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Unemployment Extension: ‘What Are They Waiting On?’

December 8, 2011

Kim Bullock of Las Vegas, Nev., said she lost her job with a telecom company almost exactly one year ago after her employer went bankrupt. Now she’s worried her unemployment insurance will run out before she finds a new job. Bullock said her yearlong search for work has resulted in several interviews, but no offers. “It’s just crazy because it seems like you have to put in 50 or 60 resumes just to get one callback, and then you’re competing with hundreds of other applicants,” Bullock said. She’s one of 6 million whose federal unemployment compensation would be cut short next year if Congress doesn’t reauthorize the benefits. And Bullock is one of several dozen jobless who’ve written HuffPost in the past week to say they are anxiously watching lawmakers for signs of a deal. Unfortunately for those people, instead of an agreement, on Thursday it seemed Congress was headed for a holiday showdown. While Democrats want a renewal of the benefits without strings attached, House Republicans are crafting a proposal that will reauthorize federal benefits programs and simultaneously slash benefits. Rep. Sander Levin (D-Mich.), the top Democrat on the House committee that oversees jobless benefits, sharply criticized the nascent proposal. “While we don’t have all the details, in this case the devil is made plain in the general outlines of the Republican proposal,” Levin said in a statement. “The plan Republicans presented this morning would slash federal unemployment insurance by more than half, cutting by 40 weeks Americans’ eligibility for assistance — even as we continue to emerge from the worst recession in 80 years. Also very concerning are indications that Republicans may propose undermining access to regular state unemployment benefits in the future.” Spokesmen for key Republicans in the House declined to provide details to HuffPost, but CNN reported the benefits would be part of a package that includes both a continuation of a payroll tax cut that has provided an average of $1,000 for every working American this year and a so-called “doc fix” to prevent a 27 percent pay cut to doctors who treat Medicare patients. The measure would be paid for with a federal salary freeze, and it would also speed construction of the Keyston XL pipeline — provisions Democrats oppose. The GOP’s plan would shorten the maximum duration workers can receive federal unemployment benefits from 73 weeks to 33 weeks, CNN reported. Federal jobless benefits kick in for people who don’t find work before running out of state aid, which typically lasts 26 weeks. Part of that reduction presumably would come from allowing the federal “Extended Benefits” program — which supplies the final 20 weeks of aid for workers in states with high unemployment rates — to phase out in 2012, which will happen anyway unless Congress proactively changes federal law to allow states to remain eligible. The Republican plan could achieve further reductions by incorporating legislation passed by a House committee earlier this year that would allow states to redirect federal jobless funds from benefits to paying down state debt to the federal government. Also, according to reports, the GOP bill would allow states to drug test the jobless. Rep. Jack Kingston (R-Ga.) introduced standalone legislation to do just that , though evidence of a drug epidemic among the jobless is hard to find. Most jobless would be eligible for more weeks of benefits under the GOP proposal than with no bill at all, though it was unclear how the new scheme would treat workers who’ve already used up a portion of their federal compensation. Kim Bullock said she’s received $398 per week since she lost her billing job with the telecom company last December. She said she’s got four kids whose ages range from five to 16, and that if she can’t find work before running out of unemployment, another family member will have to absorb her household. She worries she’d have to transfer her kids to a new school system. Already, she said, she’s holding back on even a small amount of Christmas shopping because of the uncertainty. “If I lose my unemployment there’s no way I’ll be able to make it,” she said. “What are they waiting on? Why do we have to wait in distress?”

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Robert Naiman: Could GOP Sanctions on Europe Tank the Economy and Elect Romney?

December 8, 2011

Remember, “It’s the Economy, Stupid?” So how come Democrats in Congress — over the objections of the Obama Administration — are helping Republicans press sanctions on Europeans who buy oil from Iran — sanctions that would increase unemployment in the U.S. during the 2012 campaign? The National Defense Authorization Act now contains a Senate amendment by Republican Senator Mark Kirk — supported by many Democrats in Congress — that would sanction European banks and companies that do business with Iran’s Central Bank, in order to stop Europeans from buying Iranian oil. This is a big deal, because Iran is the world’s fifth-largest oil exporter, and blocking Iranian oil exports to Europe would raise the price of oil, in Europe and in the United States. Kirk’s amendment would hurt the U.S. economy, at a time when economic contraction in Europe could push the U.S. back into recession. Is fear of the economic blowback of the sanctions on Europe that Kirk wants to impose justified? Many Europeans seem to think so. On Tuesday, Reuters reported : The European Union is becoming skeptical about slapping sanctions on imports of Iranian oil, diplomats and traders say, as awareness grows that the embargo could damage its own economy without doing much to undercut to Iran’s oil revenues. “Maybe the aim of sanctions is to help Italy, Spain and Greece to collapse and make the EU a smaller club,” one trader joked. The remark reflects the growing unease that EU sanctions would hit hardest some of the continent’s weakest economies, because Iranian oil provides the highest share of their needs, not to mention the rest of the bloc. “The likely increase in oil prices that would result from a ban would be felt by all (European) oil refiners, not just those that are big customers for Iranian oil,” ratings agency Fitch said last week. An oil industry source in Greece, which mostly relies on Iranian oil, said: “Greece can’t be put with its back to the wall.” The threat to Iran’s oil exports and fears about a possible military strike on its nuclear facilities have helped keep oil prices above $100 a barrel… Raising the price of oil will hurt the U.S. economy directly. In addition, hurting the European economy will also hurt the U.S. economy by causing U.S. exports to Europe to fall. Furthermore, adding to Europe’s economic problems now would undermine attempts to contain the European financial crisis, as the trader’s joke about sanctions helping Italy, Spain and Greece to collapse suggests. And if efforts to contain Europe’s financial crisis fail, we’re going to feel that pain in the U.S., just as Europe felt the 2008 U.S. financial crisis. What’s the Republican response to all this? When a U.S. Treasury Department spokesman said , “it is critically important that the steps we take do not destabilize the U.S. and global economy,” a senior GOP Senate aide responded by saying, “Treasury should go back and model the cost to the U.S. economy and the world economy of an Israeli strike on Iran.” So, according to this Republican argument, we only have two choices: sanctions on Europe that will hurt the U.S. economy, or an Israeli military strike on Iran that will hurt the U.S. economy even more. But that’s a false choice, because 1) a lot of people in Israel, including the former head of the Mossad, think the idea of an Israeli attack on Iran is insane, and 2) the U.S. can keep Israel from attacking Iran if it wants, just as the U.S. did during the Bush Administration. Of course, many Republicans claim that Iran’s nuclear program constitutes a national emergency in the United States, so we should be willing to accept higher unemployment in the United States in order to block Iran’s oil exports to Europe. But the “emergency” claim is extremely dubious, for the following reasons: 1) As Pulitzer Prize-winning journalist Seymour Hersh recently noted in the New Yorker , there is still no definitive evidence that Iran has a nuclear weapons program. 2) As former AIPAC staffer MJ Rosenberg recently noted , leading neoconservatives at the American Enterprise Institute — a key cheerleader for war with Iran, as it was a key cheerleader for war with Iraq — are now publicly conceding that the issue for neoconservatives isn’t really whether Iran has a nuclear weapon — it’s trying to maintain a balance of power in the region in favor of Israeli military ambitions. It’s certainly understandable that some Israeli generals would want to maintain their freedom, as they see it, to invade Lebanon anytime they want, but does supporting this ambition constitute a national emergency for people in the United States? 3) As Defense Secretary Leon Panetta recently affirmed , at best a Western military strike on Iran would set back its nuclear program by two years. Since a military strike can’t stop Iran’s nuclear program — and since such a strike would be extremely costly to the U.S. — it’s an extremely stupid thing to do, if the goal is to stop Iran’s nuclear program. The only way that military force can stop Iran’s nuclear program is if it is used to overthrow the Iranian government and install a Western client government. But few dare call for this openly, since thanks to the Iraq and Afghanistan experience, the public is now quite aware of what this program would cost in blood and treasure, and is also aware that despite that cost, the program of installing a client government could fail anyway. So there is no emergency requiring sanctions that hurt the U.S. economy. There’s just another manufactured crisis, designed to force Americans to submit again to the neoconservative agenda. But the question remains: Why would Democrats support this? Do they want to lose the election?

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Cyber Attacks Threaten To Wreck World Oil Supply

December 8, 2011

DOHA (Daniel Fineren) – Hackers are bombarding the world’s computer controlled energy sector, conducting industrial espionage and threatening potential global havoc through oil supply disruption. Oil company executives warned that attacks were becoming more frequent and more carefully planned. “If anybody gets into the area where you can control opening and closing of valves, or release valves, you can imagine what happens,” said Ludolf Luehmann, an IT manager at Shell Europe’s biggest company . “It will cost lives and it will cost production, it will cost money, cause fires and cause loss of containment, environmental damage – huge, huge damage,” he told the World Petroleum Congress in Doha. Computers control nearly all the world’s energy production and distribution in systems that are increasingly vulnerable to cyber attacks that could put cutting-edge fuel production technology in rival company hands. “We see an increasing number of attacks on our IT systems and information and there are various motivations behind it – criminal and commercial,” said Luehmann. “We see an increasing number of attacks with clear commercial interests, focusing on research and development, to gain the competitive advantage.” He said the Stuxnet computer worm discovered in 2010, the first found that was specifically designed to subvert industrial systems, changed the world of international oil companies because it was the first visible attack to have a significant impact on process control. But the determination and stamina shown by hackers when they attack industrial systems and companies has now stepped up a gear, and there has been a surge in multi-pronged attacks to break into specific operation systems within producers, he said. “Cyber crime is a huge issue. It’s not restricted to one company or another it’s really broad and it is ongoing,” said Dennis Painchaud, director of International Government Relations at Canada’s Nexen Inc. “It is a very significant risk to our business.” “It’s something that we have to stay on top of every day. It is a risk that is only going to grow and is probably one of the preeminent risks that we face today and will continue to face for some time.” Luehmann said hackers were increasingly staging attack over long periods, silently collecting information over weeks or months before attacking specific targets within company operations with the information they have collected over a long period. “It’s a new dimension of attacks that we see in Shell,” he said. NOT IN CONTROL In October, security software maker Symantec Corp said it had found a mysterious virus that contained code similar to Stuxnet, called Duqu, which experts say appears designed to gather data to make it easier to launch future cyber attacks. Other businesses can shut down their information technology (IT) systems to regularly install rapidly breached software security patches and update vulnerable operating systems. But energy companies cannot keep taking down plants to patch up security holes. “Oil needs to keep on flowing,” said Riemer Brouwer, head of IT security at Abu Dhabi Company for Onshore Oil Operations (ADCO). “We have a very strategic position in the global oil and gas market,” he added. “If they could bring down one of the big players in the oil and gas market you can imagine what this will do for the oil price – it would blow the market.” Hackers could finance their operations by using options markets to bet on the price movements caused by disruptions, Brouwer said. “So far we haven’t had any major incidents,” he said. “But are we really in control? The answer has to be ‘no’.” Oil prices usually rise whenever tensions escalate over Iran’s disputed nuclear program – itself thought to be the principal target of the Stuxnet worm and which has already identified Duqu infections – due to concern that oil production or exports from the Middle East could be affected by any conflict. But the threat of a coordinated attack on energy installations across the world is also real, experts say, and unlike a blockade of the Gulf can be launched from anywhere, with no U.S. military might in sight and little chance of finding the perpetrator. “We know that the Straits of Hormuz are of strategic importance to the world,” said Stephan Klein of business application software developer SAP. “What about the approximately 80 million barrels that are processed through IT systems?,” said Klein, SAP vice president of oil and gas operations in the Middle East and North Africa. Attacks like Stuxnet are so complex that very few organizations in the world are able to set them up, said Gordon Muehl, chief security officer at Germany’s SAP said, but it was still too simple to attack industries over the internet. Only a few years ago hacking was confined to skilled computer programmers, but thanks to online video tutorials, breaking into corporate operating systems is now a free for all. “Everyone can hack today,” Shell’s Luehmann said. “The number of potential hackers is not a few very skilled people — it’s everyone.” (Editing by William Hardy) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Uh-Oh! Huge Yahoo Partner Reportedly Wants Out

December 8, 2011

By Stephen Aldred and Prakash Chakravarti HONG KONG (Reuters) – Alibaba Group is seeking up to $4 billion in debt financing, sources said on Thursday, in a deal expected to help the Chinese e-commerce giant buy back a 40 percent stake in the company owned by Yahoo Inc. As Alibaba Group is private, there is no public figure on what Yahoo’s stake is worth, though some analysts say its worth at least $9 billion. Sources close to the matter said Rothschild, which is acting as debt adviser to Alibaba, had sent out term sheets to banks requesting underwritten proposals for the debt financing. The tenor of the debt is expected to be up to three years. Reuters was unable to obtain a copy of the term sheets. Alibaba Group, founded by billionaire entrepreneur and former English teacher Jack Ma, declined to comment. Alibaba, which counts a hugely popular business-to-business platform among its services, has long signalled its intention to buy back the Yahoo stake. Ma’s feud with Yahoo and his plans for the stake gained renewed attention lately with Yahoo the subject of takeover interest. Blackstone Group and Bain Capital are preparing a bid for all of Yahoo Inc, Reuters reported earlier this month, with Alibaba among its partners for the roughly $25 billion deal. Japan’s Softbank Corp is also part of that consortium. A source familiar with the matter cautioned on Thursday that the entire situation between the consortium and Yahoo remains fluid, and that no final decision has been made on any move that Alibaba or the other corporates plan to make. For the Alibaba debt financing, banks have been asked to provide underwritten commitments of $1 billion with an expected final hold of $400 million, according to one of the sources on Thursday. In November, Yunfeng Capital — co-founded by Alibaba’s Ma — Silver Lake and other investors completed the purchase of a 5 percent stake in Alibaba Group worth $1.6 billion. Alibaba, as a parent company, holds a 73.12 percent stake in Hong Kong listed Alibaba.com Ltd. A Rothschild representative was not immediately available for comment. (Reporting By Stephen Aldred and Prakash Chakravarti; Additional reporting by Lee Chyen Yee; Editing by Michael Flaherty and Chris Lewis)

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John W. Whitehead: Speak Out: America Is a Free Speech Forum

December 8, 2011

“Congress shall make no law… abridging the freedom of speech… or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” — First Amendment to the U.S. Constitution The United States has historically stood for unfettered free speech, which is vital to a functioning democracy. Unfortunately, the tendency on the part of government and law enforcement officials to purge dissent has largely undermined the First Amendment’s safeguards for political free speech. The Occupy Movement, and the government’s response to its encampments in public spaces, perfectly illustrates the fact that there is no longer any such thing as unfettered free speech in America today. The very fact that protesters have had to resort to occupying various public spaces in order to open up a national dialogue about issues of concern says a lot about the state of the First Amendment, or rather the sad state of it. Moreover, the heavy-handed police response to the Occupiers shows the degree to which the corporate state will go to silence these protesters and discourage any further uprisings. There was a time when communities had town squares — public areas where people gathered to exchange information, ideas, and do business. These served a vital function in America’s history, allowing opinions and ideas — whether good or bad — to be aired and debated. Yet as areas once open to the public have been overtaken by state and corporate interests, traditional public forums for free speech have all but disappeared. Town squares have been replaced by private shopping malls and parking lots, neither of which are freely accessible to individuals hoping to voice their views. Consequently, protesters, even those not engaging in civil disobedience, are shut out, sometimes forcibly, from public areas, while attempts to peaceably assemble are overburdened by government regulations and permit requirements. Furthermore, the court-sanctioned use by the government and private entities of so-called “free speech zones” to isolate protesters, even in public parks and college campuses, makes clear that the right to speak freely in public has eroded. Concentrating, monitoring and minimizing the effects of protests are the real reasons for using designated protest zones. Obviously, protesters are only perceived as dangerous because their message challenges the status quo. It’s the message that is feared. Thus, efforts to confine and control the dissenters are really efforts to confine and control the effect of their messages, whatever those might be. This is true whether they’re challenging environmental policies, free trade agreements or the political campaigns of candidates running for public office. Martin Luther King, Jr. recognized the importance of being able to come together in public and address social, political, and economic issues. He knew that there was more to American democracy than simply waiting for Election Day. The ability to come together and hash out differences is instrumental in pushing government officials to respond to the wishes of the people. Without a mass mobilization of individuals during the Civil Rights Era, we would be living in an entirely different America. Just imagine if the hundreds of thousands of participants in the 1963 March on Washington for Jobs and Freedom, which culminated with Martin Luther King, Jr.’s “I Have a Dream” speech at the Lincoln Memorial, had been forced into free speech zones. There likely would not have been a 1964 Civil Rights Act. The right of political free speech is the basis of all liberty. It’s the citizen’s right to confront the government and demand that it alter its policies. But first, citizens have to be seen and heard, and only under extraordinary circumstances should free speech ever be restricted. Historically, societies have always benefitted when the right to speak freely was secured rather than curtailed. These free speech forums provided groups and individuals of all political and ideological persuasions a physical space to be able to come together to speak their minds. For example, the agora , the center of public life in ancient Greece, found its most spectacular display in Athens. Public life emanated from the agora, with courts, commercial enterprises, and libraries adorning the square. People assembled in the agora to talk politics, religion, and business. The Roman Forum had a comparable function during the time of the Roman Republic, allowing citizens to engage civic and business leaders and discuss the issues of the day. The Forum housed marketplaces, courts of law, and religious temples. Both of these public areas were used with frequency, allowing citizens to keep abreast of current events and debate with their neighbors. Moreover, many of the most important actions during the American Revolutionary period took place in public areas. In fact, it is where Americans mobilized themselves against British tyranny. For example, Faneuil Hall in Boston (sometimes referred to as “the Cradle of Liberty”) is where the colonists protested against the Sugar Act in 1764. On March 6, 1770, Americans gathered at Faneuil Hall to recount the events of the Boston Massacre . It was there that colonial radical Samuel Adams gave an impassioned speech demanding that the lieutenant governor remove all British troops from the town. However, somewhere along the way, Americans lost touch with the impact and importance of these free speech forums. For example, Faneuil Hall, once the staging ground for revolutionary fervor, now requires individuals hoping to use the venue to submit an “Event Application” form at least 30 days in advance of proposed events. This erosion of free speech started with the upheaval of the 1960s. The protests against the Vietnam War frightened many establishment figures and led to the creation of “free speech zones.” Now free speech zones have come to dominate the political landscape. George W. Bush, for example, used them excessively during his first term as president and both the Democratic and Republican parties have used them at various conventions to mute any and all criticism of their policies. Perhaps the most egregious instance of imposing a free speech zone upon protesters came in 2004 at the Democratic National Convention. It was there that Boston Police constructed a cage of jersey walls and chain link fences out of sight of the convention center which protesters were huddled in to. Caging people who want to exercise free speech goes against the entire concept of our Constitution, the Bill of Rights and what the revolutionary generation stood for. When political protest is caged, it’s not just the rights of a few protesters that are at stake. The very definition of freedom is in danger. Freedom cannot be exercised from within a cage. Nor should the centers of power be shielded from the citizen. Our representatives have a contractual, constitutional duty to make themselves available to us. Unfortunately, politicians have gone to great lengths to evade this fundamental duty in recent years. In fact, keen to avoid voter rage, Democrats and Republicans have come up with a plan to keep things “civil”: that is, avoid town-hall meetings at all cost, make minimal public appearances while at home in one’s district, only appear at events in controlled settings where they’re the only ones talking, and if one must interact with constituents, do so via telephone town meetings or impromptu visits to local businesses where the chances of being accosted by angry voters are greatly minimized. What this does, of course, is effectively do away with any pretense that we have a representative government. No matter what your political persuasion may be, every American has a First Amendment right to speak their mind, gather together and protest against government programs with which they disagree. As such, there are really only three ways to deal with a government that doesn’t listen to the voters: one, you can be uncivil — showing up at a controlled event and shouting, heckling, and creating a disturbance and otherwise raising hell; two, you can engage in civil disobedience — staging sit-ins, refusing to pay taxes, etc.; or the final option, which is no real option at all and which we don’t want to see happen, is violence. We’ve already seen the first option, incivility, exercised more frequently, especially in the wake of the heated town hall meetings over health care reform where outspoken Tea Party activists made headlines for heckling politicians and causing disruptions. Their “uncivil” behavior prompted a number of so-called free speech advocates to start propounding about the need for “civility.” We are seeing the second option played out now in the Occupy protests, as people resort to creating shanty towns and occupying parks to get attention. The response by government officials has been to send in the police, armed with rubber bullets, sound cannons and pepper spray. Unless we act now to preserve the freedoms enshrined in the First Amendment, not only the right to freedom of speech and assembly but the right to petition one’s government for a redress of grievances — and by that I mean something as simple as picketing in front of City Hall, then I fear we will see the third option played out, outright violence, which will play right into the government’s hands and the institution of police state tactics. What can you do? Right now, the best thing you can do is sound the alarm. Form local citizens groups in your community. Educate your neighbors on their rights and inform them about the grave possibilities we face as the police state aura grows stronger. Continue to voice your discontent to your representatives at the local and state levels, and in Congress. Most of all, stay informed and exercise your right to redress your grievances with the government while you still can. It’s fine to occupy public parks, but it would be far better to occupy city council meetings and congressional offices.

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Naomi Klein: Best of TEDTalks 2011, #13: Addicted to Risk

December 8, 2011

As a culture we have been far too willing to gamble with things that are precious and irreplaceable.

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House Passes Bill Empowering Congress To Veto Executive Branch Rules

December 7, 2011

WASHINGTON — A bill that would give the controlling party of either chamber of Congress veto power over any major new regulation passed the House of Representatives Wednesday. The measure, dubbed the Regulations From the Executive in Need of Scrutiny — or REINS — Act, would require Congress to sign off on any new rule estimated to cost more than $100 million. It passed 241 to 184, with a handful of Democrats crossing the aisle. The REINS Act is only the latest of a slew of bills aimed at peeling back regulations, which House Republicans have pushed for in the name of cutting red tape and freeing up businesses. The GOP sees the regulations as overbearing rulemaking by unelected bureaucrats. “Who do the regulators answer to? No one,” said Rep. Ted Poe (R-Texas) in debate on the House floor. “When the regulators go to work everyday, like most people go to work, their work assignment’s a little different,” Poe said. “In my opinion, they sit around a big oak table, sipping their lattes. They have out their iPads and their computers, and they decide, ‘Who shall we regulate today?’ And they write a regulation and send it out to the masses and make us deal with the cost to that.” Rep. Ben Quayle (R-Ariz.), argued that if Congress can stop rules in their tracks, businesses will flourish. “Poll after poll of small business owners, of medium-sized business owners — they will show you and tell you that major regulations are holding back their expansion and the ability of them to hire more workers,” Quayle said. The bill would effectively give either chamber a veto on a regulation because leaders could simply not put it on the calendar for a vote, and the rule would expire after 70 congressional working days. The Senate is unlikely to pass the measure. Opponents of the bill argue that there is actually no evidence that regulation is a drag on the economy. Although REINS advocates frequently point to an estimate that regulations cost business more than $1 trillion a year, opponents point to a recent report from the Congressional Budget Office that found the benefits of regulations often outweigh their costs by spurring economic activity. Environmental advocates have been especially alarmed about the REINS Act because many environmental regulations fall into the “major” category, with their impact often exceeding $100 million in cost. They fear the measure is simply a way to let the Tea Party and special interests shoot down any new rule to protect the air and water. The Act’s opponents also note that it’s ironic the GOP legislative attempt comes during an administration that has promoted fewer regulations that the previous one, and that the regulations Congress wants to block stem from laws passed by Congress itself. Democrats cast the entire exercise as a partisan distraction from attempts to do something about the economy, including extending a payroll tax cut and unemployment benefits that run out at the end of the year. “Christmas is coming, the goose is getting fat — please to put a dollar in the workers’ hand,” House Minority Leader Nancy Pelosi (D-Calif.) said. “I urge my colleagues to vote no on this REINS Act, and to get to work to extend the payroll tax cut and unemployment insurance for the American people.” “Only then will we increase demand in our economy, create jobs, promote economic growth and put money into the pockets of 160 million Americans,” Pelosi said. “Think of the difference that will make instead of putting forth legislation that has no impact on our economic growth is not in furtherance of job creation.” Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook.

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Another Solution To Income Inequality? The Progressive Consumption Tax

December 7, 2011

By pulling a simple tax lever, we could reduce the costs of growing income disparities, while at the same time freeing up several trillion dollars of additional resources each year—more than enough to pay down the federal debt and rebuild our crumbling infrastructure—all without requiring painful sacrifices from anyone. This essay is adapted from Robert H. Frank’s recently published book, The Darwin Economy.

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George Goehl: President Obama Holds The Keys On Preventing Foreclosures

December 7, 2011

On Sunday, November 27th the New York Times ran an editorial, ” Romney on Foreclosures ,” critiquing Mitt Romney’s strategy to address the foreclosure crisis. The piece is right on target. Romney’s plan, which is to essentially do nothing and let struggling homeowners across the board lose their homes, would further sink a housing market that has already reached historic lows. What the editorial does not address is that President Obama’s plan, while not as mean-spirited as Romney’s, continues to lack the boldness and scale needed to alleviate the crisis. President Obama, unlike candidate Romney, has the power to help stem the tide of foreclosures and heal our housing market right now. The starting point should be the potential foreclosure settlement with big banks. At question is whether the president accepts as sufficient the small settlement currently on the table, reportedly in the $15-20 billion range, or teams with Attorneys General Eric Schneiderman, Beau Biden, and Martha Coakley to push for something more commensurate with the abuses committed by the banks and the scope of the crisis. As the Times editorial notes, mortgages in America are $700 billion underwater. A settlement as small the one being considered would be a small drop in a very big bucket, signaling another victory for big banks, the 1%, and corporate money in our political system. It makes good economic sense for President Obama to push for a larger foreclosure settlement. A settlement that halts more foreclosures will stabilize our housing market, lift homes values, and inject new money into our economy. This would help Americans across the board, regardless of whether our mortgages are underwater or we are a homeowner or renter. The housing market makes up 15% of our Gross Domestic Product. It’s hard to have a robust recovery when one-sixth of our economy is in its worst shape in generations. As the Commerce Department reported last week, median home sale prices have now fallen to their lowest level of the year. Since the housing bubble burst, over $7 trillion in home equity has been wiped out. Without courageous action by President Obama, more home equity will be lost, further weighing down our sluggish economy. To prevent foreclosures at a significant scale, principal reduction — the writing down of mortgages to their actual value — is a must. Principal reduction should be mandatory, not voluntary, for the big banks, and we should be discussing hundreds of billions in reduced principal, not tens of billions. Reforms focused solely on refinancing or forbearance and have been optional for banks have failed to make significant impact. By requiring the banks to adjust principal on a loan to actual value, we not only prevent foreclosures, but also inject the difference between the amount owed and actual value into the economy. It’s another form of stimulus, but one that does not require taxpayer dollars. Reducing principal on mortgages is not a liberal or conservative idea. Economists from across the political spectrum have increasingly come out in favor of principal reduction as a key strategy for rebooting our housing market. For example, Martin S. Feldstein, professor of economics at Harvard, and chairman of the Council of Economic Advisers under President Ronald Reagan, wrote in the NY Times that “failure to act means that further declines in home prices will continue, preventing the rise in consumer spending needed for recovery. As costly as it will be to permanently write down mortgages, it will be even costlier to do nothing and run the risk of another recession.” Taking a more aggressive approach to addressing the foreclosure crisis doesn’t only make good economic sense. It’s good politics too. Any candidate running for president must consider the fact that swing states such as Nevada, Florida, Michigan, and Ohio are among the hardest hit by the housing crisis. In Nevada, 62% of borrowers are underwater. In Florida, 46% of borrowers are underwater. Since homeowners have a particularly high voting rate, every candidate should be looking to prove he or she has the guts to go toe to toe with the big banks, demand retribution for American families, and get our housing market back on track. If there was ever a battle that signified the struggle between the 1 percent and the 99 percent, this is it. By pushing for a settlement that reduces hundreds of billions of dollars in principal the president could buoy the same economy that has been a drag on his presidency. If he doesn’t, he could end up underwater with the rest of us. George Goehl is the Executive Director of National People’s Campaign, which seeks to protect and strengthen low- and moderate-income communities across the United States.

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Romney Staff Spent Nearly $100,000 To Hide Records

December 6, 2011

Mitt Romney spent nearly $100,000 in state funds to replace computers in his office at the end of his term as governor of Massachusetts in 2007 as part of an unprecedented effort to keep his records secret, Reuters has learned.

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Regulator OK’s Rule Restricting Use Of Clients’ Money In Wake Of MF Global Collapse

December 5, 2011

WASHINGTON — A federal rule adopted Monday places tighter restrictions on how U.S. trading firms can invest their customers’ money. The action comes amid a federal investigation into whether MF Global illegally tapped its clients’ accounts before filing for bankruptcy. The Commodity Futures Trading Commission voted Monday to finalize the rule. It prohibits firms from using money from customer accounts for certain investments, including purchases of foreign debt. It also limits how much of their money can be invested in others, such as money-market mutual funds. Firms will be allowed to petition the agency for an exemption to that restriction. The agency had proposed the rule a year ago. But it held off adopting it after Jon Corzine, who led MF Global until last month, and others lobbied against it. MF Global filed for bankruptcy protection on Oct. 31 after making a disastrous bet on European government debt. An estimated $1.2 billion or more may be missing from customer accounts. Corzine, a former Democratic senator, New Jersey governor and CEO of Goldman Sachs, resigned as chairman and CEO of MF Global on Nov. 4. The House Agriculture Committee has subpoenaed Corzine to testify this week about his role leading MF Global. Two other congressional panels are also expected to vote this week to subpoena Corzine. The CFTC and other regulators are investigating whether MF Global used client funds for its own needs as its financial condition worsened. Farmers, ranchers and small business owners have said they’ve lost money that they had deposited with MF Global. Many of them use the futures markets to hedge against risks, such as swings in corn or fuel prices. The rule adopted Monday also ends the practice of firms borrowing from their customers for what are essentially loans to the firms. It also ends those kinds of financing transactions, known as repurchase agreements, between affiliates of the same firm. Firms can continue to invest customer money in U.S. Treasury securities, municipal bonds and certificates of deposit. The rule will take effect in about 60 days, and firms will have roughly six months to comply. MF Global was believed to have raised much of the money for its investments in European debt with repurchase agreements with other financial firms. But regulators say MF Global may have borrowed from customer accounts to fund more short-term operations, such as covering demands for collateral.

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White House Targeting GOP Senators In Seven States For Their Support

December 5, 2011

WASHINGTON — The White House is launching an aggressive, eleventh-hour media blitz this week aimed at pressuring Senate Republicans to confirm a stalled nominee to lead the Consumer Financial Protection Bureau. But senior Senate Republican aides are already signaling that the all-out public relations offensive planned by the White House — one that even includes President Barack Obama’s personal involvement — won’t be enough to sway Republicans to support a director for an agency that they say needs an overhaul first. The Senate is lining up its vote on Obama’s nominee, Richard Cordray, for Thursday. The president nominated the former Ohio attorney general for the slot in July, but his confirmation process has been beset by delays by Republicans, nearly all of whom signed a letter in May saying they would oppose any CFPB nominee until key changes at the agency are made. Among their demands: eliminating the director’s position, creating an oversight board instead, and requiring the agency to be dependent on congressionally appropriated funds for its operating budget. Democrats have framed Republicans’ criticisms as an attempt to undermine the agency’s work altogether. Cordray cleared the Senate Banking Committee in October along partisan lines, but Thursday’s vote is the real test. And with just a few days left to sell its message to the public, the White House is coming out of the gate full throttle. Administration officials kicked off their effort Sunday night with the release of a report , “Improving Americans’ Financial Security: The Importance of a CFPB Director.” In it, the administration outlines the kinds of bad practices that will continue to play out among nonbank institutions like payday lenders and credit reporting agencies until CFPB has a director officially to supervise their activities and ensure consumer protections are in place. For example, the report states that, unlike banks, payday lenders don’t currently have to comply with federal laws that relate to consumer financial protections, which means they can continue to charge fees of about $16 for a $100 two-week loan. That translates to an annual percentage rate of 400 percent for borrowers already struggling with debt. About 20 million people currently rely on payday lenders, the report states. “The fact that the CFPB cannot currently supervise payday lenders creates a serious regulatory gap that puts consumers at substantial risk,” reads the report. In addition to releasing the report, Obama will sit down on Monday with a handful of print reporters from seven states — Alaska, Indiana, Iowa, Maine, Nevada, Tennessee and Utah — to discuss the impact that Cordray’s nomination would have in their communities. The White House is targeting those states because they are home to Republican senators who currently oppose Cordray’s nomination. “We’re making a special effort in this handful of seven states because we believe … the citizens in these states have a lot to gain from the confirmation of Mr. Cordray,” White House deputy press secretary Josh Earnest said in a Sunday conference call with reporters. “It sets up an important decision for senators who represent the families in those states: whether they will side with the financial industry and block Mr. Cordray, or side with middle-class families.” Throughout the week, senior administration officials plan to flood television markets in those states with messages about the need for a director at CFPB, the idea for which originally came from Harvard law professor and now-Massachusetts Senate candidate Elizabeth Warren. The White House will also release bipartisan letters signed by dozens of attorneys general and mayors calling for Cordray’s confirmation. And on Thursday, the day the Senate is expected to vote, the president will talk to local television anchors from each of those seven states about the need for a leader at the consumer protection bureau. Obama is also expected to press for Cordray during a previously scheduled speech on Tuesday in Kansas, though White House officials would give no details on what he will say. The consumer protection agency was created a year and a half ago as part of the sweeping Dodd-Frank financial reform legislation that was signed into law. But while it has some operations in effect, it still lacks a director, which administration officials say has prevented the agency from fully supervising nonbank financial institutions like payday lenders, nonbank mortgage lenders, debt collectors and credit reporting agencies. “In summary, today the CFPB is hamstrung by not having a director in place,” said Brian Deese, deputy director of Obama’s National Economic Council, during the same Sunday conference call. The lack of a director at the agency means there isn’t an even playing field for banks and other financial entities, which is “bad for the financial system overall,” Deese said. In addition, he contended, some of the most “harmful, deceptive, unfair, predatory lending practices” will continue to take place, including those that precipitated the financial crisis that drove the economy into a recession. Senate Republican aides dismissed the idea that any GOP senators would cave in their opposition to Cordray without changes being made at the agency first. “You know who they’re not talking to? Republican senators who raised concerns about transparency and accountability at the CFPB seven months ago,” said a Senate GOP leadership aide. “Maybe instead of a PR campaign, they should work with Congress to fix the problems. But they haven’t lifted a finger. They haven’t talked with us about this at all. The President will talk to more reporters this week about the CFPB than he has to Republican senators.” Another senior Senate Republican aide chalked up Obama’s latest push on the issue to his need for a bump in the polls. “Another week and another White House public relations campaign ostensibly about policy but more likely related to the president’s sagging poll numbers and dicey reelection prospects,” said this aide. “There are serious policy concerns about the CFPB as it is currently exists, and we ought to be addressing that rather than having yet another White House media blitz.”

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Morgan Stanley CFO: Raise Taxes On The Rich

December 4, 2011

The movement to raise taxes on the wealthiest Americans has gained an ally at the top of one of the United States’ largest banks. Ruth Porat, executive vice president and chief financial officer at Morgan Stanley, said on Saturday at the Economist’s World in 2012 summit that the government needs to raise taxes on the rich to address its budget deficit. “The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added. President Obama has said he would like to raise taxes on millionaires , but many Republicans oppose such a tax. Most millionaires , on the other hand, say that they would like to pay more in taxes. Porat said that the global markets are more stressed now than they have been since the financial crisis in 2008. She said bank debt is now less trusted than other corporate debt, borrowing costs for European countries such as Italy have reached record highs, and banks have become less confident lending to one another. Since banks around the world now are focused on paying down their debt, they are less likely to lend to businesses and consumers, she said. Porat said she expects global economic confidence to hit bottom next year and that the eurozone ultimately will avert a breakup by becoming more fiscally integrated. “The optimistic scenario is low growth, and we only have that if in fact we see this conscientious move toward greater fiscal integration,” she said. Porat said that there is potential for an economic recovery in the U.S. to gain momentum next year, once companies become confident enough in the economic climate to make more investments. “Where there’s any sort of sense that we’re turning the corner, you’ll see a lot of cash coming in,” she said. “There is this cash on the sidelines waiting to be put to work.” But Porat said that with the extreme level of political polarization in Congress, “right now there doesn’t seem to be a path forward,” suggesting more “slow growth” in the future.

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What God Told Bachmann In Vision About Her Husband

December 3, 2011

ON THE ROAD TO ESTHERVILLE, Iowa — The cornfields edging two-lane Iowa Highway 9 fade to a sunbaked blur as Rep. Michele Bachmann’s blue-and-white campaign coach rolls on, bound for a “town hall” meeting with voters in the basement of a public library 25 minutes down the road. Inside the bus – which four years ago was chartered by John McCain and whose odometer now has 460,000 miles to show for it – the candidate folds her feet underneath her on a blue velour bench, answering questions with variations of the sound bites she’s repeated for months across this critical first-to-vote state. She pauses just once for a query that seems to catch her by surprise: What’s the public’s biggest misconception about her? “Oh, that’s a good question,” she says, the brassiness in her voice softening as she looks to a pair of campaign aides. “One thing people will say to me at these town hall conventions … they’ll say `the media doesn’t tell the story of who you are. They make you two-dimensional, a caricature.’” Bachmann has a point. The choreographed repetition of modern presidential campaigns can turn the most personable candidate into an endless loop of talking points. But any close observer of Bachmann’s political career would be hard-pressed to dismiss her as two-dimensional. At a time when voters accuse politicians of being difficult to pin down on issues, Bachmann proudly draws herself with hard lines and sharp edges. First in Minnesota and later in Washington, Bachmann has alienated some members of her own party nearly as much as Democrats. On this trip through a conservative corner Bachmann must win to resuscitate her candidacy in Iowa’s January caucus, she has another chance to make her case and offer voters a window into a political life that, now clouded by time and rhetoric, remains a singular story. Bachmann calls herself an accidental politician. But both supporters and critics say that’s selling her short. ___ Campaigning across Iowa, Bachmann frequently reminds voters she is a native. But that does not explain the route she has traveled: from Waterloo, a manufacturing city of 68,000 where she was born 55 years ago in a Democratic-voting family with union roots, to congresswoman from St. Paul’s exurbs whose personal and political life have been shaped by her embrace of evangelical Christianity and later, a highly combative brand of conservatism. Bachmann’s family left Iowa when she was 12 and her father, an engineer, took a job in Minnesota. Her parents divorced two years later. Bachmann’s father moved to California. Her mother found work as a store clerk and bank teller, but money was tight. The family managed by rigorously watching spending and relying on the generosity of relatives, says Bachmann’s brother, Paul Amble, a Connecticut psychiatrist six years her junior. “I just remember taking trips down to Iowa where my grandmother lived and we’d come back with huge Tupperware things full of food,” Amble says. The family attended a Lutheran church. But Bachmann says her life was transformed at 16 by a religious awakening. In a speech this year at Liberty University, Bachmann recalled entering church one night with three friends after mistakenly hearing there was a party inside. “When we got up to the front of the church, all of us under the power of the Holy Spirit, were called to our knees and we knelt in front of the altar and we started in prayer and the Holy Spirit convicted me and touched my heart and that of my three friends and one thing that I understood at that moment is that I didn’t know Jesus,” she said. In college, Bachmann met husband Marcus (in a vision, God told her to marry him, she says). After law school, the Bachmanns returned to Minnesota, eventually settling in Stillwater, whose historic downtown along the St. Croix River is a popular shopping and dining destination. Marcus opened a Christian mental health counseling practice nearby. Michele Bachmann tells audiences she began working as a “tax litigation attorney.” But the outspoken critic of big government avoids talking about the specifics of her job as an Internal Revenue Service lawyer pursuing people who did not pay their taxes. The couple sent their five children to a private Christian school. But over the years their colonial became home to 23 foster children who attended public schools. Bachmann says she became dismayed by one girl’s high school math assignment to color a poster. In 1993, Bachmann joined a group starting one of Minnesota’s first publicly funded charter schools. But it immediately became the center of controversy, with some parents and teachers complaining founders were trying to incorporate religious teachings. Bob Beltrame, a member of the school’s parental advisory board, says teachers complained that Bachmann and another school board member were sitting in on classes and questioning them about their methods. He recalls a phone conversation with Bachmann that fall discussing the school’s approach. “I remember one thing she said. I’ll never forget it. She said, `You know, if you really read the scientific literature you’ll find that today there’s a lot more evidence of creationism than there is the theory of evolution,’” Beltrame says. The controversy peaked that December, when the school’s CEO and board members including Bachmann resigned. But her interest in education and policy was far from over. ___ Icicle lights twinkle from the ceiling of the Rock Rapids Community Center when Bachmann steps before about 60 people on a Friday afternoon, betraying the Rotary Room’s usual function as a rental wedding hall. On the way to the podium, she works her way diligently around the room, always smiling and spending a few seconds with each person, being sure to ask their names and to make contact with her deep aquamarine eyes. “Hi, I’m Michele,” she sometimes offers. “A couple of Lyon County facts for you,” says Cody Hoefert, a chiropractor and chairman of the local Republican party, in his introduction of the candidate. In 2004, the county gave George W. Bush the third largest margin of victory of any in Iowa, he tells Bachmann. What’s more, Rep. Steve King – generally considered one of the most conservative members of Congress – gets 80 percent of Lyon’s vote. “Oh, man,” Bachmann replies. The diminutive politician beams up at Hoefert, more than a foot taller. “This is it! This is the center of the universe.” Bachmann assures the audience that together they will take their country back. “This will be a miracle from God for us to be able to repeal `Obamacare,’” she says, inviting questions. The last comes from Hoefert, who asks if Bachmann understands what it’s like to spend hours on the phone trying to get an answer from federal tax officials. “Yes, I have called the IRS because my background is I’m a federal tax litigation attorney,” replies Bachmann, not mentioning that she worked for the very agency being criticized. “So, yes, I have called them. I’ve called them and been rerouted 19 times.” ____ In Minnesota, Bachmann attacked state education standards called Profile of Learning, warning church audiences the guidelines were dumbing down lessons. She railed against federal involvement in schools. “My clearest memory is people saying `amen, amen,’ often,” said Mary Cecconi, then a Stillwater school board member who attended one of Bachmann’s presentations. “It had a true sense of a revival meeting.” One presentation impressed Bill Pulkrabek, a county commissioner and chair of the district Republican Party, who found Bachmann articulate, smart and attractive. “I said you’re too good of a candidate to be sitting on the sidelines,” Pulkrabek said. Pulkrabek backed Bachmann’s 1999 run for Stillwater’s school board, atop a slate with four of her friends. But at a candidate forum, Bachmann said she might not serve the full term because she was considering a challenge to state Sen. Gary Laidig, a moderate Republican in the legislature for 28 years. “I tried to present information to Sen. Laidig on the Profile of Learning, he was not interested,” the Stillwater Gazette quoted her as saying. “I told him if he’s not willing to be more responsive to the citizens that I may have to run for his seat or find someone else who would do so.” Bachmann and other Republican board candidates lost, alienating voters accustomed to non-partisan elections. But the turnout tripled from the previous election, raising her profile. Laidig said he arranged for Bachmann to meet legislators, but was one of just two Republicans who voted to retain state education standards. Still, he was surprised the following April at the district Republican convention, when she was nominated to oppose him. Bachmann has said she came to the convention without makeup and in a sweatshirt, not expecting to be nominated. But Bill McCallum, a party official responsible for counting votes, said he saw printed signs supporting Bachmann when he walked in the door. Bachmann won the nomination by two votes. Her candidacy caused a Republican rift, with the Senate minority leader backing Laidig in the primary. But Bachmann blanketed the district in yard signs and sent out mass mailings, including a letter promising to defend the Second Amendment in which she called a Washington rally for gun control, “the Misinformed Mom March.” And she won. In the state Senate, Bachmann led a campaign to ban gay marriage. Some Republicans saw the issue as needlessly distracting and gay rights activists called for a boycott of stores in Bachmann’s hometown. But Bachmann urged 3,000 supporters at a 2004 rally at the Capitol to “storm the doors.” Her push came despite divisions within her own family. One of the most notable opponents of the gay marriage ban was Bachmann’s stepsister, Helen LaFave, a lesbian who came to the Capitol with her partner to “bear witness on what she’s doing that’s so personally hurtful to me and to so many others.” ___ The campus center at Dordt College in Sioux Center is packed at lunch hour as Bachmann takes the stage. When rivals Newt Gingrich and Herman Cain spoke here last summer, Bachmann was on her way to victory in an August straw poll. But ever since Texas Gov. Rick Perry entered the race the same day, Bachmann has struggled to reclaim the mantle as the field’s conservative champion. Today, Bachmann wins the loudest applause for statements against abortion and defending traditional marriage. But she speaks mostly about her distaste for big government. “I want to close down the federal Department of Education – turn off the lights, lock the doors and keep that money here in Iowa,” she says. Afterward, standing before TV cameras in the parking lot, Bachmann briefly commends Perry for announcing an energy plan similar to hers, before tarring him as a politician too willing to ignore the Constitution. “We’ve seen President Obama do that by putting into place EPA regulations through the executive order. That’s a misuse of power and authority. Unfortunately we’ve seen Gov. Perry have a pattern of that in Texas,” Bachmann says. “But I do thank him and welcome him for endorsing my energy plan today.” ___ When Bachmann ran for a House seat in 2006, she drew criticism after a video surfaced in which she told worshippers at a church in her district that God “has focused like a laser beam in his reasoning on this race,” and had instructed her to run. But in a year when Democrats took control of the House, Bachmann won handily. “I’m coming here as a conservative,” she told reporters. “I’m not coming here for the purpose of controversy.” In Washington, Bachmann emerged as one of the most outspoken members of Congress, criticizing Obama’s “anti-American views” during the 2008 presidential campaign. Republican leaders kept her at arm’s length, despite her fundraising prowess, supporting a rival’s bid for a House leadership role. Bachmann, though, found her own soapbox, embracing the tea party movement and delivering a response on its behalf to Obama’s State of the Union address in January, moments after the Republican Party’s official response. And when conservative commentator Glenn Beck staged a “Restoring Honor” rally on the National Mall in August 2010 but did not invite Bachmann, she staged her own rally immediately afterward. It was a reminder of Bachmann’s fierce will, says Ron Carey, a former chair of the Minnesota Republican Party who served as Bachmann’s chief of staff in 2010. Carey – the fifth chief of staff in four years – quit after five months. He says he left because Bachmann repeatedly refused to listen to her staff’s advice. The last straw, he said, was a disagreement over paying a campaign contractor. Carey says Bachmann believed the contractor was not fulfilling its duty, and while he agreed, he pointed out that she was bound by a contract. She ordered him not to pay the company anyway. “She wanted what she wanted the way she wanted it and even though the facts said she couldn’t have it, she was just adamant she was going to have it her way,” Carey said. ___ On the road, Bachmann tells voters she will push to elect “13 like-minded senators,” giving her a filibuster-proof majority to push through changes as president. As her bus nears Estherville, she is asked what that says about her vision of leadership for a country whose increasingly fractured politics have left many voters mourning the seeming inability of leaders to find compromise. “My plan is not to fail. My plan is to succeed,” Bachmann says. Later, about 60 voters fill the basement of the Estherville library to hear the candidate and ask for autographs. “It’s going to be a lot of tough love,” Bachmann promises if she’s elected president. “You’re going to be hearing screaming and crying and gnashing of teeth from Washington, D.C. all the way to Estherville.” Afterward in the library’s lobby, Bachmann rushes over to hug Stacie Seckinger, a long-ago friend from Stillwater. It’s been years, the women tell each other, and so much has changed. Seckinger’s daughter, Erin, recalls how Bachmann gave her class a tour of the state capitol after her election to the Minnesota Senate. Then Bachmann dashes for the bus. This, Seckinger says, was the same strong woman she knew as a school activist. “She knows what she wants,” Seckinger says. “And she doesn’t waver.”

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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.”

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Scott Brown: Don’t Pay For Payroll Tax Cuts

November 30, 2011

WASHINGTON — Sen. Scott Brown (R-Mass.) may have gotten a dose of populism for his showdown against Elizabeth Warren — or maybe he prefers helping people who have jobs to aiding the unemployed. Brown declared Tuesday that he favors extending a payroll tax cut without finding a way to make up for the lost revenue, while last year he opposed extending unemployment benefits unless Congress offset the $56 billion cost. It’s a position that puts him at odds with both his own leadership and with Democrats, and comes as he’s facing a tough election challenge from the popular former consumer watchdog, Warren. Democrats have proposed a 3.1 percent cut in payroll taxes that would cost about $255 billion. They would pay for it with a surtax on earnings above $1 million. Brown’s Republican leaders said Tuesday that they would back extending the cut enacted last year if, this time, it is offset. “We need to be paying for a measure like this that’s temporary,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “And I think in the end we will pay for it. We’ll offer an alternative to the one that’s being proposed in the Senate.” But Brown saw no reason to go with the Democrats’ plan to tax the rich or with McConnell’s to find the cash elsewhere, noting that Congress did not pay for last year’s break. “It wasn’t paid for before, so why is it paid for now?” Brown told several reporters Tuesday. “Through economic activity, it’ll pay for itself. I think we need to get it out there, get the money in people’s hands.” Brown had a different take when it came to extending emergency unemployment benefits last December for people who were running out, and cast the deciding vote against an extension. “I have complete and total sympathy and understanding, and I want to help,” Brown said according to a Boston Globe account of his vote. “More than anybody here, I want to help. But to just keep throwing money that’s not paid for at a problem … makes no sense to me.” Unemployment benefits were ultimately extended after President Obama cut a deal with Republicans to also extend the Bush-era tax cuts for two more years.

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Larry Summers Denounces Inequality — But Why?

November 28, 2011

Why is Larry Summers suddenly so worried about inequality? The Harvard professor — a former U.S. Treasury Secretary and Barack Obama’s first Director of the National Economic Council — penned an opinion piece last week decrying the concentration of income at the very top. Warning of “a strong and troubling shift in market rewards for a small minority,” Summers cited “dismal” figures, such as a 275 percent increase in incomes of the top 1 percent from 1979 to 2007. During that same period, income grew a mere 40 percent for the middle class. The need for fixes is fiercely urgent, he said. But his timing is curious. Summers was driving economic policy during the worst economic downturn since the Great Depression, yet he remained largely silent on income inequality. A scan of news items featuring Summers during his recent time in power turns up almost nothing on this topic, at a moment when economic matters were at the forefront of public debate. The gist of Summers’ op-ed — that the United States has become a profoundly unequal society — will surprise no one who’s been following economic trends for the last several years, to say nothing of the country’s thousands of Occupy protesters, whom Summers conspicuously did not mention. But it’s remarkable to hear the alarm being sounded by someone who’s been portrayed by detractors as an embodiment of the tight link between Washington and Wall Street. Summers’ motivation is largely political, according to several economists contacted by The Huffington Post. “Reputation,” said Derek Shearer, who served in the Clinton administration as an economics official in the Commerce Department and is professor of diplomacy at Occidental College, when asked about the purpose of Summers’ recent move. “Show he’s a good liberal guy.” Summers did not return request for comment for this article. A career-minded technocrat like Summers — especially one who’s been associated with discredited policies like financial deregulation — has to try to stay on the leading edge of political discussion, Shearer said. “These are issues of the day, and he’s out marketing and branding himself. The facts are there, you can’t deny them. All he’s doing is stating reality. It’s like, ‘Oh, my god, there’s global warming.’ ” Dean Baker, co-director of the Center for Economic and Policy Research, agreed: “My guess is he’s being political here — he’s trying to go with the tide.” This isn’t the first time Summers has swung to the left while out of government. Baker and Shearer mentioned a series of increasingly progressive-sounding opinion pieces Summers wrote in the run-up to the 2008 election. “If you go back to ’06, ’08, he started to say some really good things in the Financial Times . There was talk about a new Larry Summers,” said Baker. But when Summers joined the Obama administration, where his job was to gather and present the president a range of economic policy options, many observers criticized him for marginalizing progressive opinions, including those of former Federal Reserve Chairman Paul Volcker and economists Joseph Stiglitz and James K. Galbraith. “None of the economists who were named to the council were particularly progressive,” Shearer said. “What you can fairly say is that there’s no evidence Larry was concerned with the issue [of inequality], and he really limited the range of interests and expertise that would be provided to the president. He saw himself as an expert on the economy, not somebody with strongly demonstrated progressive values.” In fact, when Summers is quoted talking about inequality in Ron Suskind’s new book, “Confidence Men: Wall Street, Washington, and the Education of a President,” it’s in starkly different terms than those employed in his recent opinion piece: “One of the challenges in our society is that the truth is kind of a disequalizer.” Summers is quoted as saying. “One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they’re supposed to be treated.” Summers has disputed aspects of Suskind’s account , but the remarks seem in line with a couple of other famous Summers statements. While a vice president of the World Bank in 1991, Summers penned a memo suggesting it was only logical for high-pollution industries to move to developing countries . Once the memo was leaked, Summers said it was written in jest. And in 2005, Summers said innate ability may partially explain why women are underrepresented in the sciences — comments that drew a firestorm of criticism at the time. To be sure, Summers has publicly adopted progressive positions before. During the 2008 campaign he spoke forcefully about inequality in a speech at a Harvard Business School conference . At the time, Summers was an adviser to Obama, and seen as a potential candidate to head the Treasury. Once secure in the White House, however, Summers seems to have lost focus on inequality: His next prominent statement about the issue came on October 14, 2010, when his departure from the Obama administration had already been announced. In an interview with the Washington Post , Summers spoke of the subject almost in passing, seemingly at the prompting of the interviewer, while discussing the benefits of letting upper-income tax cuts expire. The chief reason to do so, Summers said, was to allow the government to invest in job-creation: “Summers, who will step down and return to Harvard in January, agreed that tackling income inequality is also a factor,” read the article. “But ‘ this isn’t about redistribution ,’ he said.” Ira Kalish, director of global economics at Deloitte Research, said Summers should be forgiven for having other priorities while working in the White House. “The Obama administration was dealing with a near-collapse of the financial system. It was in a sense a triage,” said Kalish, who authored a study of income inequality’s implications for U.S. business . “They had to prevent the economy from collapsing before they could focus on longer term issues, and this [inequality] is a longer term issue.” While Shearer agreed that the Obama administration had to address many short-term issues, he said it wasn’t an either/or situation. “If this inequality was a major concern of yours, after dealing with the meltdown you move into the reform stages,” Shearer said, “and you of course could have been much tougher in the reforms you proposed.” At the very least, Shearer said, the White House could have established a presidential commission on inequality in the U.S., its causes and potential solutions. “That’s the bare minimum you could have done. That’s something Larry seemed to have no interest in. Instead they set up a Simpson-Bowles deficit reduction commission.” In his recent op-ed, Summers was careful to position himself at the political center, chiding those who blame “the success of the wealthy” for “the disappointing lack of income growth for middle-class workers,” as well as those who “call concerns about rising inequality misplaced or a product of class warfare.” But this equivocal stance — part denunciation, part defense of inequality — lead Summers into a vague and limited appraisal of the problem and its solutions. None of the economists contacted by The Huffington Post were impressed with Summers’ assessment of the problem of income inequality and potential solutions. Baker called the analysis “really the standard textbook stuff, small-bore stuff.” The cause of the problem, according to Summers, is that “the market system distributes rewards increasingly inequitably.” But Baker notes that the inequality we see is consistent with the direction of policy: “They designed the system to redistribute income upward. The taxpayers are subsidizing the executives at the banks and the shareholders. We have those huge compensation packages on Wall Street; that has nothing to do with the market, it’s government subsidy.” Trade agreements too have played a large part, Baker said, putting less educated workers in direct competition with people from the developing world. “That puts downward pressure on their wages, and at the same time we largely protect the most highly educated professionals — doctors, lawyers — so that they aren’t competing with their counterparts in the developing world.” “This is stuff that’s been said since the Clinton years,” Baker said. “The position is, ‘We have inequality from the market and we can ameliorate it a little bit with good policy.’ The position is that inequality came from the market, not inequality came from the policy.” “He’s not going to say something too controversial,” Shearer said. “Because then he’s not going to be hired by another hedge fund.” “You do very well if you don’t rock the boat in America. I don’t expect Larry to lead the charge,” Shearer added. “I’d be shocked if he did.”

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WATCH: Near Riot Ensue Over $2 Waffle Makers

November 25, 2011

Black Friday 2011 has seen its share of noteworthy, bargain-fueled madness. Shoppers lined up earlier than ever to take advantage of midnight openings and to get discounts at some stores that even opened on Thanksgiving Day. There have been reports of shoppers pepper spraying one another in the hunt for deals and even robbers shooting Black Friday customers to get their loot. And now, crazed shoppers reportedly got in a fight over $2 waffle makers at a Wal-Mart near Little Rock, Arkansas WBTV reports. After the video went viral, sites all across the web began to offer their commentary. Gawker wrote that the video embodies everything that’s “awesome” about America, including the “horrible economy, aggressive consumerism, mindless violence and a complete lack of concern for one’s fellow human beings.” Meanwhile, Reddit wonders if waffle makers could spawn a new slew of riots.

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Business Owner Posts Anti-Hiring, Anti-Obama Pledge

November 25, 2011

ASSOCIATED PRESS WACO, Ga. (AP) — A west Georgia business owner has been deluged with calls and emails after posting signs on his company’s trucks that say he’s not hiring anyone until President Barack Obama leaves office. Waco-based U.S. Cranes LLC owner Bill Looman tells WXIA-TV that reaction has been so intense he’s had to disconnect his phones and temporarily shut down the company’s website. He posted the signs on his company’s trucks for other motorists to see on roads and interstates across the South. The signs proclaim “New Company Policy: We are not hiring until Obama is gone.” Looman says he’s not refusing to hire employees to make a political point. He told WXIA he can’t afford to hire anyone because of the economy, and he blames the people in power. Video below via WXIA .

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Protester Occupies Obama Hand Shake Session

November 22, 2011

A speech by President Obama in New Hampshire was briefly disrupted Tuesday, when Occupy protesters attempted to upstage him with a so-called “mic check.” Though they were quickly drowned out by a chorus of “Obama, Obama,” one protester reached the president while he was shaking hands after his address and delivered him their complete message by hand. (PHOTOS BELOW) Obama addressed the Occupy Wall Street movement during a broader speech pushing for the passage of elements of his jobs bill, particularly the extension of payroll tax cuts. After the brief interruption, Obama called attention to the demonstrators and the larger Occupy movement. “I’m going to be talking about a whole range of things today and I appreciate you guys making your point. Let me go ahead and make mine,” Obama said. “I’ll listen to you and you listen to me.” The president continued, painting the motivations for getting his jobs bill passed as in line with the concerns of the Occupy protesters. “For a lot of the folks who have been in New York and all across the country in the Occupy movement, there is a profound sense of frustration about the fact that the essence of the American dream, which is if you work hard, if you stick to it that, you can make it, feels like that’s slipping away,” Obama said. “And that’s not the way things are supposed to be. Not here. Not in America.” The text of the Occupy protesters’ message: “Mr. President: Over 4000 peaceful protesters have been arrested. While banksters continue to destroy the American economy with impunity. You must stop the assault on our 1st amendment rights. Your silence sends a message that police brutality is acceptable. Banks got bailed out. We got sold out.” Photos of the encounter below:

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The Economic Battlefield Of The NBA Lockout

November 21, 2011

By David Berri of Freakonomics With the NBA away, sports fans are looking for something to satisfy their need to watch teams strive for victory. Well, why not take a look at the teams competing in the lockout? Okay, maybe this is a contest only a sports economist could love. But while it may not appeal to everyone, the labor dispute is still best thought of as a contest between two teams. The first team is the NBA owners. The owners are the dominant buyer in the world market for elite basketball talent, so they have substantial monopsony power. In the other corner are the players, who are currently trying to disband their union. This union gave the players monopoly power in the sale of elite basketball talent (more specifically, in helping to determine the conditions under which individual players would sell their services). When a monopsony meets a monopoly on the economic battlefield, the outcome is determined by bargaining. And in that case, bargaining power – or what we call leverage – means everything. Read the entire post at Freakonomics. Or more here: – Paying People to Quit: What Law Schools Can Learn From Zappos – One More Time: Most Notable Quote of 2011 – Turkey Sex: The Way It’s Done Now

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Robert Kuttner: The Superfluous Super Committee

November 14, 2011

Once again, we have a familiar soap opera. Will the Democrats save the Republicans from crashing and burning as a consequence of the Republicans’ own folly? In this case the soap opera involves the so called Super Committee of Congress. In August, in order to avoid taking responsibility for a default on the U.S. government debt, a needless crisis of their own making, the Republicans cut a deal under which a bipartisan committee of Congress had to come up with at least $1.2 trillion dollars of deficit cuts by November 23 (Happy Thanksgiving) or automatic cuts of the same amount would kick in beginning in 2013. While several Democrats on the Super Committee have been in their usual posture of bending over backwards to consummate a deal, Republicans, until this past week, were insisting that taxes could not be part of the bargain — thus killing any possible deal. Then Republicans began taking a closer look at what would happen if budget cutting went on auto-pilot as a consequence of their own handiwork. Hundreds of billions in military cuts would kick in, starting in 2013. And over a trillion dollars in Bush tax cuts, mostly for the rich, would expire. Sounds pretty good to me. So Republicans began backpedaling, incurring the wrath of Grover (The Enforcer) Norquist, and saying that they might accept some tax increases after all. The latest GOP proposal would cap individual tax deductions but also cut the top income tax rate from 35 percent to 28 percent. The Republicans claim that this would produce a net revenue increase of $500 billion. Democrats on the committee dismissed that as a revenue loser in the long run because it would also make permanent Bush tax cuts that otherwise expire at the end of 2012. However, several Democrats on the Committee were still holding out hopes for a last-minute deal. “We’ve got to be willing to probably make some folks mad on both ends of the political extreme,” Democratic Sen. Mark Warner of Virginia told CNN. “And you’ll know this super committee is getting close if you hear folks on both ends of the political extreme scream the loudest, because that will show that there’s actually movement being made.” (With spokesmen like Warner, remind me why we have a Democratic Party?) With 10 days to go, most Democrats on the committee are still holding out for progressive tax increases as key to the deal, but some are foolishly willing to put Social Security and Medicare and other program cuts on the chopping block. Please, people. Social insurance has nothing to do with the current economic crisis. The whole idea that the economy needs massive budget cuts, which would be a lead weight on a weak recovery, is a dumb idea. It was dumb when the Bowles-Simpson commission proposed it, and even dumber when fiscal conservatives in both parties went along with the automatic trigger mechanism. In September, President Obama finally got off the austerity kick and gave priority in his rhetoric to jobs. And guess what? His approval ratings finally started exceeding his disapproval ratings. The Super Committee needs to die of its own weight and its perverse policy assumptions. Its collapse will leave the Republicans exposed as a party with no plan for economic recovery other than more tax cuts for the rich and cuts in social insurance that most Americans value — leaving the whole question of what programs to cut and what taxes to raise as the proper subject of a 2012 election that Democrats could actually win. Here’s a better program. Raise taxes on the wealthy and on corporations. Use the proceeds for jobs and public infrastructure investment. Get some budget cuts out of military spending by ending two wars. My friend Chuck Collins of Wealth for the Common Good calculates that you can get about $4 trillion over a decade by five tax reforms: End the Bush tax cuts for the wealthy. Restore the estate tax. Add two new top brackets for millionaires taxing capital gains and dividend income as the same rate as salary income. Close loopholes that allow U.S. corporations to avoid taxation by booking income overseas. Add a financial transactions tax. Presto, $4 trillion over 10 years, without increasing taxes on the bottom 99 percent. That’s about the sum that austerity-mongers in both parties want for deficit-reduction. But imagine instead what that $400 billion a year might buy. Instead of using the money for deficit reduction, let’s invest some of it in a 10-year program to make U.S. infrastructure second to none and to put millions of Americans back to work. Let’s make the country energy-independent using renewables. Let’s declare a holiday on student debt until decent jobs materialize. Let’s have high quality preschool for every young child in America. Let’s refinance mortgages so that people can keep their homes. Doesn’t that beat deficit reduction, politically and economically? More people working will produce more revenue. If we want additional budget savings, let’s end two wars and cut other unnecessary military spending. If the election is fought over Democratic austerity versus Republican austerity, President Obama might limp to victory over a weak and fragmented GOP field, but the economy he inherits will be no prize. But if Democrats run as the party of the 99 percent versus the 1 percent, and the party of possibility versus penury, then they just might win a mandate worth having. I would not have written such a piece even two months ago, but the Occupy movements have opened up some new, heartening political space. The victories last Tuesday confirm that most people do not buy the union-bashing, belt-tightening vision for America. Ordinary people are leading, and change is in the air. As someone said , politicians need to get out of the way if they can’t lend a hand. Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril .

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Chinese Leader: Chinese Currency Not Causing U.S. Economic Woes

November 13, 2011

BEIJING (Reuters) – U.S. trade and employment problems would not be solved by even a major appreciation of China’s yuan versus the dollar, Chinese President Hu Jintao was quoted as saying on Sunday. “The trade deficit and unemployment problems are not caused by the yuan exchange rate. Even a major appreciation of the yuan would not resolve the problems facing the United States,” Hu was quoted as saying on Chinanews.com. Chinanews said Hu made the comments when he met U.S. President Barack Obama at the Asia Pacific Economic Cooperation (APEC) group summit in Hawaii. A subsequent statement on the website of China’s Foreign Ministry carried the same comment. Hu’s comments follow those of China’s Commerce Minister Chen Deming, who said at the recent G20 summit in Cannes that the yuan was at a reasonable level versus the dollar and was not the root cause of U.S. economic imbalances. China’s yuan currency — also known as the renminbi — has gained about 40 percent in real effective exchange terms since Beijing abandoned its peg to the U.S. dollar in 2005. The yuan has rallied almost four percent against the dollar in nominal terms this year. Hu also called on Washington to relax restrictions on high-tech exports to China and make it easier for Chinese firms to invest in the United States. Officials in Beijing say that a quick way for the U.S. to cut its trade deficit with the world’s second largest economy would be through lifting curbs on high-tech exports Washington considers sensitive. Hu made a similar point at a meeting with U.S. business leaders on the sidelines of the APEC summit on Thursday. The leaders of the world’s two biggest economies also spoke about Iran and North Korea, the Chinese foreign ministry said on its website. It said Hu and Obama “exchanged views”, but gave no details. (Reporting by Chris Buckley and Judy Hua; Editing by Nick Edwards and Robert Birsel) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Famed Batman Writer, ‘Sin City’ Director Trashes Occupy Wall Street

November 13, 2011

Frank Miller has spent much of his famed comic book writing career creating dark, urban dystopias, but the groundbreaking scribe has little regard for the chaos he says reigns at Zuccotti Park. The man behind such famed comic series as “Batman: The Dark Knight Returns,” “Sin City” and “300,” in fact, is entirely against the Occupy Wall Street movement . “‘Occupy’ is nothing but a pack of louts, thieves, and rapists, an unruly mob, fed by Woodstock-era nostalgia and putrid false righteousness,” Miller wrote in a blog entry last week . “These clowns can do nothing but harm America.” Though, for the most part, the participants in the now-global Occupy moment have protested the imbalances of the economy, corporate fiscal abuses and government officials’ close ties to Wall Street, Miller mentions the War on Terror in his slamming of the nascent movement. “Wake up, pond scum. America is at war against a ruthless enemy,” he later continues. “Maybe, between bouts of self-pity and all the other tasty tidbits of narcissism you’ve been served up in your sheltered, comfy little worlds, you’ve heard terms like al-Qaeda and Islamicism.” Miller then implores protestors to join the military, or otherwise, to go “back to your mommas’ basements and play with your Lords Of Warcraft.” In his work, Miller’s protagonists often face off against corrupt government officials. Batman, in both “The Dark Knight Returns” and “The Dark Knight Strikes Again” is faced with heavy governmental opposition, with the latter featuring an especially oppressive and corrupt government. In 2006, Miller announced that he would have Batman take on Osama bin Laden in “Holy Terror, Batman!” but later dropped Batman from the book; it became “Holy Terror,” and has been highly criticized for being hatefully anti-Islam . In a blog entry on his own site posted in September , Miller calls the book “propaganda,” a sort of throw-back to when Captain America punched Hitler, rips the news media as slanted propaganda in its own right, and says, “3000 of my neighbors were murdered. My country was, utterly unprovoked, savagely attacked. I wish all those responsible for the Atrocity of 9/11 to burn in hell.”

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Silvio Berlusconi Resigns

November 12, 2011

ROME — Italy’s presidential palace has confirmed that Premier Silvio Berlusconi has resigned, setting in motion a transition aimed at bringing Italy back from the brink of economic crisis. Cheers broke out in front of the palace by the hundreds of people who gathered to witness Berlusconi’s final act in office, ending a 17-year political era. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below. ROME (AP) – An Italian news report says Premier Silvio Berlusconi’s political party will conditionally support a technical government headed by economist Mario Monti. Italy’s president is expected to ask Monti to try to form a new government once Berlusconi’s resignation is confirmed Saturday night. Monti will be tasked with trying to bring Italy back from the brink of a Greek-style economic crisis. The LaPresse news agency quotes a statement issued after Berlusconi chaired a meeting of his People of Liberties Party, saying the party would tell President Giorgio Napolitano that it would back Monti. But it said the party would meet again to ensure that Monti’s Cabinet, legislative agenda and the timeframe of his government meet its requirements.

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Paul Tullis: What Keystone’s Supporters Get Wrong

November 12, 2011

The Wall Street Journal ‘s editorial Friday on President Obama’s decision to delay the Keystone XL pipeline contains bad data and omits pertinent information that hurts its argument. Since policy decisions need to be based on facts and not rhetoric to be successful, let’s go through these one by one. 1) The Journal says building the pipeline would create 20,000 jobs. My article on the controversy in this week’s issue of Bloomberg Businessweek notes TransCanada CEO Russ Girling’s use of this figure in his conference call with investors on November 1. But TransCanada’s own data supplied to the State Department says 2,500-4,650 jobs would be created. I’ve closely followed the Keystone XL debate for months, and one thing I noticed was that supporters’ figures on job creation rose as objection to the pipeline intensified. At one point the number 200,000 was bandied about; it was supposed to include the indirect job-creating effects of the pipeline over 100 years — even though its intended lifespan is only 50 years — and came from a study TransCanada commissioned. An indirect effect on jobs the pipeline would have, which the Journal omits, is a rise in gas prices with job-killing results. Girling told me on the conference call, “If you bring more supply into a marketplace, all other things being equal, the only direction prices can go is down. Obviously if we supply another million barrels a day of oil to the United States, we’ll see prices go down.” However, the difference in the prices of two types of oil traded, West Texas Intermediate and North Sea Brent, is currently at or near a record high. It’s because of the tremendous recent increase in the amount of oil produced in Canada and North Dakota. With the current transport infrastructure, that oil can’t get out of the Midwest; there’s a glut of it stuck at storage depots in Cushing OK, which is depressing the price of WTI relative to Brent. That’s exactly why TransCanada wants to build Keystone XL: to provide an artery for that oil to move south from Cushing to refineries in Texas, which can handle the type of crude produced in Alberta. The result will be an end to the over-supply in the Midwest, which will raise prices in the primary region now supplied by Cushing. TransCanada itself told Canada’s National Energy Board just that: The cost of heavy crude in the Midwest will increase, it said, as a result of the narrowing of the WTI-Brent spread, by as much as $2 to $4 billion annually for a period of several years. The Cornell Global Labor Institute estimates [pdf] a 10-to-20 cent per gallon increase in the price of gas as a result. “These additional costs,” it says, “will suppress other spending and will therefore cost jobs.” (TransCanada disputes the accuracy of Cornell’s report.) 2) The Journal writes, “[The Dept. of] State produced multivolume environmental impact statements that concluded the pipeline would have ‘no significant impacts’ on the environment. That should have ended the matter.” Funny how editorial writers usually so quick to lambast big government as ineffective suddenly take its word as gold when it makes decisions they agree with. Contrary to the Journal ‘s unquestioning acceptance of the EIS’s, during State’s environmental review of Keystone XL it became clear that just because an environmental impact statement is performed doesn’t mean the impact on the environment has been assessed. CEO Girling said on the conference call, in response to a question I posed, that the pipeline was subject to “by far the most exhaustive and detailed analysis ever conducted of a crude oil pipeline in the United States,” and supporters like to say that the length of the process — three years — indicated how thorough State had been. In fact, the opposite is true: The reason it took so long is that State kept messing it up. The EPA, which for obvious reasons has considerably more experience in conducting and assessing environmental reviews than does the State Dept., gave the first EIS its lowest possible rating, and the second review received just one grade up from that — twice forcing State back to the drawing board. When I asked him about the third, “final” EIS, released in August, Bill McKibben, the founder of the climate-change group 350.org and scholar-in-residence at Middlebury College who’s been a leading voice of opposition to the pipeline, said, “I’ve graded enough blue books to know when people are avoiding the main question.” The EIS, he said, was a “masterpiece of environmental obfuscation” that didn’t even address the pipeline’s potential effects on greenhouse gas emissions, as the EPA had instructed it to. 3) “Politicians [who opposed the project's route through Nebraska] seem to have no problem with some 25,000 miles of pipeline that already crisscross the Ogallala aquifer [which underlies much of the state],” writes the Journal . That might have to do with the fact that only one of them carries tar-sands oil and the benzene that the increasingly-common form of it usually contains (benzene spreads after oil stops moving), as Keystone XL would have, and none go through the most ecologically-sensitive part of the Ogallala — Nebraska’s Sandhills, where the pipe would have been sitting in the aquifer, exposing residents to benzene exposure in the event of a spill, according to two University of Nebraska scientists I spoke to. Moreover, Nebraska politicians, just like politicians and policy makers everywhere, know that it’s much harder to stop something through policy before it starts than to undo a policy once enacted. Ethanol and oil-exploration subsidies are two examples. Another is the tax-free status of Internet retailing. And most importantly, saying we shouldn’t oppose something now because we didn’t oppose it before is a recipe for moral calcification. I wonder if the Journal ‘s editorial writers would take this attitude toward slavery, or female suffrage, or many of the other issues on which the better angels of our nature have triumphed over time? 3) So that I can’t be accused of doing what I describe the Journal as doing, I will point out that there is probably some truth to its implication that alternative methods of getting the oil Keystone XL would have carried to market may have higher greenhouse gas emissions than pipeline transport. (That was the finding of a credible report I read in the course of my research for Bloomberg Businessweek .) But it may not matter. The unlikely coalition of ranchers and greens, Nebraska and Hollywood, has considerably raised the profile of tar-sands production, which is environmentally destructive locally and has higher greenhouse gas emissions than conventional oil. Opposition to increased transport in Montana (which borders Alberta) is considerable, and local and regional aboriginal populations in Canada have shown strong opposition to oil-sands development and transport through areas over which they enjoy sovereignty. Environmentalists on the left and property-rights advocates on the right scored a major victory with Pres. Obama’s decision Thursday. (Greens, who’ve been increasingly isolated politically, could learn a lesson from the experience and try to form more, similar coalitions, emphasizing that environmentalism is conservative.) The goal in opposing KXL, McKibben told me, was “to keep as much carbon in the ground as we can.” The Sierra Club has had some success along these lines: Its “Beyond Coal” campaign pressured the EPA to effectively halt licensing of new coal plants, and helped convince large utilities, such as Los Angeles’s Department of Water and Power , to switch from coal to power sources that emit less (or zero) carbon dioxide. It might work. Jackie Forrest, oil-sands analyst at energy consulting firm IHS-CERA whom I interviewed for my piece, said that “if oil sands doesn’t get a new market outlet by 2015, it’s going to saturate the markets it can get into. So we will see production growth stall.”

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Fannie Mae Seeks Additional Federal Aid To Stay Afloat

November 8, 2011

WASHINGTON – Fannie Mae , the biggest source of money for U.S. home loans, on Tuesday reported a $5.1 billion third-quarter loss and said it would seek $7.8 billion in additional federal aid to stay afloat. Fannie Mae, which was seized by the government in September 2008, said the loss was attributed to continued weakness in the housing market and credit-related expenses on home loans made prior to the 2008 financial collapse. In the year-earlier quarter it had a loss of a $1.3 billion. Fannie Mae has drawn $112.6 billion in bailout funds from the Treasury Department since 2008 and has paid $17.2 billion to the government in the form of dividends. Fannie Mae and its smaller rival Freddie Mac were seized by the government as losses on subprime mortgages threatened insolvency. The government has pledged unlimited funds to keep the firms afloat through the end of 2012. (Reporting by Margaret Chadbourn; Editing by Leslie Adler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Obama’s Recession Inconsistency

November 8, 2011

To listen to President Barack Obama, the recession is either a current condition or an historical event.

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Gas Prices Dropped Nearly 4 Cents In The Past 2 Weeks

November 7, 2011

(Reuters) – U.S. average retail gasoline prices fell almost 4 cents a gallon over the last two weeks as the weak economy prevented refiners and retailers from passing their higher costs along to consumers, according to an industry analyst. The national average for self-serve regular unleaded gas was nearly $3.43 a gallon on Nov 4, having fallen 3.82 cents per gallon since the last report on Oct. 21 by the Lundberg survey. The survey is based upon visits to about 2,500 gas stations in the United States. “Prices of crude oil rose in the past two weeks, but we did not see it at the pump,” said Trilby Lundberg, editor of the survey. She said refiners suffered declining margins during the period, meaning there was a smaller difference between the wholesale selling price of gasoline and the cost of crude oil. Retailers, meanwhile, were also unable to pass along higher costs due to declining gasoline demand. “This is directly because of poor economic conditions,” Lundberg said. “The economy has damaged the work commute, which is the chief input to gasoline demand.” Should crude oil prices keep climbing, Lundberg said refiners and retailers will not be able to continue swallowing their higher costs. But she said costs of crude might not rise in the near-term, in part because of expanding supplies from Libya. Los Angeles, at $3.83 a gallon, had the highest average price for self-serve regular unleaded gas, while the lowest price was $3.06 a gallon in Albuquerque, New Mexico. (Reporting by Ransdell Pierson; editing by Gunna Dickson)

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Amid Deficit Gloom, Several States Have Money To Spare

November 5, 2011

JUNEAU, Alaska — The budget questions that sent Alaska lawmakers into special session this year had nothing to do with austerity measures or disagreements over cuts to state agencies or programs. They just couldn’t agree on what to do with all that extra money. Resource-rich Alaska took in nearly $1.9 billion more than expected last fiscal year thanks largely to high oil prices and ended the fiscal year with an estimated $260 million surplus, an amount equal to nearly 4 percent of its general fund. A handful of states – led by those that enjoy bountiful energy reserves such as West Virginia, Wyoming and North Dakota – have found themselves in similarly enviable positions, oases of optimism in an otherwise barren landscape of budget cuts and government layoffs. A few other states, including Massachusetts, South Carolina and Virginia, have combined slight increases in tax revenue with tight spending controls to produce modest surpluses. In West Virginia, the surplus is going toward reserves, pension programs and debt. Wyoming put much of the extra money into savings after years of investing heavily in roads and schools. And in North Dakota, which is experiencing an energy boom similar to the one Wyoming went through several years ago, investments included an extra $370 million for road repair and construction, especially in the oil-producing western part of the state. Some $340 million will go to schools over the next two years to help reduce property taxes, while $22 million will go toward a disaster relief fund for a state that has been inundated with floods in recent years. At the same time they are saving and investing, North Dakota and West Virginia are reducing their corporate income tax rates, a move that could make them even more attractive to certain businesses. Unemployment in the many of the states running surpluses has been well below the national jobless rate of 9.1 percent. North Dakota’s rate, for example, was 3.5 percent in September. “I don’t think you can say we’re out of the woods,” Alaska labor department economist Neal Fried said. “We were never in the woods.” A yearlong review of fiscal and economic data in all 50 states by The Associated Press found 15 states with budget surpluses as they headed into the current fiscal year. They ranged from Mississippi, where the $6.6 million surplus represented less than 1 percent of general fund spending, to Wyoming, where the $437 million surplus was equivalent to 28 percent of the state’s general fund. Massachusetts has benefited from stronger-than-anticipated revenue from capital gains taxes to build a surplus of just more than 1 percent of its general fund budget. It used nearly three-quarters of the $460 million surplus to replenish the state’s reserve fund, while directing other surplus money to cities and towns recovering from deadly tornadoes in June, state courts and to provide modest raises to social service workers. Most states have not been so fortunate. They continue to feel the effects of a recession that has led to steep declines in state and local tax revenue, with 23 states having to make budget cuts during the last fiscal year, according to the National Association of State Budget Officers. In Washington state, for example, the Legislature is preparing for a special session to address a $2 billion, mid-year deficit. The state’s Democratic governor has proposed eliminating the state’s health care program for the poor and a medical program for disabled adults. Lower than expected tax revenue in California means that state is likely headed for deeper cuts to social services and higher education. Even in Alaska, officials are grappling with how to reverse a decades-long trend of declining oil production and face a future of reduced federal aid as Congress seeks to clamp down on spending, rising Medicaid costs and $11 billion in unfunded pension liabilities. Gov. Sean Parnell acknowledged this in making record cuts to an infrastructure spending bill passed by lawmakers last spring. Yet even with those reductions, the state wound up with a $2.8 billion public works package, the same as the year before – a spending level Parnell deemed “healthy.” Among the state’s priorities is investing in new roads, schools and energy projects that could help make the delivery of heat, electricity and fuel more reliable and affordable. Alaska also is putting $66 million toward pursuing what would be the largest dam built in the U.S. in decades. Officials say the $4.5 billion, 700-foot high Susitna River dam would help meet Alaska’s goal of getting half its electricity from renewable energy sources by 2025, plus help meet the energy demands of the state’s most populous region. The state also plans to spend money on transportation projects and upgrades to school buildings, including contributing about one-third the cost of a $109 million arena at the University of Alaska Anchorage. At the same time, Alaska is building the nation’s largest rainy day fund at $14 billion, an amount that is roughly double the state’s entire general fund. The governor and legislative leaders also have set aside $400 million that could serve as an endowment for college scholarships. Juneau resident Teddy Castillo said such a program would be a huge help to her family. One daughter will graduate high school next year and another is a high school freshman. “I think it’s just awesome to have that opportunity available for them,” Castillo said. In West Virginia, the worldwide demand for coal and a conservative approach to government spending have kept the state’s finances in the black. Instead of expanding programs, lawmakers and governors have devoted about $1 billion that was left unspent between 2004 and 2008 toward public pension programs and other debts. Most of that money eased a shortfall in the main retirement fund for teachers. But one consequence of the state’s tight-fisted approach has been government on the cheap: West Virginia ranks low for teacher and public employee wages despite several rounds of pay raises and has among the most restrictive eligibility requirements for Medicaid. “If you’re a mom with two children and you earn more than $6,500 a year, you’re not eligible,” said Perry Bryant, executive director of West Virginians For Affordable Health Care. “If you’re childless, you don’t qualify even if you’re penniless.” In Wyoming, which gets most of its money from taxes on gas, coal and oil production, investments this year included $45 million in additional highway money and $15 million to try to attract large computing centers to the state. The state also has a scholarship fund for high school students, similar to what Alaska is establishing. Republican state Sen. Phil Nicholas doesn’t take Wyoming’s energy wealth for granted. He remembers seeing how the state went from facing a $500 million shortfall in the late 1990s to being flush with cash thanks to the energy boom that started about 10 years ago. While energy production generates more tax revenue, it also can lead to higher ozone levels and other negative consequences. “Recognizing that price, though, Wyoming and our communities are significantly dressed up, if you will,” said Nicholas, chairman of the Senate Appropriations Committee. He said every town in the state has nicer schools, better parks and other amenities than existed before. “You’d be hard-pressed to go to any community in this state that has not benefited significantly,” he said. ___ Associated Press writers Lawrence Messina in Charleston, W.V., Ben Neary in Cheyenne, Wyo., Bob Salsberg in Boston and Dale Wetzel in Bismarck, N.D., contributed to this report.

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After Big Drop, Stock Market Wraps Up Best Month In Nearly A Decade

October 31, 2011

NEW YORK — October is somewhat cursed for the stock market – the Crash of 1929, Black Monday in 1987, a slow-motion meltdown in 2008. This time, the demons made a last gasp, but Wall Street still managed to break the jinx. Stocks had their best month in almost a decade, rising from their low point of the year in an almost uninterrupted four-week rally. The juice mostly came from Europe, which appeared to finally find a strategy for taming its debt crisis. But the finish sure was ugly. The Dow Jones industrial average fell 276 points and finished below 12,000 on the final day of the month. It was as rough an end as it was a beginning: On the first trading day of the month, Oct. 3, the Dow lost 258. Bank stocks were hit hard Monday. MF Global, a securities firm headed by former New Jersey Gov. Jon Corzine, filed for bankruptcy protection. Rating agencies downgraded the company last week, worried that it holds too much European debt. Still, even counting the Halloween scare, October 2011 will be remembered on Wall Street for a comeback that only the St. Louis Cardinals, baseball’s nearly eliminated, newly crowned champions, could match. For the month, the Dow rose more than 1,000 points. It gained 9.5 percent, its best showing since October 2002. The Standard & Poor’s 500 index, the broadest major market average, rose 10.8 percent for the month, the best since December 1991. On Oct. 3, both the Dow and the S&P closed at their lows of the year. The market had been through a brutal summer and was one bad day away from falling into bear market territory, down 20 percent from its most recent peak. Investors were worried that the United States, with an economy growing at the slowest pace since the end of the Great Recession, was on the brink of falling back into recession. And if the U.S. didn’t tip into a new recession by itself, the market was worried that Europe would give it a push. Greece and other European nations face crushing debt, and European banks that loaned them money face big losses. A recession in Europe would be bad news for the United States because Europe buys about 20 percent of American exports. Someone opening a quarterly account statement at about that time might have tossed it in the garbage and been afraid to look again. But that day was to be the turning point. Reports that European leaders were working on a debt plan began trickling out. Investors gained confidence after the leaders of France and Germany pledged to come up with a far-reaching resolution by the end of the month. Added to the encouraging news out of Europe: stronger corporate earnings from the likes of Google and McDonald’s and signs that the U.S. economy was not as bad as feared. Retail sales rose 1.1 percent in September, the biggest gain in seven months. When European leaders finally unveiled the deal Thursday, stocks roared higher. The S&P 500 jumped 3.7 percent and was up for the year for the first time since Aug. 3, just before the U.S. government’s debt lost its AAA credit rating. “It’s a rally off what was a very pessimistic view of the global economy,” says Todd Henry, an emerging-market equity specialist at T. Rowe Price. “Does it have legs? I think that’s yet to be seen.” Under the debt agreement, banks will take a 50 percent loss on their Greek government bonds. Europe will also add money to a financial rescue fund to protect other countries. And banks will increase their capital reserves to protect themselves. With the October books closed, the Dow was at 11,955.01, up about 83 percent from March 2009, its lowest point after the financial meltdown. It would have to rise more than 2,200 points from here to set an all-time high. The S&P 500 finished the month at 1,253.50, down 32 points on Monday, or 2.5 percent. The Nasdaq composite index fell 53 points for the day, or 1.9 percent, and ended October at 2,684. Besides the Depression-heralding collapse in 1929, the crash in 1987 and the meltdown 2008, the stock market suffered through a mini-crash on Friday the 13th in October 1989 and a 554-point drop in the Dow on Oct. 27, 1997. But the month “turned the tide” in 11 bear markets after World War II, according to the Stock Trader’s Almanac. And it turned out to be the best single month for the market from 1993 to 2007, according to the almanac. Strong as it was, this October wasn’t close to ranking as one of the best. After the 1929 crash, the market routinely ran up much bigger percentage gains. In July and August 1932, for example, the market gained more than 36 percent each month. Worries about a second recession have receded somewhat. The government announced last week that the economy in July, August and September grew at an annual rate of 2.5 percent, more than twice the speed of earlier this year. The European debt crisis is still far from fixed. One troubling sign is that borrowing costs for Italy and Spain have increased, a signal that traders remain worried about those countries’ ability to pay their debts. And there are problems closer to home. A congressional “supercommittee” has to find $1.2 trillion in deficit cuts in less than a month, and Republicans and Democrats are fighting about whether to focus on higher taxes or cuts in federal spending. If they can’t agree, investors are worried that Moody’s, the prominent credit rating agency, will follow S&P and strip the United States of its top rating, or that S&P will lower its rating even further.

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College Dropouts and Students Occupy Wall Street

October 25, 2011

NEW YORK — This past May, Audrey Hollingsworth had finally reached her limit. The rising debt and chronic joblessness among her friends, combined with the thought of personally plunking down $35,000 for another year at Warren Wilson College, was more than Hollingsworth could stomach. So, the 19-year-old, Lexington, Va., native dropped out. After a summer spent waiting tables, Hollingsworth boarded a bus to midtown Manhattan in mid-September with $4 in her pocket and no clear plan for what came next. On a whim, she ventured into lower Manhattan’s Zuccotti Park and set her sleeping bag down alongside dozens of other Occupy Wall Street protesters. And in the four weeks since, Hollingsworth hasn’t really left. “This is exactly the kind of experience I left school to go in search for,” said Hollingsworth, who doesn’t plan to venture home again until Thanksgiving. “In the past month, I’ve learned more about the world than I ever learned during an entire year of college.” Citing increasing amounts of student loan debt and rising rates of underemployment among their classmates, many college students have gravitated toward the Occupy Wall Street movement . While an estimated 150 campuses nationwide have staged formal protests and walkouts , another contingent also occupies Zuccotti Park — college dropouts who are voicing similar frustrations and worries about their own uncertain futures. George Machado, 20, is one. Machado, a philosophy and international relations major, dropped out of American University last spring with $53,000 in debt. If headed in a similar trajectory, Machado reasoned he would owe more than $200,000 in student loans come graduation day. Three weeks ago, Machado started sleeping in Zuccotti Park. At first, he wondered if it was merely a bunch of privileged kids posing as activists. But something about the sense of community quickly convinced him otherwise. “I’ve been waiting for this my whole life,” said Machado, who grew up in New York and believes that higher education should be free. “This is a revolution that’s been needing to happen and has finally begun. I’ve joined the revolution,” he said with a smile. Machado stood alongside his friend, Nicole Carty, who graduated from Brown University in May of 2010. The sociology major now works as an independent contractor, a position that includes neither benefits nor health insurance. Carty worries for the millions of well-educated young Americans unable to find decent-paying jobs. While Carty, 23, owes $14,000 in student loans, she can only afford $50 monthly payments. At that rate, including interest, she said she envisions paying off her student loans until she’s well into her eighties. Standing in the middle of Zuccotti Park on Tuesday morning, Jorden Eck and his friend passed out free slices of apple and pumpkin pie to passersby. Eck, a 20-year-old from upstate New York, dropped out of the State University of New York, Binghamton earlier this year after not being able to come up with enough tuition money to continue. Since dropping out of college, the only job Eck could find consisted of selling knives for Cutco, a cutlery vendor. Yesterday marked his 25th day of sleeping in the park. Despite the chillier temperatures that soon await, Eck vows to remain in Zuccotti Park until his demands are met. As for Hollingsworth, who plans to stay on until the end of November at least, she’s still weighing her future options. Finding a job figures prominently, as does the question of whether or not to reenroll in college at some point. Hollingsworth describes her upbringing as “solidly middle class,” with a father who worked as a financial planner. Her mother’s family operates a yarn shop and a blackberry farm on the outskirts of Lexington, Va. While her parents have expressed concern for their daughter’s safety, they’ve been generally supportive of her participation in the movement. For Hollingsworth, the fight over the affordability of higher education is one of the main reasons why she rearranges her sleeping bag each night. “Our parents always told us to go to college and that if we went to college, we’d get good jobs,” said Hollingsworth, who said she is anxiously awaiting the arrival of new tents later this week. “I’m guess I’m really just not so sure that’s going to happen anymore — and that’s why I’m still here.”

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Google Weighs Huge Acquisition

October 22, 2011

Google is exploring the possibility of helping to finance a possible deal by others to acquire Internet search company Yahoo, according to a report published report by the Wall Street Journal on Saturday. Google Inc. has talked to at least two-private equity firms about potentially assisting them to finance a deal to buy Yahoo Inc.’s core business, according to the story, which cited a person familiar with the matter, and did not identify the source. The Journal said Google and prospective partners have held early-stage discussions, but haven’t assembled a formal proposal. The source said Google may not end up pursuing a bid. A spokeswoman for Mountain View, Calif.-based Google declined to comment to The Associated Press. A spokeswoman for Sunnyvale, Calif.-based Yahoo said the company doesn’t comment “on rumor or speculation.” Any involvement by Google in a Yahoo acquisition would likely draw antitrust scrutiny from regulators, because of both companies’ shares in the Internet search business. The report came as investors have recently driven up Yahoo’s stock price, betting that the company will sell itself, either in whole or in part. Closing Friday at $16.12 apiece, the shares have gained nearly 25 percent since Sept. 6, when CEO Carol Bartz was fired. They are up 45 percent from the stock’s 52-week low reached in early August. There has been repeated speculation that the company might be sold to an assortment of buyout firms that prey upon troubled companies. Alibaba Group, a Chinese Internet company of which Yahoo owns a 43 percent stake, has expressed interest if it can line up the financing for a deal that would likely require a bid of more than $20 billion, the current market value of Yahoo’s shares. Microsoft Corp., which offered to buy Yahoo for $47.5 billion in 2008 before withdrawing the bid, also has been mentioned as a possible suitor. Since Bartz’ firing, Tim Morse has been filling in as Yahoo’s interim CEO while also working as chief financial officer. After the company’s third-quarter earnings announcement on Tuesday, Morse told analysts that he couldn’t discuss what the company’s next step might be or when it might take it. Yahoo is under pressure because its revenue has been falling at a time when the Internet advertising market has been growing as rivals such as Google and Facebook gain market share. Although it’s still recognized around the world, Yahoo’s brand has been losing its luster as people increasingly embrace social networks such as Facebook and short-messaging service Twitter to keep track of what’s going on instead of relying on a media hub like Yahoo’s website.

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Steve Jobs Biography Hints At What’s To Come From Apple

October 22, 2011

While at the helm of Apple, Steve Jobs shrouded the company’s plans in secrecy. He even lied regularly, assuring the world Apple had no plans for a certain product, just months before he’d release precisely such a device. Yet Walter Isaacson’s biography of Jobs , which was based on more than forty interviews with the Apple co-founder, lets slip several hints at what may be to come from the company and pulls back the curtain on the balance of power among the executives Jobs installed at Apple. Jobs had ambitions to reinvent television and textbooks, according to Isaacson’s biography . “I’d like to create an integrated television set that is completely easy to use,” Jobs said. As the Washington Post first noted, Isaacson writes that Jobs “very much wanted to do for television sets what he had done for computers, music players, and phones: make them simple and elegant.” “It would be seamlessly synced with all of your devices and with iCloud,” Jobs told Isaacson. “It will have the simplest user interface you could imagine. I finally cracked it.” Apple currently offers a set-top box, Apple TV, that allows users to play content from iTunes and other media providers on their television sets. Yet rumors have circulated for years that an Apple-branded television with more robust integration is in the works. The company has repeatedly dismissed the product as a mere “hobby.” Citing unnamed sources “familiar with the matter,” the Wall Street Journal reported earlier this year that Apple was at work on “new technology to deliver video to televisions and has been discussing whether to try to launch a subscription TV service.” Piper Jaffray’s Apple analyst Gene Munster also predicted that a number of signs, such as the launch of Apple’s iCloud service, Apple’s registration of TV-related patents, and new deals Apple has struck with suppliers, point to the release of an Apple television set by late 2012 or early 2013. However, Munster has previously argued that 2011 would be the year of the Apple-branded television — and users are still waiting for the mythical device. In a 2010 interview, Jobs said he was finished working on the TV industry. “Smarter people than us will figure it out,” he said –- a mere three months before unveiling the second generation of the Apple TV. Isaacson’s biography reveals that Jobs also targeted the textbook industry for transformation and met with major textbook publishers to discuss a partnership with Apple. “He believed it was an $8 billion a year industry ripe for digital destruction,” Isaacson writes. “His idea was to hire great textbook writers to create digital versions, and make them a feature of the iPad.” “The process by which states certify textbooks is corrupt,” Jobs told Isaacson. “But if we can make the textbooks free, and they come with the iPad, then they don’t have to be certified. The crappy economy at the state level will last for a decade, and we can give them an opportunity to circumvent that whole process and save money.” It would hardly be the first time Jobs would take on the challenge of revamping education: NeXT, the company he founded in 1985 after his ouster from Apple, also had ambitions of providing new tools for the classroom, though academic institutions balked at the NeXT computer’s $6,500 pricetag. Jobs’ wife Laurene Powell has been actively involved in education reform for more than a decade. In 1997, she co-founded College Track, a non-profit that aims to increase the number of low-income students who graduate from high-school and go on to receive college degrees. Isaacson’s biography also provides a glimpse into Apple’s corporate politics and the executives who now control its fate. Some doubt whether Tim Cook, who took over as CEO of Apple following Jobs’ resignation in August , can emulate Jobs’ vision and question whether a former COO known for streamlining supply chains can pioneer the industry-changing devices expected of Apple. Jobs, who nominated Cook to be his replacement, may have had his own reservations. He admitted to Isaacson, “Tim’s not a product person, per se.” Yet Jobs also had high praise for Cook, saying he could be a better negotiator than Jobs. “[W]e started to work together, and before long I trusted him to know exactly what to do,” Jobs told Isaacson. Isaacson’s biography suggests that it is Jonathan Ive , Apple’s senior vice president of industrial design and the architect of the company’s sleek and iconic devices, who may be left with the most power — which is exactly the way Jobs intended it, according to the book. “If I had a spiritual partner at Apple, it’s Jony,” Jobs said. “He has more operational power than anyone else at Apple, except me. There’s no one who can tell him what to do, or to butt out. That’s the way I set it up.”

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German Central Bank Head: Repeatedly Expanding Bailout Fund Won’t Solve Crisis

October 22, 2011

BERLIN (Reuters) – Bundesbank president Jens Weidmann said in a newspaper interview released on Saturday that repeatedly expanding the euro zone rescue fund won’t resolve the euro zone crisis. In an interview with Bild am Sonntag released ahead of publication, Weidmann also warned against giving the European Financial Stability Facility (EFSF) a banking license. He said that would be a fatal path to take if states were able to switch on the printing presses. Weidmann also said that raising the leverage of the EFSF would raise risks for German taxpayers. He said there were “good reasons” that EU treaties prevent the EFSF from obtaining a bank license. “The crisis won’t be resolved by permanently increasing the size of the euro zone rescue fund,” Weidmann said. Weidmann warned giving the EFSF a banking license would be tantamount to “turning on the printing presses for state finances and that would be in my view a fatal path to take. And there are good reasons that is forbidden by EU treaties.” He appealed to euro zone governments, saying they “must make a clear decision about which direction to go, how the future of the monetary union should continue.” Weidmann said it should also be remembered that there were also risks associated with increasing the leveraging the EFSF. “With the size of the leveraging obviously the size of the risk rises,” he said. “The fundamental question is how long will it work in the euro zone that countries continue to operate their policies independently while at the same time increasingly collectivising the risks.” He warned against subordinating the central bank beneath financial policy. “Its mission to ensure monetary stability and low inflation rates could then no longer be ensured.” (Reporting By Erik Kirschbaum) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Mike Lux: RED ALERT: Biggest Bank Sweetheart Deals of All Time?

October 21, 2011

There’s a reason a big majority of the country approves of the Occupy Wall Street folks in spite of all the media derision and right-wing attacks, and a reason that demonstrators all over the country and world are organizing in their wake. The reason is that most people know what too many politicians in Washington don’t: that the big banks on Wall Street have a corrupt business model that recklessly assumes taxpayers will bail them out if their bets don’t pan out, and that their political juice will get them out of trouble if they violate laws and slide around regulations. There are three things in the news that remind us of this sorry story once again, and the American people need to raise holy hell about all of them: another sweetheart deal for Citibank on fraud charges, a new Bank of America maneuver that could turn into the biggest taxpayer bailout of all time, and a faction in the administration trying to ram through a new deal for all the big banks to have their legal issues related to foreclosure wiped away. First case in point: the astonishing (and so far mostly unnoticed) little slight-of-hand that Bank of America pulled when it switched over its Merrill Lynch-derived toxic assets to a federally insured program. Read this and weep: Bank of America is moving $75 trillion of highly risky derivative contracts “from its Merrill Lynch unit to a subsidiary flush with insured deposits.” The FDIC, which is the government agency that insures bank deposits, is screaming bloody murder, but the Federal Reserve wants to let them do it. This is a big f’ing deal, friends. Maybe the biggest swindle ever, certainly the biggest government bailout by far if the ship goes down. It makes TARP and Federal Reserve bailouts so far look like chump change. Remember, the Fed bailed out banks to the tune of a mere $16 trillion in 2008, and TARP threw in less than $1 trillion on top of that. Seventy-five trillion dollars is almost 5 times as much. Now, we don’t know how much of the $75 trillion us taxpayers would be responsible for in the end, because we don’t have access to Bank of America’s books, and the company hasn’t failed yet. But to allow taxpayers to be on the hook for this kind of exposure to even some part of a bank’s risky bets is an obscenity beyond belief. Then there is the latest Citibank settlement. Citibank agreed to pay $285 million to settle charges it defrauded investors in a billion-dollar mortgage security deal, and Citibank didn’t have to admit any wrongdoing. This kind of settlement happens all the time , and is yet another example of a corrupted system: mega-banks pay modest fines on massively fraudulent behavior; no one goes to jail, loses their jobs, or even has to admit wrongdoing. Breaking the law — stealing from and defrauding people — and then having your company stockholders pay one of these modest fines if you do get caught is just business as usual for these huge banks. And everyone in the industry knows it. When Hank Paulson, who was generally a great friend of the big banks as the Bush Treasury Secretary, wanted to force Wall Street banks to do something he considered urgent during the 2008 financial crisis, all he needed to do was to say he was going to have the FBI look at the banks’ books and emails. They would agree to anything he asked them to do, because they knew they all had plenty to hide. Bank of America and Citi are the two most wobbly banks of the Too Big to Fail crowd. The argument from 2008-on by Tim Geithner and other pro-Wall Street government officials is that we can’t do anything tough to these banks because it would cause system-wide risk. In fact, they say, we have to keep bailing them out, letting them off the hook for their legal transgressions, not be too tough on regulating them, not break them up, etc. because otherwise we will have another financial panic. But continuing to let them drain us dry isn’t working, and as Europe has discovered, at some point the bailouts get too big to take on. A $75 trillion bailout is too big a bailout number even for the U.S. government to contemplate dealing with, but Bank of America is trying to slide such a deal under our noses. Fortunately, Dodd-Frank did actually give us clear resolution authority for the Too Big to Fail banks. Banks have recapitalized themselves; the stress tests at least in theory gave government officials more knowledge of the banks’ asset holdings. Based on what Geithner himself has said, we should be in no danger of having to bail out Too Big to Fail banks. If they get in trouble, we can take them over just like the FDIC does, sell off their assets, and wind them down. And yet, we keep doing the bailing, as well as the winking and nodding at their fraudulent behavior. The BoA $75 trillion transfer to a federally insured subsidiary is the most egregious bailout yet. The Citibank wink and nod is the latest in a long line of letting crooks off the hook. And we may be on the verge of yet another massive sweetheart deal for the big banks, a deal that if it gets rammed through will not only absolve the biggest banks of all their legal violations, but a deal that would completely undercut any administration political claims that they are willing to take on Wall Street. Check this out : U.S. state and federal officials plan to give the country’s largest mortgage servicers wider protection against legal claims in exchange for refinancing help for existing borrowers, as talks on a $25bn settlement of alleged foreclosure improprieties advance. The proposed agreement would settle allegations that Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial engaged in faulty mortgage practices, including employing so-called “robosigners” — agents who processed foreclosure filings en masse without examining the underlying paperwork — that abused homeowners’ rights and led to wrongful home seizures. The banks declined to comment. Now of course, reporters sometimes get things wrong, and I haven’t heard from the White House whether this story is accurate. What I suspect, in fact, is that there are two factions in the administration, one mostly from Treasury trying to get this done as quickly and quietly as they can, and one among the political staff at the White House who understand how insane it would be politically to give the banks yet another sweetheart deal after the President praised Occupy Wall Street and after David Plouffe told the Washington Post that they will be running against Wall Street in 2012. Understand that what’s spelled out in the Nasiripour story in terms of the legal release for the big banks sounds worse than what Tom Miller was trying to negotiate with them. Once again, big banks would get off with no legal accountability whatsoever for the crimes they committed, and the money they pocketed on fraudulent activities. And while $25 billion sounds like a lot of money, it is a mere fraction of what they made on activities that were clearly not legal, and it is an even smaller fraction of what is actually needed to help underwater homeowners maybe 5 percent of what is needed. Remember how bad HAMP was : this $25 billion program would be politically far worse, because administering a fund that inadequate to the problem would be a nightmare, and for every homeowner you helped, 19 would be ticked off because once again there was nothing to help them. This is a deal that I can absolutely guarantee to my friends in the administration will blow up in their faces badly if they go through with it. All those Occupy Wall Street demonstrators all across the country will be demonstrating against the White House. Labor unions and all the community groups doing bank actions will go crazy. Every economist and consumer group who has been working on the financial reform issue will react very badly. For Obama to run against Wall Street while handing the big banks another sweetheart deal, and getting the negative reaction it would cause, would be untenable. For all these reasons, I don’t think the President will go along with this deal. But as we know from the Suskind book , there are people in his administration who have a track record of acting on their own. Tim Geithner could well be (and from what some sources tell me, is) trying to ram this deal through while the President is dealing with getting our troops out of Iraq (thank you, Mr. President), and fighting with Republicans on taxing millionaires and billionaires. The RED ALERT in my headline is for the President as well as activists who care about this issue. We need to start reining in the big banks’ power to wreck our economy, and we can start by not giving them more sweetheart deals and bailouts.

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Lydia Fisher: Financial Occupation

October 21, 2011

“Financial occupation” is what a Greek journalist said Greece was under. I suppose the journalist means, held hostage by world bankers. Wonder how many Americans feel the same, burdened by debt — be it underwater mortgages, student loans, or credit card debt, not to mention public debt. Greece, among other dire prospects, faces liquidation of national assets? Think about that — what’s left? Within an interconnected global financial system, a poke in any one part may bring the rest of the financial spider web down. What to do when a country is way overextended relative to its growth prospects? A Greek default would ripple through Eurozone banks to the U.S. banking system. No doubt, Greece mismanaged its affairs. Politicians overpromised, overspent. For a small country, the debt’s a staggering near half trillion , with no visible growth engine in sight to service the debt. No means to borrow in capital markets. Imagine one year Greek bonds way north of 100 percent! Greece, it’s people, are at the mercy of the world’s bankers, leaders — relying on loan “handouts,” just to pay its bills, if at all. It’s people are imprisoned in chains of debt. Some innocent and some not so innocent, now feel the brunt, as austerity pushes through the front doorstep. I came across this from a friend as it relates to the economic crisis — “culpability of few, responsibility of all.” All the more, the responsibility for vigilance in the face of the seemingly invisible that sooner or later manifests itself. We live in a world of financial warriors. They can take anyone hostage — through loans, through financial speculative attack like short selling raids, through credit default swapping. The empire building “Too Big to Fails,” even come to the rescue. With provisions and creative solutions — as in the case of Greece, to find transactional ways to defer debt into the future. Creativity or “kicking the can?” No wonder, headlines pulsate with financial misdeeds against humanity. The silver lining in the ongoing crisis is that it challenges the world — about the world being owned by few. Maybe we’ll get it all out there for a healthy dialogue and movement for economic justice, for work democracy for all people, for peace and harmony. What’s the real problem here at home? It’s obviously not political democracy. Is it the free market enterprise economic system? Or, is it those at the levers? It’s people who distort systems — when they lose their sense of ethics and morality. Two economic systems can start from two different premises (for example state-ownership or private ownership) and end up in the same place through human distortion of their theoretical principles. Take the former Soviet Union. The centrally planned, state-owned economy crumbled, under the weight of big government. As we look into the future, what’s the trade here? What kind of economic system have we morphed into when byzantine banks are bailed out, propped up, now partially owned by us? Are we growing a byzantine government bureaucracy that may crowd out private enterprise? What then of progress and freedom, our ability to shape our destiny? Well-being and self-esteem come with self-reliance, a sense of ownership and participation. It’s naturally human to be motivated when we have independence, fulfillment and a sense that we are advancing, have an opportunity to make not only a living wage, but a little more to treat ourselves and our families. It makes for a healthier, happier, society all in all. There are think tanks, consulting firms, eager Americans, already working, ready and able to help, to construct an economy that aspires to benefit all. It takes leadership and will. Concentration of wealth and power is a symptom of crony capitalism. Did we play by the rules of capitalism? There’s accountability already embedded in our economic system. Manage well, you succeed. Manage poorly, you fail. What happened to the notion of a level playing field allowing many to compete? What did we do? The proper role of government in a free-enterprise system is to police market participants at arm’s length, not join their ranks and choose winners and losers. That’s a line we crossed a long time ago… Think Bear Stearns, AIG, Lehman, Countrywide, to name a few, all the way back to the Fed-orchestrated bank bailout of Long-Term Capital Management in 1998. Without Washington enablers dismantling the boundaries and paving the road, the bankers would have been bridled, hemmed in (if they couldn’t regulate themselves in the first place). After all, the dismantling of Glass-Steagall unleashed the building of the “Too Big To Fails.” Will history look upon them as dinosaurs? Bigness, of course, brings wealth and power, and with power, more wealth for more power. No surprise, then, the income inequality and the rise of what some call a “plutocracy.” A former World War II French Resistance fighter, Stephane Hessel, has written a book titled Time For Outrage . Millions of copies sold worldwide. Hessel has this to say: “If you want to be a real human being — a real woman, a real man — you cannot tolerate things which put you to indignation, to outrage,” he says. “You must stand up. I always say to people, ‘Look around; look at what makes you unhappy, what makes you furious, and then engage yourself in some action.” Otherwise? Ask Greece.

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Senate Rejects Slimmed-Down Jobs Bill Aimed At Helping Teachers, First Responders

October 21, 2011

WASHINGTON — Despite a campaign-style push this week by President Barack Obama, the Senate on Thursday scuttled pared-back jobs legislation aimed at helping state and local governments avoid layoffs of teachers and firefighters. Obama’s three-day bus tour through North Carolina and Virginia – states crucial to his re-election race next year – didn’t change any minds among Senate Republicans, who filibustered Obama’s latest jobs measure to death just as they killed his broader $447 billion jobs plan last week. The 50-50 vote came in relation to a motion to simply take up the bill. Some Democrats who voted with the president, like Sen. Joe Manchin of West Virginia and Jon Tester of Montana, however, said they couldn’t support the underlying Obama plan unless it’s changed. Thursday’s $35 billion measure combined $30 billion for state and local governments to hire teachers and other school workers with $5 billion to help pay the salaries of police officers, firefighters and other first responders. The White House says the measure would “support” almost 400,000 education jobs for one year. Republicans call that a temporary “sugar high” for the economy. Despite the negative vote, Obama and his Democratic allies are acting like they’ve found a winning issue in repeatedly pressing popular ideas such as infrastructure spending and boosting hiring of police officers and firefighters. The sluggish economy and lower tax revenues have caused many teachers’ jobs to be cut over the past several years. “In the coming school year, many school districts will have to make another round of difficult decisions that will cost jobs and put the education of the nation’s children at risk,” a White House policy statement said. After the failure of the jobs measure last week, Democrats vowed to try to resurrect it on a piece by piece basis, even though the strategy doesn’t seem to have any better chance of success. But Democrats are trying to win a political advantage through repeated votes. They’re also pressing for passage of a poll-tested financing mechanism – a surcharge on income exceeding $1 million. An AP-GfK poll taken Oct. 13-17 found 62 percent of respondents favoring the surcharge as a way to pay for jobs initiatives. Just 26 percent opposed the idea. Republicans say the president is more interested in picking political fights with them than seeking compromise. Still, they don’t seem to be afraid of a politically weakened Obama. Not a single Republican backed the president in last week’s vote “The fact is we’re not going to get this economy going again by growing the government. It’s the private sector that’s ultimately going to drive this recovery,” Minority Leader Mitch McConnell, R-Ky., said. “Look, if big government were the key to economic growth, then countries like Greece would be booming right now.” At the same time, several Democrats opposed the underlying measure, even though they voted in favor of at least allowing debate to begin. “This bill fails to give taxpayers any guarantee that this money would actually be used to hire teachers and invest in our schools,” Tester said. “States would get loads of money with little guidance that they spend the money on teachers.” And Joe Lieberman, I-Conn., said the stimulus-style jobs bill spends money the country doesn’t have and takes revenues away from a special “supercommittee” charged with cutting the deficit by at least $1.2 trillion over the coming decade. According to the AP-GfK poll, Obama’s party has lost the faith of the public on handling the economy. In the new poll, only 38 percent said they trust Democrats to do a better job than Republicans in handling the economy, the first time Democrats have fallen below 40 percent in the poll. Some 43 percent trust the Republicans more. White House Press Secretary Jay Carney, speaking the day after Obama returned from bus tour, said the president’s plan has the advantage of providing an immediate kick to the economy. “The Republicans don’t have proposals that would help the economy grow or help it create jobs now,” Carney said. “That’s the comparison.” Republicans want to roll back government regulations that they say choke job growth. They backed free-trade pacts with South Korea, Colombia and Panama that were ratified this month. They also back extending tax breaks for businesses that buy new equipment and favor offering a $4,800 tax credit to companies that hire veterans. Democrats and the White House, meanwhile, are confident that other elements of Obama’s larger jobs bill, including extending cuts in Social Security payroll taxes, will pass. A 2 percentage point payroll tax cut enacted last year expires at the end of the year. Obama has proposed cutting it by an additional percentage point and extending the cut to the first $5 million of a company’s payroll.

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Fed’s Tarullo: Housing ‘Continues To Hang Like An Albatross’ On Economy

October 20, 2011

NEW YORK (Reuters) – The Federal Reserve should consider buying more mortgage bonds to support a fragile economic recovery and a downtrodden housing sector, Fed Board Governor Daniel Tarullo said on Thursday. In his first speech explicitly on the economic outlook since joining office in 2009, Tarullo, who tends to focus primarily on regulation, argued vehemently that more should be done to address the country’s jobless crisis. Because the ongoing rut in housing is so central to the recession and the anemic nature of the subsequent expansion, the Fed should refocus its efforts on housing, he said. “I believe we should move back up toward the top of the list of options the large-scale purchase of additional mortgage-backed securities,” Tarullo said in text prepared for deliver at a conference at Columbia University. “There is need, and ample room, for additional measures to increase aggregate demand in the near to medium term, particularly in light of the limited upside risks to inflation over the medium term.” The Fed’s earlier interventions in the mortgage bond market, which totaled a whopping $1.25 trillion, were controversial, with some top policy makers saying they were leery of engaging in what potentially constituted allocating credit to a specific sector of the economy. Tarullo downplayed such concerns, arguing that putting the economic expansion on a more solid footing was the more pressing issue. “Housing continues to hang like an albatross around the necks of homeowners and the economy as a whole,” he said. He suggested lawmakers should also be thinking about ways to stimulate growth, but said Fed actions should be independent of fiscal policy considerations. “I certainly do not disagree that well-conceived policies by other parts of the government could produce gains in employment, investment, and spending. But the absence of such policies cannot be an excuse for the Federal Reserve to ignore its own statutory mandate,” he said, referring to the central bank’s dual mandate for price stability and maximum sustainable employment. Despite the Fed’s extraordinary efforts to stimulate the economy through highly accommodative monetary policy, the U.S. economy grew less than 1 percent in the first half of the year. Unemployment has remained stuck at 9.1 percent for several months, and Tarullo argued that even that startling figure understates the sorry state of affairs. “Nearly 30 million Americans … are officially unemployed, out of the labor force but wanting jobs, or involuntarily working only part time,” Tarullo said. The notion that U.S. unemployment was permanently higher due to “structural” issues is misguided, he said, saying that less than a quarter of the recent spike in joblessness can be accounted for by such factors as skills mismatches and difficulties in relocating. (Reporting by Kristina Cooke; Writing by Pedro Nicolaci da Costa; Editing by Leslie Adler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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WATCH: Donald Trump On Gaddafi’s Death: ‘Big Deal’

October 20, 2011

Hearing the news of Muammar Gaddafi’s death on Thursday, many American leaders released statements on what the end of the Libyan dictator’s run meant for the world. “The dark shadow of tyranny has been lifted,” said President Barack Obama. “I think people across the world recognize that the world is a better place without Muammar Gaddafi,” said Republican presidential candidate Mitt Romney. But businessman Donald Trump? He needed only two words: “Big deal.” After hearing of the death , Trump, the business magnate perhaps best known for his role on the NBC reality show The Apprentice , took to his webcam for an installment of “From The Desk Of Donald Trump” to discuss the political ramification ( h/t Mogulite ). Trump, who’s recently been labeled the “GOP kingmaker” by the Boston Globe , quickly launches into a criticism of the Obama administration’s decision-making during the Libyan uprising, specifically that the president should have bartered with the rebels for oil pending their victory in exchange for U.S. military support. The Obama administration did officially endorse the primary rebel group, the Transitional National Council, in July , and later pledged U.S. allegiance to the multinational coalition in aid of the uprising. “The rebels would have given us everything if we had some leader who knew how to negotiate,” Trump said in the video. “The rebels were being routed four months ago, absolutely routed by Gaddafi and his men. If four months ago we would have said, ‘We want 50 percent of the oil,’ they would have said, ‘Absolutely, we have a deal. Help us, help us. Please, you have a deal.’” That Trump takes issue with Obama is well documented. In the spring, he demanded that President Obama release his birth certificate . He’s also more recently criticized President for going too easy on the Occupy Wall Street protesters . But “the Donald” has his fair share of history with Gaddafi as well. As Mogulite points out, Trump once bragged to FOX News’ Fox and Friends that he “screwed” the Libyan dictator by renting him a plot of land at a hugely exorbitant rate. “Then I didn’t let him use the land,” Trump added. WATCH “From The Desk Of Donald Trump: Gadhafi”

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LIVE UPDATES: Latest Developments From The Global Occupy Movement

October 20, 2011

Occupy Wall Street, a movement that began as a small band of protesters in Zuccotti Park, soon gained endorsements from major unions and progressive leaders as well as prominent politicians. Within a few short weeks, it began to resemble a movement with more than 900 meetups in 900 cities across the country. On Oct. 15, the cause spread across the globe with Occupy rallies in Australia, London, Madrid and other cities saddled with long unemployment lines, gross income disparities and hapless politicians. Organizers have erected tent cities in town squares and held rallies in front of city halls. Major marches have been held in Las Vegas and Portland, and there have been strong showings in Chicago and Austin as well as a stubborn encampment in Atlanta. (CLICK HERE OR SCROLL DOWN FOR LATEST UPDATES ) It’s unclear just where all these general assembly meetings, Twitter updates and teach-ins are heading. Democratic leaders, including Vice President Joe Biden and House Minority Leader Nancy Pelosi , expressed support for the protesters this week and officials such as U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke have said they sympathize with the protestors’ feelings of anger towards big banks’ role in the financial crisis. Naomi Klein, Michael Moore, Tahrir Square veterans and notable environmentalists have all made cameo appearances. Authors have stepped up and added their names. Organized labor has also backed the protests. This support has not helped relations with the police. The activists have endured pepper spray, a baton-wielding white-shirt and the mass arrest of more than 700 demonstrators on the Brooklyn Bridge. That incident is now the subject of a class-action lawsuit filed in federal court. These incidents will either come to define the movement or simply be blips onto something more substantial and lasting. The protesters’ list of grievances is long, with issues ranging from the foreclosure crisis and work-place discrimination to student loan debt. The protests in New York and other cities focus on income inequality, a theme common in the group’s internet presence, including on a Tumblr that showcases Americans dealing with joblessness and other issues. Even if the protesters were able to narrow their concerns to one easily defined goal, some organizers say that would miss the point. So what comes next? If you’ve been to an Occupy Wall Street event anywhere in the country, we’d like to hear from you. Send OfftheBus your photos, links to videos or first-hand accounts of what you’ve seen for possible inclusion in The Huffington Posts’s coverage at offthebus@huffingtonpost.com . If you would like to sign up to be a citizen journalist through OfftheBus, sign up at offthebus.org .

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Romney Beating Obama In Wall Street Donations

October 16, 2011

It is no secret that the relationship between President Obama and Wall Street has chilled. A striking measure of that is the latest campaign finance reports.

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SEC Struggles Over Disclosing Which Companies Use ‘Conflict Minerals’

October 16, 2011

WASHINGTON (Sarah N. Lynch) – Securities regulators are struggling to craft a rule that sheds light on companies that use certain African “conflict minerals” but avoids a compliance nightmare that hurts manufacturers. The Securities and Exchange Commission is six months behind schedule in finalizing the rule that is required by last year’s Dodd-Frank financial oversight law. The rule, which was tucked into the legislation at the last minute, will require companies to disclose whether they use tantalum, tin, gold or tungsten from the war-torn Democratic Republic of the Congo. The agency is holding a roundtable discussion on Tuesday to hear from companies, human rights organizations and other stakeholders. The SEC has asked for help navigating the mine field of tricky issues such as tracking conflict minerals through the supply chain and “workable” due diligence. Corporations such as AT&T (T.N) have criticized the rule as overreaching. They say it could trip up companies who contract with manufacturers and have little, if any, control or knowledge about the origins of minor amounts of minerals that end up in their products. Fear about running afoul of the pending reporting rule has already prompted some companies such as Apple Inc (AAPL.O) and Hewlett-Packard Inc (HPQ.N) to stop sourcing from the region. “If you go from compliance on through, this starts to set up not only nightmare scenarios, but also costly scenarios that make it difficult for companies to ensure an adequate supply of raw materials,” said Tom Quaadman, the vice president of the Chamber of Commerce’s Center for Capital Markets Competitiveness. The SEC issued a draft proposal of the rule in December and hopes to finalize it by the end of the year, according to the agency’s website. The challenges of implementing the rule are many. For a start, companies will need to identify whether or not any of the four “conflict minerals” are contained in their products – something that is not always known. Then, if the mineral is present in the manufactured good, the company would have to exercise due diligence to determine where the metal came from. That could mean going through layers upon layers of suppliers, some of whom may be private companies located in third-world countries. And if the metal has been recycled, as gold often is, it could get even trickier to track. “What would be required here is the development of a global compliance infrastructure,” said Brian Cartwright, a senior adviser at Latham & Watkins and former general counsel for the SEC. “The notion is that any public company in the United States will have to file, in annual reports, as an exhibit, a conflict minerals report that has been subject to an independent private sector audit,” said Cartwright. Many companies, business groups and lawyers have urged the SEC to phase in the new rules over time to help make it easier to comply. They also want the SEC to narrow the scope of the rule so that companies are not forced to track trace amounts of minerals. But human rights groups are staunchly opposed to a phase-in period, saying the SEC needs to follow the Dodd-Frank mandate and implement the rule without delay. Because the conflict minerals rule is required by the law, the SEC has little wiggle room to stray from congressional intent. “Businesses should be held accountable for human rights issues, and investors find these concerns to be material in that they, at the end of the day, affect companies’ image and bottom line,” said Amol Mehra, the coordinator of the International Corporate Accountability Roundtable. “All companies need to do… is simply tell us what is in their products.” The SEC must also deal with potential legal challenges to the final rule. The Chamber of Commerce, which in July successfully convinced a federal court to overturn the SEC’s proxy access rule, has its sights on a possible challenge of the conflict minerals rule if the agency does not improve its cost estimates. The agency’s proposal had initially estimated the total paperwork burden of compliance would be $71 million. But the Chamber says that figure is woefully inadequate. The National Association of Manufacturers, a leading trade group fighting the proposal, has estimated the conflict minerals plan could cost industry between $9 to $16 billion to implement. (Reporting by Sarah N. Lynch; Editing by Tim Dobbyn) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Ian Fletcher: Mitt Romney’s Plan to Replace Free Trade

October 15, 2011

As I’ve noted before , Mitt Romney has given some indications that he may be serious about doing something about America’s trade mess. He’s made tough statements about dealing with China which, if sincere, would not only put him beyond the other major Republican candidates on trade, but also far beyond what the Obama administration is doing. I’ve been watching Romney ever since for signs of whether he’s sincere or not, and he just added a few more data points to the picture. Here’s what he’s just said in an op-ed in the Washington Post , one that has the fingerprints of known China hawk Glenn Hubbard, a Romney advisor, all over it: Free trade has the demonstrated ability to make the people of both trading nations more prosperous. That’s boilerplate. But then things get interesting: But for free enterprise and free trade to work their magic, laws and rules that guide the participants are essential to prevent distortions and abuses… Actually doing something about China’s cheating makes some people nervous. Not doing something makes me nervous. We are warned that we might precipitate a trade war. Really? China is selling us $273 billion per year more than America is selling China — why would it possibly want a trade war?… I’m glad I’m not the only person who’s about as afraid of starting a trade war as Ronald Reagan was of starting WWIII by proposing Star Wars! He continues: If I am fortunate enough to be elected president, I will work to fundamentally alter our economic relationship with China. As I describe in my economic plan, I will begin on Day One by designating China as the currency manipulator it is. Aha! I wrote previously about how currency manipulation is heating up as an issue and what difference it could make. Then comes the real nub: More important, I will take a holistic approach to addressing all of China’s abuses. That includes unilateral actions such as increased enforcement of U.S. trade laws, punitive measures targeting products and industries that rely on misappropriations of our intellectual property, reciprocity in government procurement, and countervailing duties against currency manipulation. It also includes multilateral actions to block technology transfers into China and to create a trading bloc open only for nations genuinely committed to free trade. What Romney is basically doing is giving China one last chance to behave, and if speaking softly doesn’t work, he’s threatening a variety of big sticks. The interesting thing is that he’s dressing it all up as an heroic attempt to save free trade — by, if necessary, resorting to such blatantly, indisputably, protectionist measures as “countervailing duties.” (I’m not being dogmatic here. The Cato Institute, the Wall Street Journal , and the other usual suspects agree with me about this definition, and, incidentally, they all hate Romney — which should tell us something.) And Romney is threatening to set up an “authentic free traders club” of nations and keep China out of it. This is tough stuff, with multi-hundred-billion-dollar consequences. It’s also a brilliant stroke of rhetoric, given that there just isn’t the time to explain to Republican voters that free trade really doesn’t work and is a mistaken ideal, period. (Romney probably on some level believes in it, anyway.) But it’s really a formula for defending not free trade, but managed trade at a zero tariff , which is not the same thing at all. This is, in fact, quite possibly a Republican candidate spelling out the end of free trade. “Free” trade, which is what America (though few other nations) practices now, means opening our borders (with trivial exceptions) and letting the chips fall where they may. It’s the international application of the old laissez faire economic ideology of the robber-baron era. It assumes that if foreign nations aren’t wise enough to reciprocate by opening their markets to us, we shouldn’t care. We should live free whether anyone else does or not. Managed trade at a zero tariff is another thing entirely. This position basically says that free trade is a wonderful system, with all these economic benefits, but it’s only good for us if other nations reciprocate. It’s not laissez faire at all, because there are rules. It’s a vision of capitalism as a game where we need to take our marbles and go home if the other side won’t play fair. “Fair” trade has traditionally been a left-wing concept in this country, centered on things like environmental and labor standards. Here we have the right-wing version. (Frankly, I’d prefer a non-ethical concept like reciprocity when dealing with foreigners who don’t and won’t share our values, but the implication is the same.) Free trade only with nations that reciprocate was, broadly speaking, what we had during the Cold War. Of course, we cut a certain amount of slack to foreign nations we wished to rebuild economically to prevent them from going communist — a loophole Japan got very greedy about exploiting long after its sell-by date — but broadly speaking, Western Europe and the rest of the developed world toed the line. Other nations were either non-industrialized and thus not a competitive threat to us, or they were outside our trade bloc because they were communist (China, Eastern Europe, the Soviet Union) or socialist (India). It’s no accident that for most of this era, we ran trade deficits that were either zero or tiny by contemporary standards. What I hope Romney understands is that, if elected, his bluff well may get called. Probably not by the velvet-gloved mercantilists in Tokyo and Berlin, who will coolly assess his seriousness and fold their cards if convinced of it, but by Beijing. I could be wrong, but I have the impression that their dependence on their trade surplus with the U.S., plus their rising sense of their own power, will push them towards a confrontation rather than a negotiated settlement. At the very least, there is the paradox that in order to avoid a conflict, the next president (whoever he or she is) must be willing to risk one. America will therefore need credible and well-worked-out contingency plans to impose a tariff on China and function, if need be, as a tariff-protected economy for a few years at least. Teddy Roosevelt’s America was, of course, a tariff-protected economy. So maybe the whole “speak softly and carry a big stick” thing will work after all.

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Anita Perry Blames Obama For Her Son Losing His Job

October 14, 2011

Anita Perry, the wife of Texas Gov. Rick Perry, said she sympathized with the unemployed Friday because her son resigned from his job at Deutsche Bank to campaign for his father, reports CNN . “He resigned his job two weeks ago because he can’t go out and campaign with his father because of SEC regulations,” she said at a Pendleton, S.C. diner, in response to a middle-aged voter who lost his six-figure job and now works as a handyman. “My son lost his job because of this administration,” she added. CNN reports that the SEC recently adopted stricter rules for investment advisers undertaking political activity. However, Thursday she said that he eagerly resigned. She recalled when her husband brought the family together to discuss his run for president last May. “So, our son Griffin Perry is 28. He loves politics, and he just couldn’t wait. He said, ‘Dad, I’m in! I’m in! I’ll do whatever you need me to do. I’ll resign my job. I’ll do what you need me to do,’” she said in a speech at North Greenville University. ABC News reported that the 28-year old recently quit his job to start an independent consulting firm and to focus on campaigning for his father. He lives in Dallas with his wife, who works as an attorney. Anita Perry has been campaigning for her husband in South Carolina this week. She spoke Thursday about how opponents had “brutalized” the campaign. “We are being brutalized by our opponents, and our own party,” she said. “So much of that is, I think they look at him, because of his faith,” she added, possibly referring to questions in recent days over Rev. Robert Jeffress, who endorsed Perry and has called Mormonism “a cult.” She also compared his decision to run for president to Biblical stories of Moses and Gideon. Rick Perry responded to her comments, saying he stood by her. “You know, family members always take these campaigns more substantially personal than the candidate,” he said Friday morning on CNN. Perry gave a speech Friday morning on how he could create jobs as president. He said, “When it comes to energy, the president would kill domestic jobs through aggressive regulations while I would unleash 1.2 million American jobs through safe-and-aggressive energy exploration at home.”

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Report: Tax Cuts For The Wealthy Cost U.S. Millions Every Hour

October 14, 2011

Tax cuts for America’s top earners are costing everyone, every hour of every day, a new report from the National Priorities Project finds. Tax cuts for the wealthiest five percent of Americans cost the U.S. Treasury $11.6 million every hour, according to the National Priority Foundation. America’s top earners will get an average tax cut of $66,384 in 2011, while the bottom 20 percent will get an average cut of $107. The report comes as party leaders wrangle over the best way to curb the nation’s budget deficit, protesters around the world demonstrate against income inequality and corporate greed and Republican presidential candidates offer their economic plans to voters. Former pizza company CEO and Republican presidential candidate, Herman Cain, has been getting lots of attention in recent weeks for “999 Plan” which would cap the corporate, income and sales tax rates at 9 percent. President Barack Obama unveiled his deficit reduction plan last month , which aims to curb the national debt through a combination of tax cuts and increased spending. The plan includes a proposal to increase taxes on millionaires — the so-called Buffett rule, name for famed billionaire investor Warren Buffett. In an August op-ed in The New York Times , Buffett argued that lawmakers should put an end to tax breaks for the “super-rich.” After Obama announced the proposal Republican leaders criticized the Buffett rule calling it “class warfare.” Still, there are some Republicans who support increasing taxes on the wealthy. Former Federal Reserve Chairman Alan Greenspan — a registered Republican — told CNBC earlier this month that he supports allowing the George W. Bush-Era tax cuts for the wealthy to expire. That could because the tax cuts are weighing on the national debt. The non-partisan Center for Budget and Priorities found that the Bush tax cuts costs about the same as the shortfall from Social Security in the ten years after they were signed into law. If the U.S. reverted to Clinton-era marginal tax rates, the U.S. Treasury would net an additional $72 billion annually , according to Citizens for Tax Justice. In addition, increasing taxes on the wealthy could also help to narrow the widening wealth gap. The net worth of the bottom 60 percent of U.S. households — about 100 million households — is lower than that of Forbes 400 richest Americans. Tax cuts for the wealthy provided Americans making more than $1 million with a $128,832 benefit, while Americans earning from $40,000 to $50,000 got an $860 benefit on average .

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Ohioans To Vote On Collective Bargaining And Health Care

October 14, 2011

While Ohio’s upcoming referendum on the state’s controversial collective bargaining law has become the marquee issue on November’s statewide ballot, two other state issues could impact voter turnout in what has been considered a low-key year. In addition to the referendum to repeal the new collective bargaining law — known as Issue 2 — voters are being asked to approve a law raising the maximum age for judicial candidate appointment and an amendment to the state’s constitution that bans laws requiring residents to buy health insurance . While not connected to Issue 2, which would repeal Senate Bill 5, one Ohio political observer believes the health care vote could impact the collective bargaining vote known as Issue 3. “There were estimates in the summer that this would increase turnout by five percent,” said John Green, director of the Bliss Institute of Applied Politics at the University of Akron, of the health care vote. Ohio has no statewide offices on the ballot in 2011, with only municipal offices being contested. Beyond those, the ballot is dominated by municipal and county referendums, including those seeking to raise school tax levies, amend local charters and grant liquor licenses to specific restaurants. At the same time, Green noted that there is no definitive connection between the two issues and both were planned separately. He did note that the two issues cross over in terms of voters, with supporters of the collective bargaining law likely the same as for the health care amendment. “These issues could be linked at the ballot box,” Green said. S.B. 5 was passed by the state legislature and Gov. John Kasich (R) earlier this year and calls for an overhaul of the state’s collective bargaining laws for public employees, including the elimination of the right to bargain over benefits. Using a state constitutional amendment allowing for referendum to overturn state laws, labor groups sucessfully petitioned over the summer to place Issue 2 on the ballot. While some have speculated that Issue 3 — which was certified for the statewide ballot after Issue 2 — was written by conservatives in order to drive up voter turnout to defend the collective bargaining law, proponents of Issue 3 and Green say that is not the case. Maurice Thompson, the executive director of the 1851 Center for Constitutional Law , said the planning started in 2010. Proponents of Issue 3 first presented the Ohio secretary of state’s office with preliminary plans for the amendment in the spring of 2010, and then fought a battle in the state courts after the state’s ballot board rejected proposed language for the amendment. The state Supreme Court ruled in September 2010 that the proposed language could be used. The final signatures for the amendment were completed this July . “It is unfortunate that this is being argued to help Issue 2,” Thompson said to The Huffington Post. While observers expected Issue 3 to be the top issue in this year’s statewide election, Green noted that the heavy campaigning on both sides of Issue 2 and the case pending before the U.S. Supreme Court to overturn the federal individual mandate law have placed it behind the collective bargaining campaign. There have been no statewide commercials on Issue 3 according to Green, while Issue 2 been the subject of multiple commercials from pro-labor groups against the law and a series of commercials from groups in favor. Green noted that the judicial age referendum — Issue 1 — has gained little notice statewide. Melissa Fazekas, a spokeswoman for We Are Ohio, the group leading the charge to overturn the collective bargaining law, said they have not been focused on Issue 3, and Brian Rothenberg, the executive director of Progress Ohio , part of the anti-Issue 3 coalition, said his group has been focused on health care. He said that while there has been some shared campaign literature, there have been no discussions on sharing get out the vote efforts. Thompson said the pro-Issue 3 group has been focused on health care and other than both issues receiving support from the state Republican Party there has been no connection. Thompson also noted the state GOP donated less to Issue 3 than Issue 2. Green said the collective bargaining law becoming the top issue does not surprise him given the scope of S.B. 5 compared to the proposed amendment. “Issue 2 was always more controversial,” he said. “Public unions and their allies were very disturbed by S.B. 5. The labor law covers a lot of different issues, while Issue 3 covers just one mandate.”

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Herman Cain Touts ‘Bold’ Plan At GOP Debate: ‘It Didn’t Come Off A Pizza Box’

October 12, 2011

Straight out of the gate at Tuesday night’s Republican presidential debate in New Hampshire, Herman Cain touted his 9-9-9 plan, as the first part of his economic strategy, which is “present a bold plan.” His bold plan, however, is going to necessarily conflict with the second part of his economic strategy, which is “get serious about the national debt.” Bruce Bartlett, senior policy adviser to Presidents Ronald Reagan and George H.W. Bush, has what is perhaps the deepest and most substantive analysis of the 9-9-9 plan available. Here’s the salient part, with regard to deficits : Veterans of tax reform attempts in the United States know reform is very difficult and time-consuming even once. If the Fair Tax is a good idea, Mr. Cain ought to just do it, without confusing the issue with his unnecessary and highly complicated 9-9-9 plan. After all, one of the prime selling points of the Fair Tax is its simplicity, and the 9-9-9 plan is far from that. Because so little detail exists, it’s hard to do either a proper revenue estimate or distributional analysis of the Cain plan. It’s obvious, however, that Phase 1 would represent a huge tax cut for the wealthy at a time when federal revenues are at a historical low as a share of the gross domestic product and the economy’s fundamental problem is a lack of aggregate demand. Thus the Cain plan would increase the budget deficit without doing anything to stimulate demand, because rich people can already spend as much as they want and are unlikely to spend more even if their taxes are abolished. The poor and the middle class might increase their spending if they could keep more of their earnings, but they will unquestionably pay more under Phase 2 of the Cain plan. With no tax on capital gains, the rich would pay almost nothing, while elimination of all deductions and credits, as well as imposition of a national sales tax, must necessarily raise taxes on everyone else, especially those not now paying income taxes. At a minimum, the Cain plan is a distributional monstrosity. The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase. Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived. Our own Zach Carter points out that Cain specifically referred to his 9-9-9 plan as “revenue neutral” on “Meet The Press” this past Sunday. “Now he’s calling for reducing debt. But there’s not enough discretionary spending in the budget to close the deficit, so he’s implicitly calling for huge medicare cuts.” Cain sparred with fellow GOP candidate Mitt Romney over his economic plan during the debate Tuesday night. “It’s a catchy phrase. I thought it was a pizza deal at first,” Romney said ofCain’s 9-9-9 plan. “9-9-9 will pass. It’s not the price of a pizza,” Cain responded. “It didn’t come off a pizza box. No. It was well researched.”

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WATCH: #OccupyWallStreet Becomes NYC’s Newest Tourist Attraction

October 8, 2011

Some have come to listen and others simply to watch, but it is clear that many travelers now see the #OccupyWallStreet protest as a New York Destination, at least while it lasts. Eager tourists lugging their Metropolitan Museum of Art shopping bags through Zuccotti Park duck under Che Guevara flags and dodge young protesters shouting anti-bailout slogans. The juxtaposition is odd, but no one seems to mind. The protesters are ready to explain their various causes to those that will listen and the tourists don’t seem to find the stale smell of weed and overused sleeping bags off-putting. When a tour bus stops at the edge of the park, the protesters urge the passengers to disembark. “Come see America,” shouts a young man waving a cardboard sign. “Tomorrow,” a woman shouts back. The bus pulls away toward the World Trade Center. A large number of the tourists in the park are young and Asian. They take pictures and avoid the big television cameras lined up like cannons. When a young girl dances up to a group of them and offers them yellow carnations, they smile and tuck them behind their ears. A Swedish couple on the sidewalk nearby is engaged in a halting conversation about the trade deficit with a sign-wielding college student when a police officer tells them to move along. The NYPD is keeping foot traffic flowing and — even as they give way — tourists take photos of the burly officers, who seem in turns game and annoyed. “Yeah, yeah, yeah,” says one policeman as he disperses a crowd amid flashes. The protesters are excited that they’re attracting a crowd: People are the medium and crowds are the message. Whether they are sympathetic to the politics of the protesters or not, the tourists are swelling their ranks just by entering the park. Numbers mean media attention, which in turn means more numbers: Many tourists say they came by after seeing the protest on CNN. A Swedish couple on the sidewalk nearby is engaged in a halting conversation about the trade deficit with a sign-wielding college student when a police officer tells them to move along. The NYPD keeps people moving along and — even as they give way — tourists take photos of the burly officers. A man approaches a girl holding a sign saying, “We are the 99%,” and takes out his camera. She poses for a picture with her hand rolled cigarette dangling from her mouth. The man looks at his camera display, smiles and says “Thank you.” “No problem,” says the young model. She blows out a long stream of smoke as the man walks away, knowing that eyes are on her. A few blocks away, another pocket of tourists gather behind the metal barricades outside the Stock Exchange, waving at police horses and bouncing off hurried traders. They are here to see the the pumping heart of global capitalism and the sounds of the protests are nothing more than a soft but steady beat.

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Robert Kuttner: Wall Street: From Protest to Politics

October 3, 2011

“There go my people. I must find out where they are going so I can lead them.” –Alexandre Auguste Ledru-Rollin, French politician (1807-1874). When elected leaders largely ignore a disgrace like the financial collapse of 2008, sooner or later popular protest fills the vacuum. The Wall Street protests are heartening — but also a measure of the utter failure of the usual machinery of democracy to remedy the worst pillaging of regular Americans by financial elites since the 1920s. For three years, we have been wondering, where is the outrage? For a time, it was co-opted by the Tea Parties — a faux populism, attacking government, financed by billionaires, delivering nothing to the 99 percent of Americans not represented by Wall Street. Now authentic protest directed against the real villains is finally here. The ingenuity of occupywallst.org, its spread to other cities, its blending of internet-organizing with on-the-ground protest, is inspiring. The New York protests, in which more than 700 people were arrested over the weekend, are likely to draw more activists, especially if police keep bungling the choreography of peaceful protest and deliberately leading demonstrators into traps. But sooner or later, protest will need to turn to politics. And God knows, we missed the rendezvous we were supposed to have with democratic politics in January 2009. With a newly-elected president who inspired great hope for change, politics failed us in that first phase of the crisis. Barack Obama installed a Wall Street-friendly team that resisted fundamental changes in the financial model that caused the collapse and the deep recession that followed. The 2010 Dodd-Frank Act, despite heroic efforts by progressives, stopped just short of separating financial speculation from ordinary banking. Most of its pro-consumer measures were added by relatively junior legislators over the objection of the Federal Reserve and the Treasury. The law’s strong provisions are being relentlessly gutted by a combination of industry lobbying, Republican obstruction, and lack of enthusiasm for tough regulation from Tim Geithner’s Treasury Department. The depth of the continuing recession can be traced back to the failure to radically reform the banks in the spring of 2009. Interest rates today are at record lows, but Wall Street banks still make their money from merger deals, complex securitization packages, and trading for their own accounts, while community banks are too traumatized to make loans to any but blue-chip customers. Meanwhile, nobody has gone to prison for the systematic frauds that brought down the economy, consumers are getting gouged by new fees that the banks dream up to compensate for their own losses. And the mortgage foreclosure crisis continues to fester and drag down the rest of the economy. So the Wall Street protestors have plenty to be angry about. But what kind of reform will the system deliver? In many ways, these demonstrations have a lot in common with events around the globe, from the protests that toppled dictators in Egypt and Libya to the spontaneous street protests in Tel Aviv, Madrid, and Athens. In every case, protest was organized outside regular political channels, because politics as usual wasn’t delivering. New people were drawn in, rightly skeptical of the system’s capacity to deliver real change. As a sixties kid, I can’t help comparing today’s situation with the two great causes of that tumultuous decade — ending the Vietnam War and delivering civil rights. In that era, reform was also blocked by mainstream politics. In the case of the antiwar protests, radicals led, liberals came later, and Congress came even later (with the exception of a few early heroes like Senators Wayne Morse of Oregon and Ernest Gruening of Alaska). In the civil rights movement, freedom rides, sit-ins, civil disobedience, the deaths of voter-registration workers — all these acts of heroism only bore fruit when protest achieved its rendezvous with politics, weirdly enough via the same President Lyndon Johnson who was prosecuting the same calamitous Vietnam war that led to his own downfall. In each case, it took several years for street protest to produce durable reform. These two great protests had happy endings (or beginnings), with great pain along the way. But history doesn’t guarantee happy endings. As Wall Street has finally engendered the kind of outrage that it so thoroughly deserves, democratically-elected officials are still light years away from embracing the kinds of drastic reforms that the system so desperately needs. In a democracy, once grassroots protest takes off, you never know what course it will take. Nobody at the time of the early sit-ins and freedom rides could have predicted three great civil rights acts within less than a decade. Bankers have immense power, until public opinion turns decisively against them and democratically-elected leaders decide to lead. These protests were a long time coming; I fear that it will take far longer for the system to deliver the drastic reforms that we need. Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.

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