should have to do job training in order to qualify for benefits. “All unemployment compensation should be tied to a job training requirement,” Gingrich said. “If somebody can’t find a job and they show up and they say, you know, ‘I need help,’ the help we ought to give them is to get them connected to a business-run training program to acquire the skills to be employable. Now the fact is, 99 weeks is an associate degree.” According to the Congressional Research Service , people with advanced degrees are no less likely than high school dropouts to join the ranks of the 99ers. There are roughly 1.9 million people who’ve been out of work for 99 weeks or longer, up from 1.4 million in December 2010. Santorum said he supported allowing states more freedom to craft unemployment policies. “What I believe, just like I did with welfare reform — when we reformed welfare, we sent it back to the states and we gave the states the flexibility to design these programs,” Santorum said. “Just as I would do here with unemployment insurance. It should go back to the states, let the states design it. If South Carolina, because of a unique situation, wants to have a longer unemployment period of time because of a unique situation here, fine. But to have a federal program that roughly and crudely tries to assess the problem of unemployment from state to state and area to area is the wrong approach.” States have more control of unemployment insurance than Santorum suggested. They already do administer their own unemployment programs within federal guidelines. South Carolina was one of several states last year to cut the duration of state-funded benefits from 26 to 20 weeks, and South Carolina lawmakers are mulling proposals to require drug testing and volunteer work for claimants. The full complement of federal benefits is only available in states with high unemployment rates. Rep. Ron Paul (R-Texas) sounded a more compassionate note during the debate, saying he opposed extended unemployment insurance but that benefits shouldn’t be cut abruptly. “A little while ago we were talking about funding the unemployed and of course that should be privatized and I don’t support it, but I don’t support cutting it off like that,” Paul said. “I would cut some of the military spending like Eisenhower advises, watch out for the military complex.” In December, Congress reauthorized extended unemployment insurance programs through February, but it did so in a way that will allow the final 20 weeks of benefits to phase out in one state after another over the course of this year even if the programs are preserved beyond February.

Read the full article →

Perfect Storm Of Threatened Crisis Roils Middle East

January 4, 2012

WASHINGTON — Storm clouds darkening over the Middle East suggest a growing peril for the United States and the possibility of a new war that could embroil the U.S., Israel, Iran and others in a bloody, costly fight. Behind this week’s exchange of threats between Iran and the United States over access to the Persian Gulf, seasoned analysts see a perfect storm of factors that could trigger armed conflict. Iran’s work on nuclear weapons is fast approaching a “red line,” the crossing of which both the United States and Israel say is unacceptable and may have to be halted by force. Washington and European capitals are preparing new sanctions that would sever Iran from the international banking system, a move that would cripple its economy and that Tehran has said it would consider a provocation to war. Growing violence in Syria threatens to spill over its borders with Israel, Lebanon and Turkey, a NATO ally. Amid the saber-rattling rhetoric from Washington and Tehran, and Arab world upheaval from Egypt to Iraq to Yemen, the United States is planning an unprecedented escalation of military cooperation with Israel, including massive joint exercises this spring to practice joint command and maneuver of ground forces in combat. And political campaigns, including a struggle between bitterly opposed factions in Iran’s March parliamentary elections and the U.S. presidential contest culminating in the fall, are likely to keep all these tensions at a boil. “‘Powder keg’ doesn’t begin to describe it,” said Louise Arbour, president of the International Crisis Group, an independent organization that monitors global tensions. “Rising strategic stakes have heightened the regional and wider international competition,” she wrote in a new assessment . It is, she concluded, “an explosive mix.” U.S. Defense Secretary Leon Panetta said last month that the planned maneuvers with Israel, dubbed Austere Challenge, will be “the largest joint exercise in the history” of U.S.-Israeli relations. What had been a biannual series of command-post computer training with simulated forces held in Germany has been expanded this year to Israel and will include U.S. Army combat troops on the ground in Israel, commanded and maneuvered by joint U.S.-Israeli command centers in Europe and Israel. The joint maneuvers are part of what Panetta has called “unprecedented defense cooperation” with Israel, which also includes joint naval exercises and the training of U.S. Marines on counterterror and urban warfare operations with Israeli commandos. Austere Challenge will play out in May, shortly after a massive joint missile defense exercise, Juniper Cobra, that will involve U.S. and Israeli defense systems and missile interceptors. U.S. officials in Washington and Europe declined to provide details on the joint exercises. Air Force Capt. John Ross, a spokesman for the U.S. European Command, which will conduct Austere Challenge, said the exercise “is not in response to any real-world event.” But Iran’s work on its nuclear weapons, newly documented last month by the inspectors of the International Atomic Energy Agency, is driving events at a fast clip. Panetta has said Iran could have a nuclear bomb in “about a year … perhaps a little less” if Iran, as suspected, has a secret uranium enriching facility. Should Iran cross that “red line,” Panetta told CBS News on Dec. 19, “we will take whatever steps necessary to stop it.” The Obama administration and others have tried economic sanctions to drive Iran to abandon its nuclear program. According to a recent report by the Congressional Research Service , the extensive web of international sanctions against Iran is not having an appreciable impact on its economy, which is growing at an enviable 3.5 percent annual rate. But Iran’s economy — and particularly its state-subsidized imports of food and gasoline — depends on unfettered access to global financial markets. Legislation reluctantly signed into law by President Barack Obama last week requires the president within 180 days to impose sanctions on any foreign financial institutions that deal with Iran’s central bank. Widespread refusal to deal with Iran’s central bank would strangle the country’s access to hard currency from its oil revenues, which earn Iran, as the world’s fourth-largest oil exporter, about $75 billion a year. In response, Iran has threatened to close the Persian Gulf at its chokepoint, the Strait of Hormuz, through which pass some two dozen giant oil tankers a day carrying one-third of the world’s oil consumption. Although the president can waive the new sanctions for 120 days at a time, a White House spokesman said the administration is working with its European allies and others “to be in a position to most effectively implement” the sanctions, seeking to “avoid negative repercussions to international oil markets.” In anticipation of an oil trade war — or worse — oil prices have risen sharply this week, and Iran’s currency, the rial, briefly fell to a new low in a signal of rising consumer prices for food and fuel. The risk, of course, is that the heated rhetoric and implied threats gain a momentum of their own. “As these things go forward it’s more difficult to step back,” said Michael Adler, an Iran scholar at the Woodrow Wilson International Center in Washington. Speaking of the region as a whole, he added, “It’s a tinderbox squared or cubed.” The unintended danger arising from the threatened sanctions is that they might push the U.S. and Iran toward conflict rather than toward a peaceful conclusion, warned Vali Nasr, a senior fellow at the Brookings Institution, a Washington think tank. “This is a significant escalation of tension between the United States and Iran, and the start of a more dangerous phase in the West’s attempt to curtail Iran’s nuclear program,” he wrote in a new analysis . “War between the U.S. and Iran may very well start, not if and when Washington decides to strike against Iran’s nuclear facilities, but because sanctions designed as the alternative to military action end up hastening its advent,” Nasr wrote.

Read the full article →

Keith Ferrazzi: Collaborative Action Comes to Life in Guatemala

January 3, 2012

Two years ago we visited Carlos’ school , which was running out of funding and couldn’t pay the rent or salaries for the teachers. A major problem in Guatemala is the economic disincentive for kids to go to school. Either you can pay for tuition and books from money a family doesn’t have, or send your child into the fields to make money for food. Carlos was a rare advocate for an alternative solution. His was the only daycare and school option in this small village, preventing these kids, some as young as 6, from having to go to the coffee fields. But he was running out of money. However, Carlos had a vision. A vision of sustainability for his school. What if he could create something that he could sell and fund his school? Like any entrepreneur, he had his false starts. A sewing program to make clothes for the kids and also sell them locally. A program where the kids could make jewelry from materials found locally and sell that. None panned out. Then Carlos came across a soy milk machine. He could make milk, have milk for his kids, sell the extra to local schools, and make enough money to pay teachers with the profits! We had to give the guy credit for trying. The last piece his venture needed was a refrigeration system to preserve the milk. It seemed like a long shot, but I wanted to reward his philanthropic zeal, so I asked our community for help and one of our followers stepped up with a $500 donation to help complete Carlos’ project. Unfortunately we didn’t hear anything from him after that. I knew the communication infrastructure was scarce, so I wasn’t offended. But after repeatedly asking others in the community how the soy milk project was doing and not hearing reports, I wrote off my expectations for that particular investment. Oh well, one out of all the projects here, no sweat. Then last night we threw a “Big Task” dinner for all the project leaders we have been funding and invited a number of the local business leaders and larger NGOs, like the Peace Corps, hoping to advance new relationships and gain some greater collaborative action among these local groups. My desire was to create collaborative support among the nonprofit community and to extend and accelerate their network, not only among each other, but up to the larger NGOs and the major money and business leaders in the region. I walked in and there was Carlos. He had the biggest smile, walked over and gave me a hug. Through translation we discovered that, indeed, our investment paid off. His soy works are in full force. He now feeds the kids a soy milk snack rich in nutrients and also sells the milk to other schools, making enough profit to pay his teachers! So, the obvious next question for a successful entrepreneur, what’s next? What can I fund that would give the highest return? I got two answers. For $500 I could fund recyclable glass jars, so he could package the product better and save on containers. Done. I funded that. He also said that a $3500 investment would fund higher grade production that would allow him to sell to commercial entities like McDonalds. I said I’d consider it and solicit our community for support and perhaps get back on that one. Anyone interested in investing in this project ? Then I had an idea. I brought Carlos over to a woman who oversees projects for nearly 10 villages. “Lilian, I’d like to purchase $500 worth of soy milk for your kids.” The idea of bringing Carlos a new 500 dollar client seemed like a big deal, and perhaps I would seed the idea with Lilian to become an ongoing client of Carlos. She was so shocked and excited. She said, “One of my dreams for the coming year was to find a way to provide a nutritious daily snack for our kids who sometimes eat only a small ration of tortillas.” Collaborative action comes to life in Guatemala! When we started www.BigTask.org and Big Task Weekend, we had the vision of bringing the most powerful companies TOGETHER to collaborate on key social reform and societal issues like health care reform, American wellness, education reform… And now the same principles were playing out for mutual benefit and societal gain in Guatemala! Mission advanced!! Anyone want to help Carlos up his manufacturing standards for the big commercial projects? Any contribution , I’ll match. If we raise half of the $3500 needed for Carlos to get to the next level, I’ll contribute the rest!

Read the full article →

Matthew Bishop: The Year of Controversial Giving

January 2, 2012

What does 2012 have in store for giving, especially the impact-driven approach to it we call “philanthrocapitalism”? Having peered into our philanthrocrystal ball, we see giving becoming more dangerous, more controversial, and more political, among other things, as philanthrocapitalists find themselves at the centre of some of the year’s biggest news stories. Here are our 10 predictions for the coming year: 1. Greater scrutiny of the 1 percent. The role of the rich in setting the political agenda is going to be one of the big stories in the run-up to the U.S. presidential election in November. Philanthrocapitalists hungry for impact are increasingly looking to get leverage by influencing government policy, and this election will set the policy agenda for the next four years at a time when America (and, along with it, the world) faces some tough choices. We have been here before, of course, with George Soros’ support for the “Move On” campaign in 2004, which was ultimately unsuccessful in unseating the incumbent president, George W. Bush. The influence of the Koch brothers on the right is already on the media’s radar, but there are plenty more to be discovered. Expect donors of the left and the right to pitch in to this contest using political donations and philanthropic giving to support policy thinking on issues like budget priorities and health care and school reform. Is this philanthropy or plutocracy? We will all be talking about that this year. 2. Nation building is back. Politics will also be a big theme of philanthropy around the world, which may bring with it genuine danger for those involved. From the nations involved in the Arab Spring to Vladimir Putin’s (for now) Russia, and maybe even North Korea, philanthropists are going to be getting involved far more than in recent years in supporting civic movements and even political movements in countries where there is a real opportunity to change the political balance, hopefully in a more democratic and just direction. As the year-end crackdown on various American-backed nonprofits by Egypt’s military government should remind everyone involved, those threatened by this philanthropy are unilkely to take foreign interference in their countries lying down. 3. Crunch time for Muslim philanthropy. On a related point, 2012 is going to be a year of decision for Muslim philanthropists. There is a huge opportunity for them to strengthen civil society in the Arab Spring countries and work with the emerging entrepreneurs and social entrepreneurs there. Pakistan and Afghanistan are both in need of high-impact philanthropy. Yet with the honorable exception of the Aga Khan Foundation, too much of the giving from Muslim donors, including by some of the multi-billion-dollar foundations set up by the rulers of Gulf countries and their leading businesses, is still focused on traditional welfare and charity rather than social change. Yet change seems likely to happen with or without them, and if they do not help it along, it may well be at the expense of the Muslim wealthy. Perhaps this is an area where Turkey’s emerging philanthrocapitalists will show a lead to the rest of the Muslim world. 4. Occupy philanthropy. One of the big questions of the year will be whether the global Occupy movement will evolve from a necessary voice of protest into an effective force for change. There is an opportunity, and we believe an obligation, for philanthrocapitalists to help reform capitalism, so that it genuinely works in the interest of the population as a whole, not just a small subset of it. Andrew Carnegie understood the vulnerability of capitalism to the perception of it being inherently unfair; it is time today’s successful capitalists did so, too. The gradually increasing pack of CEOs who get it, such as Indra Nooyi of PepsiCo, Paul Polman of Unilever, and Sir Richard Branson of Virgin, have a huge opportunity to set the agenda for their peers, as long as they back up their words with serious action. 5. Steve Jobs, philanthropist. After spending his life being fairly dismissive of philanthropy, the late co-founder of Apple is likely to be one of the most prominent additions to the mega-giving scene in 2012. His widow, Laurene Powell Jobs, has long been involved in giving, having founded an organisation to get students from poor backgrounds into college, participating in the Clinton Global Initiative and Global Philanthropy Forum, and visiting Africa on a trip for philanthropists led by Ben Affleck. Now that she controls her late husband’s fortune, expect her to start putting it to good use. We can also look forward to some weird and wacky philanthropy from new donors from the social media generation. The Facebook IPO is going to make a lot of people very rich and, since its founder Mark Zuckerberg has already signed up to the Giving Pledge, we are hopeful that the new cohort of wealthy will turn to philanthropy as a priority. The most entertaining philanthropist of 2011 was Silicon Valley venture capitalist Peter Thiel, who famously/notoriously offered $100,000 grants to get people to drop out of college and start a business, as well as supporting efforts to create new floating countries in international waters (“sea steading”) and launching a science fund closed to university academics, a large proportion of the people we normally think of as scientists. Plenty of people think Thiel is nuts, which is great. Too much philanthropy today talks about risk-taking without being willing to court controversy. Expect the donors of the social network generation to have no such fears. 6. Celanthropy’s new stars. Ben Affleck will become more prominent on the Hollywood philanthropy scene, though probably still lagging behind the likes of Brangelina, George Clooney, and Matt Damon. The celanthropist to watch, though, will be Lady Gaga, who we expect to take a big step forward in her giving, probably with a cause dear to the hearts of her “Little Monsters” (as she calls her young fans). Another celanthropist worth watching will be Ashton Kutcher, to see if he can recover as a force for good following a messy divorce and some unfortunate tweeting in 2011. Despite his and other bad celebrity experiences, the use of Twitter and other social media in philanthropy will continue to increase — which should mean even more celebrity mishaps this year. Some giving dynasties will also move more clearly into the limelight. Will Chelsea Clinton, as well as championing social causes in her new TV job, take a bigger role at the Clinton Global Initiative? Expect greater interest to be taken in Barbara Bush, daughter of George W., and her health care nonprofit, Global Health Corps. And now that he is focusing on philanthropy, expect some bold initiatives from Howard Bufffett, grandson of Warren Buffett. Also watch out for the House of Windsor, as Britain’s Brangelina, Wills ‘n’ Kate, make a serious effort to build a celanthropic brand, hopefully learning from the ability of Princess Diana to draw attention to an issue and the underrated skills of Prince Charles as a social entrepreneur. 7. Deep impact. This will be a big year for “impact investing,” which explicitly seeks both financial and social/environmental returns. So far, there has been much more talk than action, but the time has come for the money to back the ideas. The Omidyar Network has already taken a lead, but some other big philanthrocapitalists will join it this year. Enter the Gates Foundation? 8. The great extinction. Alas, it is going to be a tough year for many nonprofits. We are braced for more scandals about inspiring narratives unsupported by facts, along the lines of the 2011 Greg Mortenson exposé. The pain of government spending cuts will be felt widely, both directly, as many nonprofits rely on money from government, and indirectly, as cuts to government services will lead to greater demand pressure on non-government alternatives. We think that many nonprofits will be faced with serious shrinkage and, in many cases, extinction. Our hope is that smart donors will grasp the nettle and try to manage this culling process, encouraging mergers wherever possible, so that the best of the nonprofit sector is preserved or, better still, made stronger. 9. Philanthrocapitalism the Chinese way. There was some schadenfreude when the Gates-Buffett visit to China in 2010 failed to drum up new signatories to their Giving Pledge, although that was not the immediate goal of their mission. We expect philanthrocapitalism to become an increasingly important force in China in 2012, though it will have a distinctive local flavor. Instead of traditional, American-style, foundation-oriented philanthropy, we expect a wave of stories about corporates playing a key role in solving social and environmental problems through a version of “social investment.” China is now hitting a difficult stage of economic development when it needs to manage its use of natural resources, stop competing on low labor costs alone, start tackling potential drags on its competitiveness, such as its rapidly aging population, and deal with rising expectations among the populations. All of this requires a wave of innovation, which China’s philanthrocapitalists are well placed to lead. 10. Some good news. We are hopeful for some big breakthroughs that will prove that philanthrocapitalism works. Will some of the few remaining countries still hit by polio announce that they are free of the disease? Will the death toll from malaria plunge even further and faster? We think so, and that as it does, it will validate the “posse” approach to solving the world’s problems at the heart of philanthrocapitalism. Expect more new posse partnerships to be announced, similar to the Malaria No More campaign led by Ray Chambers, which has galvanized a powerful coalition of the willing. This is a time of growing scepticism about the effectiveness of government, international aid, and even of giving. Yet clear evidence of results may start to change the mood and persuade a growing number of people that philanthrocapitalism is worth the risk. Matthew Bishop and Michael Green are co-authors of Philanthrocapitalism: How Giving Can Save the World . Bishop is New York Bureau Chief of The Economist ; Green is an independent writer and consultant.

Read the full article →

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

December 23, 2011

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

Read the full article →

David Isenberg: Pedagogic Military Contractors: Blackwater, the Academy and the "ιδιωτικές στρατιωτικές ανάδοχος"

December 18, 2011

The famous American writer F. Scott Fitzgerald once said, “There are no second acts in American lives.” He was, of course, wrong. America is the land of second chances and second acts, from Pilgrims fleeing religious oppression in England to set up Plymouth colony in Massachusetts and brunettes going to their hair stylist to emerge as blondes, to blowhards like Donald Trump who manages to convince some people that he is worth taking seriously, as well as Newt Gingrich, who manages to make some people think he is qualified to be president, to name just a few examples In fact, in America, people and groups are not just limited to second acts. They can have third acts. That, of course, brings us to the never ending rhetorical journey of the private security company once known as Blackwater. Sometimes one has to pity Blackwater; when it comes to public image it resembles the legend of the Flying Dutchman; the ghost ship that can never make port, doomed to sail the oceans forever. Those who prefer more literary allusions can read Samuel Taylor Coleridge’s The Rime of the Ancient Mariner . In Blackwater’s case, the name may change but it seems doomed to be remembered by what happened to its contractors in Fallujah in 2004 and what its contractors did in Baghdad in 2007. Still, no harm in trying to change. As they say, if at first you don’t succeed, try, try again. And that is what Blackwater previously did. In February 2009, Blackwater announced that it would be changing its name to “Xe Services LLC.” Xe was short for Xenon, a chemical element with the symbol Xe and atomic number 54. Personally I thought naming yourself after a colorless, heavy, odorless noble gas, which only occurs in the Earth’s atmosphere in trace amounts and is generally unreactive, was a smart idea. In its primary form it consists of nine stable isotopes which don’t bother anyone. Fortunately the press never picked up on the fact that there are also over 40 unstable xenon isotopes that undergo radioactive decay. That, however, was not all bad. For example, radioactive xenon-135 is produced from iodine-135 as a result of nuclear fission, and it acts as the most significant neutron absorber in nuclear reactors. A smart PR person could have pointed out that the company, like its isotopic counterpart, prevents things from going critical. But I digress. For whatever reason, Xe, which has brought in new management in the past few years, decided it was time for a name upgrade. So, on December 12, Ted Wright, Xe’s president and chief executive, announced a new name, Academi. Mr. Wright said Academi will try to be more “boring.” The new corporate identity is supposed to emphasize the company’s focus on regulatory compliance and contract management, in addition to its job of protecting clients. All well and good, at first glance. I mean, it conjures up images of a bunch of academics discussing in measured, sober tones the pros and cons of private military and security contracting. Perhaps PMC will stand for Pedagogic Military Contractors. After all, the “academy” has an ancient and honorable lineage. The Academy was founded by Plato in 387 BC in Athens. Aristotle studied there for twenty years before founding his own school, the Lyceum. One can picture Plato and his disciples rationally debating the strengths and weakness of private military companies, or ” ιδιωτικές στρατιωτικές ανάδοχος ” as the Greeks called them. Perhaps there was a representative of the ” διεθνούς σταθερότητας εργασίες σύνδεσης ” the spiritual ancestor of today’s International Stability Operations Association, there to tout the benefit of outsourcing and privatization. Doubtlessly there were people there arguing that it was cheaper for the Greek polis (city-state) to contract with mercenaries instead of hiring a standing force. After all, it seemed to work fairly well for Philip II of Macedon. And without Philip we never would have Alexander the Great. But, on second thought, there are some problems with using Academy as your brand. If you’ve ever dealt with someone who has a PhD you’ll know what I mean. It is not for nothing that people say academics fight the most vicious battles over the most trivial matters. It’s not exactly the reputation you want attached to people who carry guns for a living. Plus, another definition of PhD is: Piled Higher and Deeper; not exactly the image of the efficiently organized, quick acting operator you want preserving your life. Not to mention that most academics spend a good part of their career striving to achieve tenure, hence the “publish or perish” phenomenon. What does a PMC do: contract, by hook or by crook, or perish? Still, as what was Blackwater, then Xe, sails off into the sunset and Academi unfurls its sails, I wish it well. As they say, third time’s the charm.

Read the full article →

Google Donates $11.5 Million To Fight Modern-Day Slavery

December 14, 2011

SAN FRANCISCO — Tech giant Google announced Wednesday it is donating $11.5 million to several coalitions fighting to end the modern-day slavery of some 27 million people around the world. In what is believed to be the largest ever corporate grant devoted to the advocacy, intervention and rescue of people being held, forced to work or provide sex against their will, Google said it chose organizations with proven records in combating slavery. “Many people are surprised to learn there are more people trapped in slavery today than any time in history,” said Jacquelline Fuller, director of charitable giving and advocacy for Google. “The good news is that there are solutions.” The Washington, D.C.-based International Justice Mission, a human rights organization that works globally to rescue victims of slavery and sexual exploitation, was chosen by Google to lead the efforts. It will partner with Polaris Project and Slavery Footprint and a handful of smaller organizations for the multi-year effort to rescue the enslaved, push for better infrastructure and resources for anti-slavery enforcement agencies overseas, as well as raise awareness here in the United States and help countries draft anti-slavery legislation. “Each year we focus some of our annual giving on meeting direct human need,” Fuller said. “Google chose to spotlight the issue of slavery this year because there is nothing more fundamental than freedom.” Gary A. Haugen, president of the International Justice Mission, said the coalition would focus on three initiatives: A $3.5 million intervention project to fight forced labor in India; a $4.5 million advocacy campaign in India to educate and protect the vulnerable; and a $1.8 million plan to mobilize Americans on behalf of the millions currently at risk of slavery or waiting for rescue around the world. The remaining $1.7 million will go to several smaller organizations working to combat slavery. “It’s hard for most Americans to believe that slavery and human trafficking are still massive problems in our world,” said Haugen. “Google’s support now makes it possible for IJM to join forces with two other leading organizations so we can bring to bear our unique strengths in a united front.” Those leading the U.S. efforts will meet in Washington on Wednesday to kick off the joint initiative. The project will focus on improved legislation to protect vulnerable children and adults in the United States, as well as a push for more accountability and transparency in the U.S. supply chain by retailers and manufacturers to make sure their products are “slave-free.” The trafficking of women for the sex trade is common in big American cities. Some illegal immigrants find themselves forced to work in sweatshops, in private homes as domestic servants or on farms without pay under the threat of deportation. The new effort will launch new initiatives that ordinary Americans can take to help abolish modern-day slavery, such as understanding how their own clothing or smart phones might contain fabrics or components manufactured by forced labor. “Whether it’s by calling the national human trafficking hotline, sending a letter to their senator, or using online advocacy tools, millions of Americans will be able to use their voices to ensure that ending this problem becomes a top priority,” said Bradley Myles, executive director of Polaris Project. Google.org – the philanthropy arm of the Silicon Valley firm – announced the anti-slavery effort as part of its $40 million in end-of-year giving that brings its charitable donations to more than $100 million in 2011. The grants will also support science, technology, engineering and math education; girls’ education in the developing world; and the use of technology for social good. Justin Dillon, the founder of Slavery Footprint, said the Google grant would allow the movement to move from “anecdote and emotion,” to tangible action that could make a dent in history. “Having a company like Google recognize the value of our work marks a major turning point for the anti-slavery movement,” said Dillon, whose nonprofit gives consumers some tools to determine whether slaves were used in the making of their goods and teaches them to use social media to sound off about slavery and engage with corporations about their supply chains.

Read the full article →

Daniel Burrus: It’s Time to Transform the U.S. Postal Service

December 8, 2011

The United States Postal Service has been doing poorly, financially, for years. With the advent of emails and electronic bill payments there’s been a dramatic drop in the use of the postal service, yet their expenses have increased. So it’s no surprise that they’ve recently announced some big cutbacks to help them rein in costs. In the future, will more people turn to online bill payments and email communications? Absolutely. That’s a hard trend. And starting in 2012, thanks to mobile banking and mobile payments, we’ll see people turning their cell phones into a way of paying bills. Additionally, Netflix, one of the biggest users of the U.S. Postal Service, will soon be streaming movies to your phone, tablet, and digital TV rather than mailing DVDs. As processing power, bandwidth, and storage continue to accelerate exponentially, the concept of DVDs coming via the mail will be obsolete. Now, I admit that it’s nice to get a handwritten letter. Additionally, you can’t email packages. But we don’t need that much mail anymore. And with FedEx and UPS being competitive in the package delivery markets, what’s the U.S. Postal Service to do? One suggestion is to get into the email business. Believe it or not, but the USPS has very sophisticated technology. In fact, they likely have the most advanced scanning technology in the world. Just think of all of the packages and letters they have to scan with handwriting recognition software — even items with the sloppiest and most illegible handwriting get to the right place. So they have amazing technology… and we have emails that are loaded with spam. What if the USPS created a secure email system for the nation that has the highest level of spam filtering?  Since it’s our government, perhaps they could connect with the Department of Defense to make sure we get good filtering, get rid of spam, eliminate viruses, and devise a national email verification system. This way we know for certain that our emails are from the companies they claim to be from and are not a phishing scheme. Would everyone in the U.S. use it? No. But if it’s a high value service, most corporations and businesses will jump onboard and pay handsomely for the service. Finally, with the layoffs the USPS is planning, estimates show that by 2015 there’ll be 120,000 fewer Postal Service employees. That’s a soft trend, since many things can still affect this estimate. But rather than just lay people off, what about retraining those workers so they can get jobs in something that is growing? Putting money toward retraining and re-educating would be well-spent so the unemployment system isn’t strained even further. Ultimately, the USPS has the opportunity to create some amazing new value for United States citizens. By generating income from e-business and retraining workers, they could positively shape America’s future rather than cling to the past.

Read the full article →

Robert Teitelman: Why Leon Cooperman Is So Upset

December 8, 2011

Andrew Ross Sorkin in Tuesday’s New York Times chats up the suddenly irrepressible Leon Cooperman of Omega Advisors, who last week sent an email around blasting President Obama and “his minions” for the increasing volume of what he believes is “class warfare” rhetoric, and has been talking about it ever since. Sorkin’s stance toward Cooperman is not exactly confrontational. Cooperman comes off as a teddy bear, telling Sorkin that “99.9%” of his email after the letter was positive (which, in this amped-up Internet world is a little hard to believe; Santa Claus doesn’t get such uniformly positive mail unless he has a very private email address), to wrap himself in his rags-to-riches story and, most importantly, to suggest that Cooperman on a raft of issues appears mildly liberal: He criticizes Republicans in Congress, urges a 10 percent surcharge on incomes over $500,000, wants a new Works Progress Administration, a freezing of entitlements and free four-year education for veterans of Iraq and Afghanistan. He’s not totally down on Occupy Wall Street either — despite their rhetoric that makes Obama’s seem offhand — and he’s signed Warren Buffett and Bill Gates’ Giving Pledge. He’s so reasonable. Cooperman reels off so many positions that Sorkin feels compelled to note that the hedge funder is not running for office. Cooperman is, however, a supporter of Mitt Romney’s candidacy, which Sorkin doesn’t mention. Given all this, what is Cooperman’s beef? He feels insulted that the president has suggested that the wealthy are somehow “bad,” and that they pay no taxes, which is an exaggeration, but hell, I lack the sensitivity of the rich. (Obama is certainly no Theodore Roosevelt of “malefactors of great wealth” fame or Franklin Roosevelt, who referred to Wall Streeters as “moneychangers” and worse.) Cooperman elevates the rhetoric swirling around raising taxes for the wealthy to help reduce the deficit to a kind of Marxist Götterdämmerung in utero. In his letter, he writes: “Whether this [so-called class-warfare rhetoric] reflects your principled belief that the eternal divide between the haves and have-nots is at the root of all the evils that afflict our society or just a cynical, populist appeal to his base by a president struggling in the polls is of little importance. What does matter is that the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them. It is a gulf that is at once counterproductive and freighted with dangerous historical precedents. And it is an approach to governing that owes more to desperate demagoguery than your administration should feel comfortable with.” I particularly like “the downtrodden and those best positioned to help them.” So Cooperman doesn’t mind paying more taxes, and he believes the poor can best be helped by the rich. At least he thinks the rich should help the poor — but does everyone? So why is he upset? Because the rhetoric separates him from “the downtrodden.” It engages in a “villainizing of the American Dream.” It’s an affront to his own considerable good works and to his own meager beginnings. In short, he takes it personally. He’s hurt. What Cooperman doesn’t do in either his letter or his Sorkin chat is deal with any of the substantive issues. He never mentions that great bugaboo of OWS: inequality. He does say to Sorkin that he’s no big fan of Wall Street (despite 25 years at Goldman, Sachs & Co.) and he thinks “they screwed up. They did some things they shouldn’t have.” But he must fully realize that politically the differences between hedge funds and Wall Street are vanishingly small, although in finance, real. And despite that admission, Cooperman offers no particular remedies on how to fix it, and seems not to realize that to the great mass of Americans, deepening inequality and a steadily expanding financial sector (including hedge funds) seem to be connected. He does not deal with the critique that finance, including Wall Street, has been fueled by risky and opaque trading operations over the last few decades that for many insiders is mostly upside, with very little downside; and that too many businesses in finance seem to produce too little real economic gain and vast amounts of personal profits. In fact, this is where the moral critique lies buried: that too much highly speculative trading, whether on Wall Street or in hedge funds, is parasitic on the “real” economy, feeding off implicit government subsidies (because of too-big-to-fail) or simply representing a drain of socially productive resources to personal ends. Now each of these is an argument, not a fact, and on too many occasions they are allowed to simply float out there as incontrovertible. (I’ve wrestled with some of them; they’re not easily resolved.) But what strikes one most about Cooperman’s letter is how it reflects the same approach the financial-lobbying and public-relations squads have taken since 2008. Engage privately, not publicly. Don’t bother to offer a sophisticated defense (thus leaving the suspicion that there is no defense); instead, leave the field to those who believe finance is too big, too risky, too socially unproductive, and that its practitioners are dangerously compensated, and wait to be saved politically. In short, neither Cooperman, Goldman, any of the lobbyists, not to say their political patrons, have made positive arguments for why the nation needs a vast, complex, global financial industry with giant, highly capitalized banks and highly speculative hedge funds. (Neither has the administration, which has left them pretty much intact.) There are exceptions. J.P. Morgan Chase’s Jamie Dimon has made sporadic attempts to defend the big banks, but they come out less as articulated positions and more as fits of anger. Private equity has also mounted a defense of its practices, particularly after it was attacked in Germany as locusts. But this defense (which ex-buyout maven Romney will presumably have to offer) is not consistently made at anywhere near the decibel level of the attacks. And most of the defenses begin and end where Cooperman lands: personal affront and a resort to Horatio Alger and the wonders of American entrepreneurialism. Perhaps there is no defense. If that’s the case, then Cooperman is arguing for the merits of a Hobbesian world where the fittest, many from below, struggle, survive and prosper in a kind of zero-sum war of all against all. It’s natural; it’s the way it is. And Obama is just insulting those who worked so hard to clamber up Mount 1%. In the end, it’s hard to imagine that Cooperman’s letter will convince anyone on either side to change positions. To do that, he would have to work a lot harder. Robert Teitelman is editor in chief of The Deal magazine.

Read the full article →

Carrier IQ Hit With Class-Action Suit

December 3, 2011

SAN FRANCISCO — Technology bloggers are asking if our cellphones are spying on us after a security researcher said a piece of software hidden on millions of phones was recording virtually everything people do with them. Amid a broad outcry, Sen. Al Franken (D- Minn.) is calling for an investigation. A class-action lawsuit has been filed against the software’s maker, Carrier IQ Inc. of Mountain View, Calif. The software, which Carrier IQ says is used on some 150 million mobile devices, appears relatively innocuous. It does watch what owners of Sprint Nextel Corp. and AT&T Inc. smartphones do with them, including what people type and the numbers they dial. But it doesn’t seem to transmit every keystroke to the company. Instead, it kicks into action when there’s a problem, like a call that doesn’t go through, and it lets the phone company know. “It is software that is developed in partnership with carriers with the intent to improve network performance. As far as we can tell, it meets this description in execution,” said Tim Wyatt, principal engineer at Lookout, a cellphone security company. “In line with our privacy policy, we solely use CIQ software data to improve wireless network and service performance,” AT&T said in a statement. Carrier IQ says the data its software gathers is stored by the phone companies or at Carrier IQ’s facilities. It doesn’t sell the data to third parties. Phone companies, of course, already are custodians of a wealth of private information, including whom you call, where you surf and what your text messages say. The brouhaha started a few weeks ago, when a programmer named Trevor Eckhart documented Carrier IQ’s workings with videos on his blog. The software company threatened him with a lawsuit if he didn’t take the information down. The Electronic Frontier Foundation took on Eckhart’s case, and the company backed down. Eckhart posted another video this week, showing Carrier IQ’s software logging keystrokes on an HTC EVO 3D from Sprint. A central privacy worry is what kind of data Carrier IQ is retaining. Andrew Coward, a Carrier IQ vice president, said the software doesn’t record every keystroke or send information about all of them back to the company. The only keystrokes it cares about are specific administrative commands, including those instructing the software to phone “home.” The rest it discards, Coward said. “We never expected to need the content of SMS messages, so we didn’t code for it,” Coward told The Associated Press in an interview. Apple Inc. has said it has stopped supporting Carrier IQ in most of its products. Separately, the company came under fire last year over location-tracking features of the iPhone and made a software change to keep data on users’ movements for less time. For now, there’s no easy way to uninstall the Carrier IQ software without unsanctioned third-party software. Coward said it is “too early to tell” whether the company will make any substantial changes to the software because of the uproar. ___ Svensson reported from New York.

Read the full article →

Senate Rejects Payroll Tax Cut Extension

December 2, 2011

WASHINGTON — The Senate failed Thursday to pass an extension of a payroll tax cut, leaving in limbo a break that saved working class households about $1,000 a piece this year. Democrats sought to extend and expand the break, while paying for it with a 3.25 percent surtax on incomes over $1 million. Just one Senate Republican, Maine’s Susan Collins, voted for the middle class break, which died 51 to 49 in a filibuster. Three Democrats opposed the bill. “I am extremely disappointed that Republicans’ insistence on protecting millionaires from paying a penny more in taxes has blocked our effort to extend and expand the payroll tax cut for millions of middle class families and small business owners,” said Sen. Patty Murray (D-Wash.). Minutes later, a Republican version of the measure was blocked by Democrats and a majority of the GOP senators. Democrats had complained that it was too small of a break — and that it was paid for by cutting 200,000 federal workers. “Tonight’s votes highlight a sharp contrast between the two parties: Democrats voted to put more money in the pockets of the middle class families who need it most, while Republicans would only support a bill that exacts a price from middle class workers while protecting the wealthiest Americans,” Murray, the fourth-ranking Democrat, said. Democrats pointed to the defection of Republicans from the GOP bill as an embarrassment for Senate Minority Leader Mitch McConnell (R-Ky.), who had predicted there would be support for some sort of payroll tax cut extension. “Republicans spent this week trying to convince us that they support middle-class tax cuts, but tonight a majority of Senate Republicans voted against their own bill -– calling into question whether they support middle-class tax cuts at all,” said Senate Majority Leader Harry Reid (D-Nev.). “I was encouraged to see one Republican join Democrats in asking millionaires to pay their fair share,” Reid said. “But because every other Republican continues to insist on protecting millionaires, middle class families could face a $1,000 tax increase next year.” Reid has said he will bring the measure back. Most Republican leaders have also said that ultimately the payroll tax cut should be extended, but it was not clear how after Thursday’s twin failures. President Barack Obama released his own statement to hammer the middle class message that’s emerging a key theme of his campaign. “Tonight, Senate Republicans chose to raise taxes on nearly 160 million hardworking Americans because they refused to ask a few hundred thousand millionaires and billionaires to pay their fair share,” he said. “That is unacceptable. It makes absolutely no sense to raise taxes on the middle class at a time when so many are still trying to get back on their feet.”

Read the full article →

The Good Times May Be Over For U.S. Defense Industry

December 1, 2011

U.S. weapons makers told investors this week they are doing all they can to prepare for leaner and more uncertain U.S. defense budgets, including redoubling their efforts to cut costs, drum up export sales and sell more goods to commercial clients. Industry executives and Pentagon officials say they are still sorting out the potential impact of an additional $600 billion in defense cuts over the next 10 years, on top of some $489 billion in cuts already being absorbed. Even if those additional cuts can be averted, as Republicans hope, the industry is facing pressure on profit margins and a dearth of new programs after more than a decade of strong growth, industry executives and analysts agreed. The Pentagon’s No. 2 budget official, Mike McCord, told a conference hosted by Credit Suisse and Aviation Week that the fiscal 2013 defense budget proposal now being finalized already included cuts in the $40 billion-range from previous plans, following a cut of around $25 billion in fiscal 2012. He said the White House had not ordered the Pentagon to revamp that plan to reflect another $50 billion in cuts, and it would be difficult, if not impossible, to do that in the few weeks before the budget documents must be completed. “We’re a little bit in the dark like everybody else is about the future of sequester,” McCord said. Clay Jones, chief executive of Rockwell Collins Inc (COL.N), a flight-controls supplier and subcontractor on many key weapons programs, said commercial sales would account for a growing share of his company’s revenue as government orders declined. “It’s been a great ride,” he told the conference. “The ride’s over.” Rockwell Collins expects sustained double-digit growth in its commercial business but says its outlook for government sales is clouded by lingering uncertainty about the U.S. defense budgets for fiscal 2012 and beyond. Bill Swanson, chief executive of Raytheon Co (RTN.N), said he was hopeful that Washington could avert the additional $600 billion in defense cuts but said his company had studied the potential impact of such cuts. “We’ve got to be smaller, we’ve got to be more efficient. We’ll get the job done,” he said. Raytheon, he said, was well positioned, given prospects for continued sales in the missile defense, intelligence, surveillance and reconnaissance, and cyber security areas. International sales — likely to account for 30 percent of Raytheon’s bookings in 2011 — would help the company offset the downturn in U.S. defense spending, he said. Swanson cited arms sales already in the works or soon to be completed, naming Saudi Arabia, Taiwan, Kuwait, Turkey and Oman. “We got a lot of activity in the pipeline,” he said, noting that in addition to solid demand from the Middle East and Asia, Raytheon was also eyeing new orders from India, Brazil and other countries in South America. The Navy’s No. 2 acquisition official said the service had not yet been asked to plan for additional budget cuts, and there was no “convergence” within the Pentagon on how to deal with the possible additional cuts. Vice Admiral Mark Skinner, principal military deputy to the Navy’s acquisition chief, said budget plans submitted by the Navy and other military services to Pentagon leaders addressed only the initial round of cuts, not the additional $600 billion now on the table. The Navy’s share of the initial cuts is $9 billion to $10 billion in fiscal 2013, Skinner said. “Sequestration is bad,” he said, referring to the additional budget cuts required because a congressional “super committee” failed to agree on at least $1.2 trillion of deficit reduction over 10 years. The cuts would affect all Pentagon programs across the board and could result in violations of existing multi-year contracts, he said. “We’re going to break a lot of china,” he told conference participants. Shay Assad, the Pentagon’s director of pricing, said the department was continuing its efforts to trim waste and improve oversight of billions of dollars of contracts. He emphasized that the effort was not aimed at squeezing corporate profit margins, but said well-run companies deserved better results than those whose programs were over budget and behind schedule. “We’re raising the bar and the expectations of our workforce, and we expect the companies to do the same on their side of the table,” Assad told the conference. Swanson welcomed Pentagon efforts to reform the way it buys weapons and said Raytheon was continually trying to reduce its costs and safeguard its healthy profit margins. But he said industry was also vigilant about taking on too much risk on new development programs, especially on bigger programs. (Reporting by Andrea Shalal-Esa and Karen Jacobs; Editing by John Wallace and Gunna Dickson) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

GOP Threatening Middle Class: Dems

November 30, 2011

WASHINGTON — Democrats and labor leaders went on the offensive against anti-union House Republicans Wednesday, accusing GOP members and business groups of threatening the country’s middle class through a raft of legislation that could weaken unions. At a forum hosted by the AFL-CIO, Sen. Tom Harkin (D-Iowa) argued that Republican efforts to strip power from the National Labor Relations Board, the federal agency that enforces labor law, were part of a broader attack on collective bargaining rights across the country. The fight, he added, was ultimately about “fairness and equity” in the economy. “We’ve got to quit being on the defensive,” Harkin said. “We have to take our case to the American people … attacking [Republicans] for what they’re trying to do. The American people are starting to understand how unfair the economic system is, how unfair it is for banks and the wealthy to get all the government largesse and for working people to get nothing.” The remarks from Harkin and others came just hours before the House passed one of several bills designed to limit the powers of the labor board, which Republicans have lambasted as overly sympathetic to unions and harmful to businesses during the Obama era. The GOP-sponsored Workforce Democracy and Fairness Act would scuttle a rule recently put forth by the labor board that would streamline the union election process and likely make it easier for workers to join unions. Bill co-sponsor Rep. John Kline (R-Minn.) has claimed the board’s rule would lead to “ambush elections” by unions, while supporters of the rule say it would merely remove red tape and give employers less time to pressure workers against unionization. The Republican measure enjoyed broad support from business heavyweights such as the U.S. Chamber of Commerce, the National Retail Federation, and the American Hotel & Lodging Association, though the legislation is unlikely to go far in the Democrat-controlled Senate. In addition to holding four congressional hearings this year on what they’ve described as NLRB overreach, House Republicans have gone so far as to propose legislation that would strip the board of its powers or defund it entirely. Many GOP members were hoping that Brian Hayes, currently the board’s lone Republican, would resign in order to kill the board’s quorum and essentially shut it down. Hayes said Wednesday that he did not intend to. At the AFL-CIO event, Rep. George Miller (D-Calif.) said that the attacks on the labor board coming from Republicans are unlike anything he’s seen “in all my time in public life.” “They have decided they don’t want the collective bargaining process to continue in this country,” Miller said. “This isn’t some tinkering … it’s about ending this agency. [Labor law] is the basic fundamental economic underpinning of the middle class in this country. It’s the wages and benefits of the working people.” In a reference to the Occupy Wall Street protests, Miller added, “That’s why you see tents around this city and this country asking for shared sacrifice.” The forum at the AFL-CIO coincided with the release of a report on Republicans and the NLRB from the Center for American Progress Action Fund, the lobbying arm of the well-known progressive think tank. Arguing that the American middle class has weakened as union ranks have thinned in recent decades, the report asserts that “House Republicans are using every tool available to them — including their budget, regulatory, and legislative-oversight powers — to wage a coordinated attack on workers’ rights by trying to eviscerate the National Labor Relations Board.” The GOP’s feud with the labor board started back in the spring, when the NLRB’s general counsel, Lafe Solomon, filed a complaint against the Boeing Company. The complaint alleged that the aerospace giant broke labor law when it established a production line for its 787 Dreamliner in South Carolina. Solomon claimed that the move amounted to retaliation against Boeing’s unionized workers in Washington state for having gone on strike in the past. The complaint put Boeing’s plans in South Carolina on hold, but on Wednesday Boeing and the union reached a contract agreement that could resolve the complaint. Although many labor experts say the complaint was not unusual, Republicans have portrayed it as an abuse of power, arguing that it will have a chilling effect on businesses. They said the same of the union election rules put forth by the labor board. In a discussion of the election rules on the House floor Wednesday, Rep. Tim Walberg (R-Mich.) said that the NLRB has “taken actions that directly oppose American job providers,” adding that “job creators are terrified of the NLRB’s actions.” The bill passed Wednesday would assure that no union election could take place within fewer than 35 days after a union has gathered enough signatures for a formal petition. Union backers argue that such a guarantee would give management more time to employ union-busting tactics, while Republicans said they simply want to give workers more time to get information. Kline said that workers “shouldn’t be deprived of the opportunity to make an informed decision. When the labor board announced the streamlined rules earlier this year, then-chairwoman Wilma Liebman said the board was merely hoping to resolve “representation questions quickly, fairly, and accurately.”

Read the full article →

99 Percenters Hurt More By Austerity Measures Than The 1 Percent: Study

November 29, 2011

Government belt tightening hurts the budgets of the 99 percent more than those of top earners, a recent study finds. Income inequality rises when countries use spending cuts instead of tax hikes to deal with budget deficits, according to a new paper from researchers Luca Agnello and Ricardo Sousa. The paper analyzes data from 18 countries between 1970 and 2010. The findings come after a 12-member congressional panel failed to agree on measures to reduce the budget deficit in time to avoid triggering $1.2 in spending cuts starting in January 2013. What deadlocked the committee? A stalemate over whether to use spending cuts or tax hikes to reduce the deficit. “During periods of fiscal consolidation, income inequality significantly rises,” the researchers wrote in the study. “Moreover, fiscal adjustments that are led by spending cuts tend to have a more detrimental impact on income distribution than those driven by tax hikes. Similarly, we show that the top 1% income share in total income increases after consolidation.” Spending cuts are a controversial around the globe right now. In Greece, unions are planning a mass strike on December 1 to protest the 2012 austerity budget as lawmakers grapple with a sovereign debt crisis. Greece’s negative reaction to the budget may be because they could face government salary cuts or lose some social services if the budget is passed. The majority of residents of France, Germany and Spain — like their Greek counterparts — say that it’s important to make sure no one else is left in need . But if European leaders implement an austerity budget while the economy is weak, it may have less of an effect on income inequality , the study found. Fiscal austerity that takes place during banking crisis episodes leads to a negligible effect on income inequality, while budget tightening in the absence of crises boosts the income gap. Nations that implement austerity after a banking crisis is resolved experience an “amplified” effect on income inequality. The wealth gap in the U.S. has skyrocketed in the last thirty years . The top one percent of earners saw their incomes grow by 275 percent between 1979 and 2007, according to the Congressional Budget Office, while the bottom fifth of earners saw their incomes rise by 20 percent. Americans’ median income fell for the second year in a row in 2010 to $26,364, while nearly half of households lack access to basic needs . At the same time, the 400 richest Americans control as much wealth as the bottom 50 percent of earners.

Read the full article →

Ian Fletcher: Curtains for the U.S. Military Industrial Base?

November 23, 2011

I’m going to turn most of my column today over to a friend of mine, Richard McCormack of Manufacturing & Technology News , who has written an exceptionally important article. Basically, after years of making economic decisions that we were warned were short-termist, the long term has finally arrived. The failure of the so-called super committee to agree on other spending cuts has finally brought the axe down on U.S. defense spending, and it’s really going to hurt this time. Oddly enough, I’m not talking about national security disasters in the immediate term. I’m talking about the fact that we are going to cut our defense spending to the point that our defense industrial base will start to lose capability. This, in the long run, is more important than how many tanks or planes the U.S. fields on a given day. Every war the U.S. has won since the North defeated the South in 1865 has turned on industrial capacity. Even before then, the U.S. arguably only survived because Congress in 1801 had the foresight to finance an American copper industry in the form of a company, Revere Copper and Brass, that still exists — and is run by Brian O’Shaughnessy, another friend of mine. (Thanks to Revere Copper, we were able to make the copper sheathing for the bottoms of our naval vessels that protected their wooden hulls from being devoured by shipworm.) This is all no accident. China, of course, knows exactly what it’s doing. Running down U.S. industrial capacity by means of predatory trade surpluses is a quintuple play for Beijing: it makes an immediate cash profit, builds up China’s productive abilities for the future, reduces a competitor’s abilities, chokes off our tax revenues, and undermines our military power. One almost has to admire the sheer elegance of their strategy. Didn’t Sun Tzu say that to subdue an enemy without fighting him was the acme of skill? Anyway, here’s the excerpt: The U.S. defense industrial base is on the verge of being irretrievably harmed if the Department of Defense budget is cut by any more than already planned, according to top executives of U.S. defense and aerospace companies. The industry is on the cusp of losing the ability to design and produce future weapons and space systems, due to $480 billion in cuts that have already been approved. “This is simply more than we can sustain,” says Marion Blakey, President and CEO of the Aerospace Industries Association (AIA). “Our position is no more cuts. No more. We believe that defense has been cut into the bone with the Budget Control Act” signed by President Obama on August 2, 2011. “We cannot have that continue.” If the congressional super committee can’t agree on a deficit reduction plan by Nov. 23, the Pentagon’s budget will be automatically reduced by another $600 billion over 10 years. Such a cut would result in the loss of one million jobs in the defense sector, increase the unemployment rate by one percentage point and reduce GDP growth by 25 percent, according to AIA. “You cannot assume the defense industrial base will be there if there is no investment in R&D and no significant investment going forward in acquisitions and new programs,” says Blakey. If the Pentagon’s budget is severely cut, there will be no peace dividend, say aerospace industry executives. “Not to be too black and white about it, but is a healthy industrial base critical to the security of the U.S. and the economic viability of the country?” asks Boeing CEO James Albaugh. “That is a question that the super committee has to answer.” Defense contractors are currently laying off employees and have stopped investing in R&D and new production equipment, according to industry executives. “If we had additional cuts of $600 billion over the next 10 years, I would question whether or not we have a fighting force that was capable or an industrial base left,” says Albaugh. “We will wake up one morning having not addressed the indusial base issue and call for a capability and find that the contractors do not have the ability to provide the capability.” Boeing knows all about this problem. The company experienced serious problems gearing up production of its new Dreamliner 787. “One of the reasons we had issues with that airplane was the fact that we hadn’t designed an airplane since the 777, and we lost the ability to do design,” says Albaugh. Boeing had not been engaged in a new aircraft development program since the early 1990s. “We forgot how,” says Albaugh. Without new program starts, the Department of Defense and its contractors will be engaged in sustaining equipment already in the field. This was Boeing’s role between the 777 and the 787. “Doing sustaining engineering is very different from development engineering, where you have to take the requirements, decompose those down to the smallest element of work and the smallest piece part and then you validate and verify that and build it up to the finished product,” says Albaugh. “We were too busy doing sustaining engineering. For me to be a viable [defense] contractor, you have to do R&D and detailed design. You have to transition detailed design into production. You need to do production, and you need to support the products in the field. If you lose any point on that continuum, you will have a very difficult time reconstituting it. Right now, there are very few new starts and active design teams supporting our United States Department of Defense.” A number of companies are building military aircraft, “but that doesn’t mean they have the capability to develop a new airplane if they are called upon to do it,” says Albaugh. The defense industry is in a more difficult situation today than when the Cold War ended in 1989. When DOD’s budget began to drop in the 1990s, a lot of military equipment was new: F-16, F-15, the B-1 bomber and Abrams tank. More than 700,000 military personnel retired from service. Today, the United States is fighting wars in Iraq and Afghanistan, along with dealing with cyber warfare and terrorism. The country is not taking people out of uniform. Equipment is old and needs to be reset. “It’s a very different time,” says Albaugh. Without cuts in personnel, health care and benefits, it means that most cuts to the military will be made in R&D and procurement. “In my mind, it’s ironic right now that there is not enough talk about the industrial base,” says Albaugh. “There has to be more. It really is the arsenal of freedom, and the first question we have to ask is: Is it strategic to the economic viability of our country? The answer is yes. I know the answer to that in the Pentagon is yes. I’m not sure what it is on Capitol Hill.” The industry is also different from the one described by President Eisenhower in the late 1950s, adds Blakey of AIA. “It is very fragile,” she says. The industry has already consolidated from 130 major companies to only seven, notes David Hess, President of Pratt & Whitney, a division of United Technologies Corp. “Rather than having four or five or six suppliers that might have a technical capability, there might be one that has that capability. If they elect to pursue other markets because defense isn’t viable, we will lose that capability altogether. We have shrunk to the point where there is little margin in these key technologies.” Hess says: “It’s the first time in history that we haven’t had a new start on any kind on a helicopter or a fixed-wing program. As that capability atrophies, it is very hard to reconstitute and get it back. This is not a discussion about the commercial viability of the companies involved here. It’s really a discussion about being able to maintain the industrial base that is absolutely critical to our national security.” The issue of de-industrialization is even more pronounced in the space sector. For the first time since the space era began, the United States does not have ability to put men into orbit. The country now relies on the Russians for all manned launches, at a cost of $60 million per launch. A new launch program is still not underway. When the Apollo program was ending, the Space Shuttle program had already been funded. “There may have been a gap in launches but there was no gap in the work on the manned space flight program,” says Hess. “All the intellectual capital that was working on Apollo naturally moved to the Shuttle program. But today, we have a gap in manned U.S. launches now that the Shuttle program has ended. That is why we have seen hundreds of layoffs at Pratt Whitney Rocketdyne as well as other companies across the industry and across the country.” NASA has announced a new space launch system, but funding is not assured. “This tremendous intellectual capital that took decades to develop and took us to the moon and back, once it is dissolved it will be extremely hard to reconstitute if and when we decide to return to space,” says Hess. Funding for the Next Generation Air Transportation system is also in jeopardy. The country is still dependent on radar and radio technology deployed in the 1960s. Completing NextGen by 2025 would generate $320 billion in benefits to the U.S. economy, according to an AIA study conducted by Deloitte Touch. It would increase the number of flights by 20 percent and cut fuel burn and CO2 emissions by 12 percent. Yet, it is another aerospace program that is threatened. AIA President Blakey says the debate over the national debt needs to take these issues into consideration. The U.S. aerospace industry is now competing with well-financed programs in Russia, China, Brazil, Canada, Europe and Japan. All are pushing to topple U.S. dominance in the sector. “It is our duty now to speak out,” says Blakey. None of this should have been hard to predict. This is all, in fact, the ultimate fruit of what we can call the “neocon-tradiction.” Since the end of the Cold War, neoconservatives have espoused simultaneous free trade and global American military predominance. But the one tends to undermine the other, as the British learned 100 years ago. Even Adam Smith warned that the logic of free trade didn’t apply to the sinews of military power. We were warned by many people (including some wise non-neo conservatives) that this would happen. We did it anyway. There were no solid reasons to expect we would escape the consequences, just happy-talk, twisted theory, and short-term greed. Friends, we have gotten what we deserved. At this point in time, it probably isn’t possible to avoid some defense cuts. The best we can hope for, with respect to the defense industrial base, is probably some version of the hunker-down strategy the Russian Federation has been using for some time. As recently as 1990, they had the #2 military industrial base in the world (it was the only part of the Soviet economy that worked), but they haven’t been able to afford to keep it running full tilt for a very long time. As a result, they’ve focused on preserving capability, rather than production, by, in essence, building small numbers of very advanced hardware. As a result, they have preserved far more advanced capabilities — which could be ramped up in future — than any other economy their size. We won’t be in straits quite as extreme as theirs, but that looks to be the direction we’re headed in now.

Read the full article →

Obama Signs Bill Into Law To Spur Veteran Hiring

November 22, 2011

Despite recent clashes in Congress , members put aside partisan dissemblance Monday in a “vow” to help veterans. With support by both Republicans and Democrats, President Obama signed into law the “VOW to Hire Heroes Act,” CNN reports . The bill provides tax credits for businesses that hire unemployed and disabled veterans. In an effort to fight the 12 percent veteran unemployment rate , the federal government has added 350,000 private sector jobs in the past three months, Military.com reports . The site quotes the President expressing the importance of providing employment opportunities for veterans: “Just as they fight for us on the battlefield, it’s up to us to fight for our troops and their families when they come home,” Obama said. “Today, a deeply grateful nation is doing right by our military and paying back just a little bit what we owe our veterans.” Bloomberg Businessweek states that the tax credit may not actually do much in the way of job creation and that it would complicate the already confusing tax code. However when it comes to giving veterans an edge in employment, the news site argues that “it’s the right thing to do.”

Read the full article →

Katie Miller: Occupy Afghanistan, Not Wall Street: A Military Opinion?

November 9, 2011

Last week theChive posted a picture of an enlisted combat veteran in the U.S. Army holding up the anti-OWS sign below. Neglecting the fact that it is inappropriate to wear a military uniform while making political statements (not that this blogger can criticize too much), this image struck me as odd, even contradictory. Bear with me as I deconstruct this a bit, sentence by sentence, in a stream of consciousness. There are some interesting forces at play here. “I joined the Army during a time of war.” Undoubtedly, this soldier is to be honored for his service, knowing full well that he would be deployed several times in a war that has lasted over a decade and stretched our forces thin. However, it would be naïve to think that the economy hasn’t been a contributing factor to the military’s recruitment success the past couple of years. In 2009, for example, the military met all of its recruitment goals for the first time in 35 years . Coincidentally, economists predicted that the 2009 economic crisis was to be the worst the world had seen in 60 years . How much did the economy play into this young man’s decision to join the military? Regardless of the answer, it doesn’t take away from his bravery and his sacrifice, but if joining and maintaining our forces was purely a matter of public service, the need for sign-on bonuses, pensions, and benefits would be nonexistent. “It didn’t pay well at first, but that just made me work HARDER .” Promotion in the military is more or less a function of time, not talent. Tim Kane’s article in The Atlantic discusses this at great length. John Nagl, a Rhodes Scholar, West Point graduate, tank-battalion operations officer, and one of the crafters of the Army’s counterinsurgency manual, left the military without having achieved a full-bird (rank of Colonel). If you’re looking for a less extreme example, think about how common it is to congratulate a servicemember for being selected a year early for promotion. A year early? The promotion window is so specific that a year differentiates the absolute best soldiers at a certain rank from his or her average counterparts. Hard work in the military is even less determinant of income than in civil society. “I have multiple deployments to countries you ’99%’ would never occupy.” I’m concerned with the fact that this soldier is voluntarily distinguishing himself from the 99 percent when middle-class Americans are disproportionately responsible for fighting and dying in today’s wars. When is the last time a robber baron hung up his suit and tie and laced up his boots? Middle-class American soldiers are bearing the burden of these wars. “Countries who know what hardship is.” I can only guess that the unidentified soldier is attempting to portray OWS protesters as ungrateful in comparison to people living in undeveloped countries. Sure, the average American enjoys a higher standard of living than Iraqi and Afghani people, but their message isn’t directed internationally, or else they’d demand humanitarian intervention in these countries. Their focus in on the unequal distribution of wealth (read: distribution of power) in the United States, which is comparable to that seen in developing countries like Rwanda and Nepal in national rankings. ” This is my $50K a year occupation.” I find this statement rather confusing, as the servicemember is drawing attention to his modest income, yet he still seems to be directing his anger toward OWSers. Maybe he should take a look at this: the Pentagon’s budget is being cut by $400 billion over the next 10 years, approximately the same amount taxpayers used to bail out banks in 2008. Theoretically, the money that could have been spent on national defense initiatives has been handed over to the 1 percent, which should resonate with military personnel. On top of that, the Armed Services are being downsized, and the coveted military pension program is under scrutiny. What’s worse, a whopping 56 percent of our homeless populations are veterans! “I am the .001%” To be factually obnoxious, about 1 percent of the U.S. population is currently serving in the military. I apologize for the rather incoherent presentation of my thoughts, but I think I’ve made clear the incoherence of this soldier’s thoughts, as well, in doing so. Many of you may be wondering why this has a place in the Gay Voices section. Using this servicemember as example, I argue that the military has been a vehicle for conservatism, even when it doesn’t make sense. (“Don’t Ask, Don’t Tell” anyone? The policy hurt our military, for Pete’s sake, yet it stuck around for over 17 years.) What this veteran doesn’t understand is that Occupy Wall Street is advocating on behalf of him; whether he chooses to recognize it or not, he’s part of the same 99 percent he’s criticizing. He spits out the “hard work” rhetoric Republicans notoriously abuse, as the conservative ideology must be so ingrained him that he doesn’t even realize who benefits from this rhetoric. It’s not him.

Read the full article →

Measuring Opportunity For The American Dream: Opportunity Nation

November 4, 2011

NEW YORK — As of Friday morning, every state and nearly every county in the U.S. has been given an “opportunity score” to determine where in the country economic mobility is flourishing and where it has grown stagnant. Called the ” Opportunity Index,” the interactive website is being unveiled as a part of the Opportunity Nation summit convening this week in upper Manhattan. The summit, which brings together leaders from business, foundations, faith-based communities and advocacy organizations, is attempting to determine what it will take to expand access to the middle class for all citizens — and make the American Dream a reality for even the most impoverished. “There’s a belief that the zip code you’re born into shouldn’t determine your life’s chances,” said Mark Edwards, executive director of Opportunity Nation, a nonprofit based in Cambridge, Mass., and funded by both private donations and foundation dollars. “In essence, what gets measured gets managed and we see this as a way of measuring opportunity.” Updated annually and developed jointly by the American Human Development Project and Opportunity Nation, the Opportunity Index is a tool for elected officials and average citizens to track yearly progress. Kristen Lewis is the co-director of the American Human Development Project, a non-partisan initiative that focuses on issues of well-being. Lewis emphasized that measuring opportunity isn’t generally found by just one indicator — say, in the poverty or unemployment rate — but is instead found at the intersection of several different metrics. As such, Lewis said the index weighs several indicators that contribute to economic mobility in the U.S. — things like median household income, on-time high school graduation rates, poverty, preschool attendance, access to high-speed internet, crime rates and civic participation. Somewhat surprisingly, income was not seen as the strongest indicator of opportunity. For instance, while Nevada has a higher-than-average median household income, it ranks last in the nation due to low scores in education and other community-based deficits. The strongest opportunity correlation, said Lewis, is when a state’s academic and economic forces align. Specifically, states with a higher percentage of 16-to-19-year-olds not in school and not working tended to have lower opportunity scores. Friday’s report also ranked each state according to the levels of opportunity available to its residents. Connecticut, Minnesota, Massachusetts, Vermont and Nebraska topped the list, while Alabama, Arkansas, West Virginia, Mississippi and Nevada ranked near the bottom. In terms of geography, the index found the 15 highest-scoring states to be fairly evenly distributed throughout the country — with five from the Northeast, five from the Midwest, three from the South and two from the West. But among the lowest scoring states, a dozen are in the South. After the summit concludes Friday afternoon , the hope is that the index might spark debate and inform both existing policymakers and future candidates for elected office. “Part of our goal as an organization is to bring the notion of opportunity into the mainstream dialogue,” Edwards told HuffPost earlier this week. “We wanted to create a tool that allows individuals to measure opportunity, compare it and ultimately to discuss it.”

Read the full article →

Pat Buchanan: Occupy Wall Street Is ‘Going To End Very, Very Badly’

October 30, 2011

Pat Buchanan issued a stern warning to Occupy Wall Street this weekend. In a round-table discussion on ‘The McLaughlin Group’, host John McLaughlin asked panelists about the future of the movement. “It’s going to end very, very badly with these folks in the winter and they’re not going to be getting publicity and they’re going to be acting up and acting badly like the worst of the demonstrators in the 60s,” Buchanan said. “They’re going to start fighting with the cops.” Occupy Wall Street took a violent turn this week as Oakland police unleashed tear gas on protesters and injured an Iraq war veteran. On Saturday, scores were arrested in Denver after protesters clashed with local law enforcement. When cops began to spray Mace on the crowd, several protestors reportedly retaliated by kicking and pushing police. Watch Buchanan on ‘The McLaughlin Group’, courtesy of the Daily Caller.

Read the full article →

Iraq’s ‘Frontier Investors’ Unlikely To Be Scared Off By U.S. Exit

October 23, 2011

BAGHDAD (Serena Chaudhry) – Foreign investors eager to snap up development projects in key oil producer Iraq are unlikely to balk after the United States withdraws all its troops at the end of the year as long as security does not deteriorate. U.S. President Barack Obama said on Friday all U.S. forces would leave Iraq at the end of 2011 as scheduled, almost nine years after the 2003 U.S.-led invasion that toppled dictator Saddam Hussein. Iraq is trying to rebuild after decades of war and economic sanctions and needs investment in every sector. The OPEC member country has signed a series of deals with international firms to develop its oil fields, the fourth-biggest in the world. Foreign investors like oil majors Royal Dutch Shell and BP and bank HSBC are already pouring billions of dollars into Iraq and a U.S. pullout will likely not thwart foreign firms for an extended period, especially those with long-standing interests in the country. “Any impact on investment will be short-term and quite muted, assuming the security situation doesn’t deteriorate drastically,” said Economist Intelligence Unit’sAli al-Saffar. “This is primarily because Iraq has only really managed to attract (beyond the oil sector), frontier investors who have some level of appetite for risk so far. These more adventurous investors know the risks associated with doing business in the country, and have become quite adept at dealing with them.” Iraqi security forces continue to battle a stubborn Sunni insurgency and Shi’ite militias, and bombings and killings still occur on a daily basis despite a sharp drop in violence from the height of sectarian fighting in 2006-07. For investors on the ground, primary concerns center around kidnapping threats and attacks on development sites. Oil pipelines are targeted by insurgents in the north and south. Some production at the southern Rumaila oilfield was stopped this month when two bombs hit pipelines. Most foreign companies with a footprint in Iraq hire personal security guards for their protection and analysts say it is unlikely the departure of U.S. troops by year-end will raise extensive concern. “For quite some time, investors have been operating in Iraq without very much in the way of assistance from the U.S. military so they may not notice a big difference following the withdrawal,” said AKE Group senior risk consultant John Drake. MORE CONFIDENCE Iraq’s government aims to attract $86 billion in investment by 2014 under a five-year economic development plan. Rehabilitation of the oil, housing, agriculture and power sectors are seen as most pressing. The head of Iraq’s National Investment Commission, Sami al-Araji, said in July the country had secured around $6 billion in investment for licensed projects so far this year. Examples of deals include a $472 million contract with Italy’s Saipem for an oil export facility expansion and sub-sea pipeline and a 100,000-unit housing project with South Korea’s Hanwha Engineering & Construction. Foreign investors have also been net buyers on the Iraq Stock Exchange (ISX) so far this year, buying 66 billion shares to end-September with a volume of $110 million, according to ISX chief executive Taha Abdulsalam. “The complete pullout will probably slow down flows to ISX in the short-term, but overall this news is priced into the market by serious investors,” said Carl Wahlquist Ortiz, investment manager at City of London Investment Management in Dubai. “Typically, if you’re looking at Iraq, you’re looking for something a bit more risky, generally speaking.” Iraq’s stock market is still relatively small compared to international exchanges and its regional counterparts, but volume on the local bourse is expected to rise as more companies, particularly the local mobile phone firms, list. “It (the withdrawal) has to bring more confidence in the political and economic management of Iraq and confidence in the capability of enforcing security,” saidAmar Essa al-Jawahiri, an independent industrial and investment consultant in Baghdad. Iraq’s northern Kurdish region is a prime example of a part of Iraq where foreign investment and construction is booming. The area has been a place of relative calm since becoming a semi-autonomous zone under Western protection in 1991 and is widely regarded as a safe haven. (Editing by Jim Loney and Mike Nesbit) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

SLIDESHOW: Tech Startups That Could Save The World

September 20, 2011

Could a Facebook competition encourage users to cut their utility usage? Can a mobile communication network help rural farmers share crop tips? Bringing together activists, world leaders and tech influencers, the second annual Social Good Summit seeks to answer these questions and more. The summit, which kicked off on Monday in New York, aims to find new ways to use new media and technology to make the world a better place. Presented by Mashable, the UN and New York nonprofit community center 92Y, the summit will host a number of events, including an inaugural “Startups for Good Challenge.” This competition showcases new businesses whose primary goal is to tackle, and solve, domestic and international issues. The organizations will compete for a chance to win a $10,000 cash prize. The following eight finalists have been selected to pitch their idea at the Social Good Summit: SLIDESHOW: WATCH Related Video:

Read the full article →

Malcolm Levene: 9 Ways To Be A Self Leader

September 17, 2011

Over a number of years, I’ve worked with and for male and female business leaders. The individuals I both respect and admire tend to lead with humility, a reined-in ego, a healthy dose of self belief and passion. They also self-lead by making difficult decisions, taking risks and owning everything they do. In essence, they take full responsibility for their actions and the impact they may have. This type of person began their journey into leadership long before the role seemed possible. They led themselves carefully into the position they have attained. Self leadership entails being the person you envision being, long before you think it likely. In my coaching practice, I work with numerous men and women who are hoping to find a purpose in their lives. One way to access this aspiration is to contemplate specifically what it is we want. A recent female client, after three telephone coaching sessions, told me she realized her goal was to be happy. She said this, yet was uncomfortable admitting it, as it might show her in a “fluffy” light. I believe that a desire to being happy is a very worthy aspiration. Knowing that you want to be happy gives you clarity and purpose, two very valuable commodities. When we have discovered our purpose, be that commercially minded or otherwise, we have the opportunity to lead ourselves to the outcomes we require. I’m reminded of shopping and customer service. Customer service here in the U.K, generally speaking, is not as good as we would like it to be. My former retail establishment garnered a reputation for providing the gold standard in customer service for a large number of years. Each member of my sales team ‘owned’ their responsibility. They took care of my business as if it were their own. They chose to lead themselves to being the best they could be. Today, for the most part, leading yourself to the future you want, rather than being led to the future someone else sees for you, is less common. When you are not being seen to self-lead, the message you send is that you need guidance, help and direction. The people I’m talking about never send that message, although they are willing to ask for help, when and if they need it. They tend to be highly aware of the impact they make, both to customers, co-workers, their boss and anyone who will see them in action. Their reputation is all-important to them — and this is the mark of a good leader. They care deeply about how they are perceived, thereby taking full responsibility for their behaviours and actions. Whether you work in a retail establishment, run a charity or sit behind a computer all day, you’ll either be seen as someone who has leadership potential or not. You’ll be noticed in ways that can serve you and your purpose. The effort you make to go the extra mile is vital, as it will enable you to stand out from the crowd. Customers want the person who is offering a service or a product, be that a doctor or a flight attendant, to provide them with the kind of attention that ‘knocks their socks off.’ Giving your all to establish yourself and leave your mark in the best way possible will entail effort, sacrifice and an ability to let go of anything that doesn’t serve your purpose. Here are nine tips to help you to self-lead: 1. Establish your purpose. 2. Focus on what makes you happy. 3. Take full responsibility for all your actions. 4. Be passionate, optimistic and brave. 5. Make efforts to continually improve yourself. 6. Envision your future as specifically as you can. 7. Be enthusiastic, even when you don’t really feel it. 8. Never, ever give up. 9. Carry a healthy self belief. To learn more about Malcolm Levene, visit www.malcolmlevene.com .

Read the full article →

Nicole Skibola: Creating a Pipeline of Angel Investors

September 15, 2011

According to a 2011 report by the University of New Hampshire’s Center for Venture Research, only 13 percent of U.S. angels were women. Investor Halla Tomasdottir described the benefit of women investors in her 2010 TEDWomen talk in terms of diversifying interests and decision-making: The whole thing about the female trend is not about women being better than men. It is actually about women being different from men — bringing different values and different ways to the table. So what do you get? You get better decision-making and you get less herd behavior and both of those things hit your bottom line with very positive results. Other thought-leaders like the Kauffman Foundation describe the dearth of women investors in terms of lost human and economic potential: The untapped human potential [of women owned enterprises] in total, is surely vast. It is just starting to be recognized as a long-term competitiveness issue for this country and others. More angel investing is not the only answer, but it is an essential element, and women must be part of it. Women investors also provide an important pipeline for jumpstarting women-owned enterprises. The Kauffman Foundation reports that census data show that women now own nearly 30 percent of all businesses in the United States, up from 5 percent in the 1970s, but they still own fewer than 10 percent of all firms with annual revenues of $1 million or more. Women-led companies also lag in the share of venture capital received and in other indicators of high growth and impact. Indeed, the foundation found that women investors are more likely to invest in women-owned enterprises, thus bringing formerly unrecognized companies — and their founders — to center stage. Women in general tend to be more conservative and less experienced investors than men of equivalent wealth. Additionally, not many women as yet have the kinds of backgrounds from which angel investors are most likely to come. Laura Roden, of The Angels’ Forum, LLC in Palo Alto notes that relatively few women have taken a high-growth startup through to an acquisition or IPO and then become “cashed-out” entrepreneurs who are most inclined to become “active and consistent angel investors.” Realizing the importance of women angel investors, the Pipeline Fellowship was born. The program seeks to increase the number of women angel investors through its six-month angel investing bootcamp, which is specifically designed for women who are first-time angel investors. While Fellows come from a variety of backgrounds (law, finance, healthcare, the arts, small business, and more), they all share a common interest in learning to invest for good. With corporate sponsors like Goodwin Procter LLP, Thinkso, and In Good Company Workplaces (IGC), Pipeline utilizes education (modules on due diligence, term sheets, valuations, board governance, etc.), mentoring (matching each participant with an experienced angel investor to serve as a role model), and practice (participants commit to invest in a woman-led for-profit social venture at the end of the training) to create a new generation of women angels. The angels’ mission is to invest in a women-led for-profit social enterprise, where they evaluate financial return and social impact. Fellow Jessica Roazzi-Magoch described her initial interest in Pipeline: I had a little capital to invest, but I was too scared to do it on my own. I know about sales, I know about health insurance, but I didn’t know how to evaluate a company… That is precisely what we have been learning. With the first class preparing for its graduation, Roazzi-Magoch mentions that the class has narrowed their investment choice to two companies. One of the companies we are looking at knows that they have been glossed over by other VCs because the social impact tends to limit the financial return. Most of these companies are never going to have the ability to offer a return 20 times the investment, so many traditional VCs are not interested. Most social enterprises just don’t ever have the opportunity to offer this return so the are thrown out of the mix right away. Pipeline’s mission to fund two underrepresented segments of investment — women and social enterprises — is a notable one, and its impact will be determined by its ability to scale. Founder Natalia Oberti Noguera is already planning similar programs in San Francisco and Los Angeles for next year. Roazzi-Magoch is eager to stay involved. “Investors invest in what they know,” she explains. “If men don’t feel they can contribute anything to a women-led company, then they are not going to choose that company. Through Pipeline, we can make a little bit of a dent in this pattern and help women led companies flourish.” For more information about the Pipeline Fellowship, visit http://pipelinefund.tumblr.com/ .

Read the full article →

Economists Scaling Back Growth Forecasts Through Next Year: Survey

September 12, 2011

WASHINGTON — Confronted with an economy that has decidedly underperformed this year, economists are scaling back their growth forecasts for 2011 and next year. In their latest forecast, top economists with the National Association for Business Economics predict that the economy will grow 1.7 percent this year – down from the group’s May prediction of 2.8 percent expansion. For 2012, the group is forecasting growth of 2.3 percent, compared to a May forecast of 3.2 percent growth. The new survey, released Monday, is in line with the outlook of other economists who have marked down growth prospects to reflect an economy that has struggled this year to deal with a spike in gasoline prices, production disruptions stemming from Japan’s earthquake, a flare-up of Europe’s debt problems and a prolonged debate over America’s debt ceiling. “A wide variety of factors were seen as restraining growth, including low consumer and business confidence,” said Gene Huang, the president-elect of NABE and one of 52 professional forecasters who participated in the survey. “Panelists are very concerned about high unemployment, federal deficits and the European sovereign debt crisis,” said Huang, who is chief economist at FedEx Corp. The survey was done before President Barack Obama appeared before Congress on Thursday to unveil a new $447 billion plan to jump-start job growth through a combination of tax cuts and government spending. The latest NABE outlook underscores the problems facing an economy that many economists fear could be in danger of slipping into another recession. The expectations for overall economic growth, as measured by the gross domestic product, for both 2011 and 2012 were trimmed by a percentage point from the May forecast. The May estimates had been trimmed from February when the NABE analysts were forecasting growth of 3.3 percent this year. The economy grew 3 percent in 2010, the first full year after the country emerged from the 2007-2009 recession, but slowed to an annual rate of just 0.7 percent in the first six months of this year. Because of the slow growth, the NABE forecasters don’t expect much improvement in the unemployment rate, which in August was stuck at 9.1 percent, a month when the economy didn’t create any net new jobs. For all of 2011, the economists are forecasting the unemployment rate will average 9 percent and will improve only slightly to 8.7 percent in 2012. In May, the NABE panel had projected unemployment would average 8.7 percent this year and 8.2 percent next year. Job growth was projected to average 124,000 per month this year, instead of the 190,000 average monthly job gains the economists had forecast in May. Next year’s average job growth was put at 162,000, instead of the 202,000 job gains forecast in May. The economy needs to add at least 250,000 jobs a month to rapidly bring down the unemployment rate. The rate has been above 9 percent in all but two months since May 2009. The NABE panel forecast that builders would start work on 590,000 new homes this year, no improvement from last year’s weak pace, while sales of new cars was put at 12.6 million units, up a modest 8.6 percent from the 11.6 million new vehicles sold in 2010. The economists did see a little better outlook for oil prices, which they projected would average $90 per barrel in December, down from a forecast of $105 per barrel in May. Oil was trading Friday around $87 per barrel. The new NABE forecast was prepared for the group’s annual conference, being held this year in Dallas

Read the full article →

Perry Attempts To Clarify Stance On Controversial Issue

September 12, 2011

In a USA Today op-ed published online on Monday, Republican presidential candidate Rick Perry seeks to clarify his position on Social Security. The Texas governor writes that he believes current recipients of Social Security benefits should be protected from potential reforms to the entitlement program. For younger Americans, however, he says, “We must consider reforms to make Social Security financially viable.” Perry explains, “For too long, politicians have been afraid to speak honestly about Social Security.” He adds, “We must have the guts to talk about its financial condition if we are to fix Social Security and make it financially viable for generations to come.” The attempt from Perry to outline his position on Social Security comes one week after the Republican hopeful raised eyebrows with harsh language he used in addressing the issue during last week’s GOP presidential debate in California. During the forum, Perry didn’t run from his past characterization of Social Security as a “Ponzi scheme.” He also repeated his criticism of the entitlement program as a “monstrous lie.” The Texas governor, however, did abandon his use of the questionable choice of words in Monday’s op-ed. HuffPost’s Jon Ward reported last week: Indeed, former Massachusetts Gov. Mitt Romney — who was the frontrunner until Perry entered the race — has gone for Perry’s jugular, painting the Texan as wanting to “end” or “abolish” Social Security. Perry could have countered that charge by saying Romney was mischaracterizing his position. But he and his staff have been slow to do so, raising questions about how exactly Perry wants to deal with the program. Meanwhile, the Washington Examiner reports that U.S. Rep. Michele Bachmann is preparing to take aim at Perry over the issue during a presidential debate being held in Florida on Monday night. “Bernie Madoff deals with Ponzi schemes, not the grandparents of America,” an adviser to the conservative congresswoman tells the Examiner . “Clearly [Bachmann] feels differently about the value of Social Security than Gov. Perry does. She believes Social Security needs to be saved, that it’s an important safety net for Americans who have paid into it all their lives.” A CNN/ORC poll released on Monday shows Perry to be running at the front of the GOP presidential pack. Below, video of what Perry had to say about Social Security during last week’s debate. WATCH:

Read the full article →

Steve Fraser: Uncle Sam Doesn’t Want You

September 12, 2011

America’s Reserve Army of Labor Marches Through Time Cross-posted with TomDispatch.com Not long ago, the city council of Ventura, California, passed an ordinance making it legal for the unemployed and homeless to sleep in their cars.  At the height of the Great Recession of 2008, one third of the capital equipment of the American economy lay idle.  Of the women and men idled along with that equipment, only 37% got a government unemployment check and that check, on average, represented only 35% of their weekly wages.  Meanwhile, there are now two million ”99ers” — those who have maxed out their supplemental unemployment benefits because they have been out of work for more than 99 weeks. Think of them as a full division in “the reserve army of labor.”  That “army,” in turn, accounts for 17% of the American labor force, if one includes part-time workers who need and want full-time work and the millions of unemployed Americans who have grown so discouraged that they’ve given up looking for jobs and so aren’t counted in the official unemployment figures.  As is its historic duty, that force of idle workers is once again driving down wages, lengthening working hours, eroding on-the-job conditions, and adding an element of raw fear to the lives of anyone still lucky enough to have a job. No one volunteers to serve in this army.  But anyone, from Silicon Valley engineers to Florida tomato pickers, is eligible to join what, in our time, might be thought of as the all-involuntary force.  Its mission is to make the world safe for capitalism. Today, with the world spiraling into a second “Great Recession” (even if few, besides the banks, ever noticed that the first one had ended), its ranks are bound to grow. The All-Involuntary Army (of Labor) As has always been true, the coexistence of idling workplaces and cast-off workers remains the single most severe indictment of capitalism as a system for the reproduction of human society.  The arrival of a new social category — “the 99ers” — punctuates that grim observation today.  After all, what made the Great Depression “great” was not only the staggering level of unemployment (no less true in various earlier periods of economic collapse), but its duration.  Years went by, numbingly, totally demoralizingly, without work or hope.  When it all refused to end, people began to question the fundamentals, to wonder if, as a system, capitalism hadn’t outlived its usefulness.  Nowadays, the 99ers notwithstanding, we don’t readily jump to such a conclusion.  Along with the “business cycle,” including stock market bubbles and busts and other economic perturbations, unemployment has been normalized.  No one thinks it’s a good thing, of course, but it’s certainly not something that should cause us to question the way the economy is organized. Long gone are the times when unemployment was so shocking and traumatic that it took people back to the basics.  We don’t, for instance, even use that phrase “the reserve army of labor” anymore.  It strikes many, along with “class struggle” and “working class,” as embarrassing.  It’s too “Marxist” or anachronistic in an age of post-industrial flexible capitalism, when we’ve grown accustomed to the casualness and transience of work, or even anointed it as a form of “free agency.”  However, long before leftists began referring to the unemployed as a reserve army, that redolent metaphor was regularly wielded by anxious or angry nineteenth century journalists, government officials, town fathers, governors, churchmen, and other concerned citizens.  Something new was happening, they were sure, even if they weren’t entirely clear on what to make of it. Unemployment as a recurring feature of the social landscape only caught American attention with the rise of capitalism in the pre-Civil War era.  Before that, even if the rhythms of agricultural and village life included seasonal oscillations between periods of intense labor and downtime, farmers and handicraftsmen generally retained the ability to sustain their families.  Hard times were common enough, but except in extremis most people retained land and tools, not to speak of common rights to woodlands, grazing areas, and the ability to hunt and fish.  They were — we would say today — “self-employed.”  Only when such means of subsistence and production became concentrated in the hands of merchant-capitalists, manufacturers, and large landowners did the situation change fundamentally.  A proletariat — those without property of any kind except their own labor power — made its appearance, dependent on the propertied to employ them.  If, for whatever reason, the market for their labor power dried up, they were set adrift. This process of dispossession lasted more than a century.  In the early decades of the nineteenth century, its impact remained limited.  The farmers, handicraftsmen, fishermen, and various tradespeople swept into the new textile or shoe factories, or the farm women set to work out in the countryside spinning and weaving for merchant capitalists still held onto some semblance of their old ways of life. They maintained vegetable gardens, continued to hunt and fish, and perhaps kept a few domestic animals.  When the first commercial panics erupted in the 1830s and 1850s and business came to a standstill, many could fall back on pre-capitalist ways of making a living, even if a bare one.  Still, the first regiments of the reserve army of the unemployed had made their appearance.  Jobless men were already roaming the roads, an alarming new sight for townspeople not used to such things. Demobilizing the Workforce Becomes the New Norm When industrial capitalism exploded after the Civil War, unemployment suddenly became a chronic and frightening aspect of modern life affecting millions.  Panics and depressions now occurred with distressing frequency. Their randomness, severity, and duration (some lasted half a decade or more) only swelled the ranks of the reserve army.  Crushing helplessness in the face of unemployment would be a devastating new experience for the great waves of immigrants just landing on American shores, many of them peasants from southern and eastern Europe accustomed to falling back on their own meager resources in fields and forests when times were bad. The very presence of this “army” of able-bodied but destitute workers seemed to catch the essential savagery of the new economy and it stunned onlookers.  The “tramp” became a ubiquitous figure, travelling the roads and rails, sometimes carrying his tools with him, desperate for work.  He proved a threatening specter for villagers and city people alike.  Just as shocking was a growing realization — made undeniable by each dismal repetition of the business cycle — that the new industrial economy wasn’t just producing that reserve army, but depended on its regular mobilization and demobilization to carry on the process of capital accumulation. It was no passing phenomenon, no natural disaster that would run its course.  It was the new normal.  Initial reactions were varied and dramatic.  Local governments rushed to pass punitive laws against tramping and vagrancy, mandating terms of six months to two years of hard labor in workhouses.  Meanwhile, the orthodox thinking of that moment raised steep barriers to government aid for those in need.  During the devastating depression of the 1870s, for instance, President Ulysses Grant’s Secretary of the Treasury put things succinctly: “It is not part of the business of government to find employment for people.” Punishment and studied indifference were, however, by no means the only responses as emergency relief efforts — some private, some public — became common.  The ravaging effects of unemployment, the way it spread like a plague, and its chronic reappearance also put more radical measures on the agenda, proposals that questioned the viability and morality of what was then termed the “wages system.” Calls went out to colonize vacant land and establish state-run factories and farms to productively re-employ the idled.  Infuriated throngs occupied state houses demanding public works. Elements of the labor and populist movements advocated manufacturing and agricultural cooperatives as a way around the ruthlessness of the Darwinian free market. Business “trusts” or monopolies were often decried for driving other businesses under and so exacerbating the unemployment dilemma.  In some cases, their nationalization was called for.   Militants of the moment began to demand work not as a sop to the indigent, but as a right of citizenship, as precious and inviolable as anything in the Bill of Rights. The greatest and most prolonged mass mobilization of the mid-1880s was the national movement for the eight-hour work day.  It was animated partly by a desire for more leisure time, but also by a vain hope that its passage by Congress might effectively raise wages. (Industrialists, however, had no intention of paying the same amount for eight hours of work as they had for 12.)  Its main impetus, though, was a belief that mandating a national reduction in the hours of work would spread jobs around and so diminish the ranks of the reserve army.  Some were convinced that capitalism’s appetite for human labor was too voracious for business ever to agree to such limits.  So long as the business cycle was on its upward arc, the compulsion to exploit labor power was insatiable.  When the market went south, all that surplus humanity could be left to fend for itself.  Its partisans nonetheless believed that the movement for an eight-hour day would expose the barbarism of the economic system for all to see, opening the door to something more humane. In other words, a wide spectrum of responses to unemployment was enfolded within a broad and growing anti-capitalist culture.  Within the organized labor movement, that proto – union, the Knights of Labor, was immersed in the idea of an anti-capitalist insurgency.  Most trade unions of the time, however, accepted that the “wages system” was here to stay and focused instead on the issues of job security, fighting for unemployment benefit funds for members, seniority, prohibitions against overtime, and the shortening of working hours.  Even agitation to ban child labor and limit female employment was motivated in part by a desire to temper the pervasiveness of unemployment by curtailing the pool of available labor.  Other trade union procedures and proposals were more mean-spirited, including attempts to ban immigration or exclude African-American and other minorities or the unskilled from membership in the movement.  That insularity bedevils trade unionism to this day. As part of this tumultuous season of upheaval, which lasted from the 1870s through the Great Depression, the unemployed themselves organized demonstrations.  A gathering in Tomkins Square Park of thousands of New Yorkers left destitute by the panic and depression of 1873 was dispersed with infamous brutality by the police.  Local newspapers labeled the protestors “communards.” (The recently defeated Paris Commune had ignited a hysterical fear of “un-American” radicalism, a toxin that has never since left the American bloodstream.)  Although the Tomkins Square rally was mainly a plea for relief and public works, there was some talk of marching on Wall Street.  Such radical rhetoric, not to speak of actual violence, was hardly unusual in such confrontations then, a measure of how raw class relations were and how profoundly disturbed people had become by the haunting presence of mass unemployment. Just as telling, the unemployed and those still at work but at loggerheads with their bosses frequently displayed their solidarity in public.  During the “Great Insurrection” of 1877, when railroad strikers from coast to coast faced off against state militias, federal troops, and the private armies of the railroad barons, they were joined by regiments of the “reserve army.”  Often these were their neighbors and family members, but also strangers who, feeling an affinity for their beleaguered brethren, preferred setting fire to railroad engine houses than going to work in them as scabs.  Amid the awful depression of the 1890s, a cigar maker caught the temper of the times simply: “I believe the working men themselves will have to take action.  I believe those men that are employed will have look out for the unemployed that work at the same business they do.” Marching Armies (of the Unemployed) Demonstrations of the unemployed resurfaced with each major economic downturn.  In the depression winter of 1893-1894, for example, ragged “armies” of the desperate gathered in various parts of the country, 40 of them in all. (Eighteen-year-old future novelist Jack London joined one in California.)  The largest commandeered a train in an effort to get to Washington, D.C., and was chased for 300 miles across Montana by federal troops.  The most famous of them was led by Jacob Coxey, a self-made Ohio businessman.  “Coxey’s Army” (more formally known as “the Commonwealers” or the “Commonwealth of Christ Army”) made it all the way to the capital, a “living petition” to Congress.  It was led by his 17-year-old daughter as “the Goddess of Peace” riding a white horse. In the nation’s capital, the “Army” lodged its plea for relief, work, and an increase in the money supply. (Jacob’s son was called “Legal Tender Cox.”)  President Grover Cleveland wasn’t hearing any of it, having already made his views known in 1889 during his first term in office: “The lessons of paternalism ought to be unlearned and the better lesson taught that while the people should patriotically and cheerfully support their government, its functions do not include support of the people.”  Christian charity was not Cleveland’s long suit.  Others of the faith, however, believers in the social gospel and Christian socialism especially, staged spectacular public dramas on behalf of the “shorn lambs of the unemployed” — even a mock “slave auction” in Boston in 1921 during a severe post-World War I slump, in which the jobless were offered to the highest bidders as evidence of what “wage slavery” really meant. The Great Depression brought this protracted period of labor turmoil to a climax and to an end. In its early years, the ethos of “mutualism” and solidarity between the employed and unemployed was strengthened.  In those years, railroads began to report startling jumps in the numbers of Americans engaged in “train hopping” — the rail equivalent of hitchhiking.  On one line, the “hoppers” went from 14,000 in 1929 to 186,000 in 1931.   In 1930, when the unemployment rate was at about today’s level, in cities across the country the first rallies of the unemployed began with demands for work and relief.  Later, there were food riots and raids on delivery trucks and packinghouses, as well as the occupations of shuttered coalmines and bankrupt utility companies by the desperate who began to work them. “Leagues” and “councils” of the unemployed, sometimes organized by the Communist Party, sometimes by the Socialist Party, and sometimes by a group run by radical pacifist A.J. Muste, marshaled their forces to stop home evictions, support strikes, and make far-reaching proposals for a permanent system of public works and unemployment insurance.  Muste’s groups, strong in the Midwest, set up bartering arrangements and labor exchanges among the jobless.  In support of striking workers, unemployed protestors shut down the Briggs plant in Highland Park, Michigan — it manufactured auto bodies for Ford — pledging that they would not scab on the striking workers.  A march of former and current employees of the Ford facilities in Dearborn, Michigan, made the unusual demand that the company (not the government) provide work for the jobless.  For their trouble, they were bloodied by Ford’s hired thugs and five of them were killed.  President Herbert Hoover took similar action.  In a move that shocked much of the nation, he ordered Army Chief of Staff General Douglas MacArthur to use troops to disperse the Bonus Expeditionary Army, World War I jobless veterans gathered in tents on Anacostia Flats in Washington asking for accelerated payments of their war-time pensions.  They were routed at bayonet point and MacArthur’s troops burned down their tent city. How the New Deal Dealt The Great Depression was, however, so profoundly unsettling that the unemployed finally became a political constituency of national proportions.  The pressure on mainstream politicians to do something grew ever more intense.  The Conference of Mayors that meets to this day was founded then to lobby Washington for federal relief for the jobless.  Even segments of the business community had begun to complain about the “costs” of unemployment when it came to workplace efficiency. Unemployment insurance, work relief, welfare, and public works — all of which had surfaced in public debate since the turn of the twentieth century — made up the basic package of responses offered by President Franklin Roosevelt’s New Deal to the inherent insecurity of proletarian life.  None were exactly expansive either in what they provided or in their execution, and yet all of them found themselves under chronic assault from birth (as they are today).   The most daring legislation under consideration, the Lundeen bill (authored by a Minnesota congressman), would have provided unemployment insurance equal to prevailing wages for anyone over 18 working part or full time.  Though it never became law , it was to be financed by a tax on incomes exceeding $5,000, and administered by elected worker representatives.  It was not atypical in its most basic assumption which once would have been thought intolerable — that unemployment at significant levels would continue into the indefinite future.  Unemployment was now to be ameliorated, but also accepted.  Harry Hopkins, who ran the New Deal’s relief efforts, was typical in predicting that “a probable minimum of four to five million” Americans would remain out of work “even in future ‘prosperity’ periods.”  Consequently, the new relief reforms were to be considered defense mechanisms designed to recharge the batteries of a stalled economy and to minimize the political fallout from outsized joblessness.  This menu of “solutions” has constituted the core of the labor and progressive movement’s approach to unemployment ever since. “The Natural Rate of Unemployment” After World War II, unemployment became, for the most part, a numerical and policy issue rather than a social phenomenon.  By the 1960s, what once struck most Americans as unnatural and ghastly had been fully transformed by economists and political elites into “the natural rate of unemployment” — a level of joblessness that should never be tampered with because it was futile to do so and to try would induce inflation.  More recently matters have turned truly perverse.  Neo-liberals, who during the Reagan era of the 1980s eclipsed Keynesians as the dominant thinkers when it came to economic policy, were worried that unemployment might not be high enough.  It was increasingly feared that, if the ranks of the jobless were not large indeed, both labor costs and inflation would rise, threatening the future value of capital investments. The world, in other words, had turned upside down. As official society adapted to the permanence of unemployment, the unemployed themselves subsided into political quiescence. There were exceptions, however.  Perhaps the most massive unemployment demonstration in the nation’s history took place in 1963 when 100,000 Americans marched on Washington for “Jobs and Freedom.”  It is a telling commentary on the political sensibilities of the last half-century that the March on Washington, recalled mainly for Martin Luther King’s famed “I Have a Dream” speech, is rarely if ever remembered as an outpouring of righteous anger about a system that consigned much of a whole race to the outcast status first experienced by the young women of New England textile mills in antebellum America. Today, the question is: As the new unemployment “norm” rises, will the “99ers” remain just a number, or will anger and systemic dysfunction lead to the rebirth of movements of the unemployed, perhaps allied, as in the past, with others suffering from the economy’s relentless downward arc?  Keep in mind that the extent of organized protest by the unemployed in the past should not be exaggerated.  Not even the Great Depression evoked their sustained mass mobilization.  That’s hardly surprising.  By its nature, unemployment demoralizes and isolates people.  It makes of them a transient and chronically fluctuating population with no readily discernable common enemy and no obvious place to coalesce. Another question might be: In the coming years, might we see the return of a basic American horror at the phenomenon of joblessness?  And might it drive Americans to begin to ask deeper questions about the system that lives and feeds on it?  After all, we now exist in an under-developing economy.  What new jobs it is creating are poor paying, low skill, and often temporary, nor are there enough of them to significantly reduce the numbers of those out of work.  The 99ers are stark evidence that we may be witnessing the birth of a new permanent class of the marginalized.  (The percentage of the unemployed who have been out of work for more than six months has grown from 8.6% in 1979 to 19.6% today.)  Moreover, our mode of “flexible capitalism” has made work itself increasingly transient and precarious.  Until now, ideologues of the new order have had remarkable success in dressing this up as a new form of freedom.  But our ancestors, who experienced frequent and distressing interruptions in their work lives, who migrated thousands of miles to find jobs which they kept or lost at the whim of employers, and who, in solitary search for work, tramped the roads and hopped the freight cars (even if they could not yet roam Internet chat rooms), were not so delusional.  We have a choice: Americans can continue to accept large-scale unemployment as “natural” and permanent, even — a truly grotesque development — as a basic feature on a bipartisan road to “recovery” via austerity.  Or we can follow the lead of the jobless young in the Arab Spring and of protestors beginning to demonstrate en masse in Europe.  Even the newly minted proletarians of Ventura, California, sleeping in their cars, may decide that they have had enough of a political and economic order of things so bankrupt it can find no use for them at any price. Steve Fraser is Editor-at-Large of New Labor Forum and co-founder of the American Empire Project (Metropolitan Books).  He is, most recently, the author of Wall Street: America’s Dream Palace .  He teaches history at Columbia University. Joshua B. Freeman teaches history at Queens College and the Graduate Center of the City University of New York and is affiliated with its Joseph S. Murphy Labor Institute.   His forthcoming book, American Empire , will be the final volume of the Penguin History of the United States . To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com here .

Read the full article →

Jane D. Wurwand: Dreaming Is Fine, but Doing Is Better

August 31, 2011

The first day of school definitely inspires optimism for the future. Speaking as the mother of a young woman who will soon begin her freshman year in college, of course we have high hopes. And no guarantees. Americans have always been dreamers. For generations, Americans have promised their children that they can be brain-surgeons and rocket-scientists, cowboys and ballerinas, astronauts or the president of the United States. Part of this optimism springs from the faith of immigrants who flooded into America a century ago, and did, indeed, create success in ways which never would have been possible in their native lands. British people like myself tend to regard this level of optimism as a bit naïve — a cultural difference, perhaps. But given the current state of the world economy, we must temper “Dream big!” optimism with pragmatism. I have spent my entire career — 30 years — encouraging and motivating young women to achieve. My specific expertise is in professional skin care, and the creation and running of a skin care business. My skills are very tangible, and my approach has always been practical. And I have used my skills to help literally thousands of women succeed in this profession. Was I a dreamer? Dreaming sounds abstract to me now, and I was always more of a doer. I began working at 13, after being told by my own hard-working mother — she raised me and my three sisters on her own — that I needed to be able to “do” something to make money, so that I would never, ever have to rely upon a man for a place to live and something to eat. My upbringing was not especially future-minded, although Mum did teach me to save money for a rainy day (we certainly have plenty of those in the UK). The focus was on the here-and-now. Not lofty, and not so very dreamy. I quickly learned there is no shortcut around sweat-equity. As a “Saturday Girl” in the neighborhood salon, my sweat-equity began with sweeping up hair cuttings and sterilizing hair-pins. Although I consider myself a perpetual student, I did not pursue an academic education. I was trained and licensed in the craft of professional skin care, which is comparatively short-term. When I had my license, I went right to work, and I’ve never stopped. This feeling of hands-on, here-and-now is what drove me to launch joinFITE.org in January of this year. The women — we’re aiming for 25,000 — we will be empowering with microloans funded through this initiative may talk about dreams. These are dreams of putting food on the table, and creating a better life for their children in very immediate terms. I recently encountered a remarkable woman who represents both the dream and the willingness to work tirelessly to make it real. Her name is Rosa, and she is the owner of a shop called Native Hand by Hand in San Francisco. Rosa grew up in a family of gifted artisans in Ecuador, and her shop is filled with exquisite silver jewelry and clothes made by artisan cooperatives in her country. But in 2009, when she wanted to expand, she was deemed “unbankable” by major lending institutions, since she had no credit history. Her first microloan from Opportunity Fund allowed her to invest in inventory, and establish herself as a business. Now joinFITE has funded her second microloan, allowing her business to expand. Rosa’s so proud that her daughter has just graduated from high school, and you can get a glimpse of this success story here . Maybe it’s semantics, but I don’t know that I would call Rosa a “dreamer.” Instead, I see unrelenting doing, working, and sacrificing for a clear objective, which is to give her daughter the tools she needs for success. I am relentlessly upbeat, but I am about to send my oldest daughter off to college with this caveat: wishing and wanting will not make it so. The vision and the dream are just the first step. The sweat-equity is as important, maybe more so. For entrepreneurs like myself in particular, this sweat-equity means 12, 14, 16-hour days, and the potential of literally years without profit. The dream and vision, the wanting and the wishing, are what allow you to persist spiritually through the hardship. But I place wishing and wanting into the same category as Snow White warbling “Someday my Prince will come.” Maybe in a 1937 Disney cartoon, but I don’t advise any of this as a strategy for success. I was reminded of this by Susana, another woman I also met on my recent trip through Northern California. Susana received a joinFITE microloan for her daycare center called Happy Faces in San Jose, and word-of-mouth in the community has enabled her business to quickly grow to maximum-capacity. In fact, she is now sought out by mothers-to-be, who place their names on a waiting list. It’s worth mentioning that Susana, like Rosa –and like myself, at age 13 — had made her living sweeping and cleaning, before being licensed as a professional in her chosen field. For everyone starting a new school year, starting a new business or just looking for a job: there is no “secret.” Americans love the word “visualization” these days, and it’s the theme for countless books, seminars, success-coaches and self-professed entrepreneurism gurus who tell willing believers that if they just want something badly enough, it will happen. But the success of Rosa, and Susana, and of Dermalogica, too, are proof that this simply isn’t so: you just can’t skip the heavy lifting. Learn more about my recent trip to Northern California to meet Rosa and Susana .

Read the full article →

Rep. Gary Ackerman: Standard-ly Poor (S&P)

August 15, 2011

Standard and Poor’s (S&P) announcement last Friday that it had stripped the United States of its “triple-A” credit rating was puzzling. What makes S&P’s proclamation so curious is that its recent securities-rating track record has been, shall we say, off the mark? Its flawed analysis included a $2 trillion math error . In all my years of teaching math, I never had even the poorest student make a two trillion dollar error. Perhaps, the primary motivating factor for the highly-publicized ratings announcement was S&P’s desire to rebuild its tarnished reputation. The downgrade was certainly not based on any substantive analysis of our nation’s actual credit quality. The United States Treasury’s iron-clad promise to meet our nation’s financial obligations remains unquestionably solid. The Financial Crisis Inquiry, which investigated the recent financial calamity, concluded that, “The failures of credit rating agencies were essential cogs in the wheel of financial destruction.” Ratings agencies bestowed “triple-A” ratings on piles of sub-prime mortgage-backed-securities. In the end, the entire U.S. economy was left holding the bag when the “triple-A” ratings turned out to be tragically inaccurate. The indisputable fact is rating agency judgments, or lack thereof, contributed significantly to the economic pain we are feeling right now. So, it is not surprising to me that S&P is now attempting to leverage this tumultuous economic moment to reassert its credibility. But, there are billions of dollars worth of devalued, mis-rated securities that seem to say otherwise. S&P further damaged whatever speck of that credibility it had left when the documents justifying its U.S. debt credit-rating downgrade included a $2 trillion arithmetic error. Oops. The glaring error, which U.S. Treasury officials quickly brought to S&P’s attention, massively exaggerated future federal fiscal deficits. Amazingly, S&P refused to reconsider the downgrade of our nation’s debt even after Treasury pointed out that the analysis was based on a basic math error. When the assumptions that you base your analysis on are faulty, then that analysis is not credible. Hey, whenever your math is off by two trillion, don’t you always get the wrong answer? The obdurate refusal to reconsider the downgrade shows that S&P had made a committed business or political decision to downgrade, not based on fact-based financial analysis. S&P hasn’t allowed silly things like facts or credit quality to get in the way of acting on behalf of the economic interests of S&P. It is true that we are facing extraordinarily challenging economic circumstances. If history is any guide, America will respond by adapting and innovating. We will emerge from this fiscal crisis a stronger and more resilient nation. We will do this despite illogical and flawed assertions made by subprime players, who are motivated by the desire to reaffirm their seriousness at the expense of U.S. creditworthiness. Investors do not question the “full faith and credit” of U.S. Treasury Securities. Treasury securities are — and will always be — the highest quality investments in the world. S&P’s flawed downgrade did not change that. The reality is that S&P would need more credibility to downgrade America’s credit.

Read the full article →

For ‘Super Congress’ Members, ‘Doomsday’ Cuts Loom Large

August 14, 2011

WASHINGTON — For the dozen lawmakers tasked with producing a deficit-cutting plan, the threatened “doomsday” defense cuts hit close to home. The six Republicans and six Democrats represent states where the biggest military contractors – Lockheed Martin, General Dynamics Corp., Raytheon Co. and Boeing Co. – build missiles, aircraft, jet fighters and tanks while employing tens of thousands of workers. The potential for $500 billion more in defense cuts could force the Pentagon to cancel or scale back multibillion-dollar weapons programs. That could translate into significant layoffs in a fragile economy, generate millions less in tax revenues for local governments and upend lucrative company contracts with foreign nations. The cuts could hammer Everett, Wash., where some of the 30,000 Boeing employees are working on giant airborne refueling tankers for the Air Force, or Amarillo, Texas, where 1,100 Bell Helicopter Textron workers assemble the fuselage, wings, engines and transmissions for the V-22 Osprey tilt-rotor aircraft. Billions in defense cuts would be a blow to the hundreds working on upgrades to the Abrams tank for General Dynamics in Lima, Ohio, or the employees of BAE Systems in Pennsylvania. For committee members such as Sens. Patty Murray, D-Wash., Rob Portman, R-Ohio, and Pat Toomey, R-Pa., the threat of Pentagon cuts is an incentive to come up with $1.5 trillion in savings over a decade. Failure would have brutal implications for hundreds of thousands workers back home and raise the potential of political peril for the committee’s 12. “I think we all have very good reasons to try to prevent” the automatic cuts, Toomey told reporters last week when pressed about the impact on Pennsylvania’s defense industry. “That is not the optimal outcome here, the much better outcome would be a successful product from this committee.” The panel has until Thanksgiving to come up with recommendations. If they deadlock or if Congress rejects their proposal, $1.2 trillion in automatic, across-the-board cuts kick in. Up to $500 billion would hit the Pentagon. Those cuts, starting in 2013, would be in addition to the $350 billion, 10-year reduction already dictated by the debt-limit bill approved by Congress and signed into law by President Barack Obama this month. Not surprisingly, Defense Secretary Leon Panetta has described the automatic cuts as the “doomsday mechanism.” He’s warned that the prospect of nearly $1 trillion in reductions over a decade would seriously undermine the military’s ability to protect the United States. For the Pentagon, “we’re talking about cuts of such magnitude that everything is reduced to some degree,” said Loren Thompson, a defense analyst at the Lexington Institute, a think tank. “At that rate, you’re eliminating the next generation of weapons.” Committee members will face competing pressures as they try to produce a deficit-reducing plan. As chairman of the Senate Foreign Relations Committee and a possible successor to Secretary of State Hillary Rodham Clinton if Obama wins a second term, Sen. John Kerry is certain to be protective of the budget for the State Department. Yet the Massachusetts Democrat, who recently said he would seek a sixth term in 2014, represents a state that was fifth in the nation with $8.37 billion in defense contracts this year, behind Virginia, California, Texas and Connecticut, according to data on the federal government’s website USAspending.gov. In Tewksbury and Andover, Mass., deep defense cuts could have serious ramifications for thousands of Raytheon employees working on the Patriot, the air and missile defense system. It was heralded for its effectiveness during the 1991 Persian Gulf War and is now sold to close to a dozen nations, including South Korea, Taiwan and the United Arab Emirates. Whatever decisions Kerry and the committee make will affect Massachusetts-based Raytheon, which was fourth in defense contracts this year at $7.3 billion, behind Lockheed Martin, Boeing and General Dynamics. Raytheon also has operations in Arizona, home to another committee member, Republican Sen. Jon Kyl. “While some will argue there is peril in serving on this committee, we believe there is far greater peril in leaving these issues unaddressed,” Kerry said in a joint statement with Murray and Sen. Max Baucus, D-Mont., after they were selected by Senate Majority Leader Harry Reid, D-Nev. In February, Murray celebrated when the Air Force ended a decade-long saga of delays and missteps and awarded one of the biggest defense contracts ever, a $35 billion deal to build nearly 200 air refueling tankers, to Boeing, a mainstay in her home state. Boeing was fourth on the list of donors to Murray from 2007-2012, with its political action committee, individual employees and family members contributing $102,610. Michigan is home to two committee members, Republican Reps. Dave Camp and Fred Upton, and General Dynamics work on the Abrams tank. The state is struggling with a 10.5 percent unemployment rate, which is above the national average. Already facing the prospect of $350 billion in defense cuts over 10 years, the Pentagon could look to scale back some projects, such as the F-35 Joint Strike Fighter, the stealthy aircraft that has been plagued by cost overruns and delays. Lockheed Martin, in conjunction with Northrop Grumman and BAE Systems, is building 2,400 of the next generation fighter jet for the Air Force, Navy and Marine Corps, as well as working with eight foreign countries. But the cost of the program has jumped from $233 billion to $385 billion; some estimates suggest that it could top out at $1 trillion over 50 years. Questioned about the defense cuts, Joint Chiefs of Staff Chairman Adm. Mike Mullen recently said that “programs that can’t meet schedule, that can’t meet cost … requirements are very much in jeopardy and will be very much under scrutiny.” The Joint Strike Fighter is being built in Fort Worth, Texas, and Palmdale and El Segundo, Calif. Those are the states of committee members Reps. Jeb Hensarling, R-Texas, and Xavier Becerra, D-Calif. Lockheed Martin and BAE Systems also have operations in Pennsylvania. The Pentagon could decide to scrap the program or scale it back while upgrading the existing F-15 and F-18 aircraft, a troubling prospect for lawmakers from the states that benefit from F-35 production. In the military world, however, reducing the number could make it more costly. “The problem when you cut back in numbers is you increase the number for one, you increase the cost for one,” said Laicie Olson, a senior policy analyst with Council for a Livable World and the Center for Arms Control and Non-Proliferation. “Sometimes it’s almost better to buy more.” Boeing, in a statement, said it has been “anticipating flattening defense budgets for some time.” Company spokesman Daniel C. Beck said that while Boeing is trying to improve production and efficiency, it’s moving into new markets such as cybersecurity and energy management. ____ Associated Press writer Marc Levy in Harrisburg, Pa., contributed to this report.

Read the full article →

Ai-jen Poo: Paying Off Our Real Debt

August 9, 2011

Kimi Lee’s mother did everything right. She saved all her life, had two health insurance policies, was a member of a union. Then, during a trip to see her newborn granddaughter, she suffered a stroke. Her family did their best to cope: Kimi and her family moved to Los Angeles to help care for her. But bills and long-term care costs still threatened to rob the family of what Kimi’s mom had worked her whole life for, including her house. “For us it was definitely a shock,” Kimi said. “When there are these long-term situations that happen to people, there’s just no safety net for that.” Henry Perry considers himself lucky. He is 96 years old, and is able to live an active, dignified life thanks to the care of Dabphne Hughes , a longtime friend from his church who came to care work after she lost her previous job. Henry can afford to pay for long-term care, but sees that many in the African American community he lives in cannot. While younger people in the community used to be able to care for their elders, job and health struggles often leave them unable to — and older people are left to struggle at the time they care the most. “It says a lot about the American Dream,” Henry said, “that you work all your life, pay your taxes and all that sort of thing. Then you get to your Golden Years and find out they’re not as golden as they’re supposed to be.” Marlene Champion came to domestic care work after decades of work at a poultry processing plant. For six and a half years, she cared for an older man who at first was home-bound and did little but watch television. “Over the years, I coaxed him out of his shell. He began to go to birthdays and weddings and bar mitzvahs — he became a different man,” Marlene said. “I learned a lot from him in those years about the struggle for dignity and respect. Someday, I hope someone will care for me that way.” These are the voices of America’s Care Crisis. The relationship between care providers and care recipients is full of love, intimacy, and interdependence. And yet millions of older Americans and people with disabilities struggle to live with dignity because they don’t have the quality care they need. Their families struggle to provide for them. Meanwhile, caregivers suffer burn-out from poor working conditions, low wages, lack of training, and benefits. And the many immigrant care workers who are currently caring for our loved ones are locked outs of the American Dream, without a path to citizenship. The crisis is growing by the day. Every eight seconds, another American turns 65. By 2050, there will be 27 million Americans with long-term care needs — more than twice the number in 2000. These older Americans are the deepest source of wisdom, values, and character we have as a nation. We owe them a debt of gratitude more profound than any other. And we have a responsibility to care for them as they spent their lives caring for us. That’s why on July 12, nearly 800 community, faith, and labor leaders gathered in Washington, DC, to launch Caring Across Generations , a national movement to solve America’s Care Crisis. Caring Across Generations aims to preserve what we have — the vital safety net of Medicaid, Medicare, Social Security — while creating what we need: two million new care jobs, training and protection for workers, new paths to citizenship for immigrant workers, and measures to make care more affordable for struggling families. White House Senior Advisor Valerie Jarrett was with us at the event, a day-long town hall-style event we called a Care Congress. “Our economy will depend on the creation of millions of home care jobs. You are the economic engine of our country,” Jarrett said. “It is up to us to ensure that these jobs come with the right benefits, what all Americans deserve: good working conditions, clear labor standards, and the ability to form a union.” Secretary of Labor Hilda Solis was with us as well. “Thanks to your work — workers and families coming together — we’re standing up today for a rightful place in society,” she said. “That’s what this is about: dignity and respect.” The July 12 Care Congress was just the beginning. Over the next 12 months, Caring Across Generations will hold Care Congresses in at least 15 U.S. cities. These events will bring together tens of thousands of Americans who are touched by the “care crisis,” particularly older adults, people with disabilities, care workers and their families. Together, we will transform public policy so that we can be a nation that takes care of one another, across generations. It won’t be easy — especially in a political moment where short-sighted and destructive budget cuts are the order of the day. But the Caring Across Generations campaign is built on love: the love of Kimi and her mother, of Dabphne and Henry, of Marlene and the man she cared for. Whatever the obstacles, love is still the most powerful force for change in the world.

Read the full article →

Obama Pushing Jobs For Unemployed Military Veterans

August 5, 2011

WASHINGTON — President Barack Obama is asking Congress to approve new initiatives to help some of America’s 1 million unemployed military veterans find work, including tax credits for companies that hire out-of-work vets. The proposal Obama is to outline Friday is part of the president’s efforts to return to a focus on jobs after spending weeks mired in the contentious debt-limit debate that consumed the White House for much of the summer. His announcement was to follow the Labor Department’s release of a new round of nationwide unemployment data showing that hiring picked up more than expected in July, with employers adding 117,000 jobs and the jobless rate inching down to 9.1 percent from 9.2 percent in June. Even so, the unemployment rate has topped 9 percent in every month except two since the recession officially ended in June 2009. The White House says the sluggish economy creates additional challenges for veterans looking to enter the civilian labor market. About 1 million veterans are unemployed, according the administration, including former 260,000 service members who joined the military after the Sept. 11 attacks. The administration says the unemployment rate for the post-Sept. 11 service members is 13.3 percent. The main features of Obama’s proposal, according to administration officials, are two tax credits for companies that hire unemployed veterans: _ A “Returning Heroes” tax credit for 2012-2013. Companies that hire unemployed veterans would receive a $2,400 tax credit. That tax credit would increase to $4,800 if the veteran has been unemployed for six months or more. _ A two-year extension of the “Wounded Warriors” tax credit, which gives companies that hire veterans with service-related disabilities a $4,800 credit. If the veteran has been unemployed for six months of more, the tax credit increases to $9,600. The tax credits would require congressional approval. Administration officials said the White House would start working with lawmakers on the proposal after Congress returns from its recess in September. One official said the administration estimates the cost of the tax credits at $120 million. The officials spoke on the condition of anonymity in order to discuss the initiatives ahead of the president’s announcement at the Washington Navy Yard. During his remarks Friday, Obama also will challenge private companies to hire or train 100,000 veterans by the end of 2013. He is expected to name some companies that already have committed to taking part in that effort. The president also will announce a joint initiative between the Defense and Veterans Affairs departments to come up with a “reverse boot camp” program that would help train service members for the civilian workforce as they wind down their time in the military. ___ Julie Pace can be reached at http://twitter.com/jpaceDC

Read the full article →

Senate Votes To End FAA Shutdown

August 5, 2011

WASHINGTON — The Senate has approved legislation ending a two-week partial shutdown of the Federal Aviation Administration, clearing the way for furloughed employees and airport construction projects to resume. Two senators were present to approve a House bill extending FAA’s operating authority, using unanimous consent procedures that took less than 30 seconds. Employees can return to work as soon as Monday if President Barack Obama signs the bill before then. The shutdown has cost the government about $400 million in uncollected airline ticket taxes and idled thousands of construction workers. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below. The Senate is poised to pass legislation ending a two-week partial shutdown of the Federal Aviation Administration that has cost the government about $400 million in uncollected airline ticket taxes and idled thousands of workers. A bipartisan compromise reached Thursday cleared the way for the Senate to approve a House bill extending the FAA’s operating authority through mid-September, including a provision that eliminates $16.5 million in air service subsidies to 13 rural communities. Senators have scattered for their August recess, but the measure can be approved Friday if leaders from both parties agree to adopt it by “unanimous consent.” FAA employees could return to work and payments for airport construction projects could resume as soon as Monday if President Barack Obama signs the bill over the weekend, transportation officials said. Republicans had insisted on the subsidy cuts as their price for restoring the FAA to full operation. But bill also includes language that gives Transportation Secretary Ray LaHood the authority to continue subsidized service to the 13 communities if he decides it’s necessary. Democrats said they expect the administration to effectively waive or negate the cuts. The shutdown began when much of Washington was transfixed by the stalemate over raising the government’s debt ceiling. During that time, the FAA furloughed 4,000 workers but kept air traffic controllers and most safety inspectors on the job. Forty airport safety inspectors worked without pay, picking up their own travel expenses. Some 70,000 workers on construction-related jobs on airport projects from Palm Springs, Calif., to New York City were idled as the FAA couldn’t pay for the work. But airline passengers in the busy travel season hardly noticed any changes. Airlines continued to work as normal, but they were no longer authorized to collect federal ticket taxes at a rate of $30 million a day. For a few lucky ticket buyers, prices dropped. But for most, nothing changed because airlines raised their base prices to match the tax. Some passengers will now be eligible for tax refunds if they bought their tickets before July 23 and their travel took place during the shutdown. As the debt ceiling crisis passed and Congress headed home for its August recess without resolving the standoff, Obama spoke out Wednesday and LaHood urged Congress to return to deal with the issues. Obama expressed dismay that Congress would allow up to $1.2 billion in tax revenue to go out the door – the amount that could have been lost by the time lawmakers return in September. Senate Majority Leader Harry Reid announced the deal Thursday afternoon, saying it would put 74,000 transportation and construction workers back to work. “This agreement does not resolve the important differences that still remain,” said Reid, D-Nev. “But I believe we should keep Americans working while Congress settles its differences, and this agreement will do exactly that.” Republican Sen. Tom Coburn of Oklahoma won’t attempt to block passage of the bill when it comes up on Friday, spokesman John Hart said. Coburn blocked several attempts by Democrats to pass an extension bill without the subsidy cuts. The partisan standoff that led to the shutdown began last month when Rep. John Mica, R-Fla., the chairman of the House Transportation and Infrastructure Committee, signaled his intention to attach the subsidy cuts to a bill to extend the FAA’s operating authority through mid-September. The agency has been operating under a series of 20 short-term extensions since 2007, when the last long-term FAA funding bill expired. Senate Democrats complained that Republicans were breaking with precedent by using an extension bill to enact policy changes that hadn’t been agreed upon. Even Republican Sen. Kay Bailey Hutchison of Texas called the measure a “procedural hand grenade.” Senators refused to pass the House bill, saying to do so would be giving into legislative blackmail and inviting Republicans to up the ante on the next extension bill. Obama, who had scolded Congress on Wednesday for not solving the standoff, expressed relief. “I’m pleased that leaders in Congress are working together to break the impasse involving the FAA so that tens of thousands of construction workers and others can go back to work,” Obama said in a statement. Both the House and Senate passed long-term funding bills for the FAA earlier this year, but negotiations on resolving differences and finalizing those bills are stalemated. The biggest holdup is a labor provision in the House long-term bill. Republicans want to overturn a National Mediation Board rule approved last year that allows airline and railroad employees to form a union by a simple majority of those voting. Under the old rule, workers who didn’t vote were treated as “no” votes. “The House has made it clear that the anti-worker piece is a priority for them and they also put us on notice that they don’t intend to give in,” said Vince Morris, a spokesman for Sen. Jay Rockefeller, D-W.Va., chairman of a committee that oversees FAA. “So we are bracing for a new fight in September.” Communities targeted for the proposed air service subsidy cuts are Morgantown, W.Va.; Athens, Ga.; Glendive, Mont.; Alamogordo, N.M.; Ely, Nev.; Jamestown, N.Y.; Bradford, Pa.; Hagerstown, Md.; Jonesboro, Ark.; Johnstown, Pa.; Franklin/Oil City, Pa.; Lancaster, Pa.; and Jackson, Tenn. ___ AP White House Correspondent Ben Feller contributed to this report.

Read the full article →

Richard (RJ) Eskow: Stock Market Plunges. The Free-Market God Is Angry With His Followers!

August 3, 2011

The American people have just endured a months-long bipartisan battering with words, as politicians and talking heads from both parties insist that they “take their medicine” by enduring severe austerity cuts. Against all evidence, they were told that this would be good for the economy. This illogical argument only has credence because Washington’s filled with followers of a free-market religion whose deity is the Market, whose Oracle is the stock exchange, and whose clergy includes bishops named Greenspan, Geithner, Rubin, and Rivlin. But if Democrats are true believers, Republicans are this religion’s fundamentalists. All they need to do is repeat the sacred phrase “Tax cuts produce jobs!” and the whole congregation forms into ranks, prepared to do battle. Believers in the One True Market believe that their Deity can only be propitiated when they sacrifice the sick, the elderly, and the poor. This lowers government expenditure and reduces political pressure to make the rich and powerful pay their fair share. We’re told that this sort of sacrifice reassures the wealthy. That means these minor deities who will then invest and create new jobs, which is why they’re given the ritual title of “Job Creator” or “Wealth Creator.” The believers tell us that once these sacrifices are made, money will flow downward like manna from heaven. There’s even an obscure mantra called Ricardian Equivalence that explains this esoteric mystery, although debunking it thoroughly (as apostate members of the clergy like De Long and Krugman have done) doesn’t discourage the True Believers. Here’s what should discourage them. The all-seeing and all-knowing Stock Exchange, that Delphic Oracle of their cult, has looked upon their handiwork… and frowned. (Or maybe it upchucked. Whatever it did today, it certainly wasn’t happy.) No sooner did the president and Speaker Boehner announce their agreement than the stock market fell dramatically. The S&P 500 fell by 2.6% to its lowest point of the year. The Dow fell 2.2%, and Nasdaq dropped 2.8%. Why does the Lord of the Economy punish its followers so? What has displeased It? For one thing, new economic data came out today and it was terrible. This should come as no surprise to anyone who isn’t caught up in the Free Market cult, but the True Believers seem to have been caught off guard. Consumer spending is down , which is one big reason for today’s battering. And why wouldn’t it be down? Wages are stagnant, the long-term unemployed can’t find work, and people are fearful for the future. A new report showed that U.S. manufacturing growth is flatlining . And is there any cause for optimism on the unemployment front? As economists like to say: girlfriend, please! Another reason for the stock market plunge was the continued threat of a downgrade of the U.S. government’s credit rating. That’s likely to come, if it comes, from organizations which are amusingly described as credit ratings “agencies.” They’re actually for-profit companies whose decision-making process was shown to be corrupt and intellectually degraded during the run-up to the last financial crisis. Their behavior in the past several months has been equally erratic and obscure. If free-marketism is a religion, they’re its corrupt medieval popes, selling their ratings like indulgences while looting the princes’ treasuries and lusting after their wives and children. What will the “agencies” decide to do? If history’s a predictor, they’ll do whatever their cash-paying client base tells them. Worship of Profit is an individual as well as a collective exercise. But it’s the agencies’ unpredictability, not the possibility of further regulation, that’s making the private sector nervous. Now, we’re not saying that the stock market really is an Oracle. Or if it is, it’s like the one in the temple at Delphi. There, some researchers believe, the “prophecies” of its priests and priestesses were actually inspired by a hallucinogenic gas seeping up from the ground. Personally, I think of the stock market as a collective agreement about reality that’s constantly being changed and updated. But whatever you think it is, it sure wasn’t impressed with yesterday’s deal. Joe Wiesenthal helpfully (if not cheerfully) points out that today marks the eighth day in a row that the stock market has been down, a serial drubbing that we haven’t seen since the bleakest days of the crisis in October 2008. It’s time to ask our oracle: Why so glum, chum? Because yesterday’s deal is an assault on the economy. The Economic Policy Institute estimates that it will cost the economy 1.8 million jobs and increase the unemployment rate by 0.6% in 2012 alone, while ending unemployment benefits that are currently being received by 3.8 million people. That’s going to hurt… a lot. Unemployed people spend most of the money they receive, which means it stimulates the economy. That’s also true of lower-income people, who will be hurt by this deal, and of the elderly, who are likely to be hurt in the next round. This kind of misguided parsimony doesn’t just harm the overall economy. Ironically, it also makes it harder to reduce deficits over the long run. Even a consensual hallucination like the stock market can figure that out. Today’s results should put fear in the hearts of the free-market radicals. It’s telling them to expect a mighty smiting from a great Invisible Hand. Like deities in all religions, the Lord of the Market is trying to tell its followers to be kinder to the elderly, the sick, and the poor. It’s trying to explain that one is never enriched by taking, only by giving. And in a very literal sense, it’s trying to tell the flock that “as you do to the least of these, you do to Me.” But like the extremists of all religions, the True Believers refuse to listen.

Read the full article →

Preeti Vissa: The Stories Statistics Don’t Tell

August 3, 2011

A rather odd study from the Federal Reserve got a smattering of press coverage in recent weeks. The overall message seems to be that hey, foreclosure’s not so bad. As the story on MSN Money put it, “For those forced to move, it’s not always for the worse.” The study, based on statistics from a large sample of consumer credit information compiled by Equifax and the Federal Reserve Bank of New York, unintentionally confirms Mark Twain’s quip, “There are three kinds of lies: lies, damned lies and statistics.” To hear Fed researchers Raven Malloy and Hui Shan tell it, for many people foreclosure is little more than an inconvenience. Most don’t end up in significantly worse neighborhoods or more crowded living conditions. “In short,” they write, “we find little evidence that many people end up living in larger households in order to defray living expenses. … [I]t does not appear that post-foreclosure borrowers are moving to much less desirable neighborhoods.” But the real story is underneath the statistics, where the Fed’s researchers don’t look. Still, small hints do creep into their report: For example, while foreclosure victims end up living with roughly the same number of people they did pre-foreclosure, they’re often different people. Therein lies a tale of families split up, children and siblings scattered, lives upended. Charlie Swarthout, whose foreclosure nightmare was described in painful detail last year in the Oakdale Leader , has one such story: “Today Swarthout is a changed man. His family is splintered, his house is foreclosed and his dreams are shattered. It’s hard to decide which pieces to pick up to fix — everything is a mess.” Two and a half years ago, researchers from the University of North Carolina and the National Council of La Raza interviewed Latino families impacted by foreclosure and found a trail of financial and personal destruction : “Spouses and partners often reported increased tension and discord in their relationships as a result of the foreclosure. This led to consideration of divorce or separation… Parents reported anxiety, arguing, and distance between them and their children… Overcrowding, affordability, and neighborhood safety topped the list of major concerns about the participants’ current housing situation.” And that’s just the personal side of foreclosure’s impact. We’ve seen a massive drain of wealth from working American families, with communities of color feeling the most devastating effects. This unevenly distributed financial catastrophe was just underlined by shocking new Pew Center data showing that America’s wealth gap has exploded: For every dollar a white family owns, the median Latino family now has roughly six cents and the median black family has a nickel. Pew explained, “The bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites.” Unfortunately, the Fed report contains no racial/ethnic data breakdowns. Yes, some people get through foreclosure with their lives relatively intact, but there is no reason at all to think that’s the norm. There are human realities that statistics don’t capture. And with the New York Times estimating that some four million foreclosures are either in process or “waiting in the wings,” we would do well to remember that.

Read the full article →

A Tale Of Two Targets

August 3, 2011

San Francisco is in dire need of a Target. There are two instances of the big box retailer situated directly across the highway from each other just south of the city, in Daly City and Colma respectively. The drive between the two takes less than five minuets (in traffic). That’s how hard San Franciscans are itching for their Target fix. Well, it looks like the days of having to drive southward to pick up a $6 meat tenderizer designed by Michael Graves are numbered because, earlier this week, the city’s Planning Commission approved a proposal for a Target to move into the former Sears location at Geary and Masonic. The Chronicle’s City Insider reports : But don’t think the suburbs are coming to the city just yet: the commission also made some tweaks to the look of the building. “I didn’t want it to look like a suburban shopping center you’d see in Phoenix or Miami,” said Commissioner Ron Miguel. “It doesn’t need that kind of lipstick and hair gloss.” As a result of a measure passed by San Francisco voters in 2006, all businesses with eleven or more retail locations must be granted a conditional use permit by the Planning Commission to be able to open up shop. The Geary location isn’t the only Target slated to come into San Francisco over the next few years. A new Target opening in 2012 will be the anchor of the Metreon Shopping center , an innovative shopping mall complex opened by Sony in 1999 that’s since devolved into a large, nearly-empty container for an IMAX theater. Last year, the Minnesota-based retailer came under fire for giving a large contribution to a group running campaign ads for a conservative, anti-gay gubernatorial candidate in their home state — something that may hurt sales in famously gay-friendly San Francisco. Interestingly, while Target apparently had little trouble getting approval for its Geary location, another large chain retailer trying to move into the area didn’t have such luck. When the San Diego-based pet supply giant Petco recently attempted to move into a vacant storefront in the Richmond at Geary and 18th Avenue, the Board of Supervisors passed legislation to block the store , citing the negative effect the franchise would have on nearby locally-owned pet stores. This move by the board preemptively blocked the store before the Planning Commission could consider issuing a permit. Pet shops aside, with two Targets inside city limits on the way, most city residents probably won’t have to go down to Colma again. At least, until they die .

Read the full article →

Robert Kuttner: The End Game: Saving Obama From Himself

July 18, 2011

As the debt doomsday of August 2 draws closer, what sort of end-game can we imagine? The worst scenario would be for an outbreak of common sense and self-interest to overtake the extremism of the House Republican caucus. If the Republicans were to accept Obama’s proffered deal, they would weaken Security and Medicare — and put the Democrats’ fingerprints on the deed — depriving Democrats of their traditional defense of America’s best loved social programs. They would also get a ten-year deficit-reduction agreement that is mostly program cuts. And they would get an austerity package that guarantees high unemployment as Obama heads into a difficult re-election. And a Democratic president is offering this deal! The Republicans would also get to savor the spectacle of a badly divided Democratic Party, as the White House twists arms of unwilling House and Senate Democrats to vote for a right-wing package. It’s quite a drama. Who will save us from a perverse approach to deficit reduction that is bad economics and worse politics — the unreality of the Republicans, or the principled resistance of rank and file Democrats? Obama and his advisers, weirdly, believe that his stance as “the only grownup in the room” who forces his own party to abandon its core principles for the sake of an austerity program will somehow win the gratitude of voters struggling with declining incomes and rising joblessness. The unemployment may be stuck near ten percent, but good old Obama brokered a deal to balance the budget in 2021. So re-elect this man. On which planet is this? A better scenario would be for Sen. Mitch McConnell to prevail among Republicans, with his idea to allow Obama to raise the debt ceiling unilaterally and then to keep negotiating a long-term budget deal along a parallel track. That would spare the country both a default on the debt and an awful ten-year budget agreement. But this offer seemed almost too good to be true, and it is. There are a few mickeys in the deal now being negotiated by McConnell and Senate Democratic leader Harry Reid. In one version, Obama would have to keep coming back to Congress to get approval to increase the debt, a little bit at a time between now and the end of his presidential term. And Obama would have to match debt increases with $1.7 trillion in budget cuts. In another variation, the deal would create a deficit-reduction commission that could send a budget-cut plan straight to the House and Senate floor for an up or down vote. In the game of chicken that the Republicans are playing with Obama, the president has a couple of big things going for him. One is reality. There actually will be dire consequences if the United States defaults on its debt. It is one thing for right-wing Republicans to deny Darwin, or sexual orientation, or even climate change, where the consequences can be fuzzed up via junk science and the impact of science-denial is diffused or delayed. It is quite another to deny the reality of an event scheduled to happen in a couple of weeks. That actually might backfire on you politically. A second presidential advantage is that the nation’s most powerful corporate executives, normally the allies of Republicans, have been imploring the GOP to stop playing these games. McConnell blinked first after dozens of CEO’s emerged from a White House session to meet with Republican leaders and request them to stop fooling around with the nation’s solvency, and nearly 500 signed a letter demanding action. But the big disadvantage is the president’s own penchant to be the Conciliator-in-Chief. When the opposition party has lost all sense of reason, a leader has a duty to say so, and not to keep splitting the difference. The stakes are so high that Obama can probably win this one without giving away the store. As the deadline comes closer, the Republicans will have to shift ground. The question is whether he will needlessly give up much of Social Security, Medicare, and the resources he needs to pull the country out of recession, along the way. As often has been the case, Obama’s lack of spine puts his own party in a difficult spot. So far, the Democrats’ Congressional leadership, from Reid and Pelosi on down, have done a courageous job of saying to Obama: No Social Security and Medicare cuts, no way. But if the Republicans suddenly agree to a deal and Obama tells the Democrats that his presidency and the country’s solvency are on the line, what will they do then? If 2012 is not to be a blowout, Congressional Democrats and base progressive organizations will need to be even firmer with their president. At times, the labor leadership has warned the White House that failure to deliver a jobs program and a cave-in on Social Security and Medicare will mean rank and file activists campaigning for Democratic House and Senate candidates but not going all out for Obama. That message — from all of the progressive forces that helped elect Obama — needs to be even more pointed. We need to get this budget fight behind us, so that the President and other Democrats can begin talking seriously about jobs, economic recovery, and saving the middle class. The more fiscal resources Obama gives away as part of a budget deal, the harder that shift will be. Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His most recent book is A Presidency in Peril.

Read the full article →

Don Bonker: Is Congress About to Cause Another Great Depression?

July 15, 2011

If you need evidence of how Congress acting irresponsibly can cause a calamity, look no further than the Great Depression. True, the 1920s were prosperous years for the country as a whole, yet there were early warning signs of catastrophic events to come. Excessive investments spurred high levels of production but it also created unsustainable surpluses and depressed prices. The commodity sector, in particular, was coping with over-production that had led to sagging markets and widespread foreclosures, setting the stage for a Tea Party-type revolt in Congress to enact a radical tariff bill which eventually led to collapse of the world economy. By the late twenties, protecting U.S. markets was the banner issue for Republicans, led by Herbert Hoover whose 1928 presidential campaign capitalized on agricultural tariffs. Upon his election, the new president convened a special session of Congress to deal with the tariff issue and suddenly the climate was ripe for Congress to run amok. The tariff issue also prompted the formation of hundreds of special-interest groups and trade associations to mobilize political support for higher tariffs and other protectionist measures that set the stage for an eager Congress to indulge as never before. Oregon’s Representative, Willis C. Hawley, presided over what was an unbridled frenzy of log-rolling, with Members jockeying to insure the maximum protection for their constituent producers. At the end of the day, the House tariff bill hiked import fees up to 100 percent on over twenty thousand products. Not to be outdone, the Senate Finance Committee, headed by Utah’s Reed Smoot, added 1200 amendments to the tariff bill that were so egregious that Democrat Senator Thaedeus H. Caraway of Arkansas was compelled to say, “I might suggest that we have taxed everything in this bill except gall.” “Yes,” Senator Carter Glass, a Vriginia Democrat, replied, “and a tax on that would bring considerable revenue.” While President Hoover’s intent was for a “limited revision” on a tariff measure, he exerted no leadership to curb the outrageous behavior or threaten to veto any bill that was out of bounds. What Congress sent to the president so alarmed the nation’s leading economists that they signed a petition urging President Hoover to veto the Smoot-Hawley Act. It was also printed in the New York Times and carried signatures from 46 states and 179 universities. The reaction abroad was quick and fierce. Within months, America’s leading trade partners — Canada, France, Mexico, Italy, Australia, in all 26 countries — retaliated by passing their own tariff bills. World trade plummeted by more than half of the pre-1929 totals that, more than anything, led to the emerging Great Depression. Those fieriest champions of the Tariff Act — Senator Reed Smoot, Representative William Hawley, and President Herbert Hoover and a host of others — were defeated in the 1932 election. What does all this have in common with the current debate on the debt limit controversy? When Congress puts political demagogy ahead of the national well-being, there are consequences. Today, it is not only the economists, but the chairman of the Federal Reserve Board, Moody’s and others in the financial community, the Chamber of Commerce and even China who are issuing warnings about the dire consequences if Congress does not raise the Federal debt ceiling by August 2. This time it is not about the collapse of the world trading system but the perilous state of America’s financial future. Should the GOP leadership and President Obama fail to address this crisis, the impact will likely be similar to what happened in 1929 — it will gravely threaten the nation’s financial well-being and those responsible, Rep. Eric Cantor and his Tea Party colleagues, will suffer the same fate in the 2012 elections.

Read the full article →

Katie Couric’s Twitter Guru On What You Can’t Find Online

July 15, 2011

Nearly every morning for almost a year, Erica Anderson would wake up at 5 a.m. just to click “send” on an email. Those daily emails were for Katie Couric. As Couric’s digital media strategist, Anderson was charged with helping to incorporate social media into Couric’s daily routine and reporting. Anderson says she never tweeted for Couric, but instead looked for ways the journalist could adapt what she was learning, reading about and working on to spark conversations online, which meant pitching tweets and crafting emails late into the night so her ideas were the first Couric saw each morning. This was how Anderson launched a career that would soon make her something of a modern-day pioneer in both the television and tech worlds, using social media to transform how reporters research, share and make news. Anderson arrived at CBS News by way of Washington, D.C. After graduating from Indiana University in 2006, she took a job in public affairs in D.C., left to cover the election for MTV News, then returned to her company in a new role she crafted for herself teaching colleagues, executives and clients (from Procter & Gamble to Johns Hopkins University) how to use social media. She quit her job in late 2009 — “to my dad’s dismay,” she noted — and started pitching herself to media companies. In June 2010, she joined Couric’s team, and the following February moved to Twitter, where she now focuses on expanding use of the service inside news organizations. Anderson, who counts veteran reporter Helen Thomas among her mentors, says she did not pursue a career in technology, but rather arrived in Silicon Valley by following her passion for media. “I started with a love of journalism and wanting to get more involved in news,” she said. “I followed the trajectory of the media industry, and here I am.” In an exclusive interview for The Huffington Post’s Women in Tech series, Anderson shared her take on what’s missing from conversations online, why social media can be challenging, and more. You’ve done a lot since you’ve graduated from college. I never sleep. It seems like you’ve excelled when it comes to being proactive with your career: You know how to take some risks, but also how to pitch yourself. I’ve always been entrepreneurial. My dad jokes that I had the largest female-run lawn mowing business in Indiana. I started the business when I was in high school and kept on building it as my summer job. I later took that entrepreneurial spirit and applied it to the world of journalism, an industry I loved that, when I graduated, was going through a tough time. Have you experienced anything during your career in the tech industry that make you feel like things are different for you because you’re a woman? I think one of the biggest challenges that I face is being young. I’ve had to work extra hard to earn people’s trust and get them to understand that I have an enormous amount of respect for the legacy of journalism and for the people who have come before me. We’re at a moment where it doesn’t matter if you’re young, or if you’re a woman, or whatever you are — we need the best ideas at the table. While I haven’t experienced distinctly unfair treatment, I have looked around and recognized that we could be doing a lot more to bring competent, capable women that we know are out there to the table. Like what? In a grassroots way, we should continue to mentor each other and bring each other up … Just the other day, I received an email from someone who used to intern for me in Washington, and I’m busy, but I took a moment to get back to her, to check in with her, to see how she’s doing. That comes full-circle. That happened for me. This also happens in a structured way: At Twitter, we have a monthly meeting of women when we talk about what we’re working on, how we can support each other and larger organizational goals, such as bringing more women on board. As someone who’s young but ambitious, how do you earn people’s trust? I do an extraordinary amount of research about the companies I work for, from their history to challenges that they’re facing. I always put in extra hours to think through possible solutions or ideas that could be of help to them. At this point in my career I’m working around the clock because I’m passionate about what I’m doing. What’s the best advice that you’ve received in your career? When I moved to Washington, I was having a meeting with Helen Thomas, who has been a mentor for about four years. I asked her, “Helen, a lot of people have told me that if I want to be a journalist, I should leave Washington and go work in a small market, and then work my way back.” She just kind of looked at me and said, “Start at the top. Don’t be intimidated.” So I stayed in Washington and took my own approach to finding ways to learn, and it seems to have served me well. What advice would you give to a woman starting a career in tech? Would it be the same advice you’d give to a man? I think I would say to people, and especially to a woman who feels like she’s at a disadvantage, “Give someone a firm handshake, look them in the eye, and say, you don’t scare me.” That’s the advice I got growing up from my family — that you are an equal, you are totally capable and competent, and it’s all about confidence. You belong there. What haven’t we been able to replicate in our online conversations that exists in our offline interactions? Patience. There’s a new standard for immediacy, but there are some stories or pieces of information that you can’t get in 140 characters and that you can’t get in a millisecond. SOUND BYTES: Erica Anderson on… Her indispensable gadget: Her iPhone Her favorite app: Twitter and Instagram Her favorite account to follow: His Holiness The Dalai Lama, Jeff Jarvis, Jay Rosen, Dave Winer Her “required reading” recommendations: Donald A. Ritchie, “Reporting from Washington: The History of the Washington Press Corps,” Timothy Crouse, “Boys on the Bus,” Helen Thomas, “Watchdogs of Democracy?: The Waning Washington Press Corps and How It Has Failed the Public” (“I recommend anyone who has a life not to read any of those,” joked Anderson. “But those are important books.”) What are important things for people not yet comfortable with social media to understand? It’s not that scary and it’s not that different. The way I’ve appealed to traditionally-trained journalists is to point out that it’s basically taking your interests, relationships, and the way you practice your craft, then thinking creatively about how you apply that to social media. What do you think is the biggest challenge people face when it comes to social media? Social media changes what privacy means and what relationships mean. There are a lot of things that are wildly intimidating about it, but that’s one of the reasons that I was attracted to this field. I think we have an opportunity and a responsibility to recognize that changes are happening: There’s a cosmic shift in the way communities, on a person-to-person level, and governments interact and communicate. What do you see as the next big idea in tech? I think in a few years, journalists and technologists will be synonymous. I can’t sit here and predict what the next big idea is going to be, but I can say that I think news will become more real-time because journalists are going to take it upon themselves to embrace, learn about, and improve the technology in their field. Do you catch yourself thinking in 140 characters? Sometimes. How so? Sometimes, it’s just fun. Brevity can be great. But I’ve had so many mentors that tell me, “Erica, you can’t only get sound bytes of information.” I work hard to create a sense of balance in my life where I consume everything first on Twitter, but I allow it to lead me to other information, and that I take the time to consume the longer piece so I can understand the context of why an issue matters.

Read the full article →

Larry Magid: Netflix’s New Pricing Model Makes Sense if You Use Other Services for Newer Content

July 14, 2011

As you may have heard, Netflix has changed its pricing model so instead of being able to get unlimited streaming plus one DVD in the mail for $9.99, you’ll now pay $7.99 a month for streaming plus another $7.99 a month for a single DVD. For those who want both, that represents a whopping 60% price increase. Not surprising, the blogosphere and Twitter are buzzing with complaints as is Netflix’s Facebook page . I haven’t read all of the more  60,000 comments there but most of the ones I did read were not from happy campers. I’m OK with Netflix’s streaming only service Personally, I’m not affected by the change because I subscribe to Netflix’s $7.99 streaming only service. I used to get DVDs in the mail but I found myself hardly ever watching them. One disc sat next to my DVD player for more than a month before I finally got around to returning it unwatched. I’m OK with Netflix’s streaming service and I have no intention of quitting even though it offers only a fraction of the content available on DVDs and hardly any new content. That’s partially because I’m a sucker for old movies and TV shows. I love classics and even some of the black and white “b” movies from the 40s, 50s and 60s. And I love some of the TV shows on Netflix including Monk, The Rockford Files and even The Dick Van Dyke Show. Netflix Business model Also, like all businesses, Netflix needs to have a model that’s sustainable and I believe them when they say that they can’t afford to mail you a DVD for only $2 a month over the streaming only service. If someone orders a movie a week, that’s more than four round trips a month. $2 wouldn’t even cover the postage not to mention the cost of running the service and buying the DVDs. Also, the company is having to pay more for streaming rights from the studios. Netflix needs to find models that work for both its streaming business and its DVD by mail business. I’m not sure if the new pricing model is exactly right, but I can understand why they felt a need to unbundle streaming from DVDs. Even though they are keeping their DVD by mail service, Netflix’s heart (as its name implies) is on the Net side of its business. There may be a few years left in the DVD rental business but the future is in video over the Internet. Rather than stretching to be the low-cost leader in a diminishing business, Netflix is smart to be the innovator in what is obviously going to be a growing market of instant video on demand not just to TVs and PCs but to mobile devices as well. Alternatives to Netflix Of course, you can’t live by old films alone but there are plenty of other ways to get newer content including Amazon’s instant video service, iTunes and even the few remaining neighborhood video stores or those $1 a night video rental kiosks at grocery stores.   For more options, see CNET’s 9 Netflix Alternatives  and the Huffington Post’s Netflix Alternatives for those who don’t want to pay up . My favorite video source is by invitation only My favorite way to watch new DVDs is on Zediva.com which is so overwhelmed with customers that it’s taking requests from people who want to be invited to sign-up. I got in before they started limiting membership and I pay $10 for 10 movies, including DVDs the day they come out. You can also pay $2 per movie but the $10 deal is a lot better. Like Netflix and Amazon, the movies are streamed to my computer or my Google TV (which lets me watch them on my big TV) but instead of streaming content from a server, they “rent” you an actual DVD and DVD player that they house at their facility. They play the movie and deliver it to you via the Net so that, for the most part, the experience of using Zediva is similar to other streaming services except, like that old-fashioned video store, it’s possible that the title you want to watch might be “rented out.” Also, the process of starting a movie is a bit slower because it involves software control of a real DVD player, but unlike most other premium services that make you watch the movie within 24 or 48 hours, you get to watch them as many times as you want for a 14-day period. Oh so early 21st century Netflix’s move may have angered people this week but in the future, we’ll all look back on DVDs and even Blu-ray as being oh-so early 21st century. It’s almost time for the DVD and Blu-ray players to go the way of the VHS machine.    

Read the full article →

Bernanke Urges Lawmakers Not To ‘Just Cut, Cut, Cut’

July 13, 2011

Federal Reserve Chairman Ben Bernanke urged American leaders not to cut spending too aggressively in the short term, warning that a sharp and quick response to the federal budget deficit could imperil the already weakening economic expansion. “We really don’t want to just cut, cut, cut,” Bernanke said Wednesday before the House Committee on Financial Services. “You need to be a little bit cautious about sharp cuts in the very near term because of the potential impact on the recovery. That doesn’t at all preclude — in fact, I believe it’s entirely consistent with — a longer-term program that will bring our budget into a sustainable position.” The chairman’s words, unusually strong for a man whose smallest utterances tend to move markets, appeared to undercut the arguments of some Republican lawmakers, who insist strenuous cutting is required to shrink the federal budget deficit. Overly swift reductions in federal spending could actually worsen the nation’s budget imbalance by weakening economic growth and dampening tax revenues, Bernanke suggested. Lawmakers in Washington are consumed by a struggle to reach a quick budget deal. Republicans have tied the debate over raising the debt ceiling to the debate over how to reduce the federal deficit, refusing to increase borrowing authority unless their demands for spending cuts are met. Economists, financiers and taxpayers the world over are watching the deliberations, with the U.S. government’s credit rating potentially at stake. The government will hit the debt ceiling by Aug. 2 if no deal is reached, the Treasury has said. But Treasury Secretary Timothy Geithner said he wants a deal even sooner , in the next several days. If no deal is struck and the borrowing limit isn’t raised, the government will be forced to abruptly reduce spending. That could mean halting Social Security payments, or pay to the military. And it could mean defaulting on the nation’s debt, an event without precedent in modern history that economists say would likely send interest rates soaring, induce job cuts and plunge the economy back into recession. But Bernanke warned against acting too hastily to reduce the federal deficit, appearing to echo earlier comments in which he said the debt ceiling was the “wrong tool” for repairing the nation’s budget. Spending cuts, if imposed in the short term, can have the unintended effect of hurting revenue by reducing the nation’s taxable income, he suggested. “I just want to be clear that cutting programs or raising taxes in ways that will reduce aggregate demand, spending and the ability of consumers to meet their bills and purchase goods and services is going to slow the economy,” the chairman said. “That’s in turn going to offset some of the benefits of the cuts,” he continued, “because it will reduce revenues and make the deficit worse on the short term.” Federal spending tends to increase demand in the economy by putting more dollars in people’s wallets, economists say. That spending might include tax incentives for businesses to hire workers, or aid for local governments to help fund projects that repair infrastructure and boost employment. Ideally, government spending yields results in excess of the value of the money spent. Higher employment fosters a general sense of confidence and optimism, which encourages more hiring and investment in a virtuous cycle. With the budget deficit widening and the debt running above $14.3 trillion, most lawmakers agree that spending must be reduced. But the timeline for these cuts, and the specific programs that will be affected, are a subject for contentious debate. The economy is hurting, with the unemployment rate at 9.2 percent, gas prices high and home prices continuing a punishing decline. Bernanke underscored these weaknesses in his testimony, arguing that any budget cutting must be handled with care, so as not to shatter the fragile economic recovery. Still, some lawmakers insist on immediate action. That view was summed up by Rep. Sean Duffy (R-Wis.), who questioned Bernanke during the hearing. “Maybe this is a rhetorical question, but if we’re not going to cut now, I mean, when?” Duffy asked. “At what point is there going to be political courage to get the debt under control if we can’t do it today?” Bernanke resisted wading into a political debate. But on the debt ceiling issue, a case in which a political fight risks inflicting real economic damage, he was firm: The limit must be raised on time. “The right analogy for not raising the debt limit is going out and having a spending spree on your credit card, and then refusing to pay the bill,” he said. “We saw what happened in 2008, 2009, where we had two consecutive quarters of 6 percent negative growth in the economy. I think something on that order of magnitude would be certainly conceivable.”

Read the full article →

U.S. Put On Review For Possible Rating Downgrade

July 13, 2011

Because of the “rising possibility” that Congress will not soon approve a deal to raise the debt limit, Moody’s Investors Service has reportedly put the U.S. on review for a possible credit rating downgrade, according to Bloomberg . From the Moody’s statement : Moody’s Investors Service has placed the Aaa bond rating of the government of the United States on review for possible downgrade given the rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on US Treasury debt obligations. On June 2, Moody’s had announced that a rating review would be likely in mid July unless there was meaningful progress in negotiations to raise the debt limit. In conjunction with this action, Moody’s has placed on review for possible downgrade the Aaa ratings of financial institutions directly linked to the US government: Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks. We have also placed on review for possible downgrade securities either guaranteed by, backed by collateral securities issued by, or otherwise directly linked to the US government or the affected financial institutions. From Reuters : NEW YORK (Walter Brandimarte and Daniel Bases) – The United States may lose its top-notch credit rating in the next few weeks if lawmakers fail to increase the country’s debt ceiling, forcing the government to miss debt payments, Moody’s Investors Service warned on Wednesday. Moody’s was the first among the big-three rating agencies to place the United States’ Aaa rating on review for a possible downgrade, which means a negative rating action is impending. In a statement, Moody’s said it sees a “rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on U.S. Treasury debt obligations.” Check here for additional debt ceiling updates.

Read the full article →

European Union Sending $14.5 Million In Food Aid To North Korea

July 4, 2011

BRUSSELS — The European Union said Monday it will restart food aid to North Korea after the country’s repressive communist regime agreed to an unprecedented monitoring system as it suffers through its worst food crisis in years. The EU will send euro10 million ($14.5 million) in food aid to North Korea, after food production in the country hit a new low and an EU mission of experts confirmed a growing hunger crisis in northern and eastern provinces. An unusually cold winter and other severe weather conditions have diminished recent harvests in North Korea, while food aid from China, which has experienced droughts and floods recently, has also declined. “The purpose of this aid package is to save the lives of at least 650,000 people who could otherwise die from lack of food,” Humanitarian Aid Commissioner Kristalina Georgieva said in a statement. The EU stopped humanitarian aid to North Korea in 2008, when it determined that it was no longer necessary. It has, however, continued to support long-term nutrition projects in the country, which has had chronic food problem for years. Because of the repressive and closed-off nature of the North Korean regime, aid to the country has long been controversial. But following warnings from the United Nations and the World Food Program, EU experts traveled to North Korea in June to examine the situation and together with the World Food Program, which will manage the aid package, negotiated a strict monitoring system with national authorities. The EU experts determined that state-distributed rations, on which two-thirds of North Koreans depend, have in some parts of the country been cut by more than 60 percent, to about 400 calories, the EU said. Even severely malnourished children in hospitals and nurseries are not getting any treatment and many citizens have grown so desperate that they are eating grass, the EU said. The aid will flow through North Korea’s highly centralized state-run food distribution system, but authorities will grant international inspectors access to all parts of the supply chain, the EU said. The WFP will check delivery at every stage and pay more than 400 visits a month to distribution sites, hospitals, child-care facilities and households, the EU said. “If at any stage we discover that the aid is being diverted from its intended recipients then the Commission will not hesitate to end its humanitarian intervention,” said Georgieva. “We simply cannot allow people to die of hunger and for this reason we are determined to monitor the delivery at every stage.” The aid will focus on malnourished children under the age of five, pregnant and breast-feeding women as well as sick and old people.

Read the full article →

Minnesota Shutdown Takes Toll On State Workers, Local Residents

July 2, 2011

The post and live blog below are a collaboration between Patch and HuffPost reporters. Minnesota is encountering its second government shutdown in six years after Governor Mark Dayton (D) and state lawmakers failed to reach an agreement in negotiations to close the state’s $5 billion budget gap late on Thursday night. Richfield Patch reports : …Dayton told MPR News on Friday that budget negotiations between himself and GOP lawmakers need a “breather.” The governor said he is willing to listen to proposals and even meet with Republican leaders over the weekend but if no offers were made he would “reach out” to them sometime on Tuesday. The governor met with DFL leaders around 9 a.m. [CST] Friday but details of the talks are being kept strictly confidential. According to KSTP-TV, Dayton has been in his office all day working on a compromise deal. The situation unfolding is already taking a toll on public workers and residents across the state. Reuters reports : Parts of the government had already begun to shut down on Thursday ahead of the midnight budget deadline, including some websites and dozens of highway rest stops on one of the biggest travel days of the year. The budget impasse means that some 23,000 of the roughly 36,000 Minnesota state employees will be furloughed and state parks and campgrounds closed ahead of what is usually their busiest stretch of the year for the July 4 holiday. Reading services for the blind are being suspended due to the shutdown, the AP reports . According to St.LouisPark Patch: The state shutdown will have a very real impact on the St. Louis Park Emergency Program’s food shelf, especially if the shutdown drags on. Roughly 26 percent of the nonprofit food shelf’s regular food supply comes free of charge from a federal program that supplies USDA commodity items to states for distribution, said Kate Burggraff, who is the food shelf manager. With the shutdown in effect, that food won’t come STEP’s way, meaning the food shelf could see its average monthly food expense of between $5,000 and $6,000 double in July, which is generally a busy month to begin with. Dayton and Republican lawmakers signaled on Friday they had no intention of holding discussions to resolve the ongoing budget dispute over the July 4 holiday weekend. Below, a live blog of the latest developments to unfold in Minnesota.

Read the full article →

David Isenberg: PMC und Drang in the Persian Gulf

June 24, 2011

This post was originally written June 5. It’s now been three weeks since the New York Times published its story on the United Arab Emirates business doings of Erik Prince, the man that lefty critics of private security contracting love to berate. So now that the reflexive PMC und Drang, to coin a phrase, has died down a bit, it is a good time to take a step back, draw a breath, and try to consider some the pros and cons of this latest development. Note, however, PMC und Drang is actually a useful phrase to keep in mind, as the protagonist in a typical Sturm und Drang stage work or novel is driven to action — often violent action — not by pursuit of noble means nor by true motives, but by revenge and greed. If you substitute free market enterprise or good old fashioned capitalism for greed — remember, as Gordon Gecko said, greed is good — then it seems entirely appropriate. For those who need their memories jogged, the May 14 NYT article ” Secret Desert Force Set Up by Blackwater’s Founder ” by Mark Mazzetti and Emily B. Hager detailed how Prince was hired by Sheik Mohamed bin Zayed al-Nahyan, the crown prince of Abu Dhabi and the de facto ruler of the United Arab Emirates, to put together an 800-member battalion of foreign troops for the U.A.E. The force is intended “to conduct special operations missions inside and outside the country, defend oil pipelines and skyscrapers from terrorist attacks and put down internal revolts, the documents show. Such troops could be deployed if the Emirates faced unrest in their crowded labor camps or were challenged by pro-democracy protests like those sweeping the Arab world this year.” While it is impossible to say for certain since I’ve not seen its documentation so far, the NYT story has, factually, stood up pretty well. Apart from using words like mercenaries, the worst thing that can be said about was an incorrect and somewhat derogatory reference to the old South African based Executive Outcomes. See the details here on Eeben Barlow’s blog So Prince has formed a new company called Reflex Responses (any resemblance to a malady like acid reflux is, I’m sure, entirely coincidental), complete with a nifty logo. He has reportedly hired Colombians, along with South African and other foreign troops that are trained by retired American soldiers and veterans of the German and British special operations units and the French Foreign Legion. Hmm, trained by Legionnaires; this could be the first Legion/PSC hybrid in history as Feral Jundi noted . What should we make of all this? Well, first, evidently Erik Prince has decided that of all the things he might or could do in the post Blackwater/Xe Services era, teaching history and economics to high school students is not one of them. Remember that was one of the things he said in early 2010 he might be doing when it was announced that he was leaving the United States and moving to the UAE. Somehow I think the UAE education establishment will weather this loss. Second, let’s consider some of the positives of this. Generally speaking, doing business in the Persian Gulf is a good thing. Why is that? For the same reason Willie Sutton robbed banks; because it is where the money is. Also, Erik has learned something from his past BW contracts in Iraq. BW, along with all the other PSC contractors, took a lot of PR grief for being protected by the old Coalition Provisional Authority immunity provision covering contractors. Although it was never the one hundred percent get out of jail free card critics claimed, it was enough to cast a cloud of suspicion and doubt over their activities. But that was then, this is now. RR’s contract with the UAE states: Article 17 Compliance with the Laws, Regulations and Bylaws The Second Party undertakes to comply with all the laws, regulations and bylaws in force in the State, and all provisions of the Decision of the Deputy Supreme Commander of the Armed Forces referred to hereinabove shall apply to this Contract, provided that the general legal principles in force in the State concerning contracts and contracting methods of the administration shall apply to any matter regarding which there is no specific provision in the said Decision or in this Contract. So if something wrong does happen you will have to take it up with the UAE legal system. Although it is unclear how responsive the UAE system will be to redressing any human rights violations. The latest annual State Department human rights report notes: Section 5 Governmental Attitude Regarding International and Nongovernmental Investigation of Alleged Violations of Human Rights The government generally did not permit organizations to focus on political issues. Two recognized local human rights organizations existed: the quasi-independent EHRA, which focused on human rights issues and complaints such as labor rights, stateless persons’ rights, and prisoners’ well-being and humane treatment; and the government-subsidized Jurists’ Association Human Rights Committee, which focused on human rights education and conducted seminars and symposia subject to government approval. And as Feral Jundi astutely noted , if things work this could be the start of a new financial empire for Prince. Call it Moycock II: Persian Gulf. Emirati military officials had promised that if this first battalion was a success, they would pay for an entire brigade of several thousand men. The new contracts would be worth billions, and would help with Mr. Prince’s next big project: a desert training complex for foreign troops patterned after Blackwater’s compound in Moyock, N.C. So will R2 be opening it’s doors for training to the world, much like how BW operated in the US? If true, I could see something like this becoming a multi-billion dollar project for Prince and company. Just because it would be located in the middle east and cater to all the OPEC nations. Furthermore, qualitatively speaking it is hard to accuse Prince of doing something new. As Strategy Page observes , just about all Persian Gulf states have, for decades, been using foreigners, either working directly for foreign governments or private sector civilians with that government’s approval to equip and train their military security forces. If one wants to accuse Prince of doing something bad one has to similarly accuse firms like Vinnell which has been training the Saudi National Guard for decades. On the negative side it is hard to see the initial force that RR is training as being for any other purpose than to deal with future internal unrest and dissent, as in cracking down on protesters. Training a force of 800 men to deal with a threat from perennial boogeyman threat Iran is farcical. The Iranian military may have its problems but it is clearly capable of overwhelming so few. Though as Nation reporter and perennial Erick Prince critics Jeremy Scahill noted : In a speech Prince delivered in late 2009, a copy of which was obtained by The Nation, Prince spoke of the need to confront Iranian influence in the Middle East, charging that Iran has a “master plan to stir up and organize a Shia revolt through the whole region.” At the time, Prince proposed that armed private soldiers from companies like Blackwater be deployed in countries throughout the region to target Iranian influence. If Prince, Sheik al-Nahyan, or U.S. State or Defense Department officials think a battalion is going to help with that, they are smoking something far more potent than Bill Clinton ever inhaled. In fact, the State Department probably deserves more blame than the Pentagon on this. Even though RR is a UAE majority owned company, Prince is still a U.S. citizen and subject to the International Traffic in Arms Regulations (ITAR) the regulation, and the law is the Arms Export Control Act (AECA). As such he needs to be registered as a Broker or as an Exporter of Defense Articles or Defense Services and would need approval from the Directorate of Defense Trade Controls (DDTC) at the State Department. Even commentators like military historian and foreign-policy analyst Max Boot, who has staunchly defended the use of PSC in the past, wrote : I am nevertheless slightly discomfited by news that Erik Prince, the former SEAL officer and founder of Blackwater, is now in the process of assembling a mercenary battalion for the United Arab Emirates. The UAE is a close American ally and by Middle Eastern standards relatively liberal. But there is no mistaking it for a democracy. It is run by a small number of ruling families which keep a tight lid on dissent–especially among the vast underclass of foreign-born workers who keep the emirates running but are denied citizenship or any of the other benefits that native Emiratis receive. Many of these workers belong to a more or less indentured class of laborers from the Indian subcontinent who live in squalid, miserable conditions. They are deported at any hint of labor organizing or any other attempt to redress their numerous grievances. If the New York Times account of Prince’s dealings can be trusted, he is recruiting Latin Americans and other foreigners, because Arabs cannot be trusted to fire on other Arabs. This suggests that his force is designed to be used for internal repression among other, more legitimate tasks. If that is the case then this is morally dubious undertaking. Again there is nothing inherently wrong with mercenaries but like any other military force they can be used for good or ill. It is not hard to imagine disreputable uses to which this new force could be put by the unelected rulers of the UAE. Likewise 800 men are also clearly inadequate to protect the UAE’s oil infrastructure. And when one looks at the UAE’s human rights record it seems, that while it is hardly the worst in the region, it is also not one inclined to tolerate things like freedom of speech and association. Thus training a force that could be used for “crowd control” doesn’t sound good if the United States wants to be on the side of democratic forces in the future. This raises an interesting potential question as the New Yorker pointed out : A document obtained by the paper describes “crowd-control operations” where the crowd “is not armed with firearms but does pose a risk using improvised weapons (clubs and stones).” After the Arab Spring, and what we have seen in Libya, that is an interesting business to be in. … If the U.A.E.’s R2 battalion ends up killing civilians, might we intervene? And would we do so with the support of private contractors from companies like Blackwater? Interestingly, but perhaps not surprisingly, Reflex Responses does not appear to be a signatory to the International Code of Conduct For Private Security Service Providers that came into effect last November. Perhaps it is because of provisions like this: 21. Signatory Companies will comply, and will require their Personnel to comply, with applicable law which may include international humanitarian law, and human rights law as imposed upon them by applicable national law, as well as all other applicable international and national law. Signatory Companies will exercise due diligence to ensure compliance with the law and with the principles contained in this Code, and will respect the human rights of persons they come into contact with, including, the rights to freedom of expression, association, and peaceful assembly and against arbitrary or unlawful interference with privacy or deprivation of property. Having to comply with UAE law, which doesn’t offer that much in the way of guaranteeing basic civil liberties, is one thing; having to incorporate basic international humanitarian law standards might be something else entirely. So what kind of grade do we give this? Actually, I see three. First, for Prince it is an A plus. Give him credit for knowing where to go to make a profit. For the United States it is a B minus. As long as nothing goes wrong, as in using the future force for breaking up a demonstration of oppressed workers or a continuation of Arab Spring protests in the UAE, the U.S. can sit back and twiddle its geopolitical thumbs and say Erik Prince, who’s that? But if and when some civilian gets killed by a RR employee it can forget about that attempt at plausible deniability. As for the PMSC industry itself, I give it a C. In recent years the PMSC industry has invested considerable effort and some resources to depicting itself as a highly ethical peace and stability operations industry. While a lot of it is rhetorical, some of it has been very real. It is not clear that Prince and RR are doing much to bolster the image that companies and trade groups have tried so hard to cultivate.

Read the full article →

Steve Blank: The Internet Might Kill Us All

June 22, 2011

My friend Ben Horowitz and I debated the tech bubble in The Economist . An abridged version of this post was the “closing” statement to Ben’s rebuttal comments. Part 1 is here and Part 2 here . The full version is below. ———————————- It’s been fun debating the question, “Are we in a tech bubble?” with my colleague Ben Horowitz. Ben and his partner Marc Andreessen (the founder of Netscape and author of the first commercial web browser on the Internet) are the definition of Smart Money . Their firm, Andreessen/Horowtiz , has been prescient enough to invest in social networks, consumer and mobile applications and the cloud long before others. They understood the ubiquity, pervasiveness and ultimate profitability of these startups and doubled-down on their investments. My closing arguments are below. I’ve followed them with a few observations about the Internet that may help frame the scope of the debate. Are we in the beginnings of a tech bubble: yes. Prices for both private and public tech valuations exceed any rational valuation to their current worth. In 5 to 10 years most of them will be worth a fraction of their IPO price. A few will be worth much, much more. Is this tech bubble as broad as the 1995-2000 dot.com bubble: no. While labeled the “dot-com” bubble, valuations went crazy across a wide range of technology sectors including telecommunications, enterprise software and biotech, not just the Internet. Are tech bubbles necessarily bad: no. A bubble is simply the redistribution of wealth from Marks to the Smart Money and Promoters. I hypothesize that unlike bubbles in other sectors — tulips, Florida land prices, housing, financial — tech bubbles create lasting value. They finance companies that invest in new technologies, new ideas and new products. And it appears that at least in Silicon Valley, a larger percentage of money made in the last tech bubble is recirculated back into investments into the next generation of tech startups. While most of the social networks, cloud computing, web and mobile app companies we see today will fail, a few will literally remake our lives. Here are two views how. The Internet May Liberate Us In the last year, we’ve seen social networks enable new forms of peaceful revolution. To date, the results of Twitter and Facebook are more visible on the Arab Street than Wall Street. One of the most effective weapons in the Cold War was the mimeograph machine and the VCR. The ability to copy and disseminate banned ideas undermined repressive regimes from Poland to Iran to the Soviet Union. In the 21st century, authoritarian governments still fear their own people talking to each other and asking questions. When governments shut down Google, Twitter, Facebook, et al, they are building the 21st century equivalent of the Berlin Wall , they are admitting to the world that the forces of oppression can’t stand up to 140 characters of the truth. When these governments build “homegrown” versions of these apps, the Orwellian prophecy of the Ministry of the Truth lives in each distorted or missing search result. Absent war, these regimes eventually collapse under their own weight. We can help accelerate their demise by building tools which allow people in these denied areas access to the truth . Yet the same set of tools that will free hundreds of millions of people may end their lives in minutes. The Internet May Kill Us The next war will more than likely occur via the Internet. It may be over in minutes. We may be watching the first skirmishes. In the 20th century, the economies of first-world countries became dependent on a reliable supply of food, water, electricity, transportation and telephone. Part of waging war was destroying that physical infrastructure. (The Combined Bomber Offensive of Germany and occupied Europe during WWII was designed to do just that .) In the last few years, most first world countries have become dependent on the Internet as one of those critical parts of our infrastructure. We use the net in four different ways: To control the physical infrastructure we built in the 20th century (food, water, electricity, transportation and communications) As the network for our military interconnecting all our warfighting assets, from the mundane of logistics to command and control systems, weapons systems and targeting systems As commercial assets that exist or can operate only if the net exists including communication tools (email, Facebook, Twitter, etc.) and corporate infrastructure (Cloud storage and apps) For our banking and financial systems Every day hackers demonstrate how weak the security of our corporate and government resources are. Stealing millions of credit cards occurs on a regular basis. Yet all of these are simply crimes not acts of war. The ultimate in asymmetric warfare In the 20th century, the United States was continually unprepared for an adversary using asymmetric warfare — the Japanese attack on Pearl Harbor, Soviet anthrax warheads on their ICBMs during the cold war, Vietnam and guerilla warfare, and the 9/11 attacks. While hacker attacks against banks and commercial institutions make good press, the most troubling portents of the next war were the Stuxnet attack on the Iranian centrifuge facilities, the compromise of the RSA security system and the penetration of American defense contractors. These weren’t Lulz or Anonymous hackers, these were attacks by government military projects with thousands of programmers coordinating their efforts. All had a single goal in mind: to prepare to use the internet to destroy a country without physically killing its people. Our financial systems (banks, stock market, credit cards, mortgages, etc.) exist as bits. Your net worth and mine exists because there are financial records that tell us how many “dollars” (or Euros, Yen, etc.) we own. We don’t physically have all that money. It’s simply the sum of the bits in a variety of institutions. An attack on the United States could begin with the destruction of all those financial records. (A financial institution that can’t stop criminal hackers would have no chance against a military attack to destroy the customer data in their systems. Because security is expensive, hard, and at times not user friendly, the financial services companies have fought any attempt to mandate hardened systems.) Logic bombs planted on those systems will delete all the backups once they’re brought on-line. All of it gone. Forever. At the same time, all cloud-based assets, all companies applications and customer data will be attacked and deleted. All of it gone. Forever. Major power generating turbines will be attacked the same way Stuxnet worked — over and under-speeding the turbines and rapidly cycling the switching systems until they burn out. A major portion of our electrical generation capacity will be off-line until replacements can be built. (They are currently built in China.) Our transportation infrastructure — air traffic control systems, airline reservations, package delivery companies — will be hacked and our GPS infrastructure will be taken down (hacked, jammed or physically attacked.) While some of our own military systems are hardened, attackers will shut down the soft parts of the military logistics and communications systems . Since our defense contractors have been the targets of some of the latest hacks , our newest weapons systems may not work, or worse if used, may have been reprogrammed to destroy our own assets. An attacker may try to mask its identity by making the attack appear to come from a different source. With our nation in an unprecedented economic collapse, our ability to retaliate militarily against a nuclear-armed opponent claiming innocence and threatening a response while we face them with unreliable weapons systems could make for a bad day. Our attacker might even offer economic assistance as part of the surrender terms. These scenarios make the question, “Are we in a tech bubble?” seem a bit ironic. It Doesn’t Have to Happen During the Cold War the United States and the Soviet Union faced off with an arsenal of strategic and tactical nuclear weapons large enough to directly kill hundreds of millions of people and plunge the planet in a “Nuclear Winter,” which could have killed billions more. But we didn’t do it. Instead, today the McDonalds in plaza labeled “Revolutionary Square” has been the victory parade for democracy and capitalism. It may be that we will survive the threat of a net war like we did the Cold War and that the Internet turns out to be the birth of a new spring for us all. Steve Blank’s blog : steveblank.com

Read the full article →

In The End, Fed’s Bond-Buying Likely Helped Economy

June 21, 2011

WASHINGTON — It would drop interest rates and lift stock prices. It would ignite inflation. It was useless. Opinions of the Federal Reserve’s program to buy $600 billion in Treasury bonds diverged sharply after the Fed unveiled it in November. Now, as the Fed wraps up its latest policy meeting Wednesday, the bond purchases are about to expire. In the end, most experts suggest, they probably didn’t hurt and might have helped the economy, at least temporarily. The bigger question, though, is: What happens now? The program was dubbed QE2 – not for the Queen Elizabeth ocean liner but as short-hand for “quantitative easing.” That’s the wonky term economists use for a tool the Fed can use to drive down long-term interest rates. It does so by buying Treasury bonds. QE2 marked the second round of such easing the Fed had taken; the first was in March 2009, at the depths of the recession. Supporters say the bond purchases worked, in part by keeping rates low and encouraging spending. Low long-term rates are vital for consumers who are buying homes and cars and for companies that are making investments. They also argue that those lower rates fueled a stock rally. When Fed Chairman Ben Bernanke outlined plans for QE2 in late August, the Standard & Poor’s 500 stock index had fallen 6 percent for the year. In the eight months that followed, the S&P 500 jumped 28 percent. Lower rates made stocks more attractive than bonds, whose yields were falling. Much of the boost from QE2 came before the bond buys actually began. Bond investors drove down long-term rates in anticipation of the purchases. From the time Bernanke revealed plans for QE2, for example, until the purchases began in November, the average rate on a 30-year fixed mortgage sank from 4.36 percent to 4.17 percent. That was a 40-year low. Mark Zandi, chief economist at Moody’s Analytics, said the bond purchases gave a sagging economy a lift by slightly reducing borrowing costs for businesses and consumers and by raising stock prices to make people feel wealthier. Still, it didn’t much energize home buying or other major purchases. “It wasn’t a slam-dunk success, but it was worthwhile,” Zandi said. Critics, including some Fed officials, saw things differently. They warned that by pumping so much money into the economy, the Fed increased the risks of high inflation later. They complained that the Fed’s outpouring of dollars lowered the currency’s value and contributed to a spike in oil and food prices. They also said they feared the bond purchases fed speculative buying that could inflate bubbles in prices of stocks or other assets. Some of the harshest criticism came from abroad. Officials in China, Brazil and Russia argued that by devaluing the dollar, the Fed’s efforts gave U.S. exports an unfair advantage. A lower dollar makes U.S. goods cheaper overseas and foreign goods more expensive in the United States. Brazilian Finance Minister Guido Mantega warned last fall that the Fed’s efforts could spur a global currency war. In April, Russian Prime Minister Vladimir Putin denounced monetary “hooliganism.” “They turn on the printing press and flood the entire dollar zone – in other words, the whole world – with government bonds,” Putin said. In a speech this month, Bernanke hit back at critics. He argued that higher oil prices were due to Middle East turmoil and demand in fast-growing countries like China. He said food-price inflation was due mainly to shortages caused by bad weather. And he said the falling dollar was caused mainly by slower U.S. growth and the U.S. trade deficit. Many critics have raised a more fundamental complaint: that the program didn’t achieve its goal of increasing growth. The economy grew only weakly in the first three months of the year, thanks to high gasoline prices, government budget cuts and sluggish consumer spending. And it may be growing only slightly better in the current quarter. Consumers remain squeezed by gas prices, scant pay increases and a depressed housing market. “There were some positive effects to the bond buying, but they were fairly transitory,” said David Wyss, former chief economist at S&P and now a visiting fellow at Brown University. Still, Zandi said critics should recall that a year ago, the economy faced the threat of deflation – a destabilizing period of falling prices. He said the bond buying helped banish that threat while strengthening the economy slightly. The purchases are set to expire June 30. Most economists say they don’t think loan rates will rise. They note that the Fed is hardly ending all its Treasury purchases. It will remain the biggest market buyer, by reinvesting in Treasurys as its existing holdings come due. Those purchases should help keep long-term rates low. Many analysts say they think the Fed won’t start reducing its Treasury stockpile until next year. And they don’t expect it to increase short-term rates until a year from now. The Fed’s key rate, the federal funds rate, has been at a record low near zero since December 2008. “Before this year’s economic slowdown, I would have said the first rate hikes would occur early in 2012, but I have put that off until June 2012,” Zandi said. One thing economists don’t expect: a QE3. Bernanke and other Fed officials have signaled there are no plans to invest new money in Treasurys, even though the economy has slowed. For one thing, critics within the Fed have become too concerned about inflation. Only a crisis that threatens to send the economy back into recession would likely lead the Fed to start a new Treasury-purchase program, most analysts say. “I would not totally rule out another round of bond buying, but it will only happen if there is a major crisis such as a loan default by Greece which causes global markets to melt down,” Wyss said. ___ AP Business Writers Derek Kravitz in Washington and Matthew Craft in New York contributed to this report.

Read the full article →

Male Sexually Harassed By Female Colleague: ‘It Can Happen To A Man’

June 20, 2011

LensCrafters, the largest optical chain in the country, has settled a lawsuit accusing the company of allowing a male employee to be sexually harassed by a female co-worker. The company admitted no wrongdoing, but it will pay former lab technician William Sheard $192,500 and will start educating its employees about harassment against males in the workplace as part of the settlement. The U.S. Equal Employment Opportunity Commission, which filed the suit on behalf of the technician in 2009, claimed Sheard fended off repeated come-ons from colleague Melissa Brandt in a LensCrafters store in Saginaw, Mich., and alleged that management ignored Sheard’s complaints because he was a man being harassed by a woman. “Sometimes people think that a young man — well, they don’t believe it can happen to a man,” Sheard told HuffPost. “They just believe every guy would jump on a situation like that. That’s far from the truth.” According to the suit, Sheard started working at LensCrafters in 1998. In 2006, Brandt told him she wanted to have a relationship with him that was “more than platonic.” Sheard declined. From then on, Brandt would reference sex acts in front of Sheard, talk openly about his body, touch and grab his chest and backside and tell him she loved him and wanted to have sex with him, the suit claimed. At a holiday party in 2008, Brandt allegedly tried to grab Sheard’s crotch several times, to the point where Sheard had to leave. After repeated rejections, Brandt eventually made a sexual harassment claim against Sheard, a charge she later admitted was false, according to the lawsuit. The lawsuit alleged that LensCrafters management immediately investigated Brandt’s charge while ignoring Sheard’s. “People witnessed things,” Sheard said. “Nobody wanted to do anything about it.” Sheard repeatedly brought his issues to management — at first the lab manager, and then up the company ladder — all to no avail, he said. All told, the alleged harassment lasted for more than a year. “I just kept taking it to higher authorities,” Sheard said. “I’d take it to a supervisor, then to their supervisor, and it just kept getting overlooked. It blew up to a point that they had no choice but to try to do something about it. But at that point it was way too late.” Sheard left LensCrafters in 2008, after Brandt’s father threatened him at the store due to his repeated complaints, according to court records. The EEOC took up Sheard’s case and filed its suit the following year. Sheard said life hasn’t been easy since his job at LensCrafters unraveled. The situation at work led to stress and anxiety problems, and after leaving the job he underwent psychiatric treatment and started taking medication for depression. Sheard had worked as an optical lab technician for more than a decade, since he was 18 years old, and finding a new job in the field hasn’t been easy. Part of the problem, he says, is that LensCrafters’ parent company, Luxottica Group , which was named in the lawsuit, owns many of the retail optical chains where Shears could potentially find work, including Pearle Vision, Sears Optical and Target Optical. “They own stuff you think they would never own,” he said. Despite his struggles with unemployment, Sheard said he’s relieved that the LensCrafters ordeal is finally over. Brandt could not be reached for comment, but in a statement LensCrafters denied Sheard’s claims that it tolerated sexual harassment. “Much of the conduct that formed the basis of the plaintiff’s complaint allegedly occurred when DOC Optics owned and operated the store at issue,” the statement said. “LensCrafters agreed to a settlement to avoid the cost and distraction of ongoing litigation.” Female-on-male harassment cases aren’t unheard of , though they are far less common than the male-on-female variety. According to EEOC data , the percentage of males filing harassment complaints has been rising in recent years, from about 12 percent in 1997 to an all-time high of 16.4 percent last year. But EEOC spokeswoman Christine Nazer says the agency doesn’t track how many of those complaints are men filing against women or men filing against other men. In 2009, movie-theater chain Regal Entertainment Group settled a similar EEOC lawsuit , in which a male employee claimed a female co-worker had repeatedly grabbed his crotch. In that case, the victim said management failed to address the situation and instead retaliated against him for reporting it. Regal paid $175,000 to settle the lawsuit. In a statement on the Sheard case, EEOC attorney Nedra Campbell said, “Sexual harassment is always unjust and illegal, regardless of the gender of the perpetrator or the victim.”

Read the full article →

Zappos’ CEO: Saving Vegas From Itself

June 17, 2011

The Zappos offices in Las Vegas are housed in a sun-drenched office park on a stretch of highway that could be found pretty much anywhere — except for the fact that once you step inside, it becomes immediately clear you’re at Zappos, Inc. Desks, ceilings and cubicles are covered with fake flowers, homemade posters, and paraphernalia ranging from mounted longhorns to marshmallow Peeps. Throughout the day there are spontaneous “parades” though the office, complete with noisemakers and homemade costumes. Zappos CEO Tony Hsieh sits under a lush canopy of fake vines and greenery, in an area of the office dubbed — for reasons that remain unclear to many employees — “Monkey Row.” A business wunderkind who sold his first company, LinkExchange , to Microsoft for $265 million two years after it was created in his living room, and has since taken Zappos from an online shoe retailer with $1.6 million in sales in 2000 to one that had over $1 billion in 2008, Hsieh is not your average CEO. Given that he is now worth hundreds of millions of dollars, Hsieh could have easily retired to Bora Bora — or any other tropical location where the monkeys might actually be real. He has instead decided to stick with the business of selling shoes, trying, in the process, to make the world a happier place. Hsieh’s vision is most concretely laid out in his best-selling book, ” Delivering Happiness ,” which chronicles the life lessons he has learned — beginning with an ill-fated worm farm at age 9 through to the near- billion dollar sale of Zappos to Amazon. Broadly, “Delivering Happiness” makes the case that happiness is good for business. “[Research shows that] great companies all have strong cultures. That’s our number one priority at Zappos,” said Hsieh. “The second ingredient is that all great companies have a vision that has a higher purpose, beyond profits or being number one in the market. By having that, it enables companies to generate more profits in the long-term. It’s a weird counterintuitive thing, this whole idea of focusing on culture and higher purpose — using happiness as a business model.” While Hsieh and Lim initially envisioned the book as a business manual, their ideas about what happiness means — and how to achieve it — resonated broadly and deeply with the general public. So far, the book has been published in 17 different languages. “One guy said to us, ‘This isn’t just a business manual, this is a life manual,’” recalled Hsieh’s co-author, Jenn Lim. This April, Hsieh and Lim decided to spin “Delivering Happiness” into an eponymous company that they describe as a “social venture” akin to Tom’s Shoes . The company is for-profit — “We want sustainable revenue to support the company,” Lim said — but profit is not its primary goal. “For us, it’s about managing the excitement and inspiration” that the book has created, Lim said. Citing the digital community that has sprung up around the book, as well as an extended cross-country book tour in the highly customized “Delivering Happiness bus,” kitted out with a bartender and a balloon artist, Lim said one of the company’s main goals will be to “connect sectors of people who have these amazing ideas — like people who want to create town halls in their own hometowns.” Delivering Happiness, Inc. will also offer advisory services around “culture coaching,” strengthening organizational DNA to make businesses places of both profit and pleasure; “culture book” services, wherein employees describe what company culture means to them; and merchandising and publishing divisions. Lim said that potential clients include private sector businesses, non-profit organizations, and international companies. The success of Hsieh’s sermon perhaps says something broader about a disconnected culture in which the notion of happiness seems so revelatory, but the possibilities for how Hsieh & Co. might revolutionize modern communities — both commercial and otherwise — remain great. As evidence, Hsieh has embarked on a mission to revitalize the city of Las Vegas, something its mayor, Oscar Goodman, calls, “Among the five most important things that have happened since I’ve been mayor in the last twelve years.” As an indicator of the city’s economic woes, last October Vegas hit a record 15 percent unemployment and was ranked second-to-last among the nation’s 100 largest metropolitan areas in terms of progress made toward economic recovery. Hsieh was looking to “increase the number of serendipitous interactions amongst employees,” he said. “That’s when ideas come out. That’s where communications happens. Very little gets accomplished in scheduled meetings — I’m super anti-meetings.” He soon became interested in the old City Hall building in downtown Vegas as a potential site for a new Zappos office. “We wanted a campus,” he explained. The location will allow all the employees to be housed under one roof, rather than in separate buildings, as they are now. Once Hsieh began examining the downtown city center, he became excited by the possibilities for revitalization. “There are the seeds of what I think can be a huge opportunity to actually create a sense of town and culture and community in the city that’s viewed, probably, by the rest of world as antithesis of that,” he said. Hsieh encapsulated his vision for Vegas as “From Sin City to Sim City” — a nod to the digital urban planning game . Once the company relocates to the City Hall building in 2013, Goodman said that there will be “10,000 Zappos employees [in the area].” He called their presence “the critical mass needed to have a very vibrant downtown.” Much like the research he used to determine how to deliver happiness and develop profitable businesses, Hsieh looked at the principle drivers of thriving urban areas, calling on the work of Richard Florida , author of “The Rise of the Creative Class” and “Who’s Your City?” “Research shows that elements of successful cities include supporting the arts scene, the live music scene — even things like having shorter sidewalks. A lot of those things are things — both inside and outside of Zappos — that we’re looking at to help bring to this area,” said Hsieh. Hsieh has developed “10 tracks” aimed at rejuvenating the downtown area, ranging from affordable housing to education to tech incubation. Zappos employees are invited to participate in these tracks and lead specific projects around them, including volunteering with local schools to teach students about technology or starting a community kitchen. Said Hsieh, “We’re trying to do fifty startups at the same time, in an integrated way.” “It’s a big deal for us,” Goodman said, about the plans being laid. While Hsieh could, at this point, be expected to take some time off from the rather significant task of rethinking corporate culture and revitalizing one of the country’s most famously downtrodden urban centers to enjoy the fruits of his labor, it’s clear that the classic distinctions between work and pleasure do not — for him — exist in the same way as they do for the rest of us. Or perhaps he just has a more enlightened view of the whole thing. “People talk about the work-life balance, or work-life separation,” Hsieh said. “Here at Zappos, we really think about it as work-life integration. Because at the end of the day, it’s just life.” WATCH:

Read the full article →