president

Why You Should Buy American

by Stylelist Home on March 13, 2012

Huffington Post…

Home decor arrives on Capitol Hill Tuesday, when Newell Turner, editor-in-chief of House Beautiful , and Sen. Kay Hagan (D-N.C.) will hold a Washington press conference to encourage consumers to buy American-made home products in order to stimulate the economy and boost job growth. Though 227,000 jobs were added to the economy in February, according to the U.S. Bureau of Labor Statistics , the national unemployment rate still stands at a staggering 8.3 percent. Turner, Hagan and leading members of the furniture manufacturing industry hope to expand the American-made home furnishings business to create more U.S. jobs. Worldwide, home decor is a multibillion-dollar market. The domestic furniture industry itself is relatively small, but Hagan says it has a notable impact on American jobs, especially in her home state of North Carolina. “Our state has a rich history in the furniture industry, and I am working to do everything I can to support and keep those jobs here in America,” Hagan tells Stylelist Home in an email. “Many Americans buy American products as a way to support our economy as it recovers, and furniture is no exception.” “There’s no better time than ever to promote American industries,” Turner says. Moreover, he adds, “There’s nothing more important than creating a home that makes you feel good and safe.” To strengthen his call for American support of domestic products, Turner is planning to discuss the findings of a new survey conducted by Ipsos Public Affairs, which questioned 1,000 adults about their furniture preferences and shopping habits. Some 91 percent of participants said they would choose to buy American-made furniture over products manufactured abroad. However, almost half of those surveyed either had recently bought foreign-made products or were unsure of their purchased item’s origin. These findings suggest there is huge potential for growth for the American furniture industry. With international retailers like IKEA offering competitive low prices, we understand why buyers might still opt for non-American-made products. Plus, international retailers employ a substantial number of U.S. workers. But Turner says there are affordable options made right here in the United States. Additionally, there is the “strong unquestioning level of quality” of American furniture ensured by federal safety regulations, Turner argues, noting that even the Chinese want American-made furniture “because they know the quality is guaranteed.” If the quality and accessibility of American furniture have not persuaded you, there’s also the environment to consider. “From a green perspective, you’re lowering the carbon footprint of things,” Turner says because U.S.-made furniture doesn’t have to travel as far to your home. Turner’s efforts for American-made furniture don’t end with the Tuesday press conference. The April issue of House Beautiful features the growing furniture and design sector in Southern California, with brands like Cisco Brothers , Elite Leather and William Haines Designs (the company founded by a former silent movie actor) shipping products across the country. Although we agree that buying American-made anything is important to our economy, we believe the largest obstacle to buying locally remains the price. Budget is often the single biggest factor when it comes to choosing furniture. So although we may want the gorgeous coffee table handcrafted in California and made with locally harvested wood, if our budget doesn’t allow it, we may just stick to our $20 Ikea Lack table … for now. Have something to say? Be sure to check out Stylelist Home on Twitter , Facebook and Pinterest .

Read more from the original source:
Why You Should Buy American

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

Bob Edgar: Mr. President: A Bit More Bold Please!

by Bob Edgar on January 25, 2012

Huffington Post…

The populist tone of President Obama’s State of the Union speech was no surprise; since he went to Kansas last month to link his presidency to the “new nationalism” of Theodore Roosevelt, it has been clear that the president will seek reelection by casting himself as a champion of economic fairness. Bully for him, as TR might say, and even better for the country if he can capture a bit of Roosevelt’s energy and passion. We could use both those qualities in a president these days, as heirs of the corporate titans Roosevelt battled a century ago hold sway over Washington. But watching Obama’s address, I was struck by his failure to strike at the heart of what’s wrong — the enormous sums of money that special interests, particularly big corporations, have invested to buy our elections and the power that goes with them. Thanks to the Supreme Court, in Citizens United and a string of other decisions, corporate and other special interest dollars now flow virtually unimpeded through our political system. The court’s declaration that corporations are people and enjoy the same free speech rights most of us thought were reserved to individuals has put big money in control. In Washington and most state capitals, political leaders have long understood that deep-pocketed donors can make and break their careers; now “SuperPACs,” fueled by anonymously-donated corporate money, are allowing those politicians to keep their hands clean while their friends do the dirty work of tearing down their political opponents. There are several ways to attack this stranglehold on our democracy; full disclosure of corporate contributions would help, and so would public financing of our elections. The president’s call for a bill to stop the bundling of campaign contributions by lobbyists is another positive step, as is his call for a ban on insider trading by members of Congress. But to really put people back in charge, we must force passage of a constitutional amendment that will permit sensible controls on corporate political spending. An array of organizations and some courageous elected officials are pushing a variety of amendment proposals. All have merit, and polls suggest an amendment would have strong public support, but I’m convinced that none will move forward until voters demand it. That’s why Common Cause has launched Amend2012 , a campaign to help voters speak where they’re sure to be heard — at the ballot box. We want to put a voter initiative or referendum question on the ballot in every state so that the people can instruct their representatives and senators to pass an amendment and submit it to the states for ratification. We understand that this is a heavy lift; amending the Constitution isn’t easy and it shouldn’t be. We may only get on the ballot in a few states this year and we know that it will take several years to get a vote in every state. But we’ve made a start and we’re determined to see it through. If the president and his Republican adversaries truly are serious about change in Washington, they’ll join us.

Original post:
Bob Edgar: Mr. President: A Bit More Bold Please!

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

WATCH: Kendall-Jackson President On Undercover Reality TV Show

January 25, 2012

As anyone who has actually pursued the dream of the wine industry knows, it ain’t easy. Thus was the lesson when Kendall-Jackson President Rick Tigner sported fake braces, color-changing contacts, a sweet new handlebar mustache and cut and dyed hair to become the newest reality TV star on CBS’s ” Undercover Boss .” (SCROLL DOWN FOR VIDEO) The show disguises executives to go undercover into the day-to-day depths of their companies. For Tigner, this meant picking grapes, bottling wines and doing the dirty work at his billion-dollar brand — the parent of labels including La Crema, Murphy Goode and others. According to SFGate , Tigner posed as Jake, “a good-old boy grocery store manager from Plano, Texas” who was starring on a pilot about people considering a career change. The Huffington Post obtained a clip of the show, featuring slapstick scenes of Tigner breaking bottles and fumbling through grape-picking. “That’s disastrous,” said one employee about Tigner accidentally breaking branches on the vines. “That’s like dropping money on the ground. A later scene showed Tigner working the tasting room with a complete lack of knowledge about the wines. (We would have hoped he would have at least been good at that part.) But in Tigner’s defense, it’s not his job to know the wines; it’s his job to keep Kendall-Jackson a billion-dollar company. Check out the episode on CBS on January 29 at 8:00 p.m., and check out our preview clip below:

Read the full article →

Obama Considering Larry Summers For World Bank Chief

January 18, 2012

President Barack Obama is considering naming Larry Summers, his former top economic advisor, as head of the World Bank, Bloomberg reports, citing “two people familiar with the matter.” Summers, a former U.S. Treasury Secretary, Harvard President and World Bank chief economist, has expressed interest in the job , according to Bloomberg. He has the backing of current Treasury Secretary Timothy Geithner and Obama’s current top economic advisor Gene Sperling. Still, the administration is considering other candidates, including Secretary of State Hilary Clinton, to head the World Bank when the term of the current chief, Robert Zoellick, expires later this year, according to Bloomberg. Summers has held a variety of positions both at elite levels of government and in other institutions, and at every move has seemed to engender controversy. Summers resigned as president of Harvard in 2006 after he battled with some faculty members was derided for comments he made in 2005 , saying that women didn’t have the genetic gifts to succeed in science and math. Summers has also faced criticism since leaving the White House for not doing enough to set the country on a path towards economic recovery while he was head of the National Economic Council — a position he held for nearly two years until the end of 2010. In addition, he engendered controversy for raking in millions from hedge funds and big banks before assuming his post. He’s also faced controversy at the World Bank. As the institution’s chief economist, Summers signed off on a memo in 1992 , which said, “I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that,” according to The New York Times . He later apologized. Under an unwritten agreement, the head of the World Bank has always been an American , while the IMF has always been headed by a European. Some emerging market leaders have questioned dividing the roles based on nationality in recent years, Bloomberg reports.

Read the full article →

The Cost Of The NATO, G8 Summits

January 17, 2012

When President Obama announced that Chicago would be the first U.S. city outside of Washington, D.C. to ever host a NATO summit , Mayor Rahm Emanuel said this was Chicago’s chance to “showcase what is great about the greatest city in the greatest country.” But some residents are questioning whether hosting the NATO and G8 summits will be worth the cost to the city — and they aren’t just talking about money. The summits, which will be held May 19 through 21 at Chicago’s McCormick Place, will cost between $40 million and $65 million. The city claims those costs will be covered by private donors and federal funds , the Chicago Sun-Times reported last week, somewhat apprehensively: The guarantee that Chicago taxpayers will not be left holding the bag is a familiar one. After repeatedly insisting that he would never put a blank check behind Chicago’s failed 2016 Olympic bid, Daley offered to sign a host-city contract that amounted to an open-ended guarantee from local taxpayers. But, the Emanuel administration insisted Thursday, “That was a guarantee — not cash out of pocket. No such guarantee is required” for the NATO and G-8 summits. University of Chicago Economist Allen Sanderson told CBS Chicago Tuesday that even with private funds and federal help, the summit could be a “potential disaster.” “Again, I hope it’s not. I hope things go really well and the city gets a real positive spin from it, but if you were betting in Las Vegas, you’d bet that’s not going to be the outcome,” Sanderson told the station, adding that battles between police and protesters could once again tarnish the city’s reputation. Already, protesters are fired up over rules in a proposed ordinance that would have cracked down on activists who resist arrest or obstruct officers. The city has since removed those fine increases and other controversial measures from the ordinance. Ald. Ameya Pawar (47th), however, told the Chicago Sun-Times that some of his constituents are afraid the summits will lead to the violent clashes that came to define the 1968 Democratic National Convention . “They’re worried. What people are saying is, ‘Let’s not put laws in place that look like they’re trying to limit protests. That’s gonna inflame people,’” he said. Meanwhile, Mayor Emanuel and the city’s aldermen faced criticism from unions who have been fighting the mayor over budget cuts and layoffs. AFSCME Executive Director Henry Bayer, who received a letter asking his members to give up their raises to keep city libraries open six days per week , wondered to WLS-AM radio why private funding couldn’t be found for city libraries . The majority of city libraries were closed last Monday after the union representing city librarians could not reach an agreement with the mayor’s office on cuts to the system. “Library services are much more important to Chicago’s neighborhoods than bringing the G-8 to the city,” Bayer told WLS. “If those people can afford to put up $45 million or $60 million, which is the city’s estimate, why isn’t he out there asking them, ‘Wouldn’t you be willing to pay a little bit more — just a fraction of that $60 million — which could be used to keep the libraries open’”?

Read the full article →

Robert K. Lifton: Mitt Romney and Bain Capital: Understanding the Reality

January 13, 2012

In support of his run for the Republican nomination, Mitt Romney has cited his experience at Bain Capital, the private equity firm he founded and led for many years. He has argued that that experience in which he “created 100,000 jobs” demonstrates his capabilities at job creation for the nation and is a qualification for the position of president. Some Romney supporters have gone further. Thus, Utah Governor Gary Herbert, appearing on CNBC’s Squawk Box, argued that Romney’s experience at Bain in “turning around” companies demonstrates that he can “turn around” the United States. Romney’s claims of job creation opened the door to attacks from other Republican candidates. Newt Gingrich and a “super PAC” supporting him, financed by Las Vegas mogul Sheldon Adelson, are claiming in emotion laden ads that Romney’s activities at Bain actually reduced jobs and harmed employees. And Texas Governor Rick Perry has characterized private equity companies like Bain as “vultures” that destroy worker’s lives. Now, Republican leaders of all stripes, including former Arkansas Governor Mike Huckabee and New York Mayor Rudy Giuliani are rushing to the defense of Romney, arguing that attacks on his business record are antithetical to the Republican party’s support of business and free market capitalism. The reality is both more simple and more complex than all those allegations would have one believe. It is simple because the function of Bain and other private equity funds has no planned relation to job creation or job losses. It is more complex, because the activities of Bain do tell us something about Mitt Romney — having nothing to do with jobs. Let’s look at how Bain and other private equity companies actually operate. The business goal of private equity companies is to make profits for investors in the equity funds they manage. The greater the profits for the investors, the larger the take of the fund managers, who typically receive a base management fee of about 2 percent plus a portion of the fund profits, generally around 20 percent. If the fund manager is very successful then the manager’s participation in profits may run as high as 30 percent, which investors may be prepared to accept just to be able to invest with that manager. We’re told that Bain was very successful in creating very high returns on investment for its investors, said to be an astounding 88 percent per year, to the point where it could get 30 percent participation in profits. One tax advantage of the fund mangers is that although their business is to get paid by creating values, unlike other payment for services, which is taxed as ordinary income, their return for their services is treated as capital gain and taxed at the lower capital gains rate. What the private equity firms do to earn those returns is to seek out opportunities to acquire companies where by adding their efforts and talents they will be able to increase the value of the company to the point where they can realize the increased value by selling the company or its assets. A sale can be made to another company, frequently a much larger one in a related field, to another private equity fund which believes it can create even more value for its own investors, or in a public offering to a broad group of shareholders. Most often, in order to increase the return on capital invested by the fund, the fund will borrow a significant portion of the purchase price of the business. And sometimes, if it can, the fund will take back as a distribution immediately upon closing the purchase of the business, a portion of its investment in the purchase price, reducing its own investment and enhancing its return on the investment left in the business. This distribution may come from the company’s existing cashable assets or from money that the company is caused to borrow. This additional leverage also creates additional risk; if things don’t go right the business will not be able to pay the carrying costs of the debt, the lender will take over the business and the fund will lose its investment. Sometimes, that results in the acquired company placed in bankruptcy proceedings either to liquidate its assets to pay off the debt or to restructure, a process Bain also experienced. It should be evident in understanding the function of Bain and other equity funds that job creation or job loss is ancillary to the investment goals and activities. To increase the profits of the acquired company, the fund may reduce the number of employees, reduce pay levels or curtail work time. In that case the fund could face worker anger and union pressure. If the company happens to become very successful, as Staples did after Bain acquired it, it may expand its business requiring that it increase hiring and work time. So what does all of that tell us about Mitt Romney? Certainly, his success in founding the Bain equity fund and operating it very successfully for a number of years speaks to his initiative and intelligence, his commitment to hard work, his ability to pull together a team of talented people and work closely with them. It also tells us that he is willing to take risks and to take action required to achieve his goals irrespective of whether that action helps or hurts people affected by it — in this case employees of the acquired companies. It also tells us that he is flexible — he could not accomplish what he did without being adaptable, willing to “go with the flow” and accommodate his views to his business interests and those of his investors and lenders. We have already seen much of that flexibility in his willingness as a candidate to change his political positions to accommodate the demands of the constituency whose support he is seeking. It also tells us that what he says now on the stump is not necessarily what he will do if he is elected president to accomplish his goals. It also should be evident that “turning around” a business has little relationship with trying to change the direction of a country. The objectives of Bain were clear-cut: increase the profits from the business at whatever cost to employees or suppliers. The objectives of a nation are rarely clear-cut and reflect the balancing of interests of different constituencies with different, often conflicting, desires and aims. The ability to change an acquired company’s direction lay within the power of Bain management. By contrast, the power of a president is diffuse and depends on political circumstances beyond the president’s control, like which party is in power in which branch of government. Leading a nation in a particular direction in those circumstances is very difficult if not impossible, and requires political talents of the highest order to bring the nation with him. And therein lies the rub. Mitt Romney of Bain Capital was a good businessman. The selection process of choosing the Republican candidate and later the president calls for a different valuation based on other criteria: choosing a political leader whose values conform to those of the voter making the choice. A person whose emotional make-up allows him to handle the crushing burdens of office and gut wrenching decisions such as sending troops off to war. Mitt Romney’s business activities at Bain tell us very little about those important values and what he would seek to do as president. And unfortunately, Mitt Romney’s career as a politician and now as a candidate tell us little more than that he can be all things to all people. We have to look elsewhere than Bain Capital to make a well-reasoned decision about Romney’s qualifications for the job of president. Mr. Lifton, a businessman and political activist is writing a book entitled “Life’s Lessons and Stories From a Member of the “Greatest Generation.”

Read the full article →

Boehner Prepares To Do End-Run Around Tea Party

January 13, 2012

By Richard Cowan and Thomas Ferraro WASHINGTON–House Speaker John Boehner, hoping to spare fellow Republicans a second embarrassing defeat over payroll tax cuts, is prepared to navigate around rebellious Tea Party-aligned lawmakers to get a deal, according to congressional aides. Republicans in the House of Representatives got a public drubbing from critics within and outside the party in December for initially refusing to approve a Senate plan to extend the tax break for 160 million Americans through February. The party of lower taxes was left on the defensive, countering a barrage of criticism that its unwillingness to compromise threatened an effective tax hike on workers, potentially damaging the fragile economic recovery. Now, with Democratic and Republican negotiators preparing for a new round of talks in the coming days to extend the payroll tax cut for the rest of the year, Republican leaders are anxious to move quickly to get a deal, aides said. Party leaders fear another battle could distract from the more important task at hand – ousting President Barack Obama from the White House and winning majority control of the Senate in the November elections. They also want to neutralize an issue that Democrats already are using to their advantage in the presidential and congressional campaigns. “I think Boehner will seek a more accommodating approach to get a good percentage of Democrats to vote for it – even if it costs him a lot of House Republican freshmen,” one House Republican leadership aide told Reuters. “His instincts will be not to be so reliant on House Republican freshmen,” the aide added, referring to the 85 first-term congressmen. The freshmen, many of whom are aligned with the populist budget-slashing Tea Party movement, helped the Republican Party win control of the House in 2010 and have since proven stubbornly uncompromising in the debate over taxes and spending. Congress has until February 29 to agree on extending the tax cut, which would give the average middle-class family about $1,000 extra a year. Support has always been soft among Republicans for the payroll tax cut championed by Obama. They question its effectiveness in stimulating the economy and the wisdom of using revenues intended for the Social Security retirement program. But the political fallout from the December showdown with Democrats was so unpleasant for Republicans that some congressional aides now speculate that Republicans might push to accelerate a deal by January 24, when Obama gives his annual State of the Union address to Congress. BIGGER BILL/BIGGER PROBLEMS? Many Tea Party-aligned lawmakers in the House are bitter that Boehner ultimately caved to pressure and agreed to the two-month extension in December. When Boehner informed his caucus of his decision in a conference telephone call, rank-and-file members’ phone lines were muted in an effort to quell dissent. Some Tea Party lawmakers, however, see round two of the payroll tax cut negotiations as another opportunity to press their demands for cuts to unemployment benefits and some federal healthcare programs and a freeze on federal workers’ pay. Those are unlikely to be accepted by Democrats who feel they have the political upper hand. But in the end, Boehner is expected to settle for a deal that gets the job done even if he loses the support of scores of Republican freshmen. A senior Senate Republican aide said December’s drama might have even strengthened Boehner’s hand. Given that a conservative groundswell in late December to block the two-month payroll tax cut, against Boehner’s advice, “backfired in a big way,” some of those conservatives might now conclude that “Boehner knows what he’s doing” and fall into line with him. Boehner spokesman Kevin Smith would not address the potential divisions among Republicans. Instead, he noted “bipartisan support for extending payroll tax relief for a full year, extending and reforming unemployment benefits, and offsetting the cost with spending cuts, while there is bipartisan opposition to tax hikes.” Freshman Republican Representative Jeff Landry, a Tea Party favorite, said that while he favors cutting workers’ taxes, the payroll tax cut is “a terrible idea” because it taps revenues that are supposed to be dedicated to Social Security. Asked about Boehner’s strategy for getting the full-year extension through the House by February, Landry said: “I don’t know how he’s going to play it. I hope he does a better job than the last time.” Landry said he will look closely to see if and how the next payroll tax cut is paid for. That is where Tea Party-aligned lawmakers could again make things more complex on Capitol Hill. Many in Congress think this could be the first and last major bill to pass Congress in this election year, except for must-do spending measures to keep the government operating. Lobbyists are bombarding Congress for requests to add pet projects onto the payroll tax cut bill – mainly extending about $35 billion worth of tax breaks for businesses that expired on December 31. Those include a research and development tax credit and a shorter depreciation period retailers enjoyed for business improvements. While these tax incentives typically enjoy broad support in Congress, the lost revenues, amid huge budget deficits, likely will spark a loud debate over whether they must be paid for. Republicans have long argued that the cost of these kinds of tax breaks do not have to be offset, as they spur economic growth over the long run and pay for themselves. It is an idea many Democrats and economists have challenged as unfounded. Now, some fiscally conservative Republicans are joining in. “I think everything has got to be fully paid for. We can’t afford to increase the debt more or rob more money out of Social Security,” freshman Representative Jeff Denham told Reuters. (Editing by Eric Walsh) Copyright 2012 Thomson Reuters. Click for Restrictions .

Read the full article →

Pro-Gingrich Super PAC Airs Ads Attacking Romney’s Business Career

January 12, 2012

WASHINGTON — A super PAC supporting Newt Gingrich began airing TV and radio ads Thursday attacking Mitt Romney for his career in the private equity world. The 30-second and 60-second TV ads label Romney, the former Massachusetts governor, a “corporate raider” and calls his company, Bain Capital, “more ruthless than Wall Street.” It quotes a number of people who claim to have lost their jobs after their companies were acquired by Bain, which Romney led from 1984 through 1998. “He pulled the rug out from under our plant,” one man says. Another man says, “Mitt Romney and them guys, they don’t care who I am.” And the 30-second ad closes with a woman saying, “I feel that is the man that destroyed us.” Some had speculated that the super PAC, Winning Our Future, might not run the ads, given the enormous backlash that had come from all corners of the conservative movement against the criticisms. But Winning Our Future spokesman Rick Tyler, a former Gingrich aide, said that the ads began running at 11 a.m. in South Carolina, which holds its primary on Jan. 21. Winning Our Future has set aside $3.4 million to spend on TV ads in South Carolina, but Tyler would not say how much of that is going toward running the ads hitting Bain. View other advertising below:

Read the full article →

Romney Blames Concerns About Inequality On ‘Envy’

January 11, 2012

Republican presidential hopeful Mitt Romney claimed concerns about Wall Street, financial institutions and income inequality were the result of “envy.” Romney — who won the New Hampshire primary Tuesday night — attacked President Barack Obama for promulgating the “politics of envy” during a Wednesday interview with Matt Lauer on NBC’s “The Today Show.” Though his attack was mainly directed at the president, Romney’s “envy” remark came after Lauer asked about the concerns of “anyone who has questions about the distribution of wealth and power in this country.” “I think it’s about envy. I think it’s about class warfare,” Romney said. “I think when you have a president encouraging the idea of dividing America based on 99 percent versus one percent… you’ve opened up a whole new wave of approach in this country which is entirely inconsistent with the concept of ‘one nation under God.’” The GOP hopeful also said it wasn’t necessary to have a public debate about the inequality of wealth distribution in this country, and claimed Obama’s focus on this issue was just “part of his campaign rally.” “I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like,” Romney said. “But the president has made this part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it’ll fail.” During a separate appearance Wednesday morning, Romney admitted he has ” an uphill climb ” ahead of him in South Carolina, where he finished fourth in the 2008 presidential race.

Read the full article →

We Watch Newt’s ‘King Of Bain’ Attack On Mitt So You Don’t Have To

January 11, 2012

When Newt Gingrich made clear that he was going to respond to getting constantly slagged by Mitt Romney’s super PAC-funded attack ads in Iowa, Lord only knows that Gingrich had plenty of options. He could knock Romney for innumerable flip-flops as he’s pandered his way through his political career, telling whatever audience he was standing in front of what he thought they wanted to hear. He could tar Romney as the man who provided the vital DNA for the Affordable Care Act that all GOP candidates are required to abhor and vow to repeal, despite the sunnier disposition toward Romney’s health care achievement in 2008. He could fillet Romney for being a conservative apostate — he didn’t merely run in a leftward direction in order to win the Massachusetts statehouse, he assured voters that he would be a moderating influence on the Republican Party, dragging the platform in a more liberal direction. Indeed, at various times, Gingrich has fired shots at Romney, mining these areas and others in an attempt to tear him down. But what no one could have possibly expected — and, judging from the reactions of conservatives, which I would describe as “mortal terror” — what no one on the right could have possibly wanted , was for Gingrich to launch an all-out assault on Romney’s Bain Capital roots, and eviscerate the candidate for being a predatory capitalist. But that is exactly what Gingrich has done, and done with astounding thoroughness, by acquiring the rights to a 28-minute attack documentary that’s come to be known as “King Of Bain.” Made ” by former Romney supporters ,” the result is a potent polemic — combining Ken Burns’ style, the darkness of the “Daisy” ad, and a bottomless reservoir of immutable rage — that paints Romney as a dark-hearted, vicious-minded, boodle-craving technocrat-privateer. It very trenchantly depicts the lives of ordinary people faced with declining job prospects and mounting expenses. It decries the indifference of Romney’s brand of capitalism, and puts a human face on income inequality. If you wanted to mount an argument against corporate personhood on the grounds that a corporation cannot have a moral compass, this will do the trick. In fact, if you screened this before an Occupy encampment, it would almost certainly draw a thunderous ovation. And if you are a GOP strategist, hoping to reclaim the White House in 2012, that’s the problem. Rather than assail Romney in the ways you would expect a conservative to do so during a presidential primary, Gingrich has jumped ahead of the process and grabbed the very argument that Democrats would have happily made to swing voters, and aimed it right at the GOP base. If we assume that Romney is the eventual nominee, then Gingrich and his super PAC, Winning Our Future, have saved the DNC and the Obama campaign a whole lot of time and money. And the attack has now forced Republicans to stand in defense of a specific form of predatory capitalism . Mind you, they’re all for that particular form of predatory capitalism! But they don’t enjoy having being made to defend it publicly, in an election year. Let me briefly describe this video addendum to the Marx-Engels Reader that Newt Gingrich has made, for America. Lights up on a shot of sky, clouds billowing, piano tinkling wistfully. The camera switches to generic depictions of industry and thrift as a voice-over narrator assures us that “Capitalism made America great” and has been a part of “American dreams.” Yes, for as long as we can remember, there has been stock footage attesting to this, and a lot of it is in this movie. But in the wrong person’s hands, we are told, “some of those dreams can turn into nightmares.” Sudden percussion sound and a dark filter? Yep. Sudden percussion sound and a dark filter. Clouds blacken, as the narrator calls out Wall Street raiders, enriching themselves at the expense of American workers. Those seamy Wall Streeters, we are told, were known for their greed — “greed that’s only matched by their willingness to do anything to make millions in profits.” Great line, by the way. “Vincent Van Gogh’s painting talent was matched only by his ability to make beautiful paintings.” “Scarlet’s reddish hue was matched only by its crimson tint.” The comparisons to the rhetoric of Occupy Wall Street, right out of the gates, is apt, save for the commercial’s ineptness. Soon enough, we’re introduced to the villain of this epic — Mitt Romney, head of Bain Capital. His “mission,” we are told, is personal enrichment, and we’re introduced to random working-class types who attest to the fact that Romney doesn’t care about the little guy. “But let’s look deeper. Let’s look deeper at his life,” says one. I predict that we are about to go deeper, and so we shall, taking a look at four instances of lives ruined by Mitt Romney and his insatiable quest to remodel his homes. “For tens of thousands, the suffering began … when Mitt Romney came to town.” And that’s the first twist. This movie isn’t called “King Of Bain.” It’s called “When Mitt Romney Came To Town.” We are introduced, briefly, to Mitt Romney, his Harvard education, and his love for “stripping American businesses of assets” and “killing jobs.” First stop on the road to ruin: Marianna, Fla. Here we learn about a local manufacturer of laundry equipment that got sold to Bain Capital. From there, everything went to crap — production sped up, quality went down, pay slashed, stress mounted. In the end, we’re told Romney “upended the company” and made big profits while “leaving behind a trail of wreckage.” But then Romney turned his sights on KB Toys and destroyed it in similar fashion. This ruined the lives of children. We know this because we see a child, staring into a television flicker, as the sounds of news reports of KB’s demise fill the background. The look on the child’s face says it all: “Oh no. The KB Toys chain is gone, and it was a brand with which I really identified.” We learn that Bain reaped a 900 percent return on investment as 15,000 jobs were lost, which the Boston Herald says was “disgusting.” “Romney called it creative destruction,” the narrator tells us. OK, but really, it was economist Joseph Schumpeter who called it that, but anyway! The ad develops the theme from there, defining “The Bain way” as profiting from the misfortunes of others. We move on to DDi, a technology company that Bain was involved in, courtesy of disgraced Lehman Brothers. Bain, we are told, quickly fired workers, and just as quickly reaped the reward of an increased share value. But Bain dumped the shares, reaping profit, before the stock crashed, and DDI filed for bankruptcy. “Average investors without insider connections were left with huge losses,” we are told, in a way that makes it sound like insider trading is some sort of virtuous pursuit. The sticking point here is that Romney denied having anything to do with this particular pump-and-dump scheme, because he was off saving the Winter Olympics, but documentation proved this wasn’t the case. Finally, we go to Marion, Ind., “which used to be such a booming town … but overnight it changed.” We’re guessing Bain was involved? Yes — there was a paper company that ended up “on Bain’s radar.” The same story plays out — workers cashiered, pay cut, quality diminished, wealth extracted, and lives ruined, as Bain pushed down on the throttle. “Every night I listen to the news and I get very upset,” says one Marionite. “Some nights it doesn’t pay me to listen to it … especially when a certain candidate for president, that ticks my ticker [appears].” (SPOILER ALERT: She is referring to Mitt Romney.) The snows of uncertainty fall, as people drive off, into the distance, leaving their lives behind, borne back ceaselessly into the past, etc. Metaphorically speaking. Also, this ruined Christmas for some. “To Romney and Bain Capital, it was just another deal … for others, it was a pit of despair.” One elderly woman sets up the final turn of the plot: “He’s a money man, and he’s going to look out for the money people. He didn’t look out for us little peons … so you put him over everything, then what? What’s going to happen then?” Well, the violins quicken to a frenzy and the voice-over testimonials grow to a desperate tone, and we’re given a chance to imagine what a Romney White House would look like — broken windows, lonely windmills, derelict buildings, a lone piggy bank falls and shatters. A crowd chants “Wall Street greed.” The phrase “the almighty dollar” is spoken aloud with a disparaging snort. And not for the first time, you think, “Wait. This is being disseminated by a Republican?” But it is, and it is unsparing in its criticism of Mitt Romney. In the world of this movie, Romney doesn’t merely make money, he goes on a “cash rampage.” He doesn’t have colleagues, he has “hatchet men.” And somewhere in the shadows of Bain, “wealthy Latin American investors” lurk, being vaguely “other.” And there is not a trace of American exceptionalism to be found in the video, because its makers have spared no effort to make Romney out to be a hyper-effete, itchy-palmed liege-lord, swelling above the peons with perfect hair and expensive suits. Romney speaks French. He has many homes. He’s always at his happiest the moment one of Bain’s downtrodden victims spills their sad story. Who on earth thought it would be a good idea to take a picture of Romney getting his shoes shined on a airport tarmac with a jet in the background? Don’t know! But Gingrich’s pet filmmakers got that picture, and used it. And they make great use of Romney’s recent flubs on the stump. That time he calls himself an unemployed person? It’s in there. His insistence that he knows how an economy works? You’ll see it. But the clip that gets the biggest workout is the one where Romney attests that “corporations are people” because all the money a corporation makes goes to people. Again and again, the film deploys the end of that exchange, where Romney, over the objections and jeers of a critical crowd, sarcastically yells, “Where do you think goes? Whose pockets?” On the off chance you’re resistant to a filmmaker that beats you over the head, repeatedly, with an anvil, the answer they’re reaching for is “Romney’s pockets.” Again, wow: this is being distributed by a Republican, not a Democrat. Purchased by a Gingrich super PAC, not MoveOn.org. And it’s not been slapped together — real care and real research went into this. But while plenty of GOP establishment types have a range of negative feelings about Romney — from distrust to derision — it’s perfectly understandable that they’d blanch at the sight of this video, and then become aghast at the way the Rick Perry and Jon Huntsman have followed Gingrich into this strange new encampment. Rick Santorum, by the way, has stayed out of this fray. And Ron Paul has risen to Mitt’s defense . And that tells you all you need to know about what motivates this argument in the first place — it’s the last resort of desperate candidates, who — led by Gingrich — have opted to set fire to the common rules of Republican Party politesse and a substantial portion of its codified economic worldview in an effort to prevent Romney from running away with the nomination. The only thing that separates Newt — the man who’s essentially responsible for this thing being out in the world — and the candidates who have leapt onto this anti-capitalist bandwagon, is Gingrich’s extraordinarily boundless need for vindication. This is the product of a man who now wants to destroy Mitt Romney so badly that he’s willing to risk his own excommunication. ( But he’s now beginning to realize he may have made a mistake .) The “King Of Bain” attack ads start hitting the airwaves tomorrow . Pop some corn. [Would you like to follow me on Twitter ? Because why not?]

Read the full article →

Ed Mierzwinski: President’s Recess Appointment of Cordray Gives Watchdog Teeth It Needs

January 8, 2012

Kudos to President Obama for standing up for consumers this week by making a recess appointment of former Ohio Attorney General Richard Cordray to head the new Consumer Financial Protection Bureau. The President’s action clarifies that the CFPB now has all its powers to protect the public from unfair financial practices, whether by banks or other financial firms, such as payday lenders and credit bureaus. Since July 21, the CFPB — a centerpiece of the 2010 Wall Street Reform and Consumer Protection Act — had been up and running, but without clear full powers. It’s the nation’s first federal financial regulator with only one job — protecting consumers — including seniors, students and servicemembers — from unfair financial practices. Now, with a director in place, there can be no dispute that the CFPB has additional abilities that kick in — including the right to supervise payday lenders, mortgage companies, credit bureaus, debt collectors, private student lenders and other non-banks. It also now has additional powers over banks and credit card companies. Along with civil rights, labor, senior and consumer groups , we had long urged the Senate to confirm Cordray, the former Ohio Attorney General, to direct the CFPB. Recently, 37 state Attorneys General , on a bi-partisan basis, had sent a letter to the Senate urging confirmation. Yet, at the behest of both the Wall Street banks and the payday lenders, some Senators had opposed confirmation of any CFPB director. In May, 45 Senators signed a letter to the president and told him that they would block confirmation of any director until and unless the CFPB’s independence and authority were first restricted. They want the CFPB weak and powerless and with a tin cup in hand. Then, on December 8, 45 Senators blocked Cordray’s nomination. (Final vote: 53 Aye – 45 Nay , but 60 Ayes needed to invoke cloture (defeat filibuster)). Fortunately, President Obama has acted to protect consumers and rejected these outrageous demands to weaken the bureau. Opponents were wrong to block appointment of a well-qualified director. They were also wrong to use the confirmation process to seek to eliminate the agency. Any disagreements over the power of the CFPB should be resolved through separate legislation, not by preventing it from doing its job. Opponents claim that the CFPB is ” unaccountable .” Actually, the CFPB is already fully accountable to Congress and the American people. Its powers are similar to those of other bank regulators, although more limited in some ways that opponents don’t like to admit. For example, while all other bank regulators have independent budgets that they can increase on their own, only the CFPB’s independent budget is capped. Only the CFPB’s decisions can be vetoed by other regulators. The CFPB is a new kind of regulator designed to do one job and do it well — protect consumers. The failure of the old bank regulators to stop predatory lending and other reckless Wall Street practices is widely recognized as a primary cause of the 2008 mortgage meltdown that caused the loss of millions of homes, millions of jobs and trillions of dollars in lost retirement income and triggered the current recession. Many consumer advocates and experts consider establishment of the CFPB in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act as the most significant consumer financial protection since deposit insurance after the 1929 Great Crash. Yet, without a director, the CFPB could not fully do its job. Too many members of the Senate failed to do their job, which is to confirm qualified nominees. They backed Wall Street’s needs, not the needs of families, soldiers, seniors and students in the financial marketplace. The president did his job with the recess appointment of Richard Cordray to direct the CFPB. Now, the CFPB can do its job, protecting consumers from unfair financial practices.

Read the full article →

Papa Johns Receipt Calls Customers OUTRAGEOUS Racial Slur

January 7, 2012

Minhee Cho went to Papa John’s for some fast food goodness. Little did she know, she would get it served with a side of racism. At around 12:30 p.m. today, Papa John’s customer Minhee Cho tweeted a photo of a receipt she received at a Papa John’s restaurant in uptown, New York City. In it, under the customer’s name section, the restaurant employee who rang up the order used the racial slur “lady chinky eyes” to describe her. PHOTO: Cho posted the photo to her Twitter page, where it was quickly retweeted by hundreds of people. By 3 p.m., the photo had been viewed over 25,000 times. When The Huffington Post reached the Papa John’s in question for comment, the assistant manager — who only gave her first name as Marjani — said she was unaware of the incident. “I apologize,” she said in a phone interview. “I’m sure they didn’t mean any harm but some people will take it offensive.” She added that she “had an idea of who it was,” based on the time of the receipt. Marjani went on to say that this was the kind of behavior that would result in disciplinary action, but declined to go into further detail on what she planned to do. Papa John’s has yet to respond to the incident in a statement or its Facebook and Twitter accounts, but with such a PR disaster on their hands, they most likely will soon.

Read the full article →

Jason Fitzgerald: Ask Not What Occupy Wall Street Will Do Next; Ask How We Will Change The Status Quo

January 6, 2012

“I wonder what Occupy Wall Street is going to do next…” So goes the refrain that punctuates many conversations about Occupy Wall Street today. The refrain marks a quiet, barely acknowledged shift in the Occupy movement’s place within the national imagination. On the one hand, there have been very few headlines to emerge under the OWS. label in the last month or so. Occupy Our Homes and Ports, the fight over Duarte Park, the short-lived re-occupation over New Year’s, and Occupy Iowa have all gotten some attention, but they have failed to recapture the energy of late October/early November. On the other hand, we’ve come a long way since the days when people crowed about the lack of “demands” from the Occupy Wall Street activists. Now they’re a known entity — identified not by policy positions but by a general political attitude and a collection of images and phrases. Some people believe “they” are simply hibernating for the spring, while others expect that the presidential campaign will spark new protests, most likely over the summer. OWS, in other words, has become a character in a reality television show for which many Americans cannot wait for the next episode. Put differently, Occupy Wall Street, and its companion “the 99%,” have become something like brands. I don’t mean to say that the occupation has been corporatized; rather, OWS has become like a brand in a more fundamental sense. A brand is a fact that can be consumed, or that can be used to motivate consumption, because it is not up for debate. A good brand doesn’t raise questions, it simply is. Nike is that shoe company that makes sneakers for athletes and puts a swoosh on everything it sells. Starbucks is that coffee place you can find anywhere with the caffé mochas you love so much. Bank of America is that dependable bank with ATMs all over the city that is (allegedly) way too powerful to go bankrupt. One can have all kinds of arguments over whether Nike, Starbucks, or Bank of America are good or bad, or do good or bad things, but no one is arguing about what they are, exactly. Occupy Wall Street is the people who are fighting the good fight. It is that left-wing activist thing that puts up tents, sponsors rallies, makes YouTube videos, uses the human mic, holds general assemblies, and gets Michael Moore excited. And ‘the 99%’ is the have-nots, the disadvantaged masses, the not-elites, the protagonist in the class war; ‘the 1%’ is the elite, the powerful, the villain. There’s another word for the transformation from an abstract and indefinable collection of facts and interpretations into a concrete and not-up-for-debate “thing” — the process is called reification . Marxists love the word, which is why most people have never heard of it these days, but it’s the key principle behind the making of a brand. And whatever you want to call the brandlike concretization of OWS, it must be acknowledged before engaging in any more serious discussion of politics in 2012. The first step to recapturing the potential of Occupy Wall Street is to resist its reification, and we can do that by remembering that the power of the Zuccotti occupation was in how much it didn’t make sense. A month and a half after the end of the New York encampment, let’s try thinking of Occupy Wall Street not as an organization but as a claim: that private interest is a public problem . It worked like this: Wall Street is a private space that pretends to be a public space (just like Zuccotti Park — the poetry was in the homology). On Wall Street, meaning the stock market, any adult can become a part-owner of a private company, so that the corporate world seems to offer itself to the democratic masses to be carved up according to its whims. But the truth is that the stock market solidifies power for the wealthy few, who, alone, can afford enough shares to hold sway in boardroom meetings — and, by extension, in the halls of Congress via lobbyists and corporate donations. For the rest of us, the stock market is both the lottery and the illusion of influence (assuming we can afford to “play” at all). Still, the health of the stock market is taken to be an indicator of the health of the nation as a whole. Occupying Wall Street means calling the stock market’s bluff: It means shaming the private sector for pretending to be public, and demonstrating that the public good cannot be served by private interest. The reason “demands” were hard to come by in the early days was that Occupy Wall Street’s claim delegitimized the stock market and corporate power altogether. If that were to be taken seriously, the means by which our nation conducts its business would be in jeopardy, and something else — something unknowable in advance — would have to take its place. The immensity of that change might feel like a revolution, but it is necessary for the well-being of America and the globalized world. So Occupying Wall Street was not a crazy scheme that a group of activists did for attention. They did it for us. If the stock market is really going to be a seat of power in contemporary society, then we all have a stake in what happens there. If Wall Street is king, then Wall Street is ours, and the activists were holding our spot. The state knew this, so it dispatched some of its employees to arrest a few of us, to pepper spray a few others, and then, finally, on a cold November night, to throw all of us out. Today, the distribution of power — you could call it the state, the oligarchy, the 1%, the “system,” or whatever — has got what it wanted. Wall Street and Occupy Wall Street comfortably co-exist. Everyone is happy that the good guys are still fighting, regardless of where they are or how many of them there are left. The stock market bell rings every morning, and both state and federal legislators continue to claim the low market numbers and the rising debt as excuses to gut public programs. Occupy Wall Street is another label everyone can wear to a New Year’s Eve party or talk about with their left-leaning friends. And journalists can do their due diligence by covering new Occupy actions as footnotes to the main event: election season. Instead of asking what Occupy Wall Street is going to do next, we should be asking what kinds of public claims can yet be made that will challenge the status quo, that will confuse people by baldly suggesting that private is public, and that everyone, not just those who can buy into the system, matter. We will know that we have succeeded in cracking the brand-status of Occupy Wall Street when we are no longer speaking about “it” and waiting for “them” to do something new. Instead, we will be talking once again about “us.” Jason Fitzgerald is earning a doctorate in Theater and English at Columbia University. This is his second essay on the meaning of Occupy Wall Street, for Off the Bus .

Read the full article →

More Defendants Would Admit Guilt Under New SEC Policy

January 6, 2012

In a change of policy that comes after more than two years of public and embarrassing scoldings by a federal judge, the Securities and Exchange Commission will now force some defendants to do something they’ve never had to do in order to settle their case: confess. Companies and individuals that settle a civil case with the SEC that also have admitted to or been convicted of criminal violations in a related matter will no longer be allowed to say that they “neither admit nor deny” the agency’s charges, according to the agency. The policy would end a practice that allowed such celebrated villains as Bernard Madoff — who was sentenced to 150 years in prison for masterminding the biggest financial con job in history — to settle charges with the SEC without admitting wrongdoing. However, it wouldn’t affect most SEC settlements, which come independent of any criminal charges. Prior to the change, the SEC, which has the power to file civil, but not criminal charges, included the boilerplate disclaimer in every settlement deal reviewed by the Center for Public Integrity in an analysis last year. “This is a logical updating of the commission’s enforcement policies” said Thomas Gorman, a Washington partner at the law firm Dorsey & Whitney, who writes the SEC Actions blog . “But it doesn’t signal a fundamental shift in policy that will affect the typical civil enforcement action.” That means that high-profile civil defendants will still be able to settle charges without admitting to any wrongdoing. Some recent examples include: Michael Dell, founder of the giant computer manufacturer, who agreed to pay $4 million to settle accounting fraud charges; Steven Rattner, the Obama administration’s one-time auto czar, who agreed to pay $6.2 million to settle pay-for-play charges involving the New York state pension fund; and Paul George Chironis, a broker-dealer at a now-defunct firm, who paid $350,000 to settle charges that he defrauded a group of elderly Sisters of Charity nuns in the Bronx. It also probably won’t do anything to lower the temperature in a public spat between New York Federal District Judge Jed Rakoff and the SEC over whether agency settlements are fair to the public. In a 2010 ruling, the judge “reluctantly” approved a $150 million agency settlement with Bank of America over its Merrill Lynch acquisition, after having rejected an earlier, smaller deal. He said that allowing defendants to walk away without admitting guilt is a “palpable” disservice to the public interest. “Here an agency of the United States is saying, in effect, ‘Although we claim that these defendants have done terrible things, they refuse to admit it and we do not propose to prove it, but will simply resort to gagging their right to deny it,’” he wrote. More recently, Rakoff rejected a proposed $285 million settlement with Citigroup Inc. over charges that it sold risky mortgage-backed securities without telling investors that it was also betting against the debt. Once again, Rakoff said the “neither admit nor deny” language left him no way to determine whether the settlement was fair. The SEC is now appealing Rakoff’s decision in the Citigroup case. The SEC’s traditional explanation for including the boilerplate language had been that defendants will not agree to settle a case if they have to admit wrongdoing because doing so would expose them to future lawsuits from whoever might claim to have been harmed by their actions. But this explanation didn’t make much sense in instances where that same defendant was already admitting to wrongdoing in a criminal case. For example, the SEC and the Justice Department announced on the same day last year that Wachovia had agreed to pay $148 million to settle charges that it rigged bids in the municipal securities market. The bank said it “admits, acknowledges and accepts responsibility for” manipulating the bidding process in the Justice Department deal. But it didn’t admit any wrongdoing in the SEC settlement. For its part, the SEC seems to be downplaying the significance of the change in policy and also serving notice that the change doesn’t mean it is kowtowing to Rakoff. “This policy change does not affect our traditional ‘neither admit nor deny’ approach in settlements that do not involve criminal convictions or admissions of criminal law violations,” the agency said in a press release. “In particular, it is separate from and unrelated to the recent ruling in the Citigroup case, which does not involve a criminal conviction or admissions of criminal law violations.”

Read the full article →

BCS Title Game Produces Record Ticket Prices

January 6, 2012

Monday’s Bowl Championship Series title game between LSU and Alabama is already a blockbuster — in ticket sales. StubHub, the ticket-resale site, reported late Friday that the median price for a ticket to the college football championship was $1,565, compared to $925 for last year’s Auburn-Oregon matchup. This year’s game is trending toward generating the highest ticket prices in college football history, StubHub spokeswoman Joellen Ferrer said. So much for one official’s opinion that the economy is hurting college bowl-game ticket sales. “Fans don’t have the money to travel to see a game,” Tom Starr, executive director of the TicketCity Bowl, told CNN . The exorbitant prices are due to a combination of factors, Ferrer said. The game is in New Orleans, a festive tourist destination near Baton Rouge-based LSU and even Tuscaloosa-based Alabama, just 266 miles away. Plus, the two teams generated extra publicity after a much-hyped 9 to 6 LSU victory over Southeastern Conference rival Alabama during the regular season. The 2008 BCS game between Ohio State and LSU — one of the most expensive title games — had a median single-ticket cost of $1,150 on the secondary market while generating a high of $4,300 and a low of $275. The absolute cheapest ticket for this year was sold for $500, Ferrer said. The most expensive ticket went for a whopping $9,600 on Jan. 5. That makes it easy to predict the winner of the big game: scalpers.

Read the full article →

The Next Big Franchise Opportunity?

January 6, 2012

Dunkin’ Donuts has kicked off 2012 with big plans for an aggressive expansion — and that includes a range of new opportunities and incentives for potential franchisees. The quick-service coffee and doughnut chain seeks to double its U.S. locations over the next 20 years, providing exponentially more opportunities for franchisees, job seekers and doughnut consumers alike. Currently, the company has about 9,500 locations, 7,000 of which are in the U.S. and predominantly franchisee-operated. Why the big push now? “The opportunity is there,” said Grant Benson, vice president of franchise and market planning for Dunkin’ Brands, the Canton, Mass.-based parent company of Dunkin’ Donuts, noting that the first part of the expansion plan will be in the Southeast and Midwest states, as well as in other regions where the company is already seeing strong growth opportunities, including western Pennsylvania, Texas, Denver, Nebraska and Mississippi. “We will ramp up growth,” he said. “There’s an embracing of our opportunities by existing franchisees looking to grow and add to their networks and by new franchisees seeking business opportunities.” According to Benson, the company’s key criteria for potential franchisees includes previous business experience, primarily restaurant and/or quick-service restaurant experience, and background in building teams and managing P&Ls. To serve as incentive for franchisees in these new markets, Dunkin’ plans to provide fee reductions, such as a “material reduction” in royalties, for the first few years of operation to “help reduce some of the early pressures” of buying a franchise. The availability and specifics of the incentives vary on a market by market basis. As far as helping franchisees get the rest of the capital they need to start, Benson said Dunkin’ doesn’t guarantee financing, but works “very closely with certain national lenders to help bring them together with franchisees.” He added, “The best sources of capital tend to be local sources in the areas franchisees are locating their businesses. We help franchisees make presentations to those banks and get information to the banks to help them understand the company.” Besides adding locations, Dunkin’ plans to add jobs. According to Dunkin’, each new store adds an average of 20 to 25 new full-time and part-time employees. “In some of the smaller or rural communities, the effect will be noticeable if even three or four more stores open,” Benson says. “It doesn’t take a lot of units opening to create a lot of jobs and increase the tax bases in these communities.” While Dunkin’ claims each new store adds an average of 20 to 25 new full-time and part-time jobs, aggressive expansion is often accompanied by potential problems, such as encroachment, in which franchisees’ locations open so closely together, they end up competing with each other. But with Dunkin’s expansion, Benson said he expects “just the opposite. Growth is moving away from markets that are already heavily penetrated. We’re going into markets where there’s a lot of room, and even in markets we have heavily penetrated, we have a good performance of not impacting existing stores.” One of Dunkin’s biggest competitors, Starbucks, with about 11,000 U.S. locations, also expanded aggressively before the recession, doubling its number of company-owned stores from 2005 to 2007 before having to close hundreds of stores and laying off thousands of employees. Benson said he isn’t concerned about the Starbucks precedent. “It gives you reason to learn and be careful. But it’s about taking a look at the proximity and the impact of putting stores too close together, and analyzing and planning that very carefully. We’re not experiencing that [issue] even in markets more heavily penetrated than Starbucks. And we continue to be cognizant of it and to look at each and every site.”

Read the full article →

Shannon Schuyler: Making Sense of Our Economic Uncertainty

January 6, 2012

2011 is behind us and we are entering 2012 with certainty and optimism. Yet, with bills to pay from a happy holiday, compounded with financial markets fluctuating daily, today’s only certainty is that our financial future remains uncertain. That’s why financial literacy is more important than ever. A Depressing Back Story Right now, though, our general understanding of finance scores a D — as in dismal. The typical college senior, upon graduation, has already racked up more than $4,100 in credit card debt, reports a Sallie Mae study . A vast majority of students — 84 percent of undergraduates in the same study — recognize they need to learn more about managing their finances. Sixty-four percent of those respondents say they would have liked to participate in some type of formalized financial literacy program. Parents who sent their kids off to college this year probably have asked or are asking themselves such questions as: Can I count on my son or daughter to be financially responsible while away from home? Does my child know how to balance a banking account or save money? Did I teach my child enough? Unfortunately, statistics suggest the answer is no. This lack of financial smarts continues into adulthood. A June 2011 working paper by the National Bureau of Economic Research found that half of adults surveyed said they have trouble keeping up with monthly expenses and bills. And when given a basic set of questions on economics and finance in everyday life, fewer than 10 percent answered all questions correctly. The New Reality While society believes fiscal responsibility starts with individuals, we haven’t given them the necessary tools to make smarter financial decisions. We want our children to understand the dismal economic condition of the country and how that plays out in their household, but at the same time we are still giving them holiday gifts and allowances with little oversight. We are continuing to contribute to an already flawed perception of reality. The old adage holds true even in these times: we cannot teach our children to fish without teaching them to reel in the line. Some states are positioning themselves to address the problem head on by mandating financial literacy curriculum by the time of high school graduation. Thirteen states now require this type of training — far less than the need to embrace this national crisis. Moreover, a study by the University of Wisconsin-Madison revealed that more than half of teachers consider themselves unqualified to use their state’s financial-education standards, and few (less than 20%) feel “very competent” lecturing a class on such topics such as risk management and debt. Piecemeal legislation and teachers who have not been given the tools to teach create an imperative to solve this detrimental education gap. Corporations, nonprofits and private institutions can do something, however. They must join together and, collaboratively, bolster and supplement classroom offerings. Through our expertise and employee base, businesses can help provide access to tools and resources. We can train teachers to master the financial literacy curriculum. We can help students become financially literate. In essence, we can help close this chasm in our education system through bringing together financial literacy knowledge with education expertise.

Read the full article →

Kardashians Shop Around Newest Idea: Their Own Magazine

January 6, 2012

The Kardashians may once again be expanding their empire, and this time in a realm they already seem to rule: tabloid magazines. Rumors are swirling that the reality stars are in talks with American Media Inc. to secure their own magazine. The New York Post’s Page Six reports that a source claimed the family has “been reaching out to several media outlets,” and that the magazine is a “Kardashian idea.” Sources muse that the family, fed up with negative media coverage, wants to feed its own news to the public. There have been no comments from American Media Inc. — the parent company to Star , Shape , Playboy and The National Enquirer — but the anonymous source says the Dash girls plan to be heavily involved in the editorial process. Several media outlets have toyed with the idea, wondering what the final result would look like . According to Page Six , sources suspect that the devoted glossy may be similar to Kim’s celebuzz blog , which posts personal stories and photos about the family and hosts ads for Kardashian-endorsed products.

Read the full article →

Netflix Users To Wait Twice As Long For Warner Brothers Flicks

January 6, 2012

‪ ‬ By Peter Kafka, Warner Brothers Will Make Netflix, Redbox, Blockbuster Wait Longer for New Movies via All Things D Want to watch a new movie just out on DVD from Warner Brothers? You’re going to have to buy it, or wait even longer to get it from Netflix or other disc renters. A new deal between Time Warner’s movie studio and Netflix, Redbox and Blockbuster will double the “window” for new releases. That means the services will now have to wait 56 days after the discs first go on sale to offer them to their customers, instead of 28 days. The move is part of Hollywood’s ongoing campaign to bolster flagging DVD sales, and sources tell me the new deal is supposed to be announced at next week’s Consumer Electronics Show in Las Vegas. Warner Brothers executives have already talked publicly about extending the current window. This is the second time that Warner has been able to get the rental services to wait before distributing its movies. In 2010, it struck deals with Netflix, and later Coinstar’s Redbox, to wait 28 days before renting its new discs. Coinstar and Netflix later landed similar pacts with most of the other big studios. (Coinstar did up end up in legal battles with Universal Studios and 20th Century Fox, which like this Web site is owned by News Corp.) Two years ago, Netflix was able to argue that by delaying access to DVDs, it was able to get its hands on more streaming content, and lower prices for the discs it did buy. This time around, though, Warner won’t be granting any additional digital rights to the studios. It will simply be offering them the ability to buy discs in bulk, at a significant discount to retail pricing, like they already do. Earlier today, news broke that HBO, another Time Warner unit, would stop selling its DVDs to Netflix altogether, but sources tell me the two moves aren’t directly related. Next week’s planned announcement is supposed to be tied to Warner Brothers’ continuing push for Ultraviolet, an industry consortium that’s supposed to allow home video buyers to watch their purchases on multiple machines, in multiple formats. Reps for Time Warner, Coinstar, Netflix and Blockbuster parent company Dish Network declined to comment. Via Warner Brothers Will Make Netflix, Redbox, Blockbuster Wait Longer for New Movies on All Things D More On All Things D: RIM Hopes Next PlayBook OS Will Impress at CES Coming to a Smartphone Near You: Gorilla Glass 2 The Music Business Welcomes the Future, a Decade Behind Schedule Viral Video: Oscar Host Billy Crystal Is a Yeti?

Read the full article →

Jobless Rate Falls To Lowest Since February 2009

January 6, 2012

WASHINGTON — A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011. The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months. The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn’t happened since April 2006. “There is no question that today’s employment report is a positive and there is also no question that the pace of job growth has accelerated of late,” said Dan Greenhaus, an analyst at BTIG LLC, a brokerage firm A better job market is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009. Still, the level may matter less to his re-election chances if the rate continues to fall. History suggests that presidents’ re-election prospects hinge less on the unemployment rate itself than on the rate’s direction during the year or two before Election Day. For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. The unemployment rate averaged 8.9 percent last year, down from 9.6 percent the previous year. Economists forecast that the job gains will top 2.1 million this year. The December report painted a picture of a broadly improving job market. Average hourly pay rose, providing consumers with more income to spend. The average work week lengthened, a sign that business is picking up and companies may soon need more workers. And hiring increased across most major industries. Manufacturing added 23,000 jobs, as did the health care industry. Transportation and warehousing added 50,000 jobs. Retailers added 28,000 jobs. Even the beleaguered construction industry added 17,000 workers. Economists cautioned that some of the gains reflected temporary hiring for the holiday season. The government adjusts the figures to account for those seasonal factors, but doesn’t always fully account for them. The gains in transportation and warehousing, for example, reflected a strong increase in hiring for couriers and messengers. That could stem from a big jump in online shopping over the holidays, the department said. The nation’s work force, which includes both people working and those searching for jobs, shrank slightly last months and is little changed from this spring. That’s a concern because a strengthening job market normally draws more applicants. The work force has declined by about 160,000 over the past two months, one reason the unemployment rate has fallen. “You have to take that unemployment rate decline with a grain of salt when you look at the declines in the labor force,” said Marisa DiNatale, an economist at Moody’s Analytics. The government only counts people as unemployed if they are actively searching for jobs. Discouraged workers who have given up on looking are not included in the rate. And some of those who are counted as employed are working part time, but want full-time work. When including those groups, the broader “underemployment” rate was 15.2 percent. That’s down from 15.6 percent the previous month, but still high. The figure has dropped for three straight months. And the job market has a long way to go to recover from the Great Recession. The nation has 6 million fewer jobs that it did in December 2007, when the recession began. More jobs and higher pay are crucial to helping the economy grow. They could enable shoppers to increase spending, which fuels 70 percent of economic activity. The economy likely grew at an annual rate of above 3 percent, a healthy pace. A more robust hiring market coincides with other positive data that show the economy ended the year with some momentum. Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday sales were solid. And November and December were the strongest months of 2011 for U.S. auto sales. Many businesses say they are ready to step up hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products.

Read the full article →

European Retail Feeling The Pain Of Austerity Measures

January 6, 2012

BRUSSELS — Retails sales in the 17-nation eurozone dropped in November, official statistics showed Friday, as consumers felt the bite of austerity measures and feared the currency union could slip deeper into crisis. Retail sales in the eurozone fell 0.8 percent compared with October and were down 2.5 percent from November 2010, according to Eurostat, the EU’s statistics agency. The steepest declines were seen in Portugal, which had to be bailed out in April and where sales fell 2.6 percent during the month and were down a massive 9.2 percent from a year earlier. But even in richer states like Germany and the Netherlands, consumers were more reluctant to part with their money, with retail sales slipping 0.9 percent in both countries during November. That shows how the eurozone’s worsening debt crisis is taking its toll even on countries with strong economies. For the whole European Union, which includes non-euro members like the U.K. and Sweden, November retail sales dropped 0.6 percent from October and 1.3 percent compared with a year earlier. Consumers appear worried by high unemployment, which remained stuck at 10.3 percent in November – unchanged from October but above the 10 percent seen a year earlier – and a darkening outlook on the economy. The weak data also underlines how many people found themselves in a worse position at the end of 2011 than at the end of 2010 – when there were hopes that the continent was turning a corner after two difficult years brought on by the collapse of U.S. investment bank Lehman Brothers in 2008. Spain’s unemployment rate was highest at 22.9 percent, up from 20.4 percent a year earlier. That’s more than four times as high as in Austria, where only 4 percent of people were looking for work. For the whole EU, the unemployment rate remained at 9.8 percent. The dark mood is set to continue in the eurozone, with a Eurostat economic sentiment indicator falling 0.5 of a point to 93.3 in December, far below the long-term average of 100. Italy and Spain, the eurozone’s third and forth largest economies which have been pulled into the eye of the crisis in recent months, grew especially pessimistic about the economy. Economic sentiment fell 4.6 points in Italy and 1.3 points in Spain. In the 27 EU countries, economic sentiment was down 0.8 point at 92.

Read the full article →

Malls Adjust To Their Aging Clientele

January 6, 2012

MONTREAL – For people who have trouble walking, seeing, hearing or making themselves understood, a shopping mall can be a frustrating and even a terrifying place. For many, going to the mall is simply out of the question. But for researchers at the Centre de recherche interdisciplinaire en readaptation du Montreal (CRIR), a shopping mall is the perfect real-life laboratory in which to test all kinds of technologies and innovations designed for the physically and cognitively challenged. (Photo: Flickr/ Grizzly McBearson )

Read the full article →

Major Oil Producers Look For New Way To Exploit Natural Gas In Alaska

January 6, 2012

(Adds background on overland pipeline plans) By Yereth Rosen ANCHORAGE, Alaska, Jan 5 (Reuters) – The chief executives of BP and ConocoPhillips, two of Alaska’s three major oil producers, said on Thursday that the only profitable way to exploit a vast but stranded quantity of Alaska’s North Slope natural gas is to export it to Asian Pacific markets. In a dramatic change from decades-old plans to send North Slope natural gas to domestic U.S. markets by overland pipeline through Canada, the BP and ConocoPhillips CEOs said they will work with Exxon Mobil, the third major North Slope oil producer, to develop an LNG project that would export to Asia. North American producers and LNG shippers are scrambling to develop export plans after a sudden surge in domestic natural gas production, thanks to shale gas, that swamped the market and pushed gas prices way below global levels. BP CEO Bob Dudley and ConocoPhillips CEO Jim Mulva made the comments to reporters after an unprecedented meeting in Anchorage of the chief executives of all three major North Slope oil producers. Exxon, whose CEO Rex Tillerson also attended the meeting, said the parties are in early discussions on an export plan, but added that the pipeline plan through Canada is still under consideration. Once expected to be a major importer, the United States now has up to a century’s worth of supply, prompting plans to ship the cheap fuel to thirsty markets in Europe and Asia where prices are up to five times higher. Five projects across the United States and two in western Canada have applied for construction and export licenses, seeking long-term deals predominantly with buyers in Asia However, critics say that exporting gas may drive prices higher at home and discourage use of a homegrown resource. TransCanada Corp and partner Exxon Mobil have been unable to win customers for the 1,700-mile (2,735 km) natural gas pipeline they proposed building from Alaska’s North Slope to Alberta, at a cost of up to $41 billion. BP and ConocoPhillips in May abandoned a rival natural-gas proposal for a similar route and similar delivery volumes after they also failed to attract shipping commitments. TransCanada has also floated the concept of a line to the port of Valdez, which would move 3 billion cubic feet of gas a day and cost up to $26 billion. (Writing by Bill Rigby, additional reporting by Edward McAllister in New York; Editing by Steve Orlofsky and Bob Burgdorfer)

Read the full article →

White House, Dems: If Congress Isn’t In Recess, Why Isn’t It Working?

January 5, 2012

WASHINGTON — With Republicans complaining that President Obama made recess appointments while Congress is not in recess, House Democrats Thursday suggested that if Congress really is in session, perhaps members should be working. “We’re here, we’re going back to work, we’ll be in session for as long as it takes,” said House Minority Leader Nancy Pelosi (D-Calif.), announcing that her members would start working to prepare for a joint House-Senate conference committee on extending payroll tax cuts for the rest of the year. “But we also would like to have our colleagues come back, have a real session,” Pelosi added. “They have the appearance of a session so it blocks what the president can do, but not a productive session to get the job done for the American people.” Congress began holding “pro forma” sessions before the last Memorial Day weekend after a group of Republican legislators said they wanted to prevent Obama from making recess appointments — especially for Elizabeth Warren to head the Consumer Financial Protection Bureau, before she launched a campaign for Senate in Massachusetts. They were able to do that by convincing House Speaker John Boehner (R-Ohio) to refuse to grant a “concurrent resolution” allowing the Senate to take time off. Such resolutions are required under the Constitution to adjourn. Ever since, both chambers have gaveled themselves in and out for a few seconds at least every fourth day, to maintain a technical session, even if when nothing was being done. Democrats last year did not want to challenge the practice by showing up for work. But ever since the pre-Christmas payroll tax battle, they’ve settled on coming into work as a key strategy , and they hailed Obama for putting Richard Cordray in charge of the CFPB and naming three people to the National Labor Relations Board, in spite of the phony working sessions. “Fortunately, or unfortunately for us, we do not have a role in the confirmation process, but we’re glad that the President took the lead, went out there, was bold and made the appointments,” Pelosi said, although Boehner had carved out a defacto confirmation role by blocking Senate recesses. “We can’t wait. We have work to do. We’re going to work right now,” Pelosi said at the Thursday Capitol Hill news conference, designed to start putting pressure on the GOP before the current two-month 2 percent payroll tax cut expires. White House Press Secretary Jay Carney took a similar tone in his daily briefing, noting that the Senate hasn’t done any actual work since before Christmas, and that the members are not in town. “I think all of you should run up to Capitol Hill, check out the House and Senate, and see if you can find a single member of Congress; and then tell me, on this working day for most Americans, whether or not Congress is in session,” Carney said. “You might find them in very warm places or snowy places having fundraisers, but you won’t find them in Capitol Hill because they are in recess.” “Only in Washington would not being in the office, not even being in the town where your office exists qualify as being on the job,” he added. “If Congress is in session, they’re supposed to be, you know, somewhere, like, close to the Capitol.” Don Stewart, spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), countered that the Senate used a pro forma session on Dec. 23 to pass that temporary payroll tax cut extension. Stewart also noted that Democratic senators have not claimed to be in recess.

Read the full article →

Sporadic Health Insurance As Bad As No Health Insurance: Study

January 5, 2012

When it comes to preventative care, having on-and-off health insurance might be as bad as not having it all. A study of diabetics by the Kaiser Permanente Center for Health Research found that patients with breaks in their health insurance coverage were less likely to receive annual preventative tests , according to NPR. The patients avoided getting the tests just as much as someone with no health insurance at all. One reason could be that Americans without health insurance have to pay a small co-pay of five dollars — a sum that could add up for patients that require a bevy of tests on a small income , one of the lead researchers told NPR. Health care costs have weighed on Americans for years now, with rising costs becoming an accepted part of everyday life for many with chronic conditions. By 2008, Americans’ spending on healthcare was more than triple what they spent in 1990 , according to a separate Kaiser report. Overall, health care spending accounted for more than 15 percent of the U.S.’s gross domestic product by that time — one of the highest rates of industrialized countries. The struggle to afford health care was especially evident in 2010 when the total number of Americans with health insurance fell for the first time in over two decades, according to CNNMoney. The number of Americans without health insurance rose to 49.9 million that year , according to data from the Census Bureau. And that number may only be poised to rise. Government analysts expect the health care industry to comprise a fifth of the total U.S. economy by 2020 , or $13,710 for “every man, woman and child.” Fewer California employers offered health insurance to workers last year, according to the California Employer Health Benefits survey. Employees also saw the costs of their insurance plans rise and one-third of employers are considering shifting more of the costs to workers next year, the survey found. Lacking health insurance means that patients skimp on more than just preventative care. Southern states are less likely to have good dental hygiene, according to a September Gallup poll. More than 70 percent of the residents of the top states for dental care have health insurance compared to 56 percent for the bottom 10 states, the poll found. Still, even Americans who have health insurance may end being charged high rates for preventive care. The health care law that President Obama signed into law in 2010 requires most insurers to pay for preventive care, according to USA Today , but some procedures, which are initially billed as preventative — such as colonoscopies — can turn into diagnostic procedures , saddling the patient with the bill.

Read the full article →

With Obama Appointment, Jeopardy Champ Takes On Payday Lenders

January 4, 2012

The new government agency tasked with looking after the best financial interests of ordinary consumers finally has a leader. President Barack Obama defied Republican congressional opposition and used a recess appointment to install his nominee, former Ohio Attorney General Richard Cordray, as the top watchdog at the Consumer Financial Protection Bureau. The move caps six months of combat over the direction of the bureau, but is just the latest chapter in the fight over the shape of Wall Street Reform and Consumer Protection Act, the controversial financial regulation law that Obama signed in 2010 that created the new agency. With Cordray in place, the bureau, which already regulates consumer practices at banks with assets of more than $10 billion, can assume its full powers to make or enforce rules governing certain non-bank financial companies, including payday lenders, mortgage brokers and private student loan companies. Consumer advocates applauded Obama’s move. “For all the ire aimed at banks, there are many serious problems for consumers posed by non-bank financial companies,” said Lauren Saunders, managing director of the National Consumer Law Center. Cordray has said that expanding the bureau’s reach to non-bank financial institutions would be his first order of business . “I’ve got a big job to do,” Cordray told Reuters . A former five-time Jeopardy! champ, Cordray attracted notice as Ohio attorney general for aggressively pursuing some of the architects of the financial crisis, including credit rating agencies. He was also the first attorney general to sue a mortgage servicer over robo-signing. Republicans quickly criticized the recess appointment. “The #CFPB position had not been filled for one reason: the agency it heads is bad #4jobs and bad for the economy,” House Speaker John Boehner (R-Ohio) said on Twitter. But consumer advocates say the decision is good for the most financially vulnerable Americans. “We applaud the president for battling through the dysfunction of a Congress that finds itself in the grip of Wall Street,” said Bart Naylor, a consumer advocate at Public Citizen. Payday lenders, including some banks and credit unions, often make loans at 400 percent annual interest or more. The consumer agency cannot set interest rate caps, but it will have authority to go into payday shops and examine their records and practices, in the same way that regulators do now at banks. It’s not clear what changes the agency could impose, but at a minimum better disclosure to customers about hidden fees and the dangers of compounding interest is expected. The bureau will also oversee “larger participants” in other financial industries, including credit reporting agencies, which Saunders said make frequent and damaging mistakes. “They affect every aspect of people’s financial lives and yet have received little scrutiny,” she said. “It is a nightmare dealing with them.” The consumer agency is currently trying to decide how to define the larger participant mandate. Interestingly, the big banks, which have otherwise opposed the bureau at every step, have sided with consumer advocates who are seeking for as broad a definition –and as such, as many companies — as possible. “Comparable accountability across all providers of comparable financial products and services is a fundamental mission” of the new agency, the American Bankers Association said. Senate Republicans, led by Sen. Richard Shelby (R-Ala.), had held up the Cordray nomination for six months. They promised to continue to block Cordray, who is currently serving as the agency’s enforcement chief, until Dodd-Frank is amended to make the agency more accountable. “No bureaucrat will have more power over the daily economic lives of Americans than this director,” Shelby said from the floor of the Senate shortly before the a vote to move the nomination forward failed last month. Without more oversight, the agency’s actions will lead to bank failures, he said. The Republicans said they wanted more control over the agency’s purse strings and a board of commissioners rather than a single director to oversee the agency — moves that would weaken the bureau, consumer advocates said. The Republican position matched that of Washington’s most prolific lobbying force, the U.S. Chamber of Commerce, which pushed a House bill that would replace the director with a five-member commission. A total of 34 industry groups list the bill as a lobbying priority, according to a Center for Public Integrity analysis of federal records, representing 183 industry lobbyists. At least 86 once worked for the government. The Chamber spent nearly $30 million in lobbying on financial regulation and a host of other issues in the first three quarters of 2011. It tasked 21 lobbyists to work bills that would restructure the agency. In addition to the chamber, the most active opponents of the bureau’s current structure include the American Bankers Association, the Financial Services Roundtable, the Independent Community Bankers of America and the Consumer Bankers Association. Consumer Financial Protection Bureau spokeswoman Jennifer Howard did not respond to a request for comment about the Cordray appointment.

Read the full article →

Richard Cordray: Standing Up for Consumers

January 4, 2012

Today, I was appointed by President Obama to serve as the first Director of the Consumer Financial Protection Bureau. I am honored by this opportunity to continue my work on behalf of consumers. And I am energized by the responsibilities and challenges facing the Bureau. The importance of this day has less to do with me personally and much more to do with you — and the millions of individuals and families across the country who access consumer financial markets every day to participate in our economy and to pursue their dreams and aspirations. That’s because now, with a Director, the CFPB can exercise its full authorities — with respect to both banks and nonbanks — to help those markets operate fairly, transparently, and competitively. Consumer finance is a big part of our economy — and it plays a large role in the daily life of almost every American. Few people spend their entire lives with so much wealth available to them that they never need to borrow money. Whether it is to pay the bills and meet their everyday needs, or to finance larger investments in their futures like an education or a home , most people find it necessary to use financial products to access credit. Financial products can help make life better, but they can also make life harder. Most of us know at least someone — a parent or sibling or friend — who has money troubles. Sometimes, those troubles are caused by a tough break or just not having enough money to go around; other times, by a poor decision. But sometimes, those consumer money troubles arise out of problems in the consumer financial markets. I have seen senior citizens lose their life savings to scams and fraud. I have seen young adults start their lives with crushing student loan debt burdens that they cannot afford. I have seen families bankrupted, and thrown out of their homes, by complex mortgages with spiraling interest costs and monthly payments that were never clearly explained. In its first six months, the CFPB has taken significant steps to make consumer financial markets more transparent so they work better for consumers and for responsible businesses. Our Know Before You Owe campaign has worked to improve disclosures and make the costs, risks, and benefits of financial transactions easier for consumers to understand. We have also launched our bank supervision program. CFPB examiners are now on the ground at the nation’s largest financial institutions, reviewing documents and asking tough questions about how these banks are complying with consumer financial protection laws. One difficulty we faced until now was that, without a director, we were unable to address all the problems we were created to tackle. In particular, we lacked the ability to supervise financial institutions other than big banks — like nonbank mortgage lenders and servicers, and payday lenders. Many of these institutions had no regular federal oversight in the run up to the financial crisis. They led a race to the bottom that pushed aside responsible businesses, including community banks and credit unions, and greatly harmed consumers. I am pleased to say that we will now be able to exercise the full authorities granted to us under the law and begin to supervise these nonbanks. Standing up this program is a top priority for the CFPB. Over the coming weeks we’ll be announcing more information about this program and how it will help to improve the consumer financial markets. As we move forward, please let us know what you think . My colleagues and I are determined to deliver positive results for American consumers in all of our efforts. We want people to know what we are doing and we want to hear their reactions. We are confident that, with help and input from consumers and honest businesses, we can play an important role in safeguarding consumers, consumer financial markets, and the American economy.

Read the full article →

Bright Spots vs. Dark Clouds: Obama Seeks Right Tone On Economic Recovery

January 1, 2012

WASHINGTON — Bullish yet wary, President Barack Obama is highlighting recent economic bright spots while taking care not to overstate a recovery that still has not put millions back to work. His Republican rivals, in the face of late-arriving economic good news, are making slight adjustments themselves, arguing that Obama’s policies have been a drag on a recovery that could have taken hold sooner. The competing rhetoric reflects the positive indicators in areas ranging from retail sales and housing to unemployment and falling gas prices. All this has pushed up consumer confidence, a potential barometer of political attitudes. Even Congress and Obama managed to agree on a two-month payroll tax cut extension before leaving Washington for the holidays. But the economic signs could prove fleeting, as they were in the early spring when economist also detected upticks in activity only to watch them tumble. These new indicators may hold more promise. But a looming European debt crisis is casting a pall. No one is more aware of that risk than Obama. “We’ve got an economy that is showing some positive signs; we’ve seen many consecutive months of private sector job growth,” Obama said last week before departing for Christmas in Hawaii. “But it’s not happening as fast as it needs to.” For Obama, the danger is in promoting an economy that while, slowly recovering, has yet to reflect reality for millions of Americans, or in highlighting positive signs only to see them falter in 2012. For David Axelrod, the Obama campaign’s top political adviser, visions of a European financial meltdown are what keep him awake at night. “I think the American economy is gaining strength, I don’t think many would argue that point,” he said. “The imponderable is not about that, it’s really about these externalities and particularly Europe. Especially now that we’ve passed this threshold on the payroll tax cut and assuming that the Republicans in Congress don’t want to rerun that battle, the one big thing on the horizon is Europe.” Indeed, as the year ends on an up note, leading economists surveyed by The Associated Press expect the economy will grow slightly faster in 2012 – about 2.4 percent compared with the less than 2 percent annual growth that the economy is expected to register by the end of this year. But underscoring the political challenges facing Obama, these same economists don’t expect unemployment to drop much in a year from November’s 8.6 percent rate. The public’s economic outlook is improving. An Associated Press-GfK poll in December found that 37 percent of those questioned expect improvement in the economy in the coming year. It was the first time since May that the sentiment significantly outweighed the share saying the economy would get worse in the next year. This modestly rosy scenario is contingent on keeping any financial disruptions in Europe contained to the other side of the Atlantic. Obama has pressing European leaders, particularly German Chancellor Angela Merkel and French President Nicolas Sarkozy, to act swiftly to avoid a wholesale debt crisis from taking hold. But Obama has few tools other than persuasion with which to influence an outcome. In a trend the Obama camp is sure to watch, the public is holding Obama more accountable for the economy. The AP-GfK poll found that the percentage who says Obama deserves little or no blame for the economy’s sluggishness has declined from 43 percent in October to 36 percent now. Republicans are watching, too. After months of asserting that conditions under Obama have worsened, Republican presidential candidate Mitt Romney this past acknowledged signs of improvement, but gave Obama no credit. “I think the economy’s getting better. I sure hope so,” Romney told CNN on Wednesday. “There’s never been a time when our economy has not recovered from recession. We will recover, but it will not be thanks to the president’s policies. It will be in spite of the president’s policies.” Republican pollster Wes Anderson, a veteran of congressional and presidential contests, says the first quarter of 2012 could lay down crucial markers that could affect the election results. “If the uptick in economic indicators that we’ve seen here this month continues into the next month at the same general pace, it will be an interesting race and it will be very close, and there will be an opportunity for Obama to win,” he said. “If economic conditions deteriorate at all, I think he’s done. “If they pick up significantly in the first quarter – I don’t know what that is, but something that is tangible for middle-class America – he probably gets re-elected,” Anderson said. The White House is ready to have the president maintain a high economic profile, showcasing his bailout of the auto industry as a concrete example of an administration policy that saved job. Beyond that, Obama’s team wants to portray the president as a champion of the middle class. “The battle is really over the long term because the Republicans have a fundamental theory that we can cut our way to prosperity – cut taxes for the wealthy, cut regulations, especially for Wall Street, and the economy will flourish,” Axelrod said. “We’ve tested that theory and it failed. Badly.” “This notion that he’s been there, we should fire him and we should go back to what we were doing before the crisis is not a very strong argument,” Axelrod said. “And obviously to the degree that the economy improves it becomes less of an argument.” Still, even economists friendly to the administration see contradictory signals in the end-of-year upswing. On the positive side, the number of people applying for unemployment benefits has dropped to the lowest level since April 2008. At the same time, November’s dip in unemployment from 9 percent to 8.6 percent was partly the result of frustrated workers leaving the labor force and no longer looking to be hired. The private sector is hiring, but states, school districts and local municipalities are shedding jobs. Also, despite an increase in consumer spending, Americans are not seeing real income growth. “For every positive indicator, there is an indicator on the other side that’s worrisome,” said Jared Bernstein, former chief economist to Vice President Joe Biden who’s now with the Center on Budget and Policy Priorities. Mark Zandi, chief economist at Moody’s Analytics whose data is often cited by Democrats and Republicans, said that for all the encouraging signs, the economy still faces drags. That includes deficit reduction measures that helped reduce the debt in the long term but could cost the economy 1 percentage point in growth next year. Washington politics poses its own challenges. “I don’t think 2012 is going to be a break out year for the economy,” he said. “It is an election year and there is going to be a fair amount of political acrimony back and forth. People in business are already on edge. It doesn’t take a lot for them to remain anxious and nervous.”

Read the full article →

Getting A Job Not Always The Last Hurdle For Long-Term Jobless

December 30, 2011

For the long-term unemployed, getting a job isn’t always the end of the story. Randy Howland spent most of this past year working at a $10-an-hour customer service job. He used to make six figures. With this job, he was settling, just so he could have the satisfaction of working. It was essentially a call-center job.

Read the full article →

John Fox: 2012: Your Marketing Department’s New Look

December 30, 2011

No doubt, 2011 was the tipping point for the marketing department. Marketing automation, content marketing and analytics entered boardroom conversations. Even at the smallest of companies (for which I consult), marketing directors and channel managers find themselves in the spotlight for the very first time. So how should the CMO, marketing director and CEO respond? I think that’s the real question McKinsey & Co. attempted to answer in their July 2011 report, ” We’re all marketers now .” (FYI: this report was the #3 most read in 2011, falling in just behind articles on strategy and brainstorming. And in typical McKinsey fashion, their research involved more than 20,000 customers… talk about comprehensive research!) Here are the highlights (you may also grab my personal, marked-up version of the report here ): “Customers no longer separate marketing from the product — it is the product.” “In the era of engagement, marketing is the company.” Customers are on the hunt for a solution waaaay before you can even think about reaching out to them in traditional direct/push marketing fashion. Translation: the conversation has morphed from “a monologue to a dialogue.” “Customers thirst for objective advice” and in response, “some have built publishing divisions to feed the ever-increasing demand for content required by company.” (aka, content marketing) “The marketing organization itself needs to become the customer-engagement engine, responsible for establishing priorities and stimulating dialogue throughout the enterprise.” The firm will “require a new kind of marketing organization… that orchestrates the delivery of the end-to-end customer experience.” What’s more, “‘Marketing is going to become a much more science-driven activity,’ says Duncan Watts of Yahoo! Research.” “A premium will be placed on problem-solving and strategic-marketing skills.” How will you respond? What are your plans for your marketing department in 2012? © 2011 John M. Fox. All Rights Reserved. John Fox is the Founder and President of Venture Marketing, a B2B consulting firm that helps business owners get their sales and marketing un-stuck. For more, follow John on LinkedIn .

Read the full article →

VIDEO: GOP Candidates Play Up Their Poor Backgrounds

December 30, 2011

It is a staple of modern political campaigning to play up your humble roots to connect with voters. Perhaps seeking to draw a contrast with President Barack Obama, who some have deemed “elitist,” GOP presidential candidates took many opportunities to mention their simple beginnings in 2011. The mashup above of campaign moments features Michele Bachmann, Rick Perry, Rick Santorum, Tim Pawlenty, Newt Gingrich, Ron Paul, Herman Cain, Jon Huntsman and Mitt Romney. Romney and Huntsman, however, grew up in very wealthy families. But, like their fellow candidates, both of them speak of families who are having trouble “making ends meet” and the pain of the middle class. Check out this recap of the campaign so far to see many of the candidates speak of poorer backgrounds and discuss how people are hurting because of the recession.

Read the full article →

Whistleblower Documents Shed Light On Case Against Big Bank

December 28, 2011

NEW YORK (Reuters) – Confidential whistleblower documents that helped spark a massive state and federal investigation into how Bank of New York Mellon Corp charged pension funds for currency exchange, provide a rare window into how a bank insider aided a lawsuit against the bank. The information provided by whistleblower Grant Wilson, who worked at BNY Mellon, included a detailed analysis of how the bank allegedly provided “fictitious” foreign-currency costs for pension funds. The analysis included a step-by-step guide to how currencies were traded and internal profits generated by the bank, according to documents seen by Reuters. A memo detailing fellow employees also was provided. Aided by Wilson’s information, multiple states, including Virginia, Florida and New York, have sued BNY Mellon, alleging that the bank improperly charged state and local pension funds for foreign exchange. The Department of Justice also has sued the bank. The allegations center on claims that BNY Mellon provided unfavorable currency-exchange rates for state and local pension funds for a decade. In a lawsuit in October, the New York attorney general alleged BNY Mellon earned $2 billion over the decade from the trading. A bank spokesman said the bank believes that many comments detailed in the documents were taken out of context or not said at all. “A handful of purported statements cherry-picked from millions of documents gathered over a decade do not reflect the way we do business or the value we provide our client,” the spokesman said. The documents illuminate why insiders with highly confidential information can be a potent force in whistleblower lawsuits. Much of the information a whistleblower provides remains confidential. Wilson, for example, worked at the bank even as he secretly provided to his legal team — lawyers in Boston and New York — information about how BNY Mellon allegedly conducted foreign-exchange trading. Wilson’s information was provided to the legal team that filed whistleblower lawsuits against BNY Mellon in 2009 and then aided state attorneys general in subsequent probes. The legal team includes Boston lawyer Michael Lesser, and Philip Michael, a lawyer in New York, as well as Harry Markopolos, a fraud investigator best known for warning that Bernard Madoff was operating a fraudulent scheme. Lesser, an attorney at Thornton & Naumes, said Wilson was not available for a comment. The information then was provided by Wilson’s lawyers to the Florida attorney general in 2009 and 2010. The attorney general at the time was weighing whether to intervene in an October 2009 whistleblower lawsuit against BNY Mellon. That lawsuit was based on Wilson’s information. In August this year, Florida Attorney General Pamela Jo Bondi filed her lawsuit in Leon County. A bank spokesman said the Florida lawsuit is “without merit.” The Wall Street Journal earlier this year identified Wilson as the whistleblower behind the state and federal investigations and reported the existence of the documents. Wilson, according to the documents, worked as a foreign-exchange trader for 19 years. He joined a predecessor bank to BNY Mellon in 1997 and left this spring. He worked at BNY Mellon’s Pittsburgh office. The documents detail Wilson’s experience at the bank, noting that the trader “possesses deep and sophisticated knowledge and personal experience in these businesses, particularly with regard to foreign exchange.” The documents note that he “never received a reprimand” during his career. Wilson’s first-hand knowledge was crucial to the state lawsuits. Information provided in 2009 underpinned subsequent state claims. Wilson “can describe, step-by-step, how the fraud is committed against the affected funds and how the various departments of the Bank work to make the process as profitable as possible,” one document alleges. Wilson and his lawyers, for example, provide 11 chronological steps to explain how pension clients allegedly receive a “falsified trade price,” documents show. Those clients used a so-called “standing-instruction” program in which they effectively give control of foreign exchange to the bank. In one document, Wilson’s lawyers provide a question-and-answer tutorial so the Florida attorney general’s office knows the right questions to ask BNY Mellon employees. The documents also show how Wilson aided the legal effort even as he continued to work at BNY Mellon. One memo was written by Wilson’s lawyers in August 2010, some eight months before Wilson left the bank. In the memo, Wilson’s lawyers tell the Florida attorney general that Wilson knows that efforts to obtain documents from the bank are being stymied with “claims of difficulty in production or other delays.” The memo, using Wilson’s knowledge of the bank, states that the information actually could be easily obtained because it is “centrally stored.” “It is stored at a state-of-the-art facility that should hasten, rather than hinder, any document response from the bank.” A month later, in September 2010, Wilson’s lawyers submitted another memo to Florida’s attorney general, noting: “We would also like to remind you that (Wilson) continues in his employment at the bank. Specific information, documents and conversations mentioned here could be connected” to Wilson. That memo alleges that BNY Mellon “is now actively and hurriedly formulating a strategy” aimed at preserving profits from the foreign-exchange business at the center of the state inquiries. The memo explains that BNY Mellon publicly wants to provide a supposedly more “transparent” foreign-exchange system. Actually, the “Project Gateway” strategy provides “no true change,” the memo claims. The memo also claims that one BNY Mellon client had received better pricing on currency transactions even as the bank continued “to steal” from other clients. The documents also show some inside BNY Mellon allegedly worried about the impact of the investigations and whether profits would soon disappear. One employee, having learned that probes were looking at how BNY Mellon traded currencies, said: “It’s over, it’s all over,” according to a March 2010 document. Another document describes two months later how a senior banker addressed FX traders and told them the bank had received 16 subpoenas. This employee told the traders, “We have not done anything wrong.” In a seven-page memo, Wilson and his legal team provided detailed biographies of fellow traders and employees at BNY Mellon to help determine whether they might be helpful in the whistleblower legal effort. One employee was described as “worried about job security … Not financially secure. Scared and probably loyal to the Bank. But also would not be inclined to perjure herself … She has a lot of information.” Another senior executive “likes to rant and rave … Mr. Wilson assumes he will want to defend the bank.” A sales executive “seems willing to push the envelope when it comes to producing profits.” (Reporting by Carrick Mollenkamp; Editing by Michael Williams and Maureen Bavdek) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

The Worst Holidays Since The Great Depression

December 23, 2011

From 24/7 Wall St.: Retail sales this holiday season are expected to rise 3.8 percent to a record of $469.1 billion, according to the National Retail Federation. While the increase is less than last year, it is a significant improvement from the slow holiday seasons the last few years. How does 2011 compare to other years? While probably not among the best, it’s also certainly not among the worst, according to 24/7 Wall St.’s analysis of the worst holidays since the Great Depression. People are tempted to spend less when times are tough. Fewer presents are exchanged and people travel less. Those without work often despair. And the joy that is supposed to accompany the end of each year does not exist for many people. 24/7 Wall St. compared 2011 against each holiday season since the Great Depression. We looked at unemployment, GDP expansion (or contraction), GDP per capita, and the Consumer Price Index. These are good indications of whether a holiday season was merry or not. High inflation erodes the ability of people to buy goods and services. Slow GDP expansion or contraction means that consumer spending is likely to be in retreat. The effects of unemployment are obvious. Not surprisingly, many of the worst holiday periods coincide with deep recessions. This is certainly true for the harsh times during the downturns of the early 1970s and early 1980s. The 1982/1983 recession had a record number of months in which unemployment was more than 10 percent. People may look back on 2011 as a difficult holiday season for a number of Americans, but it was not among the worst, as history shows. These are the Worst Holidays Since The Great Depression, according to 24/7 Wall St. :

Read the full article →

U.S. Government Warns Conglomerate To Fix Security Flaws

December 22, 2011

* Researchers say flaws make systems vulnerable to attack by hackers * Siemens says first fixes will be released in January (Adds comments from Department of Homeland Security) By Jim Finkle BOSTON, Dec 22 (Reuters) – Siemens said it is working to fix security flaws in industrial controls products that the U.S. government warned could make public utilities, hospitals and other critical parts of the country’s infrastructure vulnerable to attack by hackers. The German conglomerate, whose industrial control systems are widely used around the world, said on Thursday in a posting on its website that it had learned of the vulnerabilities in May and December of this year from security researchers Terry McCorkle and Billy Rios. The U.S. Department of Homeland Security issued an advisory that warned of the vulnerability, urging Siemens customers to minimize exposure of industrial control systems to the Internet to make them less vulnerable to attack. “Successful exploitation of these vulnerabilities could allow a hacker to log into a vulnerable system as a user or administrator,” the agency’s Industrial Control Systems Cyber Emergency Response Team said in the advisory. Rios told Reuters that one of the most serious of the vulnerabilities, known as an “authentication bypass,” allows hackers to get around password protections on Web interfaces, which Siemens customers use to access industrial control systems. Siemens industrial controls systems are used to run an assortment of facilities from power generators, chemical plants and water systems to breweries, pharmaceutical factories and even uranium enrichment facilities. “People with low skills will be able to use this authentication bypass,” said Rios, who described the problems on his blog, www.xs-sniper.com. Siemens said it had addressed some of the security vulnerabilities and that it would release its first security update to fix them next month. The company does not know of any cases in which hackers had exploited the vulnerabilities to attack its customers, spokesman Alexander Machowetz said. Some Siemens software is designed to automatically install services that make control systems accessible via the Internet, Rios said. They are installed with a default password, “100,” which is published in user manuals that are available on the public Siemens website, he added. “People set up control systems, and they don’t realize that they are on the Internet, waiting for people to connect to them,” Rios said. Siemens industrial control systems have been scrutinized by security researchers over the past few years. The notorious Stuxnet virus, which crippled Iran’s nuclear program, was first identified by researchers in June 2010. It targeted Siemens software used to control gas centrifuges that enriched uranium at a facility in Natanz, Iran. Last May, the U.S. government warned U.S. water districts, power companies and other Siemens customers of another security flaw uncovered by researcher Dillon Beresford that made systems vulnerable to attack. In August, Beresford disclosed at the Black Hat hacking conference in Las Vegas that he had found further vulnerabilities in Siemens products, including a “back door that could allow hackers to wreak havoc on critical infrastructure.” (Reporting By Jim Finkle; Editing by Lisa Von Ahn)

Read the full article →

Jobless Claims Drop To Lowest Level In More Than Three Years

December 22, 2011

WASHINGTON – New claims for unemployment benefits dropped last week to its lowest in more than 3-1/2 years, suggesting the labor market recovery was gaining speed. Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 364,000, the Labor Department said. That was the lowest level since April 2008. The economy has shown signs it is gaining steam as the year ends, although the recovery still could be derailed by any big flare up in Europe’s debt crisis. The economy also faces risks from the fight in Congress over extending special unemployment benefits and a payroll tax cut. The prior week’s claims data was revised up to 368,000 from the previously reported 366,000. Economists polled by Reuters had forecast claims rising to 375,000 last week. The level of unemployment claims has fallen in recent weeks, and analysts say fewer layoffs means employers are probably more likely to hire. Economists at Goldman Sachs said earlier in the week that weekly claims below 435,000 pointed to net monthly gains in jobs. Their research was based on figures available through October. In November, the jobless rate dropped to a 2-1/2 year low of 8.6 percent. The Federal Reserve last week acknowledged an improvement in the jobs market, but said unemployment remained high and left the door open for further measures to help the economy. A Labor Department official said claims were not estimated for any states, and that there was nothing unusual in the data. The four-week moving average of claims, considered a better measure of labor market trends than the headline number, fell 8,000 to 380,250 — the lowest since June 2008. The number of people still receiving benefits under regular state programs after an initial week of aid fell 79,000 to 3.546 million in the week ended December 10. Economists had forecast so-called continuing claims holding steady at 3.6 million. As of Dec 3, a total of 7.150 million people were claiming unemployment benefits under all programs, down 299,738 from the prior week. (Reporting by Jason Lange; Editing by Neil Stempleman) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Payroll Tax Cut Deal To Include Controversial Keystone Pipeline

December 17, 2011

WASHINGTON — Senate negotiators agreed Friday to a two-month deal to extend unemployment benefits and the middle-class payroll tax cut, but Democrats had to swallow a demand by Republicans to include language on the controversial Keystone pipeline. It was not immediately clear, however, that House Republicans who left Washington for the weekend would go along with the compromise. The estimated $30 billion deal also includes $4 billion to prevent doctors from having their reimbursement rates slashed by Medicare. The White House announced its support for the Senate compromise later Friday night, despite President Barack Obama having previously threatened to veto any payroll tax cut plan that was tied to the Keystone pipeline. Republicans insisted, however. “The President said that Congress cannot go home without preventing a tax increase on 160 million hardworking Americans, and the deal announced tonight meets that test,” White House communications director Dan Pfeiffer said in a statement. “This is an important step towards enacting a key provision of the President’s American Jobs Act and a significant victory for the American people and the economy, because as independent analysts have said, failing to extend this tax cut would have had a damaging effect on our recovery and job growth.” A Senate vote on the year-end package is expected Saturday, as well as a vote to fund the government for the rest of the fiscal year. The tax cut is fully paid for over 10 years by hiking fees on banks that do business with Freddie Mac and Fannie Mae, raising about $38 billion. Republicans hailed the decision to add the Canada-to-Texas pipeline as a major victory for their side, arguing that it forces Obama to make a quicker decision on moving forward with the 1,700-mile-long project to transport more oil from northern tar sands to the Gulf Coast. Obama angered some in the fall by delaying approval of the pipeline until 2013, citing a need to work out environmental concerns. The bill’s language requires the White House to make a decision within 60 days. “This bill will stop President Obama’s delaying tactics,” Sen. Richard Lugar (R-Ind.) said in a statement. “This is a tremendous victory for our security and for creating jobs. It is absolutely incredible that President Obama wants to delay a decision until after the 2012 elections apparently in fear of offending a part of his political base and even risking the ire of construction unions who strongly support the project.” If the compromise passes the Senate, as expected, it still isn’t a done deal since House Republican leaders have previously expressed reluctance to accept a two-month plan. “We’ll have to talk to members,” said Michael Steel, a spokesman for House Speaker John Boehner (R-Ohio). Republicans say the pipeline will create 20,000 jobs, though other estimates place it at more like 6,500. While Democrats accepted the pipeline provision, others they opposed were dropped, including one that sought to deregulate emissions from boilers. Another concession that Democrats appear to have made is that the payroll tax cut is only 2 percent, instead of the 3.1 percent they were seeking. A White House official dismissed the idea that Republicans scored a victory by forcing Keystone into the tax deal. For one thing, said the official, the Keystone language only requires that Obama make a decision on the pipeline versus requiring construction on it. In addition, the president was already criticized for delaying the project until 2013, so another round of attacks on the issue wouldn’t be new. “They didn’t get a pipeline and they didn’t get a new weapon they can use against the president. They didn’t get the pay-fors that they wanted,” the official said of Republicans. “At the end of the day, we have already made the calculation that the president owns this decision…. We’ve already taken the political hit. You can’t sort of take the hit again. We’ve already taken it.” “We feel good about the way this has shaken out,” added the official. The White House is also banking on the idea that another fight on the payroll tax in two months works in their favor. Their thinking is that the closer it gets to the November elections, the more difficult it becomes for Republicans to oppose a tax cut that impacts 160 million middle-class people. Senate Democrats expressed similar thoughts. “For the next two months, Democrats will work to extend the middle-class tax cut through the end of the year,” said Senare Majority Leader Harry Reid said. “Republicans can either join us, or explain why they want middle-class families’ taxes to go up.” A Senate Democratic leadership aide said that Democrats had pushed for the full year-long extension, but claimed Republicans were trying to pay for the estimated $200 billion cost of the full package by using some non-starters from the House Republican plan, including charging people whose earnings were $85,000 and up more for Medicare. The GOP plan also sought cuts in the federal workforce, and cut spending for preventive medicine in the health care reform law. A Senate source had said the two sides were in agreement on how to pay for about $100 billion of the cuts before the start of Friday’s talks. The sides could not work out how to pay for the rest. But a Republican aide said Democrats never offered enough savings to pay for the whole plan. And the aide insisted that the GOP Senators abandoned the House Medicare option, which would have raised more than $30 billion. Still, Democrats seemed intent to brand the GOP as enemies of Medicare. “If Republicans are going to make cutting Medicare benefits the price of extending a middle class tax cut for one year, we’ll take the two month extension and gladly have this fight for American families again in February,” a leadership aide said. Update: 10:15 p.m. This story has been rewritten to add more details.

Read the full article →

Kristie Arslan: Extending the Payroll Tax Cuts Into 2012

December 13, 2011

As 2011 comes to a close, so does the payroll tax cut for millions of Americans. If Congress does not come to an agreement, we’ll start out 2012 by paying higher taxes . This fact has a greater impact on the 22 million self-employed and micro-business owners who, in an open-letter , urged both the President and Congress to consider impacts on their sector of the economy as cuts are made to reduce the federal debt by $1.5 trillion. The self-employed play the role of both the employer and employee, which means they are responsible for paying both portions of the payroll tax. In a cruel twist, the entrepreneurs who are trying to jump start the economy are, in effect, taxed twice for their efforts. Now is the time for our policymakers to put politics aside and implement clear economic actions that will move our economy forward. Our nation’s smallest businesses are waiting for our leaders to make the difficult decisions. A payroll tax holiday for the self-employed and micro-businesses will help with adding another phone line, conducting online advertising or covering the cost of a seasonal employee. Taxes are just one item on a long list that those seeking self-employment must be aware of in their daily operations. Learning all the details of small-business ownership may seem overwhelming, but there are resources available to navigate the essentials. Extending the payroll tax cut is a step in the right direction towards an improved economy in 2012 and beyond. With money saved, small business owners can seize the opportunity to market and grow their businesses throughout local communities. Continued payroll tax cuts — aligned with the tenets of the National Self-Employment Initiative — will help small businesses rev up the economy and spur some of the nine million unemployed to embark in entrepreneurship.

Read the full article →

Chuck E. Cheese Fined For Multiple Child Labor Law Violations

December 13, 2011

Chuck E. Cheese, that famed birthday party venue “where a kid can be a kid,” has allegedly been forcing some children to grow up a bit too fast. The U.S. Department of Labor fined nine San Francisco-area Chuck E. Cheese’s restaurants a total of $28,000 for allowing 16 young workers to operate on-site trash compactors in violation of the law, according to the Los Angeles Times . The eateries also allowed two minors to run a dough-mixing machine illegally. The Fair Labor Standards Act sets the minimum wage for most non-agricultural work at age 14, but it does prohibit youth from working in manufacturing, mining or performing other “hazardous jobs.” But it appears the restaurants have learned their lesson. Officials at CEC Entertainment Inc., the Irving, Texas-based owner of Chuck E. Cheese’s, are now telling teen workers not to operate the equipment and have put stickers on the machines warning minors not to use them, according to the San Francisco Chronicle . Brenda Holloway, a spokeswoman for the company, told the Chronicle that there were some regulations that the CEC hadn’t been aware of previously. “As soon as we were made aware of that, we did correct the deficiencies and paid our fines,” Holloway told the Chronicle . “We’re walking the straight and narrow now.” The Labor Department has collected more than $650,000 in back pay and penalties from 271 south Florida restaurants for labor law violations including breaking child labor provisions, according to a press release. A Connecticut family fought back in 2010 when the Labor Department accused them of violating child labor laws by allowing their children to work in the family pizzeria, according to ABC News. The Chuck E. Cheese news comes as child labor regulations have been thrust back into the national spotlight thanks to Republican presidential candidate Newt Gingrich. Gingrich, a former House Speaker, has proposed putting poor children to work as janitors in their schools to help them learn a proper “work habit.” This isn’t the first scandal at Chuck E. Cheese this year. A photo surfaced in July of what appeared to be a mascot pointing his middle finger at a camera while next to a child. In 2010, a Chuck E. Cheese manager was accused by female employees of sexist and derogatory comments.

Read the full article →

Republicans Embrace High-Stakes Showdown With Obama

December 13, 2011

WASHINGTON — Sensing a political opening, congressional Republicans are moving toward a high-stakes showdown with President Barack Obama over a plan to link fast-tracked approval of an oil pipeline to a measure renewing a payroll tax cut. Senate Minority Leader Mitch McConnell, R-Ky., said the proposed Keystone XL pipeline from Canada to Texas will help the president achieve his top priority – creating jobs – without costing a dime of taxpayer money. “There is no reason this legislation shouldn’t have the president’s enthusiastic support,” McConnell said Monday on the Senate floor. “The only reason for Democrats to oppose this job-creating bill would be to gain some political advantage at a time when every one of them says job creation is a top priority.” The State Department said last month it was postponing a decision on the pipeline until after next year’s election. Officials said the delay is needed to study routes that avoid environmentally sensitive areas of Nebraska. The GOP language would require approval of the pipeline within two months unless Obama declares it is not in the national interest. The State Department warned Monday the congressional interference in the approval process would likely lead to a rejection of the pipeline. The State Department has authority over the project because it crosses an international border. “Should Congress impose an arbitrary deadline for the permit decision, its actions would not only compromise the process, it would prohibit the department from acting consistently with National Environmental Policy Act requirements by not allowing sufficient time” for the project to be considered, the State Department said in a statement. In that case, “the department would be unable to make a determination to issue a permit for this project,” the statement added. McConnell and other Republicans dismiss such procedural objections. “The only thing arbitrary about this decision is the decision by the president to say, `Well, let’s wait until after the next election,’” said House Speaker John Boehner, R-Ohio. Boehner and other Republicans say many Democrats support the pipeline, noting that 47 House Democrats voted in a favor a bill this summer to speed up the permitting process. GOP lawmakers say the White House opposes the pipeline provision in the tax bill so Democrats can gain political advantage by blaming Republicans for defeating the popular payroll tax cut. The tax bill is expected on the House floor Tuesday. The two parties generally agree on the bill’s fundamentals: preventing the Jan. 1 expiration of payroll tax cuts and extending coverage for the long-term unemployed. Obama has said he will reject the overall bill if it includes language speeding up approval of the Keystone XL pipeline, which would carry oil from western Canada to refineries in Texas. Obama’s threat has increased conservative support for the overall measure, with Republicans hoping to use Obama’s opposition to portray him as favoring environmentalists over jobs. Rep. Lee Terry, R-Neb., called the Keystone XL project crucial to getting thousands of people back to work. “This is an important jobs and energy security bill which just makes plain sense,” said Terry, author of the pipeline provision. “The American people want us to stop buying Venezuelan oil. The Keystone pipeline is a key component to making that happen.” Environmental groups, who celebrated the administration’s announcement of a delay in the Keystone project last month, accused Republicans of forcing a premature judgment on the pipeline in order to curry favor with the oil industry. “To get their way, House Republicans – with some support in the Senate – are even willing to block the much-needed extension of the middle-class tax cut,” said Suzanne Struglinski of the Natural Resources Defense Council, an environmental group. Struglinski called the pipeline push a “fool’s errand” because of Obama’s threat to reject the measure, and said its likely inclusion in the House bill showed that House leaders have embraced the “extreme agenda” pushed by the tea party. Senate Majority Leader Harry Reid, D-Nev., said last week that House leaders were wasting time, because the Keystone provision will not pass the Democratic-controlled Senate. The State Department decided last month to delay the project until 2013, to allow the project’s developer to figure out a way around Nebraska’s Sandhills, an ecologically sensitive region that includes an aquifer that supplies water to eight states. ___

Read the full article →

John Boehner Predicts House Will Approve Payroll Tax Cut Legislation

December 13, 2011

WASHINGTON — House Speaker John Boehner predicted Monday that the House will approve legislation that renews a payroll tax cut and curtails extra benefits for the long-term unemployed. The House is expected to approve the roughly $180 billion measure on Tuesday. Senate Majority Leader Harry Reid, D-Nev., has said the bill will go nowhere in the Senate, citing a provision all but forcing President Barack Obama to move ahead quickly with a controversial oil pipeline that would run from Canada to Texas. Boehner, R-Ohio, sidestepped a question about whether he rules out eventually agreeing to a compromise with that chamber. “The House is going to do its job, in time for the Senate then to do its job,” Boehner told reporters. Senate Democrats’ version of the bill pays its costs largely by boosting taxes on the wealthy. Republicans prefer freezing federal workers pay and other spending cuts. The House legislation would continue the Social Security payroll tax that workers pay at 4.2 percent in 2012, the same as this year. That tax is normally 6.2 percent, but was temporarily cut in a bid to spur the economy. The reduction means an extra $1,000 in the wallets of families earning $50,000 annually. The Democrats’ Senate bill, which that chamber has already rejected, would drop the payroll tax to 3.1 percent next year and provide employers with similar reductions, as Obama has proposed. If Congress takes no action by Jan. 1, the payroll tax will return to 6.2 percent. Congress is hoping to adjourn for the year before Christmas. The House GOP bill would also curtail the current 99 weeks of maximum unemployment coverage, dropping it gradually to 59 weeks by mid-2012. And it would prevent a 27 percent cut in Medicare reimbursements to doctors next year, a reduction that could prompt some physicians to stop serving Medicare patients. It would instead increase their Medicare payments by 1 percent each of the next two years.

Read the full article →

Steven Strauss: Actually, Corporations That Lobby and Make Campaign Contributions Get Special Benefits

December 13, 2011

Recent reports reveal that: GOP Presidential candidate Newt Gingrich received nearly $2 million for activities (not technically within the definition for lobbying) resembling lobbying, and former GOP Congressman Tauzin — the country’s highest paid lobbyist — received $11.6 million. With rare bi-partisan consensus, all members of Congress assure their constituents that money spent lobbying them and campaign contributions to their campaigns does not influence their judgment. Yet, despite these assurances, 75% of all Americans believe money influences Congress. Several recent academic studies support the public’s concern: • Tax Benefits: Recent research shows that, in expectation for every $1 a firm spends to lobby for targeted tax benefits, the benefit is between 6x and 21x. (See 1;2 below.) • Improved Cash Flows: On average, and controlling for other factors, firms that engaged in lobbying received more generous depreciation treatment. (2) • Increased Market Value: Another study demonstrates that firms which lobby ‘significantly outperform non-lobbying firms with respect to increased market value of equity’. This can be as high as adding another 2% per year to returns. (3) • Protection: A separate analysis found that “compared to non-lobbying firms, firms that lobby, on average, have a significantly lower hazard rate of being detected for fraud, evade fraud detection 117 days longer, and are 38% less likely to be detected by regulators.” (4) These results are from research done by non-partisan academics — using rigorous statistical techniques — and are not anecdotes or rumors. Correlation is not causality, but basically it appears that lobbying and campaign contributions can confer special benefits to corporations, while corporations breaking the law can reduce the probability of getting caught. If you doubt the value of lobbying or campaign contributions, consider that American corporations now spend about $3.5 billion/year on lobbying alone. The Cato Institute estimates the value of the resulting corporate welfare at about $90 billion/year. The recent Supreme Court decision (Citizens United) held that corporations are people for First Amendment purposes (and thus entitled to make unlimited investments supporting or opposing candidates). To our nation’s detriment, large corporations may consequently decide that investments in lobbying and campaign contributions (i.e., investments for preferential treatment at the expense of the rest of society) — are safer and more lucrative than producing innovative goods and services. If a firm decides not to participate in the lobbying game (or doesn’t have the money ‘to pay to play’) — when its competitors do — the non-lobbying firm will likely be strategically disadvantaged (e.g., pay higher taxes, receive unfavorable depreciation treatment, inappropriate treatment of intellectual property, etc.) compared to its competitors. One might ask (in this context) what the difference is between paying for lobbying and paying protection money. Good question! While all the GOP presidential candidates have spoken eloquently about small businesses, entrepreneurs, and start-ups — these are exactly the persons/entities least likely to be able to afford access to Gingrich et al. The Securities Industry and Financial Markets Association (SIFMA) reported that its member firms collectively lost pre-tax $34 billion in 2008 (an amount equal to the prior 2 years’ profits). Despite massive and unprecedented losses, the financial industry did not reduce its expenditures on lobbying and campaign contributions. Instead, it increased lobbying and campaign spending by about 40% over the prior presidential cycle — from $690 million in 2004, to $956 million in 2008. This investment in political advocacy appears to have paid off handsomely! In 2008-2009, the Federal government made up to $7 trillion available to support America’s banks — and on such generous terms — that the banking industry’s 2009 recorded profits were double those of its best prior year. All while many American small businesses (unable to afford such generous campaign contributions to their elected officials) suffered record losses/layoffs. If (like me) you are appalled, consider reading Lawrence Lessig’s Republic, Lost: How Money Corrupts Congress–and a Plan to Stop , and join the fight. I welcome your thoughts and comments. Much of the above analysis is derived from the Lessig book, but I am solely responsible for any errors and opinions in this essay. Steven Strauss was founding Managing Director of the Center for Economic Transformation at the New York City Economic Development Corporation. He is an Advanced Leadership Fellow at Harvard University for 2011-2012. He has a Ph.D. in Management from Yale University. Follow him on Twitter @steven_strauss. Sources: All campaign and lobbying data is from www.opensecrets.org, unless otherwise noted. (1) Raquel M. Alexander, Stephen W. Mazza, and Susan Scholz, “Measuring Rates of Return on Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations,” Journal of Law and Policy (2009). (2) Brian Kelleher Richter, Krislert Samphantharak, and Jeffrey F. Timmons, “Lobbying and Taxes,” American Journal of Political Science (2009). (3) Matthew D. Hill, G. W. Kelly, G. Brandon Lockhart, and Robert A. Van Ness, “Determinants and Effects of Corporate Lobbying,” [Unpublished working paper] (2011). (4) Frank Yu and Xiaoyun Yu, “Corporate Lobbying and Fraud Detection,” Journal of Finance and Quantitative Analysis (2011).

Read the full article →

Dennis M. Kelleher: Obama’s Shameful Dodge on 60 Minutes

December 12, 2011

As he has regularly done in the past with other media outlets, President Obama artfully dodged a straightforward question about lack of criminal prosecutions from Steve Kroft on 60 Minutes last night. The question was about how one of the things bothering people was the fact that no one on Wall Street has been criminally prosecuted for the financial catastrophe that has caused so much damage to our country. What he was really asking — what everyone in the country is asking — is why has there been no accountability of those on Wall Street who got rich before, during and after the meltdown they caused while the rest of the country got stuck with the bill, including historically high unemployment, foreclosures, deficits, etc. Rather than even attempting to answer that question, the president started by saying he can’t get into specific cases, which he wasn’t asked about. He then gave his standard line, “I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, some of the least ethical behavior on Wall Street, wasn’t illegal. That’s exactly why we had to change the laws.” Okay, even if that highly questionable assertion is true, he is nonetheless conceding that at least some of that behavior was illegal and therefore the question remains why he and his team refuse to prosecute Wall Street. (Evidence of those crimes was the subject of a 60 Minutes piece the prior week.) The easy answer of some is because that’s where they are doing a lot of fundraising (a bipartisan activity, I should note). While that no doubt plays a role, the more complete answer is also more complex, but no less satisfying. The president and his team decided early on that recapitalizing the financial industry in general and Wall Street in particular was the highest priority for the country. Their view was that, if they didn’t’ do that, a Second Great Depression was highly likely. They all truly believed that as went Wall Street, so goes Main Street. (This view was helped along by all the former Wall Streeters occupying the highest levels of the administration and on whom the president relied most heavily for advice on this matter.) This view is, of course, right to some extent. If the financial industry was allowed to collapse in the fall of 2008, then Main Street would suffer gravely: everything from paychecks to credit cards to the simplest of loans for everyone from individuals to small business to the big companies at the heart of our economy could have ground to a halt. Moreover, they were blindly obsessed with people’s confidence in the banking system (as Ron Suskind spelled out so well in his book, Confidence Men ). They worried that anything that was done other than helping the banks would erode confidence in the banks, which would cause the crisis to deepen and potentially cause a downward spiral. Unfortunately, this view resulted in an administration policy of protecting the banks from even the slightest criticism, never mind actual action. So, there was no financial crimes task force formed to investigate potential crimes and there was no serious consideration given to taking other actions against the biggest banks and the titans of Wall Street. Indeed, this view even stymied efforts to seriously investigate the financial crisis so that informed reforms could be implemented. (Remember, that the Financial Crisis Inquiry Commission was created very late, was given limited powers, and was structured to report only after the reform law passed.) Indefensibly, this policy of “see no evil, hear no evil, and speak no evil” of Wall Street was followed even when the administration basically handed Wall Street the keys to the treasury and US taxpayers’ pockets. In fairness, this wasn’t just an Obama administration policy. It was certainly also the policy of the Bush administration, but many thought that the November 2008 election would usher in new policies that would hold people accountable. This approach of uncritically coddling Wall Street and ignoring its role in the financial crisis was the subject of an unprecedented meeting in the White House in the spring of 2009. A number of Democratic senators demanded a meeting with the president personally to tell him directly and clearly that he was getting bad advice from his Wall Street-biased group of senior advisors and that he must take strong action against Wall Street wrong-doing. It appears that the President responded with more artful dodges along the lines of “What would you have me do? Let the banks fail? That would be devastating for the economy and the country.” Well, of course, no one was advocating — then or now — letting the banks fail and ushering in another Depression. However, there was a very strong view — then and now — that the financial industry could be saved and wrongdoing could still be punished. This view is nicely captured by the phrase that “you can save the banks, but you don’t have to save every banker.” Unfortunately, as the president revealed again last night on 60 Minutes , those bankers have nothing to fear from this administration (except the occasional criticism not backed up by any action). The policy of “hold no bank or banker accountable” appears to be firmly in place. That is bad news not only for the country, but also for the president. It’s one of the key reasons the American people are so mad and justifiably so: this foolish policy means that the rules that apply to everyone else, don’t apply to the rich, powerful and politically well-connected banks and bankers on Wall Street. And, even worse, it means that those very same banks that only exist today because the US government with taxpayer money saved them in the fall on 2008 are now using their massive profits to fight regulatory reform that is desperately needed if we are to avoid another financial collapse.

Read the full article →

Former Regulator May Be Tapped To Monitor Foreclosure Settlement

December 12, 2011

An outspoken critic of big banks and their mortgage practices leading up to the financial crisis may be tasked with making sure they comply with a long-awaited foreclosure settlement. Sheila Bair, the former chairman of the Federal Deposit Insurance Corporation, is a leading candidate to become a third-party monitor in a foreclosure settlement between five big banks and government officials, Bloomberg reports. Picking a monitor is reportedly one of the last issues to be worked out between banks and officials before the settlement becomes finalized. Bair, who led the FDIC from 2006 until earlier this year, was one of the biggest critics of Wall Street leading up to and during the financial crisis, often putting her at odds with other officials including then-president of the New York Federal Reserve Timothy Geithner. She warned of the dangers of subprime mortgage lending in 2001 , well before most began sounding the alarm, according to the Washington Post . And she continued her push when she took over the FDIC, arguing that the growth of subprime mortgages would cause homeowners to later default , wrecking neighborhoods and hurting the banking system, according to The New York Times — a sentiment that ultimately proved true with enormous consequence. When the fallout from the crisis started to become clear, Bair fought for an aggressive mortgage refinancing program to help homeowners, according to WaPo . In addition, she pushed to give her agency a seat at the table when officials were figuring out the best way to save the financial system in 2008, the NYT reports. The FDIC ultimately managed some failing institutions during the crisis, including Wachovia and Washington Mutual. Bair’s selection could be a boon for those who want to make sure lenders are held to their part of the settlement, as she continues to criticize too-big-to-fail institutions and regulator softness. Still Bair’s selection likely won’t mollify those who think the settlement doesn’t go far enough to punish lenders whose policies allegedly forced millions to lose their homes. If the deal between the five biggest mortgage lenders and the Obama administration and state officials gets pushed through, it would allow the lenders to settle without admitting wrongdoing. New York Attorney General Eric Schneiderman has been outspoken in his criticism of a deal that he says would wrongly release banks from future legal liability . California and Nevada attorneys general announced last week that they would join together to prosecute mortgage fraud , which could weaken the national settlement. In addition, Massachusetts Attorney General Martha Coakley signaled her departure from the national talks when she filed a suit against the five biggest lenders for deceptive foreclosure and mortgage modification practice s earlier this month.

Read the full article →

Right-Wing Group Targets Obama Energy Loan

December 12, 2011

WASHINGTON — A Republican-leaning group will begin airing a major advertisement this week critical of the Obama administration’s investment into a now-defunct solar-energy company, The Associated Press has learned. Crossroads GPS will spend $500,000 on three cable network ads that hit President Barack Obama for “crony” government spending in his administration’s half-billion-dollar loan guarantee to Solyndra. The Fremont, Calif.-based solar-panel maker filed for Chapter 11 bankruptcy protection in September and was the first renewable-energy company to receive a loan under a stimulus-law program to encourage green energy. The “nationwide ad by Crossroads GPS is aimed at exposing this ugly underbelly of Obama’s vision,” according to a memo from Crossroads president Steven Law. It calls the Solyndra case “a powerful cautionary tale about big-government hubris and the cronyism it invariably invites.” The Crossroads ad, reviewed by the AP Sunday, is among the group’s first sharply pointed ads aimed at President Barack Obama’s record and in part highlights support for a company backed by a major Obama supporter. An AP review of government records this fall found the administration restructured the Solyndra loan so that private investors would be repaid before taxpayers in case of a default. But the administration has defended the loan restructuring, saying that without an infusion of cash earlier this year the company would have faced immediate bankruptcy. Obama officials have said investment in renewable energy is critical for the nation’s future. “The Republican presidential candidates support a budget plan that wipes out investments in clean energy – they’d cede the market to China – so it’s no surprise that their special-interest-funded allies are attempting to keep America dependent on fossil fuels at any cost,” Obama campaign spokesman Ben LaBolt said Sunday. In recent weeks, Crossroads and other “super” political action committees have targeted ad spending in key primary states like Iowa and New Hampshire. Crossroads has spent more than $180,000 on broadcast and cable networks in Iowa this month, records show, and super PACs like Make Us Great Again – supportive of Texas Gov. Rick Perry – will spend nearly $1 million there ahead of the Iowa causes in January. Crossroads GPS is the sister group of Karl Rove-backed American Crossroads, a super PAC that has promised to raise millions this election to defeat Obama. ____ Follow Jack Gillum at http://twitter.com/jackgillum

Read the full article →

Long-Term Jobless Eye Bleak Future As Unemployment Benefits End

December 11, 2011

WASHINGTON (Lucia Mutikani) – George Parks has been out of work for 21 months and his unemployment benefits will run out at the end of the month. At 60, he fears his prospects of getting a job are very slim, even though he has a degree in civil engineering and has vast experience in project management. A similar story is recounted by John Jones, 52, a fellow resident of Lancaster County, Pennsylvania. Jones lost his teaching job last July as the Pennsylvania state government tried to close a funding shortfall. Parks and Jones are among the nearly 7 million Americans receiving jobless benefits under seven different state and federal programs. Around a quarter of those will fall off the rolls in January if Congress does not renew an extended benefits program that expires at year end. Parks’ savings are almost exhausted and his house has lost more than 30 percent of its value, making it hard for him to seek job opportunities outside Pennsylvania. He has tried to market his management skills in manufacturing and the fast-growing field of health care, but has found them already overcrowded. “It’s really getting tight,” Parks told Reuters. “The ability to provide is really diminishing and it becomes more the ability to survive.” Parks is collecting $500 a week in unemployment benefits, a far cry from the $80,000 a year he made in his last job as a project manager in architecture and construction. Although his wife still has her teaching job, they are stretching to cover their monthly expenses, which include a $480 monthly car payment. Last month, they combined and refinanced their mortgage and home equity loan, lowering their payment to $1,600 a month from $2,175. Gone are the vacations and gym memberships. “Savings are pretty much gone, we are now into our 401(K) (retirement) money. I haven’t bought any clothing in a year and a half; my wife does buy stuff occasionally to be presentable at school,” said Parks. “We have taken no vacations. I just spoke to the gym about volunteering some of my time instead of having to pay for the gym membership.” Jones, who is married and has one child, used to make about $40,000 annually teaching . His wife has an hourly paid job. He declined to say how much he was collecting in unemployment benefits. “Before I lost my job we could go out and buy extra things for the house. Right now we do not have that option. We have to watch everything that we’re spending and buying,” said Jones. That includes foregoing dental check-ups. “Our savings are about gone and the benefits will be running out fairly soon,” Jones added. BENEFITS RUNNING OUT The Obama administration estimates that through the course of 2012, about 6 million people would lose federally funded unemployment benefits if Congress does not act. Currently, federal money ensures that the unemployed receive benefits for up to 99 weeks in states where joblessness is high. Ending the program would mean the newly unemployed would have to rely on state programs that usually last for only 26 weeks. Extended benefits have been renewed several times as the economy struggled to mount a vigorous recovery from the 2007-09 recession, the worst since the Great Depression. According to Christine Owens, executive director of the National Employment Law Project, the average unemployed worker receiving extended benefits gets just $296 a week. “That represents only 50 percent of the income needed to cover the most basic necessities of food, housing and transportation,” she said. The extended federal benefits have become a target in the fight over budget policy between Republicans and Democrats, and renewal is uncertain. Analysts warn that removing that cushion from the millions of unemployed would dampen the still-fragile economic recovery. “If the unemployed do not have money to spend, then spending in the economy is going to decline. Providing unemployment benefits is one of the effective ways to create jobs,” said Lawrence Mishel, head of the liberal Economic Policy Institute in Washington. Analysts estimate that not extending benefits for the long-term unemployed could chip away as much 0.3 percentage point from GDP. NO STIMULUS FROM JOBLESS BENEFITS? Those opposed to extending the benefits, including the conservative Heritage Foundation, argue that they have failed to stimulate the economy and are instead encouraging recipients to continue seeking jobs that do not exist. Half the jobs lost during the downturn were in manufacturing and construction. Most of them are not going to be recovered. That is bad news for Brian Krady, another Lancaster County resident, who lost his job in August after 20 years in manufacturing. Krady, 47, is collecting $500 a week in jobless benefits that will extend for several more months. The Heritage Foundation says raising benefits to 99 weeks has increased the unemployment rate by 0.5 percentage point. “People are trying to find jobs similar to what they had previously, when those jobs completely don’t exist, so they will spend a good portion of their period unemployed looking for jobs that they are unlikely to find,” said James Sherk, a senior policy analyst at the Heritage Foundation. “The only sound arguments for extended unemployment benefits are humanitarian.” DESPERATE TO WORK Jones and Parks bristle at the suggestion they are contributing to the high unemployment rate by staying on benefits for a long time. Both men have been actively looking for work with the help of the PA CareerLink of Lancaster County. The unemployment rate in the county is 6.1 percent, 2-1/2 percentage points below the rate for the nation as a whole. Jones said he has applied for more than 100 jobs since being laid off, and some of them outside education. “Most people don’t respond. I have gone to visit places, trying to get a job and you can’t even get past the front desk,” he said. “You can’t make a pitch, they just don’t want to talk to you. Right now I am looking to work. I don’t care what it is in.” Parks believes his age puts him at a disadvantage. “I believe I run into some age discrimination when I get an opportunity to interview. Things go well into the interview, it sounds like it will progress to the next stage,” he said. “In one case they asked for a background check and they just disappeared. This has happened three times,” said Parks. “You can’t blame the employer, if they can find somebody younger and cheaper, and there is a glut of employees there, why should they choose to go with an experienced, expensive worker?” The longer Parks and Jones remain unemployed, the dimmer their prospects of getting a job become as they lose skills and connections. About 43 percent of the 13.3 million unemployed Americans have been out of work for 27 weeks and more. “Most of the long-term unemployed are people who had pretty good jobs and these jobs were permanently eliminated,” said Harry Holzer, professor of Public Policy at Georgetown University in Washington. “If they exhaust their benefits … what are their options?” Already, the labor force participation rate — the percentage of working-age Americans either with a job or looking for one — is at 28-year lows. While many experts advocate retraining, especially for those who lost their jobs in construction and some sections of manufacturing, Holzer warned that will not necessarily help older unemployed workers like Parks. “For people who are in their 50s, it’s hard to go back and retrain. A 55-year-old with a brand new degree is less attractive than a 25-year-old with the same degree,” said Holzer. Analysts say some of the long-term unemployed could end up settling for lesser-paying jobs, but even those are in short supply. For every one job opening, there are about 4.6 people. “It means there are simply no jobs available for more than three out of four unemployed workers,” said the Economic Policy Institute’s Mishel. “In a given month in today’s labor market, the vast majority of the unemployed are not going to find a job no matter what they do.” (Reporting by Lucia Mutikani; Editing by Dan Grebler) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Fired RIM Execs ‘Chewed Through Restraints’ In Flight

December 10, 2011

New details are emerging about the rowdy behaviour of two Research In Motion executives who were fired for disrupting a transcontinental flight — including that they managed to chew their way out of restraints and wound up being subdued by other passengers until the plane landed. George Campbell, 45, and Paul Alexander Wilson, 38, each pleaded guilty to mischief for disrupting a Nov. 30 flight from Toronto to Beijing. The plane landed instead in Vancouver, where a court later ordered them to pay $72,000 in restitution. They also received suspended sentences and were placed on parole for a year. RIM fired both men after investigating what happened, but little information has been made public about what was so disruptive about their behaviour. However, court documents obtained by CBC News paint a very chaotic picture. The pair seemed heavily intoxicated from the start of the flight, according to one passenger. They drank, passed out, and woke up to continue consuming alcohol and yelling at one another. Campbell was described as a “rowdy and abusive” passenger who at one point warned that he would “off people when they left the plane,” according to the Crown prosecutor. One of the men also “assaulted a flight attendant and threatened to punch another,” the prosecution said in court. Crew members tried repeatedly to subdue the pair, but they kept struggling to get free, “verbally abusing” people on board and eventually “chewed their way through their restraints.” Diverted to closer airport As the situation escalated, the pilots decided to divert the plane to Anchorage. But the situation become so dire that they opted for the Vancouver airport, which was closer. During the final 80 minutes of the flight, “several flight attendants and a couple of passengers” restrained the two men and the crew initiated a “lockdown situation” so that no one was allowed to leave their seats. The prosecutor in the case called Campbell and Wilson’s conduct “way over the top.” “The repercussions for the company as well as every single person on the plane, both financially and perhaps even emotionally, are going to be huge.” Air Canada pegged its losses for diverting the flight at nearly $200,000 and RIM issued a statement saying that the conduct did not fit with the company’s “standards of business behaviour.” The two men were on a week-long business trip for the BlackBerry maker, but they were arrested after the flight landed in Vancouver. Both men live near Waterloo, Ont., where RIM is headquartered. Campbell refused to comment on the incident when reached by phone on Friday. Air Canada issued a statement but would not answer questions about the case.

Read the full article →

Elizabeth Warren: ‘Karl Rove Is Not Telling The Truth’

December 9, 2011

Massachusetts Senate candidate Elizabeth Warren struck back at former Bush White House senior adviser Karl Rove Thursday, after an ad by the Rove-linked group Crossroads GPS attacked her for overseeing “bailouts that helped pay big bonuses for bank executives while middle-class Americans lost out.” “Congress had Warren oversee how your tax dollars were spent, bailing out the same banks that helped cause the financial meltdown, bailouts that helped pay big bonuses to bank executives while middle-class Americans lost out” says the narrator in the ad, referring to her position as chair of the congressional oversight panel on the Troubled Asset Relief Program. Crossroads GPS attacked Warren, a professor at Harvard Law School who has long advocated for financial reforms, last month for being too close to the Occupy Wall Street movement, directly contradicting the group’s most recent ad suggesting that she is too close to Wall Street. “I can’t find the right words to describe how wrong that is. Factually wrong and morally wrong,” said Warren of the ad to the Boston Herald . “Karl Rove is not telling the truth, and I think anyone who is not telling the truth shouldn’t be running ads in this race,” she continued. “Karl Rove was part of the inner circle when President Bush pushed for TARP bailouts,” she added. “Now he’s using Wall Street money to attack me for being too cozy with Wall Street? I was calling out Wall Street over the TARP bill from the beginning.” Warren’s panel wrote scathing reports about how the Treasury Department implemented the program. One report hit the Treasury Department for taking “no steps to use any of [the $700 billion rescue package] to alleviate the foreclosure crisis,” and that “raises questions about whether Treasury has complied with Congress’ intent that Treasury develop a ‘plan that seeks to maximize assistance for homeowners,’” according to ABC News. She criticized bank bonuses in March 2010 : “I do not understand how it is that financial institutions could think that they could take taxpayer money and then turn around and act like it’s business as usual,” she said. “I don’t understand how they can’t see that the world has changed in a fundamental way, that it is not business as usual when you take taxpayer dollars.” A poll released Wednesday by UMass Lowell and the Herald found Warren leading Sen. Scott Brown (R-Mass.) by a 49-42 margin. The survey suggested that early advertising both by Crossroads and the Warren campaign has mostly helped her — her name identification has gone up, while Brown’s approval rating fell from 53 to 45 percent. Read more about Warren’s career in the slideshow below:

Read the full article →

‘This Makes Absolutely No Sense’

December 8, 2011

WASHINGTON — President Barack Obama says there’s no reason why his nominee to lead the new consumer protection bureau shouldn’t be confirmed by the Senate. Obama spoke shortly after Senate Republicans blocked the nomination of Richard Cordray. Only one Republican joined Democrats in voting for him. Obama says he’s still considering all available options to get Cordray on the job protecting consumers. He didn’t rule out the possibility of using a recess appointment while Congress is on break as a way to circumvent Republican opposition. Republicans say the Consumer Financial Protection Bureau has too much power and too little accountability. The agency is designed to protect consumers from some of the lending and mortgage practices that led to the financial crisis.

Read the full article →

Venezuela orders 20 jets from Embraer

December 5, 2011

(MENAFN) President Hugo Chavez announced ordering 20 commercial aircrafts from Embraer, Reuters reported. The deal was to supply the aircrafts for Venezuela’s national carrier Conviasa to support …

Read the full article →

Peru Declares Emergency Over Protests

December 5, 2011

LIMA, Peru — President Ollanta Humala declared a 60-day state of emergency Sunday in a northern region wracked by protests against a highlands gold mine, the country’s biggest investment, by peasants who fear for their water supply. The emergency restricts civil liberties such as the right to assembly and allows arrests without warrants in four provinces of Cajamarca state that have been paralyzed for 11 days by increasingly violent protests against the $4.8-billion Conga gold-and-copper mining project. U.S.-based Newmont Mining Corp. is the project’s majority owner. Dozens have been injured in clashes between police and protesters, some of whom have vandalized Conga property. The general strike also shuttered schools and snarled transportation as protesters mounted roadblocks. Humala said in a brief televised address Sunday night that protest leaders had shown no interest “in reaching minimal agreements to permit a return of social peace” after a day of talks in Cajamarca with Cabinet chief Salmon Lerner and three other ministers. Humala said the government “has exhausted all paths to establish dialogue as a point of departure to resolve the conflict democratically” and blamed “the intransigence of a sector of local and regional leaders.” He said the emergency would take effect at midnight Sunday. Lerner’s group was accompanied by Peru’s military and police chiefs and guarded by hundreds of heavily armed police. Cajamarca state’s governor, Gregorio Santos, who has been leading the protests, called Humala’s announcement an unnecessary provocation. He said protest leaders had been planning to end the strike and had asked government officials for 12 hours to consult with protesters. “I think what’s being sought is for this to end in a bloodbath,” Santos told The Associated Press by telephone. Police have already used tear gas and bullets against protesters. “We will continue with our fight,” Santos added, without specifying how. Local elected officials have led protests against Conga, an extension of the nearby Yanacocha mine, for more than a month. They say they fear it will taint and diminish water supplies affecting thousands and have demanded a new study of the environmental impact of the mine, which was to begin production in 2015. Peruvian government officials have expressed no intention of redoing Conga’s environmental impact study, which was approved by the Ministry of Mining in October 2010. Those plans call for displacing four lakes more than two miles high and replacing them with reservoirs. Local residents say they fear that could affect an important acquifer on which thousands depend. Several weeks ago, the Interior Ministry asked prosecutors to file criminal charges against Santos and four other local leaders who have led protests against Conga, a top ministry lawyer, Julio Talledo, told the AP. The charges include “hindering the functioning of public services” and carry prison terms of at least two years. It was not immediately clear whether prosecutors have acted on them. The streets of the regional capital, Cajamarca, and the town of Celendin, a flashpoint of protests, were empty Sunday night after Humala’s announcement but people remained tense, local police told the AP by phone. Local reporters reported seeing busloads of soldiers and police with assault rifles arriving in recent days. Cajamarca police duty officer Miguel Vigil said police commanders were meeting to plan their next steps. “We can’t yet say what measures will follow,” he said. Newmont announced last week that it was suspending work at Conga until order could be restored. Its chief executive, Richard O’Brien, said in a statement then that if Newmont was unable to continue with Conga, “the scale and diversity of Newmont’s global portfolio” would allow the Denver-based company to “reprioritize and reallocate capital” to “alternatives in Nevada, Canada, Ghana, Indonesia and Suriname.” Humala told Cajamarca residents during campaign swings before his June election that clean water was more important for him than gold. Many local inhabitants said they now feel betrayed by the president. Peru’s economy depends heavily on mining, which accounts for 61 percent of its export income. Humala, a former radical leftist who moved toward the center before his June election, persuaded the mining industry to agree to a tax on windfall profits to help him fund social programs The government says will yield about $1 billion a year. If Conga were to be shelved, government officials fear not just for the windfall tax’s yield but also for the fate of more than $40 billion in mining investment that’s in the pipeline. Cajamarca is not the only Peruvian region where peasants have risen up against mining. There are currently more than 60 disputes over the alleged detrimental impact of mining on water supplies, according to the national ombudsman’s office. Several big projects have recently been scrapped as a result. One protest leader in Cajamarca, Milton Sanchez, told the AP on Sunday night that “this government that has put itself on the side of mining companies and distanced itself from its electoral promises.” “We are not radical,” he added. “It’s just that the Conga project has not legitimacy in the eyes of the people.” ___ Associated Press writers Frank Bajak and Martin Villena contributed to this report.

Read the full article →

← Previous Entries