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Huffington Post…

Homeless kids have the right to an education. That’s the basic rationale behind the McKinney-Vento Act of 1987, a law meant to ensure that homeless kids receive the same quality of schooling as everyone else. But with more families losing their homes as a result of the lingering effects of the recession, many homeless advocates say the law doesn’t go far enough to help them. Yet attempts by these advocates to change things have led to a bitter debate within the field of homelessness advocacy itself. At the center of the debate is the question of who qualifies for government-subsidized housing. As it stands, anyone defined as homeless by the Department of Housing and Urban Development can apply for housing aid from the government. The problem is that HUD’s definition leaves out thousands who lack permanent homes — people who sleep on the couches of friends and relatives, or many who live in cramped motel rooms. Before approving aid in these cases, HUD requires proof that their arrangements are very tentative: either documentation of a lack of funds to afford a hotel room for more two weeks, or confirmation from the friend offering the couch that this setup can not be permanent. Providing such documentation is often a difficult hurdle for people living under these circumstances. Families with children make up a large part of this population. As the fastest growing segment of the homeless population, homeless families have been especially affected by the recent recession. Since the economic downturn, according the Department of Education, the number of homeless children has increased by 38 percent, to almost 1 million (many experts consider this a low estimate). But by HUD’s definition, only about 30 percent of such children, about 300,000, are considered homeless. In December, six children testified at a congressional hearing on H.R. 32 , a bill aimed at expanding HUD’s homeless definition and introduced by Republican Judy Biggert (R-Ill.) The children talked about the hardships of sleeping four or five to a room in cheap motels and bouncing from one relative’s living room to the next. They said that the resulting stress had caused them to struggle in school. Yet because they fail to meet HUD’s criteria for homelessness, they and thousands of others like them aren’t eligible for housing help. On Tuesday, the bill made it out of a markup session of Biggert’s Financial Services Subcommittee on Insurance, Housing and Community Opportunity. If the legislation is passed this year, HUD would count these kids as homeless. The responsibility of identifying homeless children would fall to organizations that already track them for the public schools; this would bring the homeless children count closer to the Department of Education’s estimate of 1 million. Supporters of the bill include the National Association for the Education of Homeless Children and Youth. But not all advocates for the homeless are on board. The Corporation for Supportive Housing and the National Alliance to End Homelessness have opposed the bill, saying that it would expand the rolls of kids eligible for HUD aid without increasing the amount of funds. They worry that homeless people with the most pressing needs would suffer as a result. “Our understanding is that this would have a bad impact on the worse-off kids,” said Steve Berg, an executive for the National Alliance to End Homelessness, “kids who are living on the streets and in abandoned buildings and in backs of cars.” Homeless advocates should devote their energy to getting Congress to enlarge the budget of HUD and other agencies that help the homeless, Berg said. If Berg and his allies are now in the uncomfortable position of fighting a measure clearly intended to help homeless people, the same is true of several Democrats in the House. Representatives Maxine Waters, Mel Watt, and Luis Gutierrez — all established liberals — criticized the bill at the markup session. To make the bill more palatable, Waters offered an amendment that would provide more funding for homeless children. “Unless we add the Waters amendment with additional resources for those kids, someone who is currently getting services is going to end up on the street,” Gutierrez said. “This is not an easy issue, but the conversation we need to have isn’t about how to count homeless kids; it is about how we get resources to those kids.” Yet, many Republican who favor the measure, in part because they believe it could help streamline HUD’s bureaucracy, are unlikely to go for Waters’ proposal. Some ardent backers of the bill dismiss such Waters’ amendment as unrealistic. Even if Democrats regain control of the House, they say, politicians this year will never agree to spend more money on homeless people — unless they comprehend the full scope of the problem. And that won’t happen unless they get an accurate count of the country’s homeless families, they say. “Congress doesn’t really think it’s a problem,” said Diane Nilan, a prominent advocate for homeless families who attended the December hearing. “They don’t see the vulnerable families that are just hanging on.”

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They Live In Motels And On Friends’ Couches, But Are These Kids Homeless?

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Dennis Santiago: FDIC Shutters Banks in Illinois and Indiana

by Dennis Santiago on February 11, 2012

Huffington Post…

On Friday, February 10, 2012 the FDIC shifted bank closure activity from the South to the center of the country this week failing Charter National Bank and Trust in Hoffman Estates, Illinois and SCB Bank of Shelbyville, Indiana. SCB at $200B assets was the larger of the two and began to hemorrhage significantly in the 2nd quarter of 2011. It will reopen as part of First Merchants Bank, National Association on Monday. Charter National Bank and Trust was down to $98M in assets as of 3Q2011 and had been living with elevated stress indications from Institutional Risk Analytics (IRA) since March of 2009. Like SCB, Charter also experienced an increase in operating loss rates beginning around the 1st to 2nd quarter of 2011. Charter will reopen as part of Barrington Bank & Trust Company, National Association on Monday. Complete forensic reports can be found here, Charter National Bank and Trust – Hoffman Estates, IL SCB Bank – Shelbyville, IN

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Dennis Santiago: FDIC Shutters Banks in Illinois and Indiana

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Bill Gunderson: Can a Businessman Run a Country?

February 10, 2012

President Obama sure likes to hold Warren Buffett up as an example these days. After all, it is Warren Buffett that is dying to pay a higher tax rate. Never mind that he is currently fighting the IRS over a paltry billion dollars or so in unpaid taxes. Warren is also hot and bothered about his secretary paying a higher effective tax rate than most millionaires and billionaires. Of course, we still have not seen her tax return, so we really don’t know what rate she does pay. I guess it does not matter however, that Mitt Romney paid several million in taxes while Buffet’s secretary may have paid a few thousand. Who’s counting anyway? My question to you the reader is this: If God forbid, something should happen to Mr. Buffett, would he feel more comfortable hiring Barack Obama or Mitt Romney to take over the management of Berkshire Hathaway? Oh, I know what you are thinking, government cannot be run like a business; it takes politicians to get things done. It is thinking like this that has helped create a current debt load of $15 trillion dollars! Do you think that Mr. Buffett would have gotten us into the mess that we are currently in had he been running the country over the last 10 years? I highly doubt it. Warren still lives in the same humble abode that he has lived in for years. He is known for being pretty frugal. Oh, I forgot however that Mr. Buffett is a businessman though. We can’t have a businessman running our country. Actually, it would be real interesting to know where we would be today had Warren Buffett been running the country for the last 10 years. Maybe he would have consulted with other businessmen like Steve Jobs of Apple Computer or Jim Skinner of McDonald’s about the economy and job creation. Instead our president goes to CEOs like Jeffrey Immelt of General Electric and Antonio Perez of Eastman Kodak to get his advice about job creation. Is that the same Jeffrey Immelt who has had the stock of GE going backwards by an average of 3.3 percent per year over the last 10 years? Is that the same Antonio Perez who just had his company file for bankruptcy ? Eastman Kodak was once a member of the Dow Jones Industrial Average, it is now a penny stock! I don’t know about you, but when I want to lose weight, I seek out a skinny diet counselor. Now back to Berkshire Hathaway. What does President Obama’s resume look like when it comes to investing in companies? Let’s see, there was some $520 million that went into Solyndra. How did that one turn out? Did the investment go there on merit or favoritism? What would Buffet’s shareholders say if Warren made an investment that went from $520 million to zero in the span of 18 months? How did the Obama administration’s investment in Beacon Power go? Oh well, it is just taxpayer money that we don’t have. How about the billions that went into the so-called stimulus program? What kind of return are we getting on that one? While it is intriguing to think where our country might be today had a crackerjack businessman like Warren Buffett been running the show, it is an absolutely frightful thought to think where Berkshire Hathaway might be today, had Mr. Obama been at the helm for the last 10 years. This may sound like a harsh observation, but close your own eyes and ponder these questions for a minute. The bottom line is this: What we have been doing has not been working. The hole that we have to climb out of here in America is getting deeper and deeper and deeper. In fact, it is getting so deep, I think I can see Greece-austerity, strikes, riots, and bailouts anyone? We need a different skill set in the White House right now. We need a turnaround expert in the worst way. Oh, I forgot that a businessman cannot run a country. If a bunch of politicians can run the country into the ground, I feel pretty confident that it will take some businessmen to turn it around.

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Fake Suicide Call Prompts Woman To Sue Big Bank

February 10, 2012

These days, debt collectors are putting some people through so much pain that it’s landing them in the hospital. Anne Sessions of Lane County, Oregon is suing Wells Fargo after one of its debt collectors reported to police that that the 85-year-old was threatening suicide, a claim she maintains was false, The Oregonian reports . After hitting financial trouble, Sessions says she arranged a payment plan for her credit card debt with Wells Fargo last year, but just days later she allegedly received a call from a debt collector who badgered her with a “contemptous tone,” according to the lawsuit. Sessions told the collector that such abuse may cause other customers to take their own lives, which allegedly prompted a line of questioning that included the collector asking Sessions: “But…if you did [commit suicide], how would you do it – hurt yourself?” Courthouse News reports . Within a half hour police arrived at Sessions’ door and forcibly took her to the hospital. She was released hours later after hospital staff said they “strongly” believed Sessions was not a threat to herself or others, ABC News reports . But the incident left Sessions stuck with a hospital bill worth $1,055, for which she is seeking compensation, as well as $250,000 in punitive damages. Sessions’ suit may involve one of the more puzzling instances of debt collector abuse recently, but harassment of its kind is far from uncommon. Complaints filed to the Federal Trade Commission about debt collectors rose to 140,036 in 2010, up from 119,609 in 2009 . The boost may be explained in part by the industry’s growth in a troubled economy that’s caused many Americans to delay debt payments. Over the next three years, the debt collection industry is expected to expand by 26 percent . Indeed, all the negative reports — collection agencies are responsible for the most complaints to the FTC of any industry — may be beginning to take a toll. The FTC has begun cracking down on illegal debt collecting tactics , including repeated calls to the debtors, failure to notify consumers in writing of their rights, misrepresenting the debt in question as well as using profanity or threats. Last month it settled with Michigan-based debt collection company Asset Acceptance for $2.5 million on charges of misconduct . It also took action against two California-based collection agencies last year, one for attempting to collect debts that didn’t exist and the other for threatening to kill debtors pets and desecrete the bodies of deceased family members .

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’99 Percent’ Protest CPAC

February 10, 2012

WASHINGTON — The Conservative Political Action Conference drew crowds of protesters on Friday, as members of the Occupy Wall Street movement and labor groups demonstrated against the annual confab as a powwow for the “1 percent.” (CLICK HERE FOR LIVE UPDATES) Inside the Marriott Wardman Park Hotel in Washington, D.C., students affiliated with Occupy silently interrupted a speech by GOP presidential hopeful Mitt Romney. The protesters, wearing “We are the 99%” stickers over their mouths and shirts that read “If money is speech, poverty is silence,” were escorted from the building by security. While leading figures in the conservative movement continued to meet inside, outside the hotel the atmosphere was more raucous, with several hundred people rallying at noon beneath a giant inflatable “fat cat.” They held signs, chanted, and set up a few tents at the bottom of the hotel’s winding driveway. But when protesters began marching up the driveway shortly after noon, several D.C. police officers impeded their path and instructed protesters — and members of the media — that they needed to move back. Police said the driveway was private property and that those still on it risked arrest. The protest began moving back down the driveway as CPAC attendees watched from the sidelines. Police continued to keep protesters and members of the media off the driveway but allowed the protest to spill off the sidewalk, blocking the street. The protest saw a number of outlandish attendees, from the Brooklyn “Tax Dodgers,” a faux baseball team who satirically support former Massachusetts Gov. Romney, to “Candidate Walmart,” aka Ben Waxman, who said he was standing up for a corporation’s right to run for president. It also drew a mix of Occupy protesters, union supporters and members of local groups. “We’re protesting CPAC’s propping up of policies that don’t force U.S. corporations to pay their fair tax share, and really promote obscene income inequality in this country,” said James Adams, a coordinator with Our DC , another group of protesters that focuses on jobs. “The dreams of Americans who make up the 99 percent are being squashed by CPAC and their poster boy, Mitt Romney.” Although protesters expressed concern on issues from hydraulic fracturing, or fracking, to foreign policy, most said they were focused on economic policy. “We’re trying to create more jobs here in the District, and we feel by holding Congress and big corporations accountable for not paying their fair share of taxes, they can create more jobs by doing so,” said Dwayne Devoe, another member of Our DC. “A lot of them are talking about creating jobs, but at the end of the day, what they’re saying doesn’t really relate to their message.” Jeanae Paul, a member of Good Jobs Baltimore, said she was trying to call attention to the plight of the jobless. “I’ve been unemployed for over a year now, and it’s been really hard,” Paul said. “I’ve been going on interviews, but there’s no jobs out there. They’re non-existent. And it’s hard to feed my family, it’s hard to buy clothes, to celebrate the holidays.” Paul said she made the trip to Washington because she wanted the Republican candidates for president to hear stories like hers. “It’s important to let them know that we’re people, too,” she said. “We want to be heard. You know, they need to know the real stories, instead of listening to what their 1 percent is saying. Because we’re the 99 percent.” Brendan Duke, a spokesman for the Service Employees International Union, an organization of 2.1 million members, told The Huffington Post that there were 600 protesters on hand, including 300 unemployed workers from the D.C. area. He said the protest was scheduled to last until 2 p.m. Most CPAC attendees simply walked around the rally, but several stopped to speak with protesters. Byron Sanford, a Catholic University student who supports Rep. Ron Paul (R-Texas), seemed sympathetic. “I agree with Occupy Wall Street on one of the things they stand for — I think corporations are ripping off the American people,” he said, admitting that he was actually more comfortable with the atmosphere outside the conference. “I feel much better out here.” Others were less impressed. “I’ve been to a couple of these things, and it’s pretty typical — it’s the same slogans,” said John Sexton, who writes for Verum Serum, CPAC’s 2012 Blog of the Year. “Individually, they can be very reasonable, but in groups, you’re not thinking.” Another protest outside CPAC is planned for Friday evening. Michael Calderone contributed to this report. CORRECTION: The original version of this story quoted James Adams and Dwayne Devoe as members of Occupy DC. They are part of the group Our DC.

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Adele Scheele: Making Meetings Mean Something

February 10, 2012

For some companies, the usual Monday morning meeting is becoming unusual. It is revamping itself, becoming a stand-up, short-lived check-in. For those who still endure the old sit-down conference table version, the format is unbearably predictable: the boss unceremoniously starts the meeting by reading the agenda, reciting the latest sales report, warning of anticipated obstacles, and then spends the remainder of the time discussing the pet peeves and projects of the few most vocal employees excluding everyone else. Or else there are the endless arguments over old issues that never get resolved. For many of us, coping with meetings is more stressful than doing the actual work — it often feels like not much is accomplished. Sixty to ninety minutes of tortuous boredom leads to anger, which, in turn, leads to withdrawing to keep from exploding or else becoming a comedian to camouflage emotions. Most of us are stuck in a frustrating situation we feel unable to change. Maybe the only people who don’t bristle during routine, energy-sapping staff meetings are the managers who call them and those unlucky ones whose jobs are even more unbearable than the meetings. Instead of increasing your blood pressure or clenching your jaws, why not try to turn the situation around to our own advantage? Here are some tactics that can lead you to a more effective meeting outcome and better mood: 1. Start by changing your own role. Play host early and greet people by asking each about some recent good news. Share yours too. 2. During meetings, compliment any good idea out loud and suggest ways it might benefit your group. If two ideas offered are similar or complementary, suggest a way to incorporate both. 3. When factual disputes arise, suggest an immediate decision on principle, rather than fact. 4. When the old, unresolved issue rears its ugly head again, suggest a way towards resolution; perhaps a debate. Offer to find someone who can act as a debate coach, working with your group divided into opposing teams. In a short time, perhaps only two hours, a rational decision can be forged to everyone’s relief. 5. When you want to introduce an idea, be strategic. Don’t bring it up by the usual method — flinging it into the middle of the table and hoping that others will respond. Nobody does. Ideas, even good ones, usually fall flat. Instead, prior to the meeting, garner support from your leader and several members of the team so that you are backed up and can ensure better results. 6. Invent more roles to play during different meetings. Ask questions to elicit action or piggyback on a good idea or project. Just don’t play antagonist or devil’s advocate more than once. 7. Summarize what has already been agreed to; note new agenda items from stray conversations for subsequent meetings. 8. After a major project, suggest that each team member tell what he or she has contributed. Then go around again asking them to tell what they would do differently if the project were repeated. Record their remarks from what they’ve learned and see how you can use them next time. Don’t be deterred by flack by others who think you are overstepping; try to get them involved too. You might talk to your manager about how to gather what’s been learned to make the next projects more effective. 9. Of course, not every plan will work every time. But it’s worth a try. More than a try. Not only does trying keep your anger quotient and your blood pressure down, but it gives you a chance to realize what the rest of your group craves — someone willing to change things so that they will work better. Let that someone be you! Make your luck happen!

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Dennis M. Kelleher: First Bank Fraud, Now Political Fraud

February 10, 2012

First the banks committed massive fraud in originating and packaging mortgages, leaving the country littered with millions of little mortgage time bombs set to explode in the years after they lined their pockets and made their get-away. The poster child for this unconscionable conduct is Countrywide (now owned by Bank of America) and its CEO Angelo Mozilo, but they were just one of many, many culprits. Then when those mortgage time bombs exploded a few years later, those very same banks committed more massive fraud, this time by improperly charging homeowners fees and other costs, commencing unjustified foreclosures, and knowingly and intentionally filing false documents in court to foreclose on people when they never even bothered to check to see if they owned the mortgage they were trying to foreclose on. That is lying, cheating and stealing that would get anyone else in this country thrown in jail for many years. And, this was even worse than that because they filed falsely sworn documents in courts throughout the country as a routine practice. That is perjury (not that any of this is called criminal; no, these crimes are covered up with euphemisms ). This is very, very serious criminal conduct that was engaged in for years by the biggest banks in this country as a routine business practice. People go to prison for many, many years for crimes much less serious than that and these crimes merit long prison sentences and crippling fines. But, not if you’re a big bank. That is why people are so mad in this country. There is one standard for hard-working people and there is another standard for the wealthy, well connected, powerful, and, almost always, the big campaign contributors. The law gets applied to the former, often mercilessly and ruthlessly, but the law doesn’t apply to the latter, who get off time and again for nothing, next to nothing or by paying a window-dressing fine usually with other people’s money. As if that isn’t enough insult and injury to the American people, almost always you have politicians, prosecutors and sundry others racing to the microphones to claim a great victory for “punishing” those wealthy, well connected, powerful, and, almost always, the big campaign contributors. It is as if they think the country is populated by idiots who cannot see through the transparent PR political fraud that they spin to cover the fact that the big shots and their buddies are getting away with it again. Yesterday was no different as 49 state AGs, the U.S. AG and the White House all raced to the cameras to tout their claims that the mortgage settlement with 5 banks was a great victory for victimize homeowners. $26 billion, they all blared, coming to a neighborhood near you. Wahooo! Finally, relief, justice and help to beleaguered homeowners and other victims across the country. The problem is that the facts, the actual terms of the deal, as near as they can be determined from what little information was disclosed, suggest that this great victory isn’t going to help hardly anyone. True, it does appear to be better than nothing, but is that really the standard? And, none of those politicians said it was merely better than nothing. No, they claimed that this is going to help millions of homeowners across the country. First, only $5 billion of the settlement was cash (a mere $1 billion from each mega-bank, which is nothing to them) and the other $21 billion will come in the form of mortgage modifications, which isn’t anything like cash and will cost them almost certainly less than half of that cost. Second, as many have pointed out, $26 billion (even if it was real) isn’t much and won’t help much. For example, as a New York Times story today shows, even if all $26 billion was actually used as claimed, it will help, at most, 10 percent of the 20 percent of homeowners under water and even those homeowners aren’t likely to be helped much. Don’t miss the graph . Nothing beats seeing how little the help will be. There are approximately 11 million homes under water by an average of $50,000. The huge victory will help at most 1 million for an average amount of $20,000. So, nothing for 10 million and the 1 million will get to reduce the amount underwater on average to $30,000. It’s like saying rather than drowning in a lake 50 feet deep, you get to drown in a lake that is only 30 feet deep. And, people are taking victory laps? You don’t believe any of that and still think what the politicians said about punishing the banks was true? If this was a real punishment, then the stock of those banks would have taken a hit. They did not. The announcement had no effect. You could say that was because the settlement had been talked about for some time so the cost was already priced into the stock days before, but there wasn’t any hit during that time either. Thus, the markets confirm the facts of the settlement and rip the PR spin off the political fraud that compounds the banks’ fraud and, once again, victimizes the American people by falsely raising their hopes for relief and dashing — again — the claims that the criminals, liars, cheaters and scammers were finally going to be held accountable. Sadly, this is yet another example of the double standard that has been so painfully obvious to everyone in this country since the 2008 financial crisis: pain on Main Street, bonuses , bailouts , and arrogant whining on Wall Street, and nothing but PR spin from Washington, D.C. and elected officials.

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The Story Of Obama’s Brush With Political Disaster

February 10, 2012

Shortly after four o’clock on the afternoon of Wednesday, April 13, 2011, U.S. Treasury Secretary Tim Geithner walked down the hallway near his office toward a large conference room facing the building’s interior. He was accompanied by a retinue of counselors and aides. When they arrived in the room — known around Treasury simply as “the large” — four people were seated at a long walnut table on the side near the door. Geithner and his entourage greeted them, then walked around to the far side and took their seats.

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The States Where Companies Are Hiring

February 10, 2012

From 24/7 Wall St.: Companies across the country are hiring more workers, at least if you ask their employees. In 2011, 31 percent of U.S. workers reported that their employers were hiring, according to Gallup’s Job Creation Index . Only 18 percent said that their employers were laying workers off. Of course, residents of some states report much higher rates of job creation than others. 24/7 Wall St. reviewed the Gallup Index, as well as a number of other economic indicators, and identified the eight states where residents think companies are hiring most. Read The Eight States Where Companies Are Hiring To develop the Job Creation Index, Gallup asked those surveyed whether companies are hiring or letting employees go. While the national score reflects that most states believe employers are hiring, 24/7 Wall St.’s analysis suggests that self-reporting by workers may not perfectly align with reality. These states are not experiencing the greatest recoveries — including in employment — as they have little to recover from. The states’ strong economies may be affecting their residents’ perception of the economy. Five of the eight states on this list are among the top nine states on another recent Gallup poll ranking states’ confidence in the national economy. Those who live in states that are doing well see the entire country as doing well. The majority of states where high percentages of workers reported job creation also have extremely low unemployment rates to begin with. Six of the eight states have among the 10 lowest unemployment rates in the country. North Dakota, the state where the largest share of workers reported that their employers are hiring, has the lowest unemployment rate in the country. And while unemployment rates are low, the majority of these states have had relatively low unemployment rates for some time. Most did not have particularly impressive improvements in unemployment last year. Other than Utah and West Virginia — the only states with exceptionally large drops in unemployment — the rest have had low unemployment rates since 2006 and throughout the recession. Housing markets in most of the states where respondents believe jobs are plentiful also have been stable. Seven of the eight states on the list are among the 15 markets that suffered the least from the third quarter of 2006 to the third quarter of 2011. Five of the states actually experienced increases in home prices over this period. These are the eight states where workers say companies are hiring, according to 24/7 Wall St. :

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Another Big Bank Slashes Its Bonus Pool

February 10, 2012

LONDON — Barclays PLC revealed Friday that it is slashing its bonus pool after earnings at its investment banking division fell sharply and dented overall profitability. The bank said it was taking the action as it reported that its profit after taxes fell 15 percent last year to 3 billion pounds ($4.8 billion) from 3.56 billion pounds the year before even though income rose 2.6 percent to 33 billion pounds. Much of the profit decline was due to a 32 percent fall in pretax profit at the Barclays Capital investment banking unit to 2.97 billion pounds. The bank said the average bonus for Barclays Capital employees will be 64,000 pounds ($101,000), down 30 percent from 2010. The total bonus pool was cut by 25 percent and the average bonus per employee will be 21 percent lower at 15,200 pounds. “We need to balance remaining competitive with being responsive to the public mood,” Chief Executive Bob Diamond told reporters after the publication of the results. Bonuses are a highly sensitive political issue in Britain, particularly at Royal Bank of Scotland and Lloyds Banking Group which were bailed out by taxpayers. Lloyds chief executive Antonio Horta-Osorio and RBS CEO Stephen Hester have both waived their bonuses, though Hester did so only after coming under intense political pressure. Barclays said bonuses for executive directors and the eight highest paid senior executive officers would be down 48 versus 2010 on a like-for-like basis. Diamond received a bonus in shares worth 1.8 million pounds last year. Barclays said no one would get a cash bonus of more than 65,000 pounds. A more detailed look at the results show that the bank’s adjusted pretax profit of 5.6 billion pounds fell short of the consensus forecast of 5.8 billion pounds. After initially opening lower, Barclays shares in London were trading 2.9 percent higher after an hour of trading. Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers, said the initial sell-off appeared to respond to the disappointing top line results and that the upturn fed on more positive news within the earnings report. Hunter noted a 48 percent gain in pretax profit in the retail and business banking, a return to profit in the corporate division, a 9 percent hike in the dividend to 6 pence and a “sturdy” Tier 1 capital ratio of 11 percent. Barclays shares are now at their highest level since July. A year ago they were trading at about 330 pence but fell as low as 139 pence in September.

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Guess Which Local University Shattered Fundraising Records?

February 10, 2012

SAN FRANCISCO — Stanford University’s latest five-year fundraising drive netted $6.2 billion, the largest amount ever raised in a higher education campaign, school officials said Wednesday. Money from the Stanford Challenge is being used to fund an interdisciplinary approach to teaching and research on areas such as education, environment, human health and international affairs, officials said. “We’ve undertaken a new model in higher education, with experts from different fields joining together,” school president John Hennessy said in a statement. “This kind of collaboration has enabled Stanford to assume a larger role in addressing global problems.” The money is providing funding for more than 160 endowed faculty positions, 360 graduate student fellowships, the construction or renovation of 38 campus buildings, $27 million in seed grants for innovative research and more than $250 million for need-based undergraduate scholarships. The $6.2 billion raised by the Stanford Challenge is the most collected by a university in a single fundraising campaign, said spokeswoman Lisa Lapin, citing the Council for Advancement and Support of Education. That total surpasses the $4.3 billion goal set when the campaign was launched in October 2006. During the campaign that ended Dec. 31, the university received donations from more than 166,000 alumni, parents and community members. The university received contributions of more than $50 million from Stanford alumni such as Yahoo Inc. co-founder Jerry Yang, Nike Inc. co-founder Phil Knight and Silicon Valley venture capitalist Robert King. Stanford is the latest university to announce a successful multibillion fundraising campaign. Last year, Yale University said it had raised $3.9 billion, and the University of Pennsylvania said it collected $3.5 billion. “It’s an impressive drive for funds that most public universities can only dream to eventually match,” said John Aubrey Douglass, a researcher at the Center for Studies in Higher Education at the University of California, Berkeley. “Donors are attracted to the big-name universities, but I worry some that the rich keep getting richer.”

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Google’s $12.5 Billion Deal Expected To Be Approved

February 9, 2012

By Diane Bartz WASHINGTON (Reuters) – The Justice Department will approve Google’s $12.5 billion bid to acquire Motorola Mobility Holdings Inc, according to sources close to the antitrust review. The department is also expected to approve an Apple-led consortium’s bid to acquire a group of patents from bankrupt Canadian company Nortel Networks. Both deals are expected to be cleared early next week. Google, whose Android software is the top operating system for Internet-enabled smart phones, announced in August it planned to acquire phone-maker Motorola Mobility. The deal will give Google one of the mobile phone industry’s largest patent libraries, as well as hardware manufacturing operations that will allow Google to develop its own line of smart phones. The Apple-led consortium, which includes RIM, Microsoft, EMC, Ericsson and Sony, had agreed in July pay $4.5 billion for 6,000 patents and patent applications that telecom-equipment maker Nortel had put up for sale, including coveted 4G wireless technologies. The companies joined forces to outbid Google for the patents. Google, the world’s No. 1 search engine, has been under increasing regulatory scrutiny. The U.S. Federal Trade Commission and the European Union are both investigating Google’s business practices. The company faces accusations it uses its clout in the search market to beat rivals as it moves into related businesses. The Justice Department will likely continue monitoring patent litigation in the telecom space, according to the sources. The department of Justice, Google, and Apple did not immediately respond to requests for comment. (Reporting By Diane Bartz; Editing by Tim Dobbyn)

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Janet Murguía: Why the AG Settlement is Good for Communities of Color

February 9, 2012

This is a joint blog post with Marc Morial, President and CEO, National Urban League Today, state Attorneys General (AG) announced that they arrived at a $25 billion agreement with mortgage servicers in response to the “robosigning” scandal that broke 18 months ago. When New York AG Eric Schneiderman, California AG Kamala Harris, or Nevada AG Catherine Masto signed onto the agreement for their hardest hit states, it was a clear indication that this is a strong settlement for our families. We at the National Urban League (NUL) and National Council of La Raza (NCLR) celebrate this significant move as one in a series of enforcement steps that are essential to restoring the public’s faith in our housing system. The closure of these proceedings is incredibly important to healing our families and neighborhoods. The entire nation has felt the burden of the enduring foreclosure crisis. Black and Hispanic homeowners have been especially hard hit. One in four Black and Hispanic borrowers in the U.S. lost homes or are at serious risk of losing their homes, more than half the number of White borrowers. Asian, Black, and Hispanic families were 1.7, 3, and 2.2 (respectively) times as likely as White borrowers to receive subprime loans even after accounting for similar credit profiles. Through foreclosures, our families have battled substantial wealth loss, emotional distress, and an uncertain financial future. The AG settlement will bring relief to our families, with approximately $17 billion dedicated to principal reductions. Writing down principal has proven to be a win for both borrower and lender alike, especially when compared with the costs of foreclosure, property maintenance, and a sheriff’s sale for pennies on the dollar. Up until this point, however, servicers have not made it a priority. This settlement and a recent announcement to increase incentives for principal reductions should compel servicers to help families and clear the logjam on write-downs. Also, we are confident that rapid uptake of these new resources will soon generate the empirical information needed to convince naysayers that write-downs are vital to stabilizing the market. We are encouraged by the AG settlement and plan to do everything we can to ensure that affected families have access to these new resources. Finding homeowners is no small endeavor, especially finding those who have slipped through the cracks. Outreach will be an enormous undertaking in its own right and NUL and NCLR hope to deploy their housing programs to seek out eligible clients. Despite the challenges, we believe this AG settlement will set families up for success and will bring true accountability and systemic improvement to our housing market.

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Occupy Y’All Street: Occupy Charlotte Activist Gambles Everything On The Movement

February 9, 2012

This is the fourth in a series of stories and short films on under-publicized Occupy sites. The first is here , the second is here , and the third is here . Stay tuned in the coming days for more from our road trip through the South. CHARLOTTE, N.C. — Vic Suter is looking for Ghost. She sloshes through the slick grass and soggy leaves matting the grounds of the Old City Hall. She and the rest of Occupy Charlotte have called the property home since early October. She knows every sign, every tent in this place. But it’s Ghost’s tent that she wants. A cold rain begins to fall steadily on a camp that’s all but deserted. Vic, 22, doesn’t care. Vic motors past tents sagging under layers of tarp and other jerry-rigged, middle-of-the-night weatherproofing. Dragging a cardboard sign with a bitten corner, she ignores all those tents before finally stopping at a giant beige orb, outfitted with a mesh enclosure that gives off a screened-in porch effect. There’s room for three chairs and what look like wind chimes. Ghost has his shit together. “Hey Ghost?” she shouts, a few feet from his tent. Vic leans into the orb’s entrance. Her face, curtained by her brown hoodie, is pale and expectant. Even at 11 a.m. in early November, she looks game. “Hey Ghost! You in there?” The orb shows no signs of life. “You got to Godzilla people’s tents — shake them, nag them to get up and go on a march,” she explains later. Vic lets out one long “Ghooouuuust!” in a nagging sing-song. She thinks this is funny. She stoner-laughs to herself. The rain sounds like it’s hitting the trees a little harder. Vic fiddles with the orb’s flaps. “Let’s see.” The tent is locked. “No, he’s not here.” Vic finally has to give up. She trudges past the orb in her untied black army boots — shitkickers her stepfather wore when he turned 18 in Vietnam. She says she’s worn them every day since high school. Instead of lockers and jocks, she has to stomp past an empty bucket, empty plastic chairs and more empty tents. Ghost is a memory. She’s looking for James and Bobby, and somebody named Peanut. Vic hits on the last of the tents located at the outer edge of the camp. They’re quiet, too. “Where is everybody?” she asks. A month earlier, the Occupy activists in Charlotte had drawn more than 500 to their first march uptown, a noisy success that included a stop at Bank of America’s North Tryon Street headquarters, where the throngs chanted up its 60 stories. The building — the tallest in the state and a dominant spear in the city’s skyline — had been a force for civic pride. But since the Great Recession, the bank has become one of the country’s great villains. The Wall Street of the South now had its own potent occupation. The early general assemblies could number in the hundreds. The meeting participants were drawn by growing income disparities, rising college tuition costs, the region’s environmental decay. They were among the metro area’s double-digit unemployment rate. They realized they were everybody. Vic had joined on the first night and had been charged with welcoming newcomers and teaching them the movement’s hand signals. Soon she began organizing three marches each day to one spot. This was her work week. Charlotte’s downtown had grown rich with examples of injustice wrapped in glass and outfitted with bad public art. Vic filled up to-do lists with ideas for future marches. For years, she had searched for her place. She tattooed “Restless” in black cursive script on her shoulder. But at Occupy, she thought she might have found her calling, and her very own tribe in the buckle of the bible belt. She fell hard. “When you’re throwing yourself into something,” she explained to us, “you don’t have a lunch break. You don’t have time off. You don’t get a vacation from a long-term protest.” The movement proved it could inspire people like Vic to produce Pastebin manifestos, YouTube gotchas, and a working kitchen. But a month or so in, Occupy began facing an important dilemma that they have yet to resolve. How does a non-hierarchical movement avoid arguing itself into oblivion? How does it sustain the true believers? As the days got colder, and inertia seeped in, the general assemblies got smaller and so did the press stories. Even before the big city camps were razed, a lot of activists had already burned out. But Vic never did. The problem for Vic was that the chants never got old. Vic wants Ghost and Peanut for a march that will begin in a half hour and lead her — and as many willing activists as she can cajole — from their camp, through downtown Charlotte to Duke Energy’s headquarters. Vic chose the energy mega-company for its planned rate hike ; its environmental record and its hold on power in the region and beyond — planners for the Democratic National Convention, to be held in Charlotte, rely on a $10 million line of credit from the company. She is still exuberant about this march — even if it means chanting in the rain to stone-faced security guards in Charlotte’s bank-building canyon. Not everyone in Occupy Charlotte is as charged up. Last night, Vic says she begged three fellow activists to get her up on time for the morning march. Her cell was dying and she couldn’t depend on its alarm. “None of them wake up,” she explains of her neighboring activists. “Thanks guys.” She ended up oversleeping. Vic trudges back toward the camp’s center, first stopping at the information desk’s uncovered table and filing cabinet. A fellow activist shows her his sign — it’s the state outline with a fight-the-power fist punching up through its midsection. Vic approves. “That’s awesome. Right on. Hell yeah.” A small group of guys are standing by a cluster of tents near the kitchen and storage spot where the activists keep their signs. Earlier that morning, the kitchen’s tent started collecting water and nearly caved in. It had to be held up by a broom. The guys watch her. As one of the only female campers, she stands out — a girlie gutter punk with piercings (tribal) and tattoos (personal), a sea-green streak manic-panicked through a mess of matted, light-brown curls piled high above her round face. You don’t want to mess with that. You want to follow that. The guys are waiting for her orders. One is wearing a dress. “You guys want to mic check?” she hollers down toward them. They want to mic check. “IF YOU’RE GOING TO MARCH, WE’RE LEAVING NOW!” Suddenly, stragglers appear and grab signs. They display them for Vic to sign off on. Vic asks for a cigarette. A guy rolls one for her. Vic asks for a light. She leans into the flame and exhales a fat cloud. She eats a banana that someone drops on the ground. She laces up her stepfather’s boots. She tells everyone that marching in untied boots is lazy. Fifteen Occupy Charlotte activists — all men — are ready to join her. And then Vic asks the question she’s been wanting to ask all morning: “Why are we still here?” * * * * * Occupy Wall Street’s most effective recruitment tools were not testimonials from the unemployed or income-inequality charts. The movement grew exponentially with each video that captured police actions against demonstrators. The mass arrest on the Brooklyn Bridge, the maiming of Iraq War Vet Scott Olsen in Oakland, the UC Davis cop pepper-spraying seated students — each jolted the movement’s sense of outrage, and gave the mainstream media fresh footage to endlessly loop. The resulting demonstrations were some of the bigger, more effective marches. None had more impact on Occupy than the videos capturing NYPD Deputy Inspector Anthony Bologna’s close-range pepper-spraying of a group of women penned behind orange police netting. One YouTube video of the incident racked up more than 800,000 views. Another attracted more than 1.5 million. Vic had seen the clips: the white-shirt official firing the stinging spray, the women cooped in, shrieking in horror before crumbling to the pavement. “It was just a catalyst,” Vic says. “It got me going. For the following week after that, I was just sitting there like obsessive at the computer just trying to find out more and more and more.” How long is this going to last? Are they serious? Vic wanted to know. Vic began calling around to the few activists she knew in Charlotte, hoping for any signs that a local occupation might be starting. The odds were against her. The city had no reputation as a rowdy place of political dissent. The big banks held sway over the local economy, the southern conservative mindset over the political discourse. Just days before the occupation started, Mayor Anthony Foxx, a Democrat, defended Bank of America against criticism for wanting to charge customers a $5 monthly fee for using its services: “People who live in this community know how generous our financial institutions have been.” Vic’s last activism had been a silent protest, helping with a letter writing campaign against Monsanto, an agri-business giant. She couldn’t remember the last time she marched or attended a rally. As soon as she heard that Occupy Charlotte would start, she put in her two-weeks notice at the earthy grocery store where she did food prep for $9 an hour. The first day that Occupy Charlotte began its encampment — Oct. 8 — was Vic’s last at the grocery. After her final shift, Vic said goodbye to the group house she’d rented for about $252 per month. Her roommate gave her a ride downtown. She forgot to pack a sleeping bag or pillow. But she did remember to stuff in her backpack a couple journals and books (Emma Goldman, George Orwell, Noam Chomsky, Nietzsche), a re-useable water bottle, extra clothes and a couple blankets. She also packed nonperishable food like granola bars and sunflower seeds, along with a few pieces of fruit. She did not plan on leaving. That first night, Vic joined maybe a dozen strangers. They formed a circle and introduced themselves: the high school dropout, the injured iron worker, the local musician, the college student. They talked about what the movement would mean to them. Vic said she was glad to see people in Charlotte finally not “turning a blind eye to things.” She says she didn’t go to sleep for two days. “It was awesome,” she says. “It came at a good point in her life,” says Vic’s stepfather, Danny Hill, 59. “She needed something to latch onto that would get her focused again … It was just get up and go to work. She didn’t really have much time for herself. This has been her passion all along but she just didn’t know how to go about doing it.” A month before she joined Occupy Charlotte, Vic wasn’t sure where she belonged. She wrote in her journal: “The world is changing quickly or maybe I’m not adapting fast enough. Maybe it’s not changing fast enough for me — or perhaps I’m not changing fast enough for me.” In Charlotte, Vic had a difficult time finding her way. Her beloved older brother Nick moved out before she hit middle school. Her parents put her in a small, private, Christian high school. She graduated an expert on what it felt to be shunned by your own peers. “Being the only out gay person in your school, being someone who graduated from a Christian school who never believed any of it, I was alone,” she says. She’d had to sit through Bible study every day for two years. Vic moved a little more than 90 minutes away, across the South Carolina border, and enrolled in Columbia College. But she quickly found that the all-women’s school wasn’t for her either. “All my peers were busy reading Vogue,” she says. “They were in school to meet their husband and their bridesmaids. I was starving to learn more.” Vic dropped out after her freshman year. For three months, Vic bounced around the Southeast: Athens, Atlanta, Savannah. “I’d hang around somewhere for a week, get bored and then leave,” she says. She’d walk or hitch or jump trains. In Tallahassee she joined up with a friend’s band. In Tampa, she squatted in a warehouse covered in black mold. Her itinerary ended with a return trip to her parents’ house. After a short stint at a community college, Vic enrolled at Winthrop University. But all that came to a chaotic end in October 2009 when she contracted swine flu. That December, she lost her grandfather. She felt overwhelmed and depressed. She decided to withdraw. Vic tried to re-enroll but says Winthrop wouldn’t accept all of her old credits. It became too much of a financial burden. “I was heartbroken that I couldn’t go back,” she says. Instead, she took the grocery job. “It was hard to live one block from my school and walk through campus on my way to work. It was a daily reminder.” Her mother Karen Hill says they couldn’t pay for Vic’s college; they had persistent health problems, and barely enough money to eat on their fixed incomes. Danny Hill has shoulder and lung issues, as well as post-traumatic stress disorder from his tours in Vietnam and the first Gulf War. It is hard for him to walk without having to catch his breath. Karen Hill handled baggage for US Airways, loading and unloading up to 20,000 pounds of luggage per shift, she estimates. After 23 years on the job, she had to have carpel tunnel surgery. She says her doctors soon rushed her back to work; she ended up with nerve damage in both hands. She never was able to get worker’s comp, she says. Her hands swelled up so bad, Vic had to dial for her and cradle the receiver. Vic had racked up her own share of medical debts. She had grown up with lungs weakened by a stubborn asthma that left her immune system vulnerable to attack. Hospital stays were common annoyances. In her journals, she taped a hospital bracelet from this past June. In the corner of the page, she wrote in black: “DIE YOUNG AND SAVE YOURSELF.” As the start of the occupation grew closer, she wrote in her journal: “Clean slate in front of me, bumpy road both behind and before — I’m bursting … I must become as strong as stone.” During the first week Vic lived at Occupy Charlotte, she says someone stole her clothes, her jacket and her ID. She eventually got a tent and a lock. She says she was afraid to leave the camp. She’d only leave for an hour or two a day. “I was always scared — What’s going to happen while I’m gone? What am I going to come back to?” she recalls thinking. “I was just scared that somebody was going to do something stupid and get us shut down and I was going to come back and tents were going to be destroyed.” Despite the setbacks, Vic confessed to her mom just how meaningful it all was. “She told me that this is the most important thing she’s ever done in her life,” Karen Hill says of her finally grown up daughter. “I had to let her go.” It was hard to fathom that this was the same daughter who had come out to her by handing her a note. Hill made sure to drop off an entire wardrobe of clothes. Hill couldn’t march, but she could open her home to her daughter’s new friends. As the seasons changed, she supplied the activists with vitamin c and cold meds. When they needed a break, she invited them over to the house for a hot meal and the use of their washer, dryer and shower. They hardly disturbed the household. “Usually, they would sit on the floor with their computers — and it was Occupy, Occupy, Occupy,” Hill says. But their victories went beyond blog posts and tweets. A group of Latino tenants were facing eviction when the camp decided to take up their cause. The landlord soon backed down. “That’s a concrete thing that they can point to and say ‘Look, this is what we did,’” says Mark Kemp, editor in chief of Creative Loafing, the Charlotte weekly. Luis Rodriguez , a former organizer with Occupy Charlotte, describes Vic as pivotal to whatever success the camp had. “She’s a big motivator,” Rodriguez explains. “She’s very charismatic and she has a way of rallying support to her … You look at her and you see the hair and the piercings and then you get to talking to her and she’s really, really passionate. She does not suffer idleness and she wants everyone else to be constantly moving.” The marches were addictive. Vic says she yelled so much that no one heard her real voice for long stretches. For the first three weeks, her voice was constantly hoarse. But it wasn’t powerful enough to silence the camp’s in-fighting that sometimes got physical. On a few occasions, people got caught bringing drugs into the camp. One leader left in a well-publicized dispute over the direction of the camp. Restraining orders were exchanged, the scope of which banned one of the main organizers from the camp and from participating “directly or indirectly” in general assemblies. There was a fight over who controls the camp’s website. The ousted activist turned one site into an anti-Occupy Charlotte missive. The remaining occupiers had to start a new site. General assemblies became a grind even for Vic. After a particularly intense session, Vic walked away in tears. She thought about quitting. She’d been occupying for about a month. She was tired of seeing too many activists sitting around. She’d sometimes had to barter with them to march: I’ll give you a cigarette if you get out of your tent . She and others even had to march on their own camp to motivate the laziest camp squatters. They’d tromp through the haphazard rows of tents shouting, “Out of the tents and into the streets!” More than once, Vic complained about the camp going slack. Not everyone appreciated her bluntness. Some tent dwellers had taken to calling Vic a “stuck-up bitch.” If an activist quit the camp, others blamed her. She didn’t miss the quitters. There was always the next march to organize. She didn’t care if she could only get a half dozen to march with her. They were an escape from the camp’s drama and bad vibes. The morning of the march on Duke Energy, one man sits in the rain in front of a chess board, expressionless. Later, an activist shouts down a young girl. She doesn’t look old enough to drive. She’d been at the camp before. She had runaway from home and ended up there. She left in a police car that time. The activist isn’t happy that she came back. He bellows at her loud enough for the whole camp to hear. He calls her a “fucking bitch.” The girl asks to borrow one of our cellphones. She needs to get a ride home. That night, the camp is partly illuminated by the city’s police headquarters across Trade. The Occupiers are only a short walk from the heart of downtown Charlotte’s decade-and-a-half building boom, but the tents feel a world away from the gleaming hotels and loud bars. One activist describes it as “a bubble.” It’s kind of quiet inside the bubble. There are no drummers, or old heads moderating debates over the ” Pedagogy Of The Oppressed .” Instead of a friendship circle, there are small cliques hanging by the information desk and around the kitchen smoking cigarettes. They all look young and tired, shivering in jean jackets and hoodies. At the previous night’s general assembly, several activists debated whether another should be allowed to wear a ball cap emblazoned with the words “Fuck the Police.” Zuccotti Park inspired more than a hundred camps just like this one. The tents and general assembly hand gestures may be the same. But camps like Occupy Charlotte’s have had to make their way very much in the dark, without the correctives that constant media attention can bring, without the steady flow of donations and celebrity cameos. Russell Simmons and Michael Moore have not stopped by. Here, it’s up to Vic and her ability to get Peanut to wake up and march. The night before Vic had sat at the information desk until 4:30 a.m. in the hopes of pitching the movement to any stranger that happened to stumble down to this darkened block of Trade. Tonight, she just wants sleep. Vic slinks away from her group and walks carefully past the tree line running along Trade and into the pathless dark, looking for her one-person tent. She unwraps her tent tarp and fiddles with the combination on her padlock. “The weather is ruining this lock,” she complains. Her voice is a rasp. It’s about 10 p.m. when she finally takes her boots off. After little sleep, she wakes up at 7:30 a.m. feeling sick. The first march to a military recruiting center to highlight the plight of veterans will have to be put on hold. Vic wants more sleep. At 10:30 a.m., Vic’s speech is groggy, her eyes bloodshot. “You’re catching me like just waking up,” she says, laughing. “Sorry.” She decided to join a friend’s tent for the conversation and the platonic body warmth. “When it gets cold, you make friends with your neighbors,” she says. “Body heat is a necessity.” Vic spies the camp from the tent’s entrance. Not a soul in sight. “I wish more people were up and moving about,” she says. She insists she will be ready for the next march: “Put my boots on and go.” Vic had one advantage over all the other Occupy activists: her older brother Nick. From an early age, he introduced her to Orwell and Zinn and radical punk bands like Crass and the Dead Kennedys. He’d stand in the doorway to her bedroom and roll his eyes at her record collection. “What is this except for a waste of record space?” he’d sneer. He was eight years older. He left home when she was 10. Even when he moved out to the Midwest, he made sure to heckle her long distance — pushing her toward more alternative culture. “I’ve always looked up to him,” Vic explains. “He never led me astray … He was always there to give me that hint.” Nick had been a part of the anti-globalization protests a decade earlier. He marched against the World Bank and the International Monetary Fund in Washington, D.C. While the movement’s message, tactics and global analysis animated the Occupiers, Nick’s generation faced an ambivalent public and brutal police. Pepper spray was the least of their worries. The press corps only seemed to accept the kettling tactics as a justified use of force. After one infamous mass arrest, The Washington Post headlined its editorial ” Hail to the Chief–and His Cops .” The preemptive roundup would ultimately cost taxpayers millions in civil-suit settlements . No activist got famous on Twitter or ended up as a talking head on MSNBC. Nick remembers the tear gassing and pepper spraying, the times when the police beat him with their nightsticks and stomped on him with their heavy boots. None of it ended up on YouTube. But he could share his war stories with Vic. “I guess I wanted to try to pass on values, a willingness to stand up for what you believe in,” he says. “I didn’t really want to pass on a lot of the stuff I was doing. Nightsticks hurt. And tear gas isn’t fun. I wouldn’t want her to experience that part of things.” Vic had sought counsel from her brother before her planned arrest. Nick recalls telling her to not piss off the cops. Make them work for her arrest but not too much. “Make them pick you up,” he told her. “Ride that fine line between being cooperative and resisting.” Five days after we met her, Vic and three others formed a human blockade in front of the entrance to Bank of America’s headquarters. They stretched out a banner that said “Bank of Coal.” The Charlotte cops didn’t really know what to do at first. The blockade lasted maybe five minutes. “But it felt like an hour,” Vic says. Vic and seven other activists were arrested for blocking the entrance and climbing the flag pole for another banner drop. Vic made sure, her mother says, to take off her piercings, so she’d look more respectable. But Nick had to call to critique her mugshot. “I was kind of let down she wasn’t smiling,” he says. “I thought she would have smiled for it. When I talked to her, I gave her a hard time about it.” He said he was surprised how easy her arrest went down, that the cops didn’t get rough. He had to admit, though, that he was impressed with her commitment — especially her decision to quit her job for Occupy. “I was actually pretty proud of that,” he says. “I wish I had been at a place where I could do the same and join her. It’s an admirable thing. You find something that means that much to you and you’re willing to give up what you have to be a part of it … It’s kind of her taking it to where I wanted to be.” The Bush Administration and its two wars would consume the energy of the U.S.-based anti-globalization movement. As Nick got older, he says the activists organizing the most aggressive actions appeared to migrate overseas. “It kind of hit a point where nothing was happening,” he recalls. “All the meetings started taking place in Europe. You got punk kid from Charlotte — you can’t go over to Italy or those places.” Especially not a punk kid with growing financial debts. Nick, 30, says he needed to find steady employment, which eventually led him to railroad work as a track laborer in Wisconsin. He currently is a train conductor based in Duluth, Minn. — far from his old activist friends. He’s getting married in June. The closest he gets to protesting is participating in union meetings, and calling and texting his sister. When Vic first started, Nick called with some advice. He still remembers the conversation, that he cautioned her not to let Occupy become all consuming. “I didn’t really know what all to say at the time,” he explains. “Just tried to tell her to be careful and don’t make it like work, like a job. I’d seen a lot of people … taking it to a point where it becomes too much work, too stressful.” When the activists deserted the camp during the Thanksgiving holiday, Vic insisted on remaining behind, her mother recalls. “Somebody had to be there,” Vic explains. “I didn’t trust leaving. I was scared. If I left and everyone else did, anything could happen.” What would the media say if they found a ghost town? she wondered. On Nov. 26 she wrote in her journal: “As of today I have been protesting for 50 days straight. Not one day I haven’t marched.” She had watched the camp grow from six tents to more than 40. In mid-December, Vic learned that a friend — not affiliated with Occupy — had died from a heroin overdose. She says she couldn’t handle the funeral. When word spread about a ride to Occupy DC, she took it. She left behind both her tent and an ambitious schedule of marches. She brought with her a backpack full of clothes and $3. Vic says she needed to step away from Charlotte’s small, intense group. She wanted to witness up close how a big city’s Occupy force handles things. She made sure to take a few Occupy Charlotte friends with her. Vic says she spent her first night with Freedom Plaza’s Occupy faction. There was no friendly circle, no introductions, and no all-night bonding session. “It was cold shoulders everywhere I went,” she says. “It was an ‘I’m too busy’ type thing. That was disappointing.” The next day, Vic and a friend moved their shared tent to Occupy DC at McPherson Square, just off K Street. She found a spot under a giant tarp that made up the neighborhood named after Malcolm X. She’d jump into people’s faces: “Hey, I’m Vic.” Vic’s voice eventually grew hoarse in D.C., too. She participated in marches against the National Defense Authorization Act — the recently signed law that allows for indefinite detention of American citizens. She screamed in front of the White House. She’d loved watching others do the same. “You could see it and it was beautiful,” she gushes, when we catch up with her in D.C. But there are fights at the camp nearly every night, she says. There are fights over missing money. There are fights over a missing laptop. There are drunken fights. Even worse than the fights — some days, there aren’t any marches at all, just rumors of marches. Sometimes, when they march, Vic says the organizers seem to get lost. We go to a used bookstore a short drive from the camp. She says she could spend hours there. She could fall asleep in a corner of the literature section. We walk around a bit, looking for a place to eat. Vic seems oblivious to the stores and restaurants. None of it matters. She isn’t protesting them. Vic admits that it had maybe been 24 hours since her last real meal. She is still an outsider at the camp, just an Occupy tourist. She only mentions one Occupy DC activist — a painter she had met on her first day. Her deeper connection is still with Occupy Charlotte. “I was really down about Charlotte and the state of things,” she says. “Coming here helped me get a little respect back for my hometown’s occupation.” Ten days into her stay, Vic develops a cough. “You lay down at night to go to sleep,” she explains, “and it’s just like a chorus of coughing.” We are sitting in a sandwich shop, the closest warm place to the camp that afternoon. Outside, it looks like it might rain. She admits: “I’ve been terrified … If I hear people coughing, I might put my bandanna up.” Vic gives her cough a funny name. She calls it her “Occu-Cough.” She thinks there’s another anti-NDAA march. Maybe it’s at 6 p.m. Maybe it’s at 8. She doesn’t know but she does want to join it. By 6:30, she texts: “No ones marching yet!,” then, “Im trying to see if anyones wanting to march at 8 against the ndaa.” Whatever plans there are wash away with the night’s heavy rains. We find her in her tent in the back of Fort Malcolm. A battery-powered lantern illuminates the small space filled with old clothes, half-empty sugar cereal boxes, and tangles of adapter wires. Vic would rather be marching. “Everybody’s pussing out, man,” she complains, curling up in a fuzzy blanket next to a new friend named Kiki. Even without the march, Vic has a lot on her mind — including her other Occupy Charlotte transplants. “My to-do list keeps growing,” she says. “I have to write three press releases. I have to call my lawyer tomorrow. I have to get Tate to call the lawyer tomorrow because he’s not doing it on his own, same with Jesse. Fucking babysit. I have to find out what’s going on tomorrow as far as marches. I’ve got two meetings tomorrow. It just doesn’t stop.” * * * * * Shortly before Christmas, Vic returns to Occupy Charlotte to address her court case and add a New Year’s Eve march to her to-do list. The planning hits a snag when police catch a couple activists burning American flags late one night and charge them with careless use of fire . One of the culprits claims that the flag burning was done as an attempt to motivate the camp. Instead, they receive a lot of bad publicity, and two well-attended but drama-filled general assemblies that fail to resolve the matter. A small faction of activists who don’t reside at the park walk into Occupy Charlotte and read a declaration that they are no longer working with the campers. Vic finds that the activists have done very little in her absence. They respond with laughter when she asks whether they had kept up the marches. “Is there a purpose in me doing this?” she worries. “I don’t know.” Vic was not on the scene at the time of the flag burning, but at her parents’ house. “We are the pissed off white kids. We need to be so much more,” she complains after hearing the news. “It’s now tarnished everything.” She then utters the previously-unthinkable: “I’m going later today to get my tent.” But Vic decides to keep her holiday march on schedule. She and about two dozen other activists read off her New Year’s resolutions in front of Wells Fargo, Bank of America and Duke Energy. They all begin the same way: “We the people of 600 E. Trade St. as a part of Occupy Charlotte, stand in protest of the injustices brought upon the city of Charlotte.” It is her last march through her hometown. Even before her return, she had planned her exit strategy, what she calls out her “Occu-Hop” — a nine-month tour of still-standing Occupy camps, with visits to friends and family along the way. The first stop would be a return trip to Occupy DC, then she’d travel to Chicago and maybe stop in on her biological father, and then to Duluth to see Nick. Eventually, she’d make her way to Oakland before returning east to Charlotte, in time for the Democratic National Convention in September. Before she leaves for D.C., her stepfather Danny Hill presents her with his Marine duffel bag, which he’d had since 1970. It fits with the boots and the Vietnam-era gas mask he’d given her. When she isn’t looking, he stuffs a $100 into her belongings. “It is different with her in D.C.,” Hill says. “You get a little more worried. You watch things going on there. You can tell it’s on a whole different level … We’d rather her stay here. But at the same time, we understand that’s what she was wanting to do.” On Jan. 4, Vic and her ride leave Charlotte. As they head out through the city, Vic stops at the Occupy site one last time. She still needs to get her old tent. She makes her rounds, too, saying her goodbyes. Some are sad, some are angry that she is leaving. They all tell her to “be safe.” Vic knows the camp may be gone by the time she returns. By the end of the month, it will be — police clear the site after the city passes an ordinance banning camping on public property. It is 1:40 p.m. when Vic finally gets going. “I’ll certainly be worried about the occupation as well as my family within and outside of it,” she texts, “but I’m ready for the road …”

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Al Norman: Life & a Cheap Death at Wal-Mart

February 9, 2012

Ten months ago, Sprawl-Busters first reported the death of a Brazilian immigrant worker during a botched renovation job by an unlicensed crew inside a Wal-Mart in Massachusetts. Romulo de Oliveira Santos died at the age of 47 on the floor of a Wal-Mart vision center in Walpole, Massachusetts. His muscles were charred, his skin was coagulated, and one-fifth of his body suffered second and third degree burns. There were bruises and cuts on his face, back, arms and hands. According to an autopsy, Santos had been electrocuted. This week, the Boston Globe picked up the Santos story in its Business section, noting a similar job site injury and death at Wal-Mart elsewhere in the country. On the night of September 8, 2008, Santos was working as part of an inexperienced, unsupervised subcontract crew on a remodeling project at Wal-Mart store #2103 on Providence Highway in Walpole. There was no properly licensed supervisor watching over crew members from Italo Masonries, for whom Santos worked. Italo had never done demolition work before. Wal-Mart hired a general contractor to oversee the reconstruction of its Vision Center, and that contractor has subbed out the interior demolition to Italo. Santos was working without licensed supervision. In 2000, Santos came to America on a work visa to pursue a dream. He wanted to become an electronic technician. Santos enrolled in ESL classes to learn English, and began working on a cleaning crew. Santos would send some of his earnings back to the city of Volta Redonda, Brazil, where his family lived. He was 39 years old when he first entered the U.S. Eight years later, he was inside the Walpole Wal-Mart working a late hour shift — his last. The construction scene inside the Vision Center was a tangle of unlabeled wires and cords. Wal-Mart had insisted that the remodeling job would proceed while the store remained open. On Santos’ last night, the general contractor, electrical contractor, and Italo Masonry all left no supervisors at the site. But several light circuits were left on, because the renovations could be done quicker and easier by leaving the area “hot.” One junction box at the top of a wall was left “hot.” Santos arrived at the site just before 10:30 pm — a time when most Wal-Mart shoppers were home in bed. Santos and his coworkers were not warned that a 227-volt circuit powering the overhead lights in the Vision Center had been left live. Santos had no reason to expect that wires behind the walls were hot. It was normal practice that live wires would be clearly marked and labeled, to avoid lethal danger. One of Santos’ coworkers began tearing down a wall that had been marked for demolition. The crew member, wielding a reciprocating saw, cut through the live wire at the top of the wall. The lights went out, leaving the whole crew in the darkened Vision Center. The crew began to exit the site, when Santos came in contact with the live wire. According to witnesses at the scene, Santos moaned in pain, and fell to the floor in between a scissors lift and the wall. A crew member rushed to his side, but Santos died within minutes — badly burned from the trauma. The federal Occupational Safety and Health Administration (OSHA) issued Wal-Mart an immediate stop work order, and listed numerous violations of federal safety regulations. “Workers were exposed to hazards of arc-flash and arc blast while working on energized parts of the circuit breaker panels without proper personal protective equipment,” OSHA wrote. “Employees were exposed to electric shock hazards while performing . . . tasks without de-energizing the circuits.” Attorney Brian A. Joyce of the Joyce Law Group, the firm that is handling a civil lawsuit against Wal-Mart on behalf of the Santos family, says that Romulo’s death could have been avoided if Wal-Mart had held its general contractor to its contractual obligation to permit only properly licensed and qualified subcontractors to demolish the Vision Center. Joyce notes that the general contractor has a rap sheet with OSHA for hiring unlicensed contractors. “Wal-Mart’s callous indifference to the safety of construction workers at the Walpole store is not an isolated incident,” Joyce told Sprawl-Busters. Similar construction-related deaths have occurred in Texas, Nebraska, and Indiana. OSHA has cited Wal-Mart in numerous other cases for its negligence in protecting workers. “In its ruthless quest to cut prices and maximize profits,” Joyce charges, “Wal-Mart allows cutting corners, especially when it comes to safety, and is willing to risk the lives of construction workers to save on costs. When the sadly predictable accidents occur, Wal-Mart remorselessly opposes attempts by the surviving family members to discover what happened, and to seek justice for their lost loved ones.” The family of Romulo de Oliveira Santos has waited for almost three and a half years to see justice done in this case. The sudden death of their son who traveled to America was tragic enough — but Wal-Mart’s response since the accident has made the family’s ordeal even harder to accept. On February 14, 2011, the Boston law firm hired by Wal-Mart acknowledged in a letter to the Joyce law firm that “an offer of $25,000 was made” to the Santos family by the retailer and its general contractor as compensation for Santos’ death. That was one year ago. There has been no movement by Wal-Mart since then. Attorney Joyce says Wal-Mart’s financial offer is a slap in the face to the Santos family: “If Mr. Santos — who was in excellent health when this tragedy occurred — had worked until his retirement age, he could have had another $1 million in salary alone. Apparently $25,000 is the value that Wal-Mart puts on this man’s life.” An everyday low price for a life — from the company that made its fortune on cheap imported products — like the labor of Romulo de Oliveira Santos. Al Norman is the founder of Sprawl-Busters. For almost twenty years he has been helping community groups defend themselves against big box development. His most recent book is The Case Against Wal-Mart.

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In Minnesota, Missouri, Colorado, Economies Languish As GOP Candidates Vie For Votes

February 8, 2012

When Republicans in Minnesota, Missouri and Colorado cast their votes for presidential candidates Tuesday, many will no doubt have the economy on their minds. Tying the three economies together is government, among the top three employers in all three states. And in all three states, government employment is falling too. Missouri particularly struggled last year, losing jobs while nationwide employment grew. And nearly a third of Missouri’s mortgages are underwater — a larger share than the national average. The state is also less confident about the future of the economy than 35 states. Though Minnesota and Colorado’s economies are doing better than average, they are still far from healthy. Minnesota’s home prices plunged 20 percent over the past five years. And Minnesota’s unemployment rate is lower than the national average largely because of slow population growth, said Troy Walters, an economist at IHS Global Insight. Coloradans may feel a bit wealthier than the nation as a whole since the same housing bust has not been as severe there. Home prices have fallen just 5 percent over the past five years, and 16 percent of Colorado mortgages are underwater — far below the national average.

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As Minnesota, Missouri, Colorado Vote, Republicans Talk Cuts Not Investment

February 6, 2012

Most politicians would brush aside their mother if it meant scoring a photo-op with a Minnesota businessman like John Van Dine. His 22-year-old company, SAGE Electrochromics, is in the middle of a $150 million expansion to double its workforce to total 250, all in Fairbault, Minn., and pulling in a decent wage. SAGE, which makes glass plates with electronic sensors that turn lighter or darker depending on the time of day, is even exporting to Asia and the Middle East. But Van Dine isn’t look to share the stage with any politician; he’s just hoping for more government investment in infrastructure, education and health care, all needed for a sustained economic recovery, he said. But as voters head to the caucuses and primaries on Tuesday in Minnesota, Colorado and Missouri, those aren’t the kinds of initiatives making headlines. Instead, the leading Republican candidates are hammering home the idea that cuts to government spending and fewer regulations are key to an economic rebound. “It’s not that they are not aware of the problems; it is that they haven’t provided the leadership,” said Van Dine, adding that politicians in both parties are to blame for not having the courage to propose investing on a large scale to fuel economic growth. Minnesota is in better shape than most of the rest of the country, including Colorado and Missouri. Unemployment is relatively low, at 5.7 percent. The state’s manufacturing sector has seen 16 straight months of growth, according to the Minnesota Department of Economic Development. Yet, according to the Bureau of Labor Statistics, job growth in Minnesota is slow, just 1 percent in 2011 — slightly higher than the national average. The state’s manufacturers employ fewer workers than before the recession, and these types of jobs are unlikely to be fully restored to pre-2008 levels, said Troy Walters, an economist at IHS Global Insight. In addition, Minnesota is experiencing cutbacks in government spending. There were 1.4 percent fewer government workers in this state by the end of 2011, compared with the tally at the end of 2010, according to the Bureau of Labor Statistics. Local government layoffs have hurt economic growth in the state, said Thomas Stinson, an applied economics professor at the University of Minnesota and an economist for the state. When workers in the public or private sector are laid off, they spend less, which then reduces employers’ demand for workers — hurting consumer demand even more, Stinson said. “It really starts a vicious circle.” Missouri and Colorado also lost government jobs last year, and Republican presidential candidates have made government job cuts part of their platforms. Romney wrote in his economic plan that if elected, he would slice the size of the federal workforce 10 percent and cap federal spending at just 20 percent of the U.S. gross domestic product, which would mean trimming federal spending about 17 percent. Romney and Gingrich have both said they would slash regulations, corporate taxes and government spending as a means of addressing America’s economic woes. The campaigns did not immediately return requests for comment. The other Tuesday primary states would love to be in Minnesota’s position. The total number of jobs in Missouri declined 0.1 percent in 2011, according to the Bureau of Labor Statistics. And among all states, Missouri is the 15th most pessimistic about the economy, according to Gallup. Colorado’s economy is doing better than Missouri’s, but it is still not healthy. Many of its job gains last year came within the leisure and hospitality sectors, where positions tend to be low paying. Manufacturing in Missouri and Colorado is starting to rebound, however. Last year manufacturing in Missouri grew the most quickly of any sector — attaining a 3.1 percent job growth rate, according to the Bureau of Labor Statistics. In Colorado, jobs manufacturing, comprising less than 6 percent of its total, grew 0.7 percent last year. Despite of Minnesota’s improving economic situation, Minnesotans are still very concerned about jobs and the economy, Stinson said. “If you haven’t got a job, if you’re worried about your job, the national debt is not what you’re concerned about,” he said. While Republican candidates have mainly proposed cutting government spending and regulation, at a New Hampshire debate in January Gingrich mentioned that the United States should focus on developing its technological infrastructure. “You cannot compete with China in the long run if you have an inferior infrastructure. You’ve got to move to a 21st-century model. That means you’ve got to be technologically smart, and you have to make investments,” he said , according to the Daily Caller . For his part, President Barack Obama said during his Jan. 24 State of the Union address that he would like to cut taxes for high-tech manufacturing companies that hire in the United States while establishing a minimum corporate tax rate. But economists and labor leaders say rebuilding the economy takes more than incentives; it will require new investment. Damon Silvers, policy director at the AFL-CIO, estimated in January that the economy needs a $4 trillion public investment program over 10 years — with spending focused on education and infrastructure — to make the economy competitive enough to support the middle class.

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Cutest Super Bowl Ad?

February 6, 2012

Let’s face it. Selling financial solutions during a Super Bowl is far from easy. But E-Trade manages to capture our spirit and laughter with its clever ad. The baby reassures a new dad about planning for his daughter’s future with E*Trade Financial Consultants. His friend Bobby stops by for an unexpected surprise visit, too and even jokes he’s speed dating in the nursery. Even if finance isn’t your thing, the voice over and the hilarious expressions from this adorable baby make it well worth watching. Check out some reactions to the ad from Twitter. CLICK HERE to see the rest of the 2012 Super Bowl commercials as well as all of the best, worst and most memorable from years past. For years , viewers have tuned into the NFL’s Super Bowl as much to see what the advertisers roll out as how the two teams vying for the sport’s top prize perform. This year is no different. Each time that NBC cuts away from Super Bowl XLVI between the New York Giants and New England Patriots a hush will come over most Super Bowl parties as everyone — and not just the diehard sports fans with a rooting (or betting) interest — focuses entirely on the ads. While iconic Super Bowl commercials like Apple’s ’1984′ and Coke’s ad starring Mean Joe Greene will be remembered so many more are soon forgotten or, even worse, ridiculed as super fails. How does this Super Bowl ad stack up?

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Mike Lux: A Healthy Skepticism

February 5, 2012

The struggles around a potential settlement with the bankers over crimes they committed have been fascinating. Beyond the immediate settlement talks on robo-signing, the bigger saga about whether Wall Street will be held accountable, and whether the housing market recovers any time soon, is going to take as long to resolve itself as President Obama is in office — although the short-term resolution will have a lot to do with whether that is for one more year or five. The immediate debate is on the settlement — state attorneys general have been instructed that they need to decide by Monday whether to sign on it. The issues remain exactly the same today as it has been throughout the time the settlement talks have been going. Administration officials arguing for a settlement say that on robo-signing alone that it would be a long laborious process to prosecute all these claims, that not that many attorneys general would do aggressive prosecution, and that even if prosecutors won all the potential cases, the amount of money that would be awarded wouldn’t be all that much more than what the settlement is calling for. They argue that the money from the settlement would not only write down a lot of underwater mortgages but would provide money for desperately needed legal services that would help lots of hard pressed people who have been screwed by bankers. Those attorneys general who have been reluctant to sign on, and progressive activists like me who have been against a settlement, have been concerned that no investigations are being done to determine the full extent of the crimes committed, and that any legal release would be drawn far too broadly allowing the big banks to once again get off without being held accountable for their crimes. I have always been of the view that there are two supremely important things in this whole fight over the settlement. The first is a much more comprehensive and aggressive investigation of the biggest banks, one that, done right, would result in indictments of bank executives for fraud, along with the possibility for a far bigger amount of money from the banks for mortgage writedowns. The second is the legal release issue, because if that release is broadly drawn, any investigations going further — whether they are federal or state — could be rendered moot before ever getting out the door. Beyond those two things are a whole set of relatively more modest but still significant issues in terms of how a settlement would be structured, including the actual amount of money involved. On the first issue, the task force gives some hope, and the administration deserves credit for appointing it, but many issues remain including whether it will have the needed staffing resources, and whether the Department of Justice and Securities and Exchange Commission officials who have seemed reluctant in the past to support more aggressive investigation will support New York Attorney Genral Eric Schneiderman in his efforts to push strongly ahead. On the second issue, I remain hopeful the release will be narrow, but also have confidence that Schneiderman, California Attorney General Kamala Harris, Nevada Attorney General Catherine Cortez Masto, Delaware Attorney General Beau Biden, and perhaps some other important attorneys general will refuse to sign on to a settlement with bad release language — and those are four incredibly important states not to be in a settlement. On the final set of issues, I have less confidence at the moment that I and other progressives will be happy with all or even most of the details, although I’m sure there will be a mix of good and bad. One bit of good news: according to Housing and Urban Development Secretary Shaun Donovan in a blogger call Saturday, it looks like there may end up being as much as $40 billion in mortgage writedown money involved in the settlement deal, as opposed to the $25 billion that had been reported previously. There is one other factor on all this which is a great sign: Schneiderman’s lawsuit filed against the big banks is a sign he is going to continue to be aggressive and independent in pursuit of justice on Wall Street. If, as I suspect, DOJ needs prodding, I think this kind of lawsuit is a good shot across the bow, as well as incredibly significant legal work in its own right. Here’s a great report from Rachel Maddow Friday night about the lawsuit: Visit msnbc.com for breaking news , world news , and news about the economy Side note before I go on: I am delighted to see Maddow doing such a good job of digging into this subject (in addition to this segment, she did a very knowledgeable interview with Schneiderman a few days ago). One of the key parts to the all-important task of holding the new task force accountable is good reporting from high-profile reporters like Rachel. In addition to good reporters continuing to pay attention to what happens next with the task force, the broader progressive movement needs to be very focused on holding that task force accountable. I know there has been a lot of debate and division among progressives over how optimistic to be, with some arguing that the administration’s history re investigating financial fraud and holding the big banks accountable in general has been very weak, that this new task force doesn’t have enough resources assigned to it, and that some of the players in the task force have not been inclined to investigate Wall Street fraud in the last three years. Some of us have been more optimistic given Schneiderman’s role and a sense that the political tides are shifting, although even a relative optimist like me is unhappy with the still relatively small amount of DOJ resources allocated and the continuing drip of rumors that key DOJ players want to slow this task force down. However we think on this, though, I think progressive optimists and pessimists need to be firmly united in one thing: we need to be singularly focused in the months to come on scrutinizing everything going on — and especially not going on — at the task force, and holding it absolutely accountable. Any report of a road block in the investigation, any information about a DOJ or SEC player holding things up, any inkling that Schneiderman is being held back, and I think we should raise holy hell. And if the weeks and months go by with few subpoenas and depositions, and with no or very few lawsuits or indictments of major financial industry players, we should be asking- with our outdoor voices, not our indoor voices- what the hell is going on. Having said all that, let me close on an optimistic note. Healthy skepticism is a good activist’s best asset, especially in this case with an opponent so powerful who has yet to be held accountable by anyone. And this administration has been a disappointment on too many banking industry related things. But political dynamics do actually change things, and effective political organizing and communications do too. Progressives won a strong, independent Consumer Financial Protection Bureau because we fought side by side with a great champion Elizabeth Warren to make it happen, and I hope and believe that in working with Eric Schneiderman and other progressive attorneys general we can do the same thing with this investigation. In the last few months, Obama did recess appointments of strong progressive nominees for CFPB and the National Labor Relations Board; he has gone from cutting deals with Republicans on the budget to fighting strongly for new jobs programs paid for by tax increases on the 1 percent; he has rejected the Keystone pipeline. On housing itself, he has announced a progressive new policy to develop new rental property, forced bankers to adhere to standards making it tougher to foreclose on unemployed people, and adapted a new homeowners’ bill of rights that has the potential to be significant. And in the course of these settlement talks, progressives allied with Schneiderman and other progressive attorneys general have fundamentally changed the nature of the deal, with this new task force not even on the table a couple of months ago. If it turns out the release language in the settlement is narrow, and we get $40 billion in write-down money instead of the $15, $20, or $25 billion discussed a couple months back, that would also be the result of great organizing by progressives and a new responsiveness by this administration. I’ll say it again: a healthy skepticism is an activist’s best asset, and we need to keep banging away to hold the administration accountable. But to ignore the fact that some important things are changing, and that hope is a real possibility, is to ignore our own success as organizers, and to ignore that the underlying political circumstances are shifting in our favor and that we should take advantage of that fact. President Obama is responding to us. We should keep the heat on, but we should also recognize that we are capable of winning some victories.

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Robert Kuttner: Showdown for the Banks, Showtime for Obama

February 5, 2012

The proposed $25 billion “settlement” of the mortgage servicing mess, scheduled to be made public any moment, must be a way station to much larger reductions of mortgage principal for underwater homeowners and much more serious consequences for the banks and their allies whose fraudulent actions created the mortgage meltdown. If the settlement turns out to be the final installment of relief for homeowners, it will be a colossal failure, both as economics and as justice. However, while the settlement talks among state AGs, the Obama administration and bankers were in their final phase last week, New York Attorney General Eric Schneiderman filed a massive lawsuit against three of the largest players, Wells Fargo, Bank of America, and JPMorgan Chase. This bodes well for further enforcement actions, settlement or no settlement. The lawsuit minces no words in alleging that the big banks fraudulently used the electronic system known as MERS to “evade county recording fees, avoid the need to publicly record mortgage transfers and facilitate the rapid sale and securitization of mortgages en masse.” According to Schneiderman, the illegal scheme saved banks $2 billion directly in recording fees, and the banks could be subject to much more money in fines. Schneiderman’s suit also seeks to block the ability of the banks to foreclose on some 70 million properties held in the name of MERS. Much of this same fraudulent misconduct is also the subject of the proposed settlement talks. Schneiderman signed onto the talks, and to a newly activated federal task force on criminal wrongdoing in mortgage securitization. So how can he file this case without blowing up the talks? The answer is that the suit does blow up the wrong kind of settlement — one that would protect the banks from further civil and criminal liability. In fact, the settlement now taking final shape would only narrowly insulate banks from federal and state litigation directly related to fake robo-signing. Nothing in it shelters the banks from other liability, such as fraudulently claiming that trust documents contained mortgage notes that in fact weren’t there. The proof of the pudding is that Schneiderman’s case went forward, and there will be more such cases. Why would the banks still agree to a settlement? Because the Frankenstein system that they created is such a mess that they need government help in cleaning it up. $25 billion is a small price to pay for the ability to restore a system that clearly establishes titles and liens — and the right to foreclose. The question is whether it is too small a price to pay, whether the government is giving up leverage that it could use to extract a much larger settlement, and whether the result will be major principal write-downs — or expedited foreclosures. Unfortunately, HUD Secretary Shaun Donovan muddied the waters in a press call on Saturday, when he bragged that the settlement would be bigger than the $20-25 billion previously reported, but that much of the cost would be borne substantially by the investors who bought the subprime securities created by the banks. While some of these investors are hedge funds speculating in depressed paper, others are pension funds that bought the bonds in good faith based on the very misrepresentations that leave the banks open to prosecution. As Senator Sherrod Brown has previously warned, it would be a travesty to whack taxpayers once in their capacity as workers and homeowners, and a second time as the value of their pensions takes a hit. At the same time, it is reasonable that the holders of the bonds be part of settlement discussions. These securities are already worth far less than their book value. The market has discounted them, based on the high mortgage default rates. A settlement that allowed millions of homeowners to stay in their homes and reversed the collapse in housing prices would be good for all concerned, including the pension funds. But while the penalties on the banks that caused the calamity should be mandatory, those who got stuck with the bonds should be at the write-down negotiations in a voluntary capacity. The risk is that banks will get off too easy. The Treasury’s prime goal all along has been to prevent the bank balance sheets from taking too big a hit. Others in the administration, however, seem to belatedly recognize that much deeper mortgage relief should take priority. We will soon learn two crucial things. First, will the deal be a sellout — as some fear — or a down-payment? Will it give banks any protection except from the narrowest litigation related directly to robo-signing? Will it leave prosecutors free to pursue all the other illegalities that have marked the entire mortgage meltdown? And will the state AGs and the federal agencies pursue other civil and criminal cases that lead to a much larger set of fines that can be used for mortgage relief, more proportional to the damage done by the banks? There are those who think that the administration has been so in the pocket of the big banks until now that any state AG who collaborates is by definition tainted. There are others who admire the independence and gumption of the AGs who blocked earlier versions of the settlement, and who look to them to lead. Robert Kuttner is co-editor of “The American Prospect” and a senior fellow at Demos. His latest book is “A Presidency in Peril.”

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Super Bowl: Microbrews Make A Run At Big-Time Beer Makers

February 5, 2012

By David K. Randall Feb 3 (Reuters) – Beer and football: it’s one of those perfect combinations, like peanut butter and chocolate. Super Bowl Sunday is the eighth-largest day for beer sales in the United States, according to the Nielsen Co. Most of the estimated 49.3 million cases sold will be consumed at home or a living room party, not at a bar. That large in-home audience for American football’s annual championship game this Sunday is part of the reason the broadcast has long been prime real estate for beer commercials featuring everything from talking frogs to glass bottles playing quarterback. But investors shouldn’t be fooled by the clever advertising from big-time beer makers touting brands like Coors Light and Budweiser. Those names might be dominant on the airwaves, but space in the refrigerator is increasingly going to specialty beers. The U.S. beer market is in the midst of a transition. Smaller, craft brewers are taking market share from global giants like Anheuser Busch InBev, which has a 47 percent share of the U.S. beer market. These smaller companies target discerning, and often affluent, customers who are the foodies of the beer world. The message is resonating. While sales of traditional names have fallen by as much as 2 percent since 2009, revenue in the craft brew segment has grown by double-digits, according to Beer Marketer’s Insights, a trade publication. How to play a shifting beer market. GO SMALL, BUT HEDGE Craft brewers are a concentrated bet on higher-end U.S. consumers. The majority of their sales come from the domestic market. Typical buyers of craft beers are frequently Whole Foods customers. Concerned more with quality than convenience, they are willing to pay more for what they believe is a superior product. They tend to be older than 30, employed as professionals and earn higher-than-average salaries. The core audience for traditional products distributed by global beer companies, meanwhile, is 21 to 30 year old men, a demographic that has been hit harder by unemployment since the recession ended in 2009. Though prices differ by region, craft brews tend to be more expensive than bigger brands. A six-pack of Coors Light bottles goes for just under $7 in the New York area; a similar pack of seasonal Sam Adams for about $9. Boston Beer Company, the brewer behind Sam Adams, is the most efficient option for tapping into the craft brewery trend. It is the biggest small company in the marketplace, with a share of about 1 percent of the total U.S. beer market. Analysts like Boston Beer in part because it is small, but growing at a time that customer tastes are changing. “Consumers have been willing to try and embrace new and interesting beverages and change long-held daily habits,” noted Marc Riddick, an analyst at Williams Capital Group, in a Jan. 30 report. Riddick rates the company an outperform. Still, it is more expensive than the average stock, trading at 23 times earnings. The broad Standard & Poor’s 500 index trades at about 13 times earnings. And shares are down about 5 percent since the start of the year, on investor concern about the effect of high commodity costs on the company’s margins. Barley cost pressures are estimated to add more than $8 million in incremental cost, according to the company. Investors can hedge a bet on Boston Beer by picking up a commodity-focused fund that would benefit from a jump in barley prices. The $427 million Elements Rodgers International Commodity Agriculture ETN (RJA), for instance, holds futures contracts for some 22 products, including wheat, barley and oats. The fund charges 75 cents per every $100 invested. The Craft Brew Alliance, a smaller brewing company in the Pacific Northwest, is another bet. It has less than 0.6 of the total beer market, analysts said, but could be a takeover target for a larger company looking to expand its reach. PLAYING DEFENSE Global brewers are also taking steps to go smaller. Anheuser Busch InBev, for instance, purchased Chicago’s Fulton Street Brewery last year for $38 million and will continue to distribute its popular 312 Urban Wheat Ale. Molson Coors Brewing and SABMiller, meanwhile, signed a joint venture in 2007 called MillerCoors. One of its divisions, called Tenth and Blake, markets and sells craft brands. Tenth and Blake’s sales increased by 17.2 percent in its last quarter, driven by increased sales of Blue Moon and Leinenkugel’s. “These mega beer companies really depend on the success of their brands like Coors Light and Bud Light,” said Thomas Mullarkey, an analyst at Morningstar who covers the beer industry. “But they want success at the craft level too. By buying small, they can put their tremendous distribution networks to work and add to their competitive advantage.” Larger brewers also offer another benefit: dividends. Anheuser Busch InBev, trades at a P/E of 20 and has a dividend yield of 1.7 percent. SABMiller trades at a P/E of 23, with a dividend yield of 2.4 percent. Diageo, parent of Guinness and several liquor brands, has a 3.14 percent dividend yield. Only a few funds offer specialized bets on the beer market. The $82 million Vice Fund offers perhaps the best alternative, though it comes with a hefty price tag of $1.81 per every $100 invested. The fund concentrates its bets on so-called sinful markets of alcohol, tobacco, gambling and weapons manufacturers. Diageo, SABMiller and Carlsberg are among its top holdings. The fund is up an annualized 0.5 percent over the five years, slightly more than the 0.1 percent return of the S&P 500 over the same time. (Reporting By David Randall; Editing by Jennifer Merritt and Steve Orlofsky) Copyright 2011 Thomson Reuters. Click for Restrictions .

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10 Retailers With The Most Sales Worldwide

February 5, 2012

Regardless of the number of mom and pops around the world, a small number of retailers continue to dominate the industry as a whole. Of the top 250 global retailers in 2010, 10 alone accounted for 29.4 percent of the all sales, according to a new report from Deloitte Touche Tohmatsu Limited and STORES Media . All together, sales for the world’s top 250 retailers were up 5.9 percent in 2010, compared to just 1.2 percent the year before, the report found. Whether an individual retailer thrives or dies still seems largely based on the individual outlet. Take Home Depot, coming in at eighth in sales, which plans to hire 70,000 additional workers to cover expected increased demand this spring. That’s more than can be said for Kmart and Sears, which announced they would be closing 100 to 120 stores this year due to revenue shortages. Yet larger economic forces still play some role in retail trends. In the U.S., where consumer spending accounts for roughly 70 percent of the economy, 2011 saw signs of momentum. Despite shopping over the holiday shopping not providing the boost many expected , sales experienced the largest percentage increase since 1999 . Europe has not been so fortunate as of late. In the face of a sovereign debt crisis that threatens the very existence of its currency, retail sales on the continent have been sluggish . Even so, Europe-based retailers like France’s Carrefour and the U.K.’s Tesco remained among the top 10 strongest retailers in 2010, according to Deloitte’s report . Here are the top 10 retailers with the most sales in 2010, according to Deloitte Touche Tohmatsu Limited and STORES Media .

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Swiss Bankers Anxious After Bank Indicted Over Tax Evasion

February 4, 2012

By Katharina Bart ZURICH, Feb 3 (Reuters) – The first indictment of a Swiss private bank over hiding untaxed money for wealthy Americans has heightened tension among private bankers fearful of being next in the firing line. The United States has indicted St.Gallen-based Wegelin, the oldest Swiss private bank, on charges it enabled Americans to evade taxes on at least $1.2 billion in offshore bank accounts. The indictment, which was announced by the U.S. Justice Department on Thursday, set Wegelin rivals in Zurich and Geneva buzzing on Friday, highlighting the fear of another U.S. strike against a private bank. “It seems the U.S. is shooting at everything in sight and we don’t know when it’s going to stop. I think the chances of another bank being indicted are pretty big,” a Geneva private banker said. “After all, why should the U.S. stop? Switzerland is small, it’s an easy target, but a lot of money can be made out of it. When this whole thing started we didn’t know how far the U.S. would go, but now we’ve found out.” Switzerland’s finance department, foreign ministry, regulator Finma, banking lobby and finance ambassador SIF were silent on the indictment of Wegelin. Wegelin itself, founded in 1741 and run by loquacious and gregarious private banker Konrad Hummler, also didn’t comment. The threat of imminent U.S. indictment, seen as the kiss of death for businesses, drove Wegelin to sell itself last week. The indictment is the culmination of months of uncertainty for private bankers, many of whom won’t travel to the United States, even for personal reasons, for fear of being arrested. Several Wegelin rivals chided Hummler for “bringing on the indictment himself” through repeated verbal swipes at U.S. officials as they began cracking down on offshore centers like Switzerland. Unusually outspoken among banking peers who typically prefer to blend in and live and work in relative obscurity, Hummler courted press attention, which he successfully translated into business for Wegelin. However, he did not fear irking U.S. authorities repeatedly. Justice officials were annoyed by a “farewell, America” letter he wrote to Wegelin clients in 2009, in which Hummler urged clients to sell any U.S. securities they owned given heightened Internal Revenue Service scrutiny of tax dodgers, according to people briefed on the matter. Hummler’s letter was taken by many rivals as a codified invitation for tax evaders to bring their funds to Wegelin as UBS and other banks were sweeping their accounts clean of tax offenders. PAINFUL STEP Hummler’s “fatal error” was thinking Wegelin was safe from a U.S. indictment because the bank didn’t run any U.S.-based branches, several rivals said on Friday. Wegelin broke itself up last week in the face of the U.S. campaign, moving most of its employees, along with clients and assets of 21 billion Swiss francs, to Notenstein Privatbank, in turn bought by Swiss cooperative bank Raiffeisen for an undisclosed sum. Last week, Hummler, who wasn’t available for comment on Friday, called the step an extremely painful one. U.S. and Swiss officials continue to work towards a solution to sweep Swiss bank accounts clean of offenders and make good on past transgressions. Several banks including Credit Suisse , which has put aside money towards paying a fine to the U.S. over offshore accounts, and Julius Baer, have come under intense U.S. scrutiny. Those banks, which both report earnings next week, declined comment. Swiss giant UBS, seen by many as the blueprint for subsequent negotiations for Swiss private banks after its 2009 data handover and fine, also didn’t comment. The U.S. seized more than $16 million from UBS’s Stamford, Connecticut branch, which served as Wegelin’s correspondent bank. Early in 2009, UBS averted a criminal indictment by contravening Swiss banking secrecy and handing over around 250 sets of data to U.S. authorities on an emergency order by Finma, which was later taken to court over the move. Finma’s handling of the affair was eventually vindicated on appeal. The timing of Wegelin’s indictment dovetails with the U.S. launch of an amnesty programme designed to induce taxpayers into coming clean on hidden assets, the IRS’s third such program during its recent offshore campgain. “This is classic tax enforcement strategy – the iron fist and the velvet glove,” said Scott Michel, a tax lawyer and resident of law firm Caplin & Drysdale in Washington, D.C.

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Goldman Sachs CEO Nets Smaller Bonus Than Last Year

February 4, 2012

Feb 3 (Reuters) – Goldman Sachs Group Inc awarded Chairman and Chief Executive Lloyd Blankfein a $7 million restricted stock bonus as part of his 2011 compensation package, according to a regulatory filing on Friday. The payout is less than the $12.6 million restricted stock award Blankfein received last year. Goldman’s earnings declined 67 percent and its stock declined 46 percent during 2011. Blankfein also received a base salary of $2 million during the year, bringing his total pay to at least $9 million. Four other top executives including Chief Operating Officer Gary Cohn, Chief Financial Officer David Viniar and Vice Chairmen Michael Evans and John Weinberg received the same restricted stock bonus as Blankfein, according to Form 4 filings with the U.S. Securities and Exchange Commission. Altogether, Goldman awarded seven senior executives and nine board members $40.5 million for their work in 2011. The bonuses came in the form of 356,685 restricted stock units on Wednesday, when the closing price was $113.45. Since then, Goldman shares have risen 3.6 percent to close at $117.53 on Friday. The restricted stock units will convert into common Goldman shares in three equal installments through 2015, but cannot be sold for five years.

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In Wake Of Blocked Deal, NYSE CEO Says ‘Mega-Mergers’ Unlikely In Near Future

February 4, 2012

* Says exchanges likely to return more capital to holders * Does not think CME Group would try to acquire NYSE * NYSE Euronext likely to make more technology acquisitions By John McCrank ORLANDO, Feb 3 (Reuters) – NYSE Euronext plans to focus on smaller deals and returning capital to its shareholders after its failed $7.4 billion merger with Deutsche Boerse, the company’s chief executive said on Friday. “I would not expect us, nor anyone else in the industry, to do a mega-merger any time soon,” said Duncan Niederauer, chief executive of NYSE Euronext. “I think everyone is going to kind of take a pause and reassess the landscape. European anti-trust authorities on Wednesday blocked the merger, which would have created the world’s biggest stock exchange operator, making it the fourth among a series of large exchange deals to be blocked over the last year. The European Commission blocked the deal, which had already been approved by U.S. regulators, saying that the combined entity’s “near-monopoly” would make it hard for new players to compete. “This (merger) was a game changer,” Niederauer said at TD Ameritrade Institutional’s national conference in Orlando. “It made a lot of sense. It didn’t happen. Now, I don’t think the next thing I should be going to shareholders with is another great cross-border mega-merger.” He also said he does not think CME Group, the biggest U.S. futures exchange operator, would make an attempt to try to acquire NYSE Euronext or Deutsche Boerse, as it is unlikely those deals would get consummated. CME on Thursday surprised investors with a sharp increase in its dividend, as well as an annual payout. Niederauer called the move “really interesting” and said that other exchanges would likely follow suit. “I think everyone is going to say, ‘maybe we should just distribute more of the money to shareholders and run kind of a slightly lower-growth, more utility-like model.’” Niederauer said that five of NYSE Euronext’s past six acquisitions were technology assets and that he expects the company will do more such deals as it continues to diversify its asset base. The parent of the Big Board reports its quarterly results next Friday, and Niederauer said he would address three issues on the conference call to discuss the results: The company’s cash management strategy – it recently said it would proceed with $550 million of share buybacks that had been on hold during the merger talks; the running of the business and the expense base of the core company; and NYSE Euronext’s post-trade business in Europe and other new initiatives. “I expect to be held accountable for all of that in the conference call next Friday,” he said.

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Charles Ferguson: Let Them Eat Task Forces

February 4, 2012

In his State of the Union speech, President Obama said and proposed many reasonable-sounding things. One of them was this: We’ll also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud… financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender… So pass legislation that makes the penalties for fraud count. And tonight, I’m asking my Attorney General to create a special unit of federal prosecutors and leading state attorney general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. Now, how could you be against that? In his speech, and indeed as has been true for his entire career, Mr. Obama deserves an A for rhetoric. But what grade does he deserve for action? Alas, he flunks. It has now been three and a half years since the financial crisis of September 2008. Only a few months after that crisis — three years ago now — President Obama took office. At the time, he had an overwhelming popular mandate and huge majorities in both houses of Congress. The nation was in crisis, with unemployment growing nearly half a percent per month. The Bush Administration’s policies (and the financial sector that those policies had allowed to run wild) were utterly discredited. If ever real change is possible in Washington DC, this was that time. In that situation, and over the intervening three years, what did President Obama do? Well, we got a stimulus package, and then a year later a watered-down, absurdly complicated new law that addressed everything except the most important issues. And that’s about it. Consider the record: President Obama’s personnel appointments were heavily weighted towards those who had sat by and done nothing as the housing bubble grew (Tim Geithner, Ben Bernanke), former officials who had made major contributions to causing it (Larry Summers), senior lobbyists for the worst of the banks (Mark Patterson, Tom Donilon), a former board member of AIG (Richard Holbrooke), and literally dozens of former executives of banks and hedge funds that had played major roles in causing the crisis. The new chair of the SEC, Mary Shapiro, was the former head of the investment banking industry’s self-regulation body, which brought not a single enforcement action related to the bubble. Her new director of enforcement, Robert Khuzami, was formerly general counsel for Deutsche Bank, which profited by helping John Paulson create securities so that he could profit by betting that they would fail. We got the Financial Crisis Inquiry Commission, deliberately crippled through its tiny budget (less than $10 million for its entire operation, beginning to end), limited subpoena power, and publication date conveniently just after the 2010 midterm elections. Even so, the FCIC actually did a pretty decent job, and demonstrated that the housing bubble had involved pervasive fraud on the part of the banks. Moreover, there followed a huge wave of private lawsuits. The banks fought them hard, and have tried extremely hard to prevent depositions and testimony from becoming public. But many plaintiffs persisted, and there has now accumulated a massive record of extraordinarily repulsive, and clearly illegal, behavior. In a book that I have just finished, and which will be published in May, grimly entitled Predator Nation , I go through what is known in considerable detail, and make the case for large-scale prosecutions and asset forfeitures. This information is already public. So what has happened as a result? Well, the SEC has filed some civil fraud cases — not many, and not big. Thus far, every single one has been settled with a minor fine, with neither individuals nor banks required to admit guilt. Criminal prosecutions of banks? Zero. Criminal prosecutions of senior financial executives related to the bubble? Zero. RICO cases, such as were used against Michael Milken and are routinely used against drug dealers and other organized criminals to seize their assets and forfeit their ill-gotten gains? Zero. Sarbanes-Oxley prosecutions, based on CEOs’ certification of obviously fraudulent financial statements? Zero. In Mr. Obama’s three years in office, not a single U.S. bank or senior financial executive has been convicted of any crime (or even prosecuted), or had their assets confiscated. But now, it’s re-election time, and Occupy Wall Street has shown simmering anger among the population. So we create a task force. (There was another one before, too, but never mind.) A week later, several bankers are arrested. They’re low level patsies, who worked for a Swiss bank, and who didn’t create or sell the toxic stuff; they just traded it afterwards. And the task force? Its initial personnel: a whopping 15 people in the Justice Department, and ten — count them, ten — FBI agents. Eventually, Justice says, the task force will have an awesome 55 people. Goldman Sachs has 32,000 employees, there are several thousand financial industry lobbyists, the FBI has a total of 14,000 agents — but hey, I’m sure that those ten agents are the very best. So yes, it’s absurd, and rather disgusting. But it must also be said that President Obama is not alone in prostrating himself before the financial sector. Congress is no better, and neither are Obama’s likely opponents in the presidential race. Newt Gingrich screamed about government interference while he was being paid $1.6 million by Freddie Mac’s chief lobbyist for “conservative outreach.” In Mitt Romney, we have someone who thinks it’s perfectly OK to have a tax rate of 14 percent on over $20 million per year in unearned income, and who wants to increase taxes on the poor while reducing them further for the wealthy. Unfortunately, the power of financial sector money has by now produced a pervasive, bipartisan systemic disease in American politics, of which the president’s recent speech is merely one example among many.

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How Brady, Manning Stack Up Off The Field

February 4, 2012

New England Patriots quarterback Tom Brady and New York Giants quarterback Eli Manning gathered impressive stats to guide their teams to Sunday’s Super Bowl. But what about their financials? Huffington Post Business compared three key assets — real estate, endorsements and salary — to determine a winner. (Hint: It’s the three-time Super Bowl champ with the supermodel wife. But as they might be saying in New York, who’s counting?) Our super disclaimer: Reported figures do vary, and endorsement estimates do not include hidden incentives and player performance bonuses. Other real estate transactions may have occurred without being publicized. This isn’t science; it’s the Super Bowl.

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Walmart Women Still Seek Justice In Sex Discrimination Case

February 4, 2012

The women who say Walmart discriminates aren’t giving up. Five hundred female employees in Alabama, Arkansas, Georgia, Mississippi and North Carolina filed discrimination charges last week with the Equal Employment and Opportunity Commission, a federal agency that litigates on behalf of workers against their employers. The filings will pave the way for women to continue their fight in lower courts after being turned away last summer by the Supreme Court in their class action against Walmart . The women argue that Walmart systematically favors men over women for raises and promotions. The new filings also send a message to the giant retailer: Despite the landmark Supreme Court ruling in Dukes vs. Wal-Mart, the women will continue in their quest for justice. “When the Supreme Court’s decision came down, Walmart announced that the case was over,” said Joseph Sellers, co-lead counsel for the Walmart plaintiffs. Things are far from over, according to Sellers, who argued the Dukes case. Sellers’ firm and other lawyers for the plaintiffs say that they have been contacted by 12,000 women reporting discrimination at Walmart. Some were involved in the Dukes case and others are reporting new allegations. In October, plaintiffs from the Dukes case launched new class actions in California and Texas courts. “Many of the women we’ve spoken to still work [at Walmart],” Sellers said. “What we’ve heard is that women continue to be treated as second-class citizens in many ways.” Walmart, meanwhile, filed a motion to dismiss the California case on Jan. 16. “Plaintiffs have failed to come to grips with the Supreme Court’s ruling,” company representatives wrote in the court document. Filing charges with the EEOC is the first step for these women who might wish to pursue individual lawsuits or class actions in the future. The filings might also prompt the EEOC, an independent federal agency that investigates discrimination, to investigate and file lawsuits. Sellers estimates that “thousands more charges will be filed.” And he hopes that any class actions that might come after the fillings will succeed where Dukes failed. Although the Dukes decision came as a huge blow to plaintiffs, it didn’t kill their case all together, as it did not rule on whether discrimination had occurred. Instead, the Supreme Court established new standards for class actions, ruling that the individual claims of discrimination from 120 women — which began in 2000 with San Francisco worker Betty Dukes — couldn’t be grouped together. In the decision, the Supreme Court said that the 1.5 million women that Walmart employed was a group too large and too diverse to be considered a “class” and that the individual instances of discrimination alleged by the women had too little in common to be labeled a systematic company practice. Pay and promotion decisions were made by managers in stores and at regional levels, not by Walmart as a company, the court said. By breaking the workers up into smaller groups, lawyers hope it will be easier to prove that discrimination was systematic within regions of Walmart stores. The suits filed in California and Texas, are the first two of these efforts. More lawsuits will likely emerge after the EEOC filings. Eventually, Sellers expects the filings to generate “about a dozen” regional class actions around the country. Walmart maintains that such class action efforts will be in vain, as they rest on the same logic as the case overturned by the Supreme Court. That is not to say that individual plaintiffs won’t have their day in court, however. “There’s been a blurring of the lines beween the discrimination claims and the class action claims,” said Greg Rossiter, director of corporate communications for Walmart. “These claims have never actually been heard on their merits.” Then there’s the possibility of EEOC lawsuits prompted by the filings. The EEOC has sued Walmart in the past, independently of the Dukes case. In 2010, Walmart settled a lawsuit brought by the EEOC, paying $11.7 million in back wages and compensation damages to women in London, Ky., who were denied jobs because of their sex. In an interesting twist, the EEOC would not have to prove that the Walmart workers constitute a “class” — the very thing that stalled the Dukes case. That’s because the EEOC represents the U.S. government, whose job is to ensure fair workplaces for citizens, not individuals whose claims must be consolidated. Whatever route the lawsuits take, the Walmart women aren’t giving up. “They’re pressing ahead,” Sellers said.

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Will There Be A ‘Cyber Cold War’?

February 3, 2012

By Peter Apps, Political Risk Correspondent LONDON (Reuters) – With worries growing over computer hacking, data theft and the risk of digital attacks destroying essential systems, western states and their allies are co-operating closer than ever on cyber security. But as they do so, the gulf between them and China and Russia — blamed for many recent hacks and with a very different and much more authoritarian view over the future of the Internet — grows ever wider. Last week, Chinese officials turned down invitations to a privately-run conference of military and civilian experts on cyber security in London, telling organizers Defense IQ they would not attend due to a “low tide” in relations with the U.S., particularly its military. A senior Russian official also pulled out at the last moment, citing a failure to obtain a UK Visa in time — although other attendees suspected that might simply have been an excuse. Western officials talk down such snubs. But they admit progress towards international agreement on “norms of behavior” in cyberspace remains a distant dream. “It is worrying,” says John Bassett, a former senior official at British signals intelligence agency GCHQ and now senior fellow at London’s Royal United Services Institute. “If anything, in the last year the differences have become more apparent and there seems to have been little success in tackling them. There is a risk it could end up damaging the wider relationship.” Russia and China, it seems, have little appetite to tackle data theft whilst the West has no intention of acquiescing to Russian and Chinese demands for a more controlled Internet. Jim Lewis, a former U.S. foreign service officer and now senior fellow at Washington DC think tank the Centre for Strategic and International Studies, participates in regular semi-official meetings with China on cyber. “There are several things coming together here,” he says. “There is the political difference over the freedom and future of the Internet. Then that gets tied together with the theft of commercial property — which itself becomes part of the wider trade issues..” Already, Western officials and academics involved in talks say discussions on cyber between East and West have become much more difficult and more complex than on any other issue. “This is going to be a very gradual process,” says Christopher Painter, the U.S. State Department lead official on cyber policy. “There are obviously some very different visions of the future of the Internet… On intellectual theft, I’m not going to single out China or Russia but it’s obviously something we take very seriously.” A November London conference organized by British Foreign Secretary William Hague was supposed to kickstart progress towards global consensus. But if anything, it looks to have simply exacerbated the differences. A follow-up conference in Budapest later this year could be similar, some fear. “The London conference did seem to show a “non-flexible” attitude from both the West and East,” says Tony Dyhouse, a leading cyber security specialist for UK defense firm Quinetiq. “Dare we coin the term “Cyber Cold War?”" INTELLECTUAL PROPERTY THEFT In public, U.S. and other Western officials almost always decline to detail where they believe the plethora of recent cyber attacks have come from. In the last year, they have included attempts to break into computer systems at the U.S. State Department and British Foreign Office and other highly publicized attacks on Lockheed Martin, Google, the NASDAQ and the International Monetary Fund amongst others. But privately and occasionally on the record, they frequently point the finger at Russia and China. Both angrily deny any involvement, saying they too are victims of hacking. But many Western security specialists say the evidence against both nations — particularly China — has become increasingly compelling. “China is currently engaged in a maximal industrial espionage effort that it justifies internally in terms of a catch up strategy (with the West),” says Thomas Barnett, chief analyst at political risk consultancy Wikistrat and a former strategist for the U.S. Navy. “The key question here is: can China assume the mantle of intellectual property rights respect fast enough to avoid triggering economic warfare of the West… If it can’t, then this is likely to get ugly.” PricewaterhouseCoopers consultant Tim Hind, a former intelligence chief at British bank Barclays, has few doubts. “I think government circles and organizations now… have very good attribution,” he says. “The question is what you do diplomatically with that attribution… I think our government sees our economic and political mission with China as more important than addressing the cyber issue.” Some believe the most promising avenue of negotiation might be to link it to one of Beijing’s primary worries — the buildup of U.S. military forces in Southeast Asia. “There is a deal to be made here involving the U.S. ceasing its intelligence gathering, naval and air activity off China’s coast,” Nigel Inkster, a former deputy chief of Britain’s Secret Intelligence Service (MI6) and now head of political risk and transnational threats at London’s International Institute for Strategic Studies, said late last year. But others suspect the scale of Chinese responsibility might be overstated. “One thing is certain — the “in thing” to do is blame China and hence it is likely that at least some of the actions blamed on China will not be of that origin,” said another European cyber security expert, speaking on condition of anonymity. “They’ve become a “no questions asked” scapegoat.” Because of the focus on China, some experts say the scale of hacking from Russian territory is often ignored. That, some suggest, is how Moscow was able to marshal so many “patriotic hackers” to paralyze Estonia’s Internet during a political face-off in 2007 as well as attacking Georgian websites during the 2008 war. More recently, such hackers have targeted dissident websites. VAST PHILOSOPHICAL GULF Perhaps even more serious than worries over hacking, however, is the vast philosophical gulf between East and West. Last year, both Russia and China saw a rise in Internet-fuelled unrest that they blamed in part on the West. Beijing’s censors increasingly struggled to control micro-blogging on their relatively tightly regulated Internet, whilst recent protests against Vladimir Putin are seen further fuelling Russian desire for control. In the run-up to the London meeting, Moscow and Beijing released a suggested “code of conduct” for the global Internet that would give national governments much more control over the Internet within their borders. But Western states swiftly shot down such suggestions. Despite British hopes the Chinese and Russians would not feel “ambushed” at the London summit, they would have found much to dislike there. “The Chinese see the Internet as an American construct, designed to provide the U.S. with military and commercial advantage,” said Lewis, adding that Beijing suspected the West of fostering dissent within its borders as well as building powerful cyber weaponry with which to attack. With almost every nation dramatically ramping up its military spending on cyber security — including offensive “cyber warfare” capabilities to attack essential networks, turn off power grids and cause massive disruption — some fear more serious confrontation. In a worst-case scenario, a single damaging cyber attack could spark a wider conventional war or even nuclear confrontation — with the risk a nation might wrongly blame a rival government for the actions of a single hacker and strike back. The 2009 Stuxnet computer worm attack on Iran’s nuclear program that reprogrammed sensitive equipment to tear itself apart was seen by many as a sign of things to come. As with any potential military conflict, experts have long said the key to avoiding accidental escalation is the creation of “confidence building measures” between all sides such as meetings, hotlines and shared discussions over threats. Senior officers from the newly launched U.S. Cyber Command and other officials have massively ramped up links with other military and civilian cyber agencies across NATO and the Western world. That process with China and Russia is at a much earlier stage, officials say. Some believe more should be done. “Even if you have long-running cyber arms control negotiations that never really went anywhere, that would give you the chance to get conversation and contacts going,” says former GCHQ official Bassett. For now, many believe the greatest risk is that paranoia sets in on both sides, further entrenching positions. “We are very tempted by a “Cold War” way of thinking,” says Lewis at the Centre for Strategic and International Studies. “The problem is that that can be very self-fulfilling.” (Additional reporting by William Maclean and Tim Castle) (Reporting By Peter Apps)

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The Stock Rally That Nobody Believes Hits New Highs

February 3, 2012

The stock market’s recent wild run is like one of those mass UFO sightings: Everybody sees it, but nobody believes it. The Dow Jones industrial average closed Friday at 12,862.23, jumping 156.82 points to its highest close since May 2008, back when Lehman Brothers was still a going concern. The Nasdaq composite index jumped 1.65 percent to 2905.66, its highest close since December 2000 — that’s almost within shouting distance of the peak of the tech-stock bubble. The broader S&P 500 index, which probably makes up the biggest chunk of the average person’s 401(k), jumped 1.5 percent to 1,344.90, but has no sexy historical comparison to brag about. It’s still a little lower than it was last July. Nevertheless, this is a big rally, resulting a 16 percent rise of the S&P since Thanksgiving, and it has been driven largely by better-than-expected economic data, the biggest of which was this morning’s jobs report for January. We at The Huffington Post did as much context-placing as we possibly could with that report, reminding people of the millions still out of work and the depths from which the economy still has to climb . But as single economic reports go, it was a good report. Some on Wall Street even think it’s a game changer, the signal of a new phase in the recovery. Of course, head fakes have appeared before: Eonomic data improved dramatically early in 2011, too, before Japan’s earthquake and Europe’s debt-quake brought the recovery to a screeching halt. Meanwhile, corporate profits in the fourth quarter have not been the strongest , particularly if Apple’s surprisingly strong results are excluded. And Europe still has the potential to disrupt everything. Greece still hasn’t reached agreement with its private creditors, and Portugal’s sovereign debt is increasingly under pressure. Such concerns have kept many Wall Street analysts from believing in the rally, trading volumes light and many retail investors from throwing cash at the rising market. Mutual fund investors have tiptoed back in the past three weeks, putting more than $2.1 billion into equity mutual funds during that time, according to the Investment Company Institute. But that follows two weeks with investors yanking nearly $14 billion out of stock funds. That has been the pattern for much of the past three years: Stocks have had hair-melting rallies, and mutual-fund investors have been reluctantly dragged back into the market. Will mom-and-pop investors be a little more willing to believe this time?

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Mike Lux: The Least of These, the Middle Class, and the Most Powerful

February 3, 2012

I have changed a lot of my religious beliefs since my childhood, but have never changed this one: that how we will ultimately be judged (by ourselves, by other people, by history, and by a God if one exists) will be on how we will treat the people Jesus called “the least of these”: the hungry, the thirsty, the ill, the poorest of the poor. I also have always believed that the fates of middle-class folks who work hard and play by the rules but who are getting crushed by the most powerful are inextricably linked with those poorest of the poor, that their fates are bound together. And policymakers need to make a choice about whether they will side with the poor and middle class, or whether they will side with the most powerful. It is sometimes difficult figuring out what to believe about policymakers. Policy making is complicated stuff, with many facets. Legislation and new regulations can have both good and bad aspects, especially on the biggest most important issues. Compromises and negotiations sometimes make a muddle of things. Tiny details in the wording of policies can turn what seems like a victory into a defeat. And things are definitely not always as they seem. I’ve been definitely finding that on banking and housing issues lately: lots of murkiness out there. On other issues as well. Here’s something I saw yesterday that really ticked me off but may turn out okay: The Wall Street Journal published an item saying the Department of Agriculture was backing down, due to pressure from agribusiness interests and the Chamber of Commerce, on a rule to make sure the most basic legal standards regarding farmworkers were being applied to companies that USDA did business with. I was outraged, made angry calls and wrote emails to everyone I know in the Obama administration. By the end of the day I got a clarification from a senior administration official who wanted to remain anonymous, but said the WSJ story was in fact inaccurate. This source told me that they had in fact already tightened up requirements on contracting which could be done internally, and that USDA would not be doing any business with companies that violate key labor provisions. I was told that the rule being pulled back was very technical in nature and was in fact redundant to USDA’s current contracting requirements, that it simply was not drafted or taken through the rulemaking process properly, but that the USDA had absolutely tightened and strengthened requirements for their vendors to make sure they were only doing business and buying food from companies that were strictly adhering to the rules. What seemed initially like bad news turned out, apparently at least, to be very good news. My excitement about that is tempered by the fact that the laws covering the treatment of farmworkers are quite weak, so merely not contracting with labor law violators isn’t exactly a high bar, but at least this looks like a real step in the right direction. Now back to banking and the settlement talks over robo-signing, which are as murky as can be. There’s a new Huffington Post story out which raises some important issues, including questions around whether the settlement will help homeowners who are severely underwater, and whether “the proposed deal would give mortgage companies a pass on instances of illegal foreclosure practices under one percent of all their loans.” I have talked to senior officials in the administration who say that the latter issue, the pass for certain kinds of illegal foreclosure practices, is not accurate, and they are adamant that bankers would game the system if given full credit for partially writing down the mortgages of people who are so underwater they will lose their homes anyway. Another article by David Dayen raises serious concerns about whether the enforcement side of the settlement will be too soft on the banks, and the answer I got from administration officials on that was a lot murkier, so I worry that Dayen might turn out to be right. Meanwhile, my allies at New Bottom Line have issued a ring-the-alarm-bells statement attacking what they are hearing about the settlement. Finally, as one bit of definitively good news, Eric Schneiderman filed a major new lawsuit against the biggest banks in the country over the mess they created through MERS. This lawsuit, which is separate and apart from whatever the task force on financial fraud ends up doing, will have put serious new legal pressure on Wall Street’s biggest banks. All of this happened in the last 24 hours! It’s hard to keep up with. I will say this: my sense is that literally no one, including the people at the center of the settlement negotiations, know everything going on related to it right now. There are so many players and so many side conversations, it is ridiculous. I have heard several contradictory accounts in the last day about different aspects of the deal. It is not at all clear to me it is even going to finally come together. I have always believed that ultimately, unless the good guys get hosed re: how narrow the legal release language is, that this settlement is a sideshow. If the release language is bad, the task force is dead, all efforts to hold bankers accountable are dead, and all efforts to get serious mortgage write down relief are dead. But if we win that battle, the big show is in the fraud task force tent. That’s where we have a real chance to achieve our goals, so that is where we have to keep the heat on in the coming weeks. We can’t let the DOJ or SEC or anyone else throw road blocks up, or slow things down. (Speaking of which: check out this absolutely outrageous story re: the SEC avoiding tough sanctions for the biggest banks, it will make your blood boil. ) I for one am going to stay focused like a laser beam on calling them out if there is even an iota of evidence of that. As for the settlement itself beyond the all-important release language, I think it is impossible to know until we finally see the complete language. I have a feeling there will be a lot in there I really don’t like, and I may well vehemently oppose it, but there may be some nuggets of unexpected gold in there as well, who knows. I don’t think we’ll know for sure until we see the full language as opposed to fragments and rumors. I do think it is a great sign that Schneiderman is moving full steam ahead on his big MERS lawsuit, which means he has confidence he won’t be blocked by a terrible settlement. In the meantime, let’s keep hoping, and fighting for, a government that picks the side of the hard working, hard pressed middle class — and the least of these — as opposed to the side of Wall Street, which has been the side that’s been helped way too often the last few years.

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House GOP Takes Aim At Safe Routes To School, Mass Transit

February 3, 2012

Two House committees voted on Thursday and Friday to eliminate federal funding for a program that creates bicycle and pedestrian paths for children going to school and to cut off mass transit from its major source of federal funding, the gas tax. The House’s actions, propelled by GOP leadership, could politicize the previously staid issue of infrastructure investment and put Congress’ chances of passing a new surface transportation bill this year in jeopardy. House Republican leadership has touted its transportation bill as an important step in job creation. “The leadership of the House is looking to support highways. It seems that they’re not wanting to support bicycle, pedestrian or transit use,” said Deb Hubsmith, director of the Safe Routes to School National Partnership . The decision was particularly disappointing, she said, because “one of the biggest problems facing America right now is childhood obesity.” The Safe Routes to School program cost about $202 million in its most recent year — a drop in the bucket compared to the roughly $40 billion a year the federal government spent on highways. It has strong supporters even in House Transportation Chair John Mica’s home district in northwest Florida. Pat Northey, a Democrat on the Volusia County Council, said it recently helped build a sidewalk to a middle school in her area. Volusia has passed a resolution in support of the program. “It is a mistake to dismantle a successful program, to uncouple it from the federal bill,” Northey said. Mica has suggested that areas truly invested in building bike paths and sidewalks will take it upon themselves, but Northey said that “neither the locals or the state have the resources to add new programming to their budgets.” Hubsmith said the program, which on her website features smiling children walking down sidewalks and bicycling, has now seemingly become “an ideological issue.” The House Committee on Transportation and Infrastructure shot down on Thursday an amendment offered by two Republican congressmen, Tom Petri (R-Wis.) and Tim Johnson (R-Ill.), who broke ranks with their leadership and tried to restore funding for the program, along with another that supports sidewalks, rail trails and bike paths. Justin Harclerode, a spokesman for the Transportation Committee, said the House’s decision to end dedicated federal funding for such “transportation enhancements” would simply grant states more flexibility on spending highway dollars. “If a State chooses to continue to fund bike and pedestrian paths at the same level as before, localities will see little or no difference,” he said in an email. On Friday, the House Committee on Ways and Means also killed an amendment offered by Reps. Earl Blumenauer (D-Ore.) and Charlie Rangel (D-N.Y.) to block another controversial move by GOP leadership to stop dedicating gas tax revenues to mass transit. The amendment failed on a 22-15 party line vote. Two Republicans later voted against the bill as a whole, but it passed the committee. The House bill eliminates an estimated $25 billion set aside from gas tax funds over the next five years, according to the American Public Transportation Association. Blumenauer told HuffPost that the last 24 hours were “sort of an out of body experience” for him and broke with his nearly 15 years of experience in Congress on transportation issues. “For the last 30 years, there’s been an accord, a partnership that was brokered with President Reagan and the Democrats in Congress,” he said. “There wasn’t going to be an annual food fight between roads and bridges and transit.” The bill’s financial provisions, which would send money that would have otherwise gone to mass transit to highways and fill the gap for the former with revenue sources like offshore drilling in the Arctic National Wildlife Refuge, are “fantasy land,” he said. He predicted that the House bill has “no chance of passing” this year. “I see something like this and I think, what a wasted opportunity,” he said. It wasn’t just Democrats who were disappointed with the vote over mass transit. The American Association of State Highway and Transportation Officials (AASHTO), whose members build interstates but also oversee transit systems, expressed its opposition, as did the Amalgamated Transit Union, the AFL-CIO, and the U.S. Chamber of Commerce. “Think about it in the major metropolitan areas,” said Jack Basso, AASHTO’s chief operating officer. “The highway system in many of those areas doesn’t have a potential for much expansion, so the alternative is to make sure we have a vigorous transportation system that helps to mitigate that congestion.” The House’s move seems designed in part to cover highway funding without raising gas tax revenues. Because of more fuel efficient cars, the Congressional Budget Office predicts the Highway Trust Fund, now running on empty, will sputter to an end by 2014. “The House, in fairness to them,” Basso said, “is faced with the same problem we are: The money is very, very tight, and they’re faced with some very difficult decisions.” On the Senate side, Democrats and Republicans have avoided acrimony and difficult decisions by writing a much shorter transportation bill that would only cover the next two years. The federal surface transportation bill is set to expire March 31. If the House and Senate cannot agree on a bill, an extension of the current legislation would likely be passed instead.

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Tim Devane: On Brainstorming

February 3, 2012

I think people spend a lot of time thinking about ideas. I spend far too much time thinking about thinking about ideas. What is the structure and emotion of the mindset that comes up with a great idea? You’re supposed to have a blank canvas right? Where you can be uninhibited, creative, counter-intuitive? But … then you might start thinking about everything and so not one actual thing meaningfully. There aren’t answers I suppose and I don’t like getting stuck here, though my mind often drifts from ideas to the specific canals of thought process that lead to ideas. When actually focusing on defining a new idea many factors can influence the process: trends, light bulbs going off, levels of passion, gut feeling, problems, what’s next, the desire to hit a homerun in a snap second. Those rare few that don’t wade through a field of muck to arrive at innovation baffle me. I can’t not stumble, at least at first. AC, my friend and first ever employer, says that at first brainstorming is really just throwing stuff up on the wall and seeing what sticks. I get this and it sounds doable, unbounded, and possibly fun. So a first hint from AC: you have to start. There’s no reason to stress about the particulars before there exists any generality to beget them. But what are we throwing? Where are we throwing it? What does it mean to stick? Another friend Jake often talks about defining an authentic problem and specific audience that experiences it before addressing concepts that solve said problem. The problem seems at least more concrete and quantifiable than the idea. To give a parameter to why an idea should exist, the problem helps set the stage for the idea and define, at least at first, its scope. So there’s the ammunition. We’re tossing problems against the wall. Of course, it doesn’t end at a problem — that’s too general. Details emerge. What are the real issues causing the problem. Is there a vacuum? An inefficiency? A lack of information? And so begins the slipping and sliding down alleys and tributaries towards a specific idea. Process can emerge and vanish, concept can crystalize, shatter, and reform. In the madhouse of your own mind and with the whiteboard as an arrested crutch, the idea will pitch and froth and mutate as the clarity of the idea arises. My advice items on this journey are extremely limited but here goes. Keep it simple — You want to change the world but you aren’t going to change the whole world all at once. The necessary focus should be maintained around the simple problem-solution-idea that you’ve diagnosed and how to execute around it. Very few companies that set out to do too many things end up accomplishing any of them. It’s hard enough to achieve a simple goal, so stay there until you do. Write it down — Our brains are simply not retaining information the way they might have a few years ago. And, no one remembers every whiz bang idea they come up with in the shower. Use Evernote, Omnifocus, notepad, Moleskin, or just email yourself, but record it. Otherwise, brilliance is lost on transient thought and ADD. There shouldn’t really be structure here. It needs to be frustrating, it’s meant to be chaotic. There’s no cloud yet for this process, it’s called storming for a reason. I’ll stick to the path of: problem-hypothesis-concept-idea with the notion that every step can disappear or change and maybe one day, in an instant, the lightbulb just goes off.

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Robert Reich: America’s Jobs Deficit, and Why It’s Still More Important Than the Budget Deficit

February 3, 2012

The most significant aspect of January’s jobs report is political. The fact that America’s labor market continues to improve is good news for the White House. But as a practical matter the improvement is less significant for the American work force. President Obama’s only chance for rebutting Republican claims that he’s responsible for a bad economy is to point to a positive trend. Voters respond to economic trends as much as they respond to absolute levels of economic activity. Under ordinary circumstances January’s unemployment rate of 8.3 percent would be terrible. But compared to September’s 9.1 percent, it looks quite good. And the trend line — 9 percent in October, 8.6 percent in November, 8.5 percent in December, and now 8.3 percent — is enough to make Democrats gleeful. But the U.S. labor market is far from healthy. America’s job deficit is still mammoth. Our working-age population has grown by nearly 10 million since the recession officially began in December 2007 but many of these people never entered the workforce. Millions of others are still too discouraged to look for work. The most direct way of measuring the jobs deficit is to look at the share of the working-age population in jobs. Before the recession, 63.3 percent of working-age Americans had jobs. That employment-to-population ratio reached a low last summer of 58.2 percent. Now it’s 58.5 percent. That’s better than it was, but not by much. The trend line here isn’t quite as encouraging. Given how many people have lost their jobs and how much larger the total working-age population is now, we’ve got a long road ahead. At January’s rate of job gains — 243,000 — the nation wouldn’t return to full employment for another seven years. When they’re not blaming Obama for a bad economy, Republicans are decrying the federal budget deficit and demanding more cuts. But America’s jobs deficit continues to be a much larger problem than the budget deficit. In fact, we can’t possibly achieve the growth needed to reduce the budget deficit as a proportion of the total economy unless far more people are employed. Workers are consumers, and consumer spending is 70 percent of economic activity. And cutting the budget means fewer workers, directly (as government continues to shed workers) and indirectly (as government contractors have to lay off workers) and therefore fewer consumers. Yet deficit hawks continue to circle. State and local budgets are still being slashed. The federal government is scheduled to begin major spending cuts less than a year from now. Republicans are calling for more cuts in the short term. Austerity economics continues to gain traction. Meanwhile Congress is debating whether to renew extended unemployment benefits. This should be a no-brainer. The long-term unemployed, who have been jobless for more than six months, comprise a growing share of the unemployed. (In January they rose from 42.5 percent to 42.9 percent). Republicans say unemployment benefits are prolonging unemployment, that people won’t get jobs if they get unemployment checks from the government. That’s claptrap, especially when there’s only 1 job opening for every 4 people who need a job. Republicans also say we can’t afford to extend jobless benefits. Also untrue. Jobless workers spend whatever money they get, and their spending keeps other people in jobs. Government should extend unemployment benefits, and not cut spending until the nation’s rate of unemployment is down to 5 percent. Then, and only then, should we move toward budget austerity. The job situation is better than it was but it’s still awful. The jobs deficit is still our number one economic problem. Forget the budget deficit until we tame it. Robert Reich is the author of Aftershock: The Next Economy and America’s Future , now in bookstores. This post originally appeared at RobertReich.org .

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Republicans Pooh-Pooh Increase In Jobs, Cite High Unemployment

February 3, 2012

WASHINGTON — Congressional Republicans pooh-poohed the latest jobs report on Friday, saying that while the decline in the unemployment rate might be good, it would have been better if they were in charge. The Labor Department announced Friday morning that the economy had added 243,000 jobs in January and that the national unemployment rate had continued to decline, from 8.5 percent to 8.3 percent. While this is the 16th straight month of job growth, House Speaker John Boehner (R-Ohio) joined several other House Republicans in a press conference to point out it’s the 36th consecutive month with an unemployment rate above 8 percent. “There are flickers of hope in our recovery, and certainly they are welcome,” Boehner said. “But the American people were promised by the president that unemployment would not exceed 8 percent, and here we are at 36 straight months with unemployment over 8 percent.” Of course, politicians always spin the monthly jobs update. But Friday’s announcement, notwithstanding concerns about long-term joblessness and the shrunken size of the labor force, is the latest of several broadly positive reports . A reporter at the conference asked Boehner if he really thought it was so bad: “This has been a very negative news conference despite the good news this morning. Aren’t the numbers some indication that the economy is headed in the right direction under the president’s policies?” “I think I made it clear there’s certainly some positive news here,” Boehner said. “But the point we’re making is that we could do a lot better. If the president would work with us on the bills that have passed the House that are awaiting action in the Senate, the American economy could do better.” Another reporter seemed baffled by the negativity: “You’ve been in control for a year. You’ve had some success in controlling spending. Why don’t you take credit for some of the good news in the economy instead of talking down what most people see as good news?” “What I’m suggesting to you to you today is that we could do better,” Boehner said. “The American people are still asking the question, Where are the jobs? While the unemployment rate is down slightly, and a few more Americans are at work, we still have millions of Americans that are looking for work.” He’s right about that: Nearly 13 million people were out of work in January, and 5.5 million had been jobless for six months or longer. Both numbers are smaller than they were last year, but they’re still huge numbers. Not to be outspun, White House communications director Dan Pfeiffer tweeted a link to a press release from Boehner’s office in 2004, when he was chairman of the House Committee on Education and Workforce. The Labor Department had just announced the economy added 288,000 jobs that April, and that the unemployment rate had fallen to 5.6 percent. Pfeiffer tweaked Boehner for touting consecutive months of job growth then but not now. “Eight consecutive months of positive job growth shows the Republican plan for economic prosperity is working and more and more Americans are finding work everyday,” Boehner’s release said.

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Erika Christakis: A Modest Proposal: The Case for Fair Trade Porn

February 3, 2012

We have fair trade coffee and humanely raised pork. So why can’t we create a market for ethically sourced pornography? A couple of decades ago, people didn’t give much thought to their food’s provenance. We didn’t care about carbon footprints or the working conditions of the poor Africans who sold us our coffee beans. Slowly, however, consumption habits began to shift under the weight of scientific evidence and cultural change. We’re becoming a little more selective in our consumer choices. Yet not with that multi-billion dollar white elephant: pornography. We hear rumblings here and there about the sexual trafficking of women and children, and it’s always a relief when a criminal ring is busted for what’s euphemistically called “abuse.” It’s reassuring to know that whatever was going on in the far reaches of a few sick minds has little to do with our own primitive — but relatively harmless — impulses. But do porn consumers ever think about where their porn is sourced? What a downer! No one wants to hear about drug-addicted runaways or Albanian teenage sex slaves. Nobody wants to imagine STD infections on movie sets or the life circumstances that would impel a woman to engage in physically punishing sexual acts on camera. (And just Google the word “bukkake” if you want a quick education in the mainstreaming of fringe sex acts.) Part of the problem is our reluctance to acknowledge the pornification of contemporary life. If we can relegate porn to the margins of our cultural conversation, we can pretend it only touches a small minority of adult men, rather than the vast majority of Americans, many even in their first or second decade of life. Maybe it’s just too embarrassing to admit the extent of our obsession, but people of all stripes really like watching sex acts. For example, surveys of Evangelical Christians report porn viewing rates similar to the general population. Utah leads the nation in per capita subscriptions to online porn. Technology has produced the ideal Petri dish for the biggest sexual market in human history, providing easy access, affordability, and anonymity in one appealing package. Calls to regulate the content of pornography, like Tipper Gore’s ratings system for music lyrics, are missing the point. One person’s degradation may be another person’s kink, and we don’t need more Rick Santorums policing our fantasies. Moreover, sanitized desire, like a lot of so-called “feminist porn,” can be a buzz-kill. But shouldn’t consumers have some context to evaluate what they are viewing? Shampoo bottles and Tuna cans assure us that animals were unharmed. Shouldn’t we know if porn actors are subject to out-of-control STD rates , or are forced to do things against their will? At a minimum, a Porn housekeeping seal of approval would tell us by, and for whom, the porn was made. It might make you think twice before downloading that random YouPorn video or chatting with a “horny Russian slut” at LiveJasmin. There probably are attractive, uninhibited people who are excited by the rewards of porn careers — people who are untroubled by the ethics or lifestyle limitations of making a living as sex workers, or who at the least may consider it the best of their uninspiring options. But there are probably relatively few of these people, and consumers should know who they are so they can make informed choices. Making such informed choices would have a few collateral benefits. If we knew for sure that porn production was free of coercion and desperation, for example, we might find there are fewer women willing to be gagged, choked, and “triple penetrated” on camera. Fair Trade porn might also finally allow us to call a moratorium on assertions that women aren’t aroused by visual imagery or don’t sometimes fantasize about anonymous, unemotional sex. And market forces could eventually affect the aesthetic standard of pornography, which might, in turn, shift the skewed gender balance of viewership. If you think this is a fairytale, recall that a generation ago, no one talked about animal abuse or the case against corporal punishment. Cultural norms do change. Pornography is a fact of life, and parental controls and moralizing spoilsports won’t make a dent in its exponential growth. But the bar needs raising. The sustainable food movement hasn’t eliminated factory farms or our inexhaustible craving for junk food. But it provides an alternative model of consumption that we can aspire to. Organic and fair trade practices are leading us, gradually but inevitably, to a better relationship with food. Maybe Fair Trade porn could reconnect us to a better relationship with the human body. Erika Christakis, M.P.H., M.Ed., is an educator, public health advocate, and Harvard College administrator. As House Master of one of Harvard’s twelve undergraduate residential communities, she is responsible for the well-being of 400 young adults.

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Small Businesses Prepare For Super Bowl Madness

February 3, 2012

The Super Bowl is much more than the nation’s most-watched sporting event. The traveling festival of fans creates a business frenzy for the lucky host city, which is charged with transforming itself into a game-ready mecca of football fanaticism. However, this year’s host, Indianapolis, is quite different from past locations. Sprouting out of miles and miles of farmland like a pop-up book is the “Circle City,” whose charm is far from the usual glitz and glamour that has been expected from past locations. While Indianapolis plans to stay close to its roots and dole out plenty of Midwestern culture to game-goers, local businesses were sure to be prepared for the madness that descended on them as early as two weeks before the big game. The NFL estimates that between 100,000 and 150,000 people will visit Indianapolis for Super Bowl XLVI, generating anywhere between $150 million to $400 million in revenue for the city, which adds up to one big payday for local small businesses. So how does one prepare for such an event? We talked to small businesses and a local government official about their preparations and expectations for the big day. I’ve doubled up on staff in the front and back of the house, and I’ve even recruited friends to help hosting. I did a lot of advertising leading up to this weekend, especially with the downtown hotels, including in-room ads and videos. We’re planning on operating the business normally, but I did choose to scale down our menu to make things as efficient as possible. I bought extra stock in everything — I added coolers, which all added up to about $5,000 based on the speculation that this is going to be a big weekend for us. We haven’t seen too much of a change yet, so I hope the weekend meets expectations or else we’ll be set back a month or two. Walter Bolinger Owner Red Lion Grog House We’ve enclosed our outdoor patio and added three bars to it, so we worked a lot with the city’s local code enforcement. We have overstocked everything — I literally have cases of beer stacked up in my office. At this point, we haven’t really seen a big shift in sales, but the amount of people in the city is visible now, so we anticipate things will pick up very soon. We are usually open for lunch and dinner, but for the event we are now open for breakfast as well. We’re open 21 hours and staffed 24 hours. We retained most of our normal menu and added a special Super Bowl menu and increased some of our high-ticket items. We are hoping to get completely blown away this weekend. So far this week we’ve had a lot of the Patriots in here and some of the announcers, like Tony Siragusa. Jeff Chapman Sales and Marketing Manager 14 West Our city is incredibly excited to host Super Bowl XLVI. Hotels, restaurants and entertainment venues downtown are completely booked, accommodating upwards of 150,000 fans. Our businesses are thriving — it’s a tremendous boom for our local economy. Scott Miller President Greater Indianapolis Chamber of Commerce

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Jared Bernstein: January Jobs Report, First Impressions

February 3, 2012

Well, how about that? A hefty upside surprise from the jobs report. Employers added 243,000 jobs last month — 257,000 in the private sector — with gains across most industries. And the unemployment rate ticked down from 8.5% to 8.3%, the lowest it has been since Feb 2009. Technical issues having to do with fun stuff like revisions and seasonal adjustments are playing a role in the monthly numbers right now so it’s good to average over a few months. Over the last three months, the average rate of job growth has been 200,000, compared to about half that if you go back a few months. As I stress below, today’s report contains a critical message for policy makers; we’ve got some real momentum here on the most important economic issue to the American people-JOBS… let’s not screw it up. As shown in the charts — with apologies for the lame-looking arrows — the trend is our friend both on the unemployment rate and net job growth. Source: BLS, with my arrows, obviously. Now, for some caveats. 8.3% unemployment is still evidence of a very slack labor market, with 12.8 million unemployed and millions more underemployed. Long-term unemployment is still historically very high, over 40%. 243K is a good number, but it’s a good number in the context of a slow recovery. Historically, it’s not been at all unusual to see gains of this magnitude coming out of a downturn. Weekly earnings are up 2.5% over the past year. That’s a bit of an acceleration reflecting the improving job market, but it’s still probably behind inflation, which has been running at around 3% (we don’t yet have inflation for January). The payroll graph shows we’ve been here before. Friendly trends can be obliterated by bad shocks — Europe, oil, and especially fiscal drag are still very real downside threats. Re: that last point, as I wrote yesterday, this is your unemployment rate under fiscal drag. While policy makers are very unlikely to follow current law — full sunset of Bush tax cuts — in the near term, they’re also unlikely to go the other way — to add a fiscal boost to the recovering job market. Even extending the payroll tax cut and UI benefits is proving — predictably — to be a heavy lift. This jobs report, which clearly shows positive momentum, should force Congress to absolutely seal that deal immediately. From the perspective of working families, the most important part of the economy is showing some improvement. We’re not talking banks, GDP, industrial production, credit flows, deficits, interest rates — we’re talking JOBS. Let’s not screw this up. This post originally appeared at Jared Bernstein’s On The Economy blog.

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Possible Cartel Behavior By UBS And Credit Suisse?

February 3, 2012

BERN, Switzerland — The Swiss Competition Commission said Friday it has launched an investigation into possible cartel behavior by a dozen banks including the country’s two biggest institutions UBS and Credit Suisse. The banks are suspected of colluding to influence key interest rates and the trading conditions for derivatives, the commission said in a statement Friday. “Specifically, collusion between derivative traders might have influenced the reference rates LIBOR and TIBOR,” it said. The London Interbank Offered Rate, LIBOR, and the Tokyo Interbank Offered Rate, TIBOR, underlay many commercial interest rates. The commission said the banks are also suspected of illegally influencing market conditions for derivatives based on these reference rates. The foreign institutions named in the Swiss probe are Bank of Tokyo-Mitsubishi UFJ, Citigroup Inc., Deutsche Bank AG, HSBC Holdings PLC, JP Morgan Chase & Co., Mizuho Financial Group Inc., Rabobank Groep N.V., Royal Bank of Scotland Group PLC, Societe Generale SA, and Sumitomo Mitsui Banking Corporation. Competition authorities in the United States and Britain have launched similar investigations.

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Ramon Nuez: Using YouTube Interactive Videos to Drive Customer Engagement

February 2, 2012

When Chad Hurley, Steve Chen, and Jawed Karim founded YouTube back in 2005 — the trio simply wanted to create a better way of sharing videos. So from its inception, YouTube, has been a social tool. A tool that not only allows for the sharing of cat videos but allows businesses to market their latest products. Over the past 7 years, YouTube has evolved exponentially. I remember the very first video shared by Jawed Karim — Me at the Zoo. It was uploaded at 8:27p.m. on Saturday April 23rd, 2005. It’s a typical YouTube video which runs for 19 seconds. Now while you might find that the average YouTube video to be similar to Me at the Zoo , there has been a fundamental shift in the who, what, where, when, why and how  of YouTube videos. We are seeing that more and more outlets, bloggers and companies are taking to YouTube. Why, well let me list a few stats : 48 hours of video are uploaded every minute Over 3 billion videos are viewed a day YouTube’s demographic is broad: 18-54 years old 800M unique users visit YouTube each month The stats are impressive to say the least. And for any one outlet, blogger or company to ignore the YouTube “laws of attraction” is just being foolish. YouTube is a tool that must be used in any marketing campaign. But questions of “how” is this medium used effectively are still a mystery to most. One very clever use of YouTube was done by Immunoprecipitation. These folks created an interactive video “guide to help find the optimal product for your specific experiment.” This is a very smart use of interactive videos. This clearly works well for choosing products. But I am also thinking of how customer service can use this technique or even technical support. Let me know what you are thinking. —- Post image credit: engadget

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America’s Three Deficits

February 2, 2012

BERKELEY – This year began with a series of reports providing tantalizing evidence that economic recovery in the United States is strengthening. The pace of job creation has increased, indicators for manufacturing and services have improved, and consumption spending has been stronger than anticipated. But it is too early to celebrate.

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Liz Ryan: A New Frame for Human Resources

February 2, 2012

I sat on a panel a few years ago at a women-in-business conference. I shared the dais with a set of very smart and accomplished leaders — women at the top of their fields. One panelist, a division president, was asked “What is your biggest obstacle to doing your job?” She answered “My Human Resources department, without question. Those people are so slow and such an impediment.” I listened, down at my end of the table, with a brittle fake smile pasted on my face. “What’s your take, Liz?” asked the moderator. I said “My fellow panelist, like all leaders, has the HR staff she deserves.” What is an HR team if not a reflection of the CEOs vision for people and talent? You don’t like your HR people, get rid of them and get new ones. Would you blame your sales department for slowing you down in your agenda? Scapegoating of HR is a famous, lame copout for leaders who haven’t found their power. That being said, I’m not here to sing arias about the amazingly supportive and transformational role that the vast majority of my HR brethren and sistren play in their organizations. It’s just not happening. That is the vision, to be sure, but it’s not the reality at most organizations I’m familiar with. Over and over and over again, right through 2011 and into 2012, I hear the same stories of worthy HR initiatives scuttled, HR functions de-staffed and scaled back, and senior leaders tuning out on issues of culture, talent and spark. “Hey, there’s a recession on. No time for the frilly stuff!” The business back-to-basics agenda never seems to include noticing or acting on dysfunctional leadership teams or toxic cultures. It’s kind of weird. The albatross sits on the table cracking peanut shells all over the floor, and we sit in meetings talking about whether we should require one stopover on our employees’ business trips to save air travel costs, or two. HR leaders are asked to install Talent Acquisition programs and Talent Retention programs. They spec software and install systems and build flow charts and create project plans. But the core elements that would allow for a thoughtful examination of an employer brand or enable a more slippery recruiting process, or more nimble internal communications (elements like trust, openness, collaboration, creative spark and spontaneity) are not always in abundance. That can mean that despite an HR leader’s best intentions, the process changes but the energy doesn’t. And when I talk to HR VPs about The Problem, here’s what they say. “We are torn left and right. The fact that my job and my team’s function is constantly in play is a major issue. HR is the white canvas leaders can splash their hopes, dreams, fears and unresolved anxieties on. We’re expected to be all things to all people.” I can relate to that one hundred percent. For twenty years as an HR leader I juggled sometimes contradictory personas, and the tension between the roles of cheerleader, strategist, coach, disciplinarian, judge, advocate and pastor never abated. It wasn’t even discussed — we all know the frame for HR, right? HR is the group that keeps the company out of court. HR people are the ones who write all the policies and enforce them. HR are the people who are supposed to listen to you when your boss acts like a jerk. HR people take care of benefits issues, and sign you up for training courses and issue your ID. The HR people run the annual review process and tell your manager how much of a raise you can get. Every manager and employee in your organization likely has a slightly different view of what HR is supposed to do. How’s an HR person supposed to plow through the wall of expectations? One minute you’re handing someone a tissue as you discuss an emotional issue, and the next minute you’re the prison warden holding the line on some policy violation — or on the hook to deliver another ten percent cost reduction (without sacrificing service levels, needless to say). The CEO’s perspective is critical, of course, but here’s where the white-canvas issues rears its head. One month, your CEO’s top goal is leadership team development, and the next, it’s all about diversity. There’s no cohesion to the action, as long as HR folks languish in the Desert of Framelessness. We need a new frame for HR. Here’s my bid. You’ve got a CFO, and we’ll call him Bill. Bill’s job is crystal clear. Bill oversees the the short- and long-term financial health of the company. That’s it. There’s a friendly-uncle piece to the job, and a vision-setting piece and a money-cop piece and forty other pieces. There are analysts to be coddled and pension fund biddies to be soothed. (I’m joking. Love everyone.) There are forty other aspects. We’re talking about high-level skills, here. It’s an integrated left-brain/right-brain job. If the CFO is all about the spreadsheet and can’t see the bigger scope, the company’s toast. It’s the same deal with your HR chief: he or she is responsible for the short- and long-term organizational health of the business. It’s pretty darned simple: there are two pieces to the puzzle. One piece is the individuals in your shop, and the other is the overall group and its subsets. You balance those two priorities every day — for instance, when you have to decide whether Decision A or Decision B in some minute-but-culturally-weighty policy tangle sets the better precedent. When I was pretty much thrown into the job of HR manager in 1984, I was simultaneously exuberant and appalled at the number and gravity of the issues hitting my desk every day. I’m talking about domestic violence, drug use, AIDs in its first, awful stages, mental illness, theft and physical violence, in a workplace with 450 employees and a wet-behind-the-ears HR manager. I spent more time on the phone with my EAP advisors than with all the company executives combined. It was the Wild West, and every day I got lessons about one-on-one communication, teams, conflict, fear and trust. Those were the real lessons I learned as a fledgling HR person — not the left-brain stuff, the constantly-shifting rules and practices. I noticed that people put a lot of stock in that stuff, but it changed every two minutes. I picked up the HR laws and the forms and the regulatory bodies in six months or so. I learned that it’s more important to know where to step back and call the experts than to try to memorize (or God forbid, act on) the employment laws myself. But HR colleagues in other companies kept telling me, “It’s a Systems job. HR leadership is a Systems issue.” I’d bite my tongue. Systems? Yes, certainly. We used all kinds of systems, in the service of getting great people in the door. In the service of building teams of people who are excited to be together, and having those moments and hours and weeks of socio-intellectual spark, energy and trust that you get when people get energized. When you hit that point, not only do the business markers naturally fall into line but work takes on a different place in the team members’ lives. I believed my job as HR manager was to get people way past the point where some business transaction defined how their work fit their lives. That’s the magical stuff that I learned as a young HR person. The laws and forms and policy crap is just flotsam and jetsam. It doesn’t move our companies forward. It actually holds them back. If we can see the HR function through the frame “Those guys make sure the environment is healthy, so the best people come here and stay here” then we take HR out of the disciplinarian role, forever. We take them out of the Fake Fun Dispensary role, too, organizing field trips to Dave & Busters instead of ironing whatever kinks in the energy flow are keeping the team from chugging along. That’s a mission. I can’t imagine doing anything else in an organization. HR stuff is the only stuff that interests me, but that’s because it’s marketing, it’s selling, it’s product development, it’s process control — it’s a people-colored view of the overall organization that helps to shift the conversation about everything from business to art to life and community. How could that not be the most fun job around? How could any leader relegate HR to slashing travel costs and fighting unemployment claims? What do people think companies run on, anyway? You can read the energy as soon as you walk in the door, in any retail store and any chrome-and-glass HQ. You can feel it. You can’t hide that. We are animals. (If you’ve given birth, I don’t need to tell you.) We don’t need to spend money taking photos of our employees and plastering them on the walls with shiny-happy testimonials to the awesomeness of the big company they work for. You don’t have to do that if the energy is good on its own. If retitling your HR leader the Minister of Culture is too new-agey for your taste, call your HR chief the VP of Energy and call it a day. It’s fuel, that people energy that you get to tap when you treat people like valued collaborators and give them tough problems to chew on. It’s renewable energy. But you knew that, already, because you’ve read this far. Our organizations are human-powered, and the employers who figure that out or always knew it will win. Their HR people already spend their time reeling in talented people and celebrating the team they’ve got. They’ve figured it out: any power that comes from authority (“I can make you comply!”) is fake, flimsy and pathetic. It’s the opposite of power. Integrity, vision, honest communication and a worldview that values people over profits gives HR leaders true power in their organizations. Their CEOs find them, and vice versa. Working in a talent-focused environment (where the culture celebrates people, not just on paper and in recruiting videos but every day, in the clinch) is the nirvana state for HR leaders, and I’m eternally grateful to have experienced that kind of environment. I didn’t realize, at the time, how exceptional it was. Nowadays, I preach the Minister of Culture gospel. I don’t believe the Kool-Aid that tells HR people their department won’t be viewed as a Serious Business Function unless they man up and stop talking about wussy employees who don’t want to work hard. We all deserve a new frame for HR — employees, leaders and HR people themselves. (And CFOs. Let’s not forget Bill.) The old music is dissonant. We know the limits of left-brained, by-the-book management when living human beings are involved. We need a new theme for HR, and now’s not a moment too soon.

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Super Bowl Brings Calls For Gambling Help Lines

February 2, 2012

As Super Bowl betting reaches a fever pitch this week, advocates for gambling addicts are telling newspapers and websites to play fair: Those publishing the point spread should include a help number for problem gamblers. “If you’re going to list a betting line, list a help line,” said Keith Whyte, executive director of the National Council on Problem Gambling . “This is something that’s completely fallen on deaf ears. A portion of their best customers are people with severe gambling problems. There has to be a sensitivity there.” As many as half of all American adults will bet on Sunday’s Super Bowl game between the New England Patriots and the New York Giants, some analysts say . Around $8 billion will change hands, mostly illegally through private transactions, offshore operations, organized crime and office pools, according to the Council on Compulsive Gambling of New Jersey . Whyte and other outreach advocates believe addicts will account for 2 to 10 percent of the transactions. Many gamblers place a wager based on the point spread, the number that is supposedly intended to predict the margin of victory but is really devised to split the betting between both teams. As of this writing, the Patriots were 2 1/2-point favorites over the Giants. That means if a bettor wagers on the Patriots to beat the spread, New England will have to win by more than 2 1/2 points for the bettor to collect. Someone wagering on the Giants to beat the spread would collect if the Giants either win or lose by less than 2 1/2 points. The point spread is published in mainstream newspapers such as USA Today , plus thousands of websites. They also provide information on other betting options, such as the “over-under” for total points scored in the game. Given that only the state of Nevada legally permits the booking of single-game bets (three other states allow more limited sports betting), and the chances of someone flying to Las Vegas to book a bet are slim, most readers are likely using the information to make an illegal bet. Up to 10 percent of those gamblers can’t control their impulses. As long as that dynamic exists, critics argue, why not offer help for those who might need it? “That would be the responsible thing to do,” said Arnie Wexler , a New Jersey-based counselor for gambling addicts. A few sites run disclaimers that the betting line is for entertainment purposes only — but few buy that line. Danny Sheridan , who provides the betting odds in USA Today and predicts game outcomes for private clients at an undisclosed fee, said he once bent to political correctness by including a disclaimer. Not anymore. Sheridan said the financial meltdown hasn’t slowed sports betting a bit, but he thinks the estimated number of compulsive gamblers is inflated. Betting is a product of living in a free society, he argued, noting that stock investors are free to gamble millions away without the same scrutiny. If listing a 1-800 outreach phone number is necessary, he asked, should one be posted for any subject that might be sensitive? “If I write an article about milkshakes, should I include a help line for Overeaters Anonymous?” said Sheridan. The National Council on Problem Gambling estimated it received 301,000 calls last year. The volume has increased 10 to 15 percent every year for the last decade, Whyte said. Wexler said he receives hundreds of phone calls following the Super Bowl, many from flat-broke gamblers who tried to overcome previous losses with life-ruining large bets. The cries for help often arrive the very next morning. “The biggest time I ever have is after the Super Bowl,” he said. Readers who think they might have a gambling problem are encouraged to call one of the following: 1-800-GAHELPS (Gamblers Anonymous) 1-800-522-4700 (National Council on Problem Gambling) 1-888-LASTBET (Arnie and Sheila Wexler Associates) All calls are confidential.

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Ann Coulter Defends ‘Romneycare’

February 2, 2012

Ann Coulter offered a surprising defense of Mitt Romney’s Massachusetts health care law — affectionately dubbed ‘Romneycare’ — on Wednesday. In a blog post featured on her website, entitled “Three Cheers For Romneycare!”, she explains, “If only the Democrats had decided to socialize the food industry or housing, Romneycare would probably still be viewed as a massive triumph for conservative free-market principles — as it was at the time.” Coulter is a vocal supporter of Romney’s 2012 run. The presidential candidate has backed away from the law he spearheaded as governor of Massachusetts in an effort to distance himself from the GOP-detested health care legislation that President Obama signed into law in 2010. Critics of Romney have linked the two laws in an effort to paint him as a moderate. In her post, Coulter lays out what she sees as a basic distinction between the Massachusetts law and the federal law. “One difference between the health care bills is that Romneycare is constitutional and Obamacare is not,” writes Coulter. Jonathan Gruber, one of the economists Romney hired to help craft the Massachusetts health care law, recently told Capital New York that the two laws are “the same f***ing bill.” Philip Klein of the Washington Examiner slammed Coulter’s comments as “shameful” and accused her of “defend[ing] big government social welfare policy as conservative and treat[ing] conservatives like they’re too dumb to understand the difference.”

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Retaining Employees: 5 Things You Need To Know

February 1, 2012

Even when the economy is tough — and maybe especially then — it’s never a bad idea to show your employees appreciation. You may have a few knuckleheads you wouldn’t be sorry to see go, were they to walk out, but the last thing you need is your best employees to leave you high and dry. And they will, if you take them for granted. After all, especially in a world in which retiring with a gold watch is increasingly a fantasy, why should talented employees stick around if they aren’t being treated like a best employee should be? It can obviously cost thousands of dollars to train a new employee, depending on the position, especially taking into account all the money a company can lose when its talent isn’t around to land new accounts, maintain quality control and provide superior customer service. (There are a lot of employee turnover calculators online to prove this point, like this one . So if you want to keep your employees happy, in both good and bad times, here are five things you need to know. 1. Challenge your employees. You don’t want to overwhelm them, but you shouldn’t bore them either. Adam Neary, CEO of Profitably.com , a website that helps businesses better plan, manage and execute their finances, says, “I believe people do their best when the work they are doing is right in the arc between where they’re coming from and where they want to go.” Neary clarifies: “Look at Jason Purtorti, the lead designer from Mint. He was a hurricane of awesome and had no interest in leaving while they were in the throes of it all. It had to do with stretching him from where he was coming from as an agency guy and an independent designer into actually owning a brand and a visual aesthetic. It was a growth role for him, but not unreachable. And it led to him being able to take a role like ‘Designer in Residence’ at Bessemer and then a co-founder of Votizen. If, however, you wanted to get Jason to be your designer and play the role he played at Mint after Mint, it wouldn’t make sense. And even if you convinced him short term, you’d lose him.” 2. Pay your employees. If at all possible, “pay them more than they think they are worth,” suggests Gerry Patnode, assistant professor of management and marketing at York College of Pennsylvania and a former business owner for 23 years. But if you can’t pay a high salary, keep in mind, says Chip Manning, director of the Babson Center for Global Commerce , that “benefits, such as family time and flexible work schedules, can have more value to the employee rather than additional cash.” Pay your employees compliments. True, if all you are is complimentary, that won’t go too far forever, but it is important. The key here is respect, says Manning. Respect can be shown via money, valuing an employee’s time and simply making it clear that you value your staff by, yes, complimenting them for their hard work. Or show them that you realize there’s more to them than their job. The SuperGroup , based in Atlanta, is a small, digital interactive shop, that boasts high employee retention, probably due to a program which allows significant personal use on company time to be spent doing anything creative, like penning a novel or screenplay, learning to paint or taking music lessons. 3. Don’t hover. This should be obvious, but if it was, we wouldn’t have books out there like “My Way or the Highway: The Micromanagement Survival Guide” by Harry Chambers or “Creating Passion-Driven Teams: How to Stop Micromanaging and Motivate People to Top Performance” by Dan Bobinski. Remember, if you hired employees because they’re talented, creative and have a unique set of skills and intelligence, if you constrain them too much and make them do their work exactly like you would do it if you were in their position, you risk losing the very qualities that you hired them for in the first place. 4. Make the work environment as work-friendly as possible. It’s not all about the employees, exactly. Look in the mirror and at your environment. Money is an important motivator, but so is going into a workspace that lacks office politics and general tension. Is the office everyone works in kind of a dump? How is the heating and cooling system in your office, store or building? Would you work here if you were an employee of yours? All important questions to ask. 5. Employees need to get something out of their job. If you aren’t giving or can’t give your employees some sort of ownership in the company — whether stock, or bonuses when the company is doing better — you need to, at the bare minimum, offer your employees as much career growth as possible. Employees know that, any day, theoretically, no matter how good of a job they’re doing, they could be kicked to the curb. Understanding that tends to make employees very acutely tuned in to improving their hireability. Employees tend to want to know that if that day comes and their services aren’t needed any longer, they’re still going to be in demand because they’ve been working with the most cutting-edge equipment in the industry or taking yearly seminars. It may seem counterproductive to help prepare an employee for a better job, but the more you help an employee grow and evolve so they can get a better job, the better the odds that they’re going to realize that the better job is the one they have.

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Kevin L. Petrasic: CFPB Weighs in on International Money Transfers

February 1, 2012

In what is likely to be a regular occurrence over the months and years ahead, the Consumer Financial Protection Bureau, or CFPB, recently weighed in through an agency rulemaking on acceptable practices and consumer protection standards for a consumer financial product or service. The specific product in this instance is international money transfers, and the CFPB unveiled a final rule focused on addressing concerns about the type of information provided by money transmitters to U.S. consumers who send money to foreign recipients. In the CFPB’s first “final” rulemaking, the agency rolled out a relatively straightforward series of requirements intended to promote a comprehensive system of consumer protections for international money transfers. Noting that money transfers by U.S. consumers to foreign recipients account for billions of dollars annually and make the U.S. the largest source of any country for remitting currency internationally, the CFPB focused its initiative on addressing the most common areas of potential abuse. First, the CFPB’s rule imposes various disclosure requirements on companies and depository institutions that provide international money transmission services to U.S. customers. In particular, the rule specifies that a money transfer provider must disclose to a U.S. consumer the applicable exchange rate, fees and taxes for a transfer, and the amount of money to be delivered to a foreign recipient. In addition, the rule specifies certain documentation requirements a provider must provide to a customer in connection with an international money transfer. These include a receipt listing the relevant disclosure information (exchange rate, fees, etc.) that also indicates the date when transferred money will be available to a foreign recipient. The rule also establishes certain consumer protections to address money transmission errors and handle consumer disputes. Finally, the rule allows a consumer to cancel a transaction and obtain a full refund, provided the cancellation is made within a timeframe designated by the rule. The rule provides a one-year transition period to enable money transmitters to establish the necessary program to comply with the requirements of the rule. Beginning January 20, 2013, the CFPB rule will apply to money transfers greater than $15, originated by a U.S. consumer, and sent to a recipient in a foreign country. The rule will apply to various types of transfers, including wire transfers, ACH transactions, and account-to-account, account-to-cash and cash-to-account products offered by banks and other financial firms. While the CFPB rule is designed to implement a statutory directive to provide U.S. consumers with adequate information regarding international money transfers, the requirement poses some problems. For one, the rule is hamstrung by a statutory requirement that customers be advised of the amount to be delivered to a foreign recipient. This imposes a disclosure obligation that some money transmitters may find difficult, if not impossible, to satisfy. This result also potentially undermines one of the primary objectives of the rule to encourage the provision and use of low-cost remittance transfers to U.S. consumers. Highlighting the problem is a statutory exception that allows banks and other insured depository institutions to provide a “reasonably accurate estimate” of the amount to be received where the institution is unable to know the actual amount. The exception is available until July 21, 2015, but may be extended for an additional five years. Similarly, the rule allows for the use of “reasonably accurate estimates” by nonbank providers for countries where providers are unable accurately to know the amount of currency to be received due to foreign laws or methods used to effectuate a transfer. While the rule provides considerable commentary and guidance on what constitutes a “reasonably accurate estimate,” it also highlights the potential issues for a money transmitter attempting to meet a standard listed in the final rule. Regardless of the methodology, the guiding principal remains to avoid increasing the overall cost to consumers, a standard referenced in the agency discussion on the rule but that may be difficult to maintain. Accompanying the CFPB’s final money transfer rule is a concurrent regulatory proposal that focuses on various unfinished issues that relate to the final rule. While the details in the proposed rule are important to the CFPB’s efforts to implement a viable and cost-effective international money transfer regulatory regime, the overriding objective appears to be identifying ways both to reduce compliance burdens for providers and to increase the benefits to consumers. Ultimately, this remains the most significant challenge for the CFPB in implementing an effective and comprehensive system of consumer protections for remittance transfers, as well as many other financial products and services. At the most basic level, the issue remains how to implement increased consumer protections without increasing the costs that are passed onto consumers to provide such benefits. Certainly, there are significant issues and challenges that must be addressed to find the best solutions, whether the subject is international money transfers or some other consumer financial product or service. The CFPB’s international money transfer rule provides a good preview of the interests that will have to be continually balanced, assessed and rebalanced by the CFPB as it pursues the regulatory portion of its mission to improve consumer financial protections for U.S. consumers.

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Benedict Clements: It’s the Years, Not the Mileage: IMF Analysis of Pension Reforms in Advanced Economies

February 1, 2012

Indiana Jones, the fictional character of the namesake movies, once said ” It’s not the years, it’s the mileage. ” This quote comes to mind as many advanced economies wrestle with pension reform and the best way to ensure both retirees and governments don’t go broke. Our view, explained in a new study , is that the years do matter. Our analysis shows that gradually raising retirement ages could help countries contain increases in pension spending and boost economic growth. Further cuts in pension benefits, or raising payroll contributions, are also options countries could consider, although many countries will find many advantages in raising retirement ages. The challenge is to reform pension systems without hurting their ability to provide income security for the elderly and prevent old-age poverty. Pension Reform and Fiscal Consolidation Pressures from aging populations and increases in pensions — relative to wages — have pushed public spending in this area from 5 percent of GDP in 1970 to 8.5 percent in 2010. Pension spending now accounts for about a fifth of government spending. Higher pension spending has helped alleviate old-age poverty in many countries, but has also put pressure on public finances. The level of pension spending a country should aim for is ultimately a question of public preference. However, since many countries need to reduce government debts and budget deficits, most big-ticket public spending categories, including pensions, will need to be part of countries’ fiscal adjustment strategies. This is particularly important in countries where pension spending will continue to rise under current policies. Outlook for Spending and Risks Ahead Pension systems, both public and private, are designed to give people access to the benefits of future production to support their consumption during retirement. This makes pensions vulnerable to demographics: In the future, there will be many more retirees consuming what fewer workers will produce (Figure 1). From a fiscal perspective, taming public spending will not be easy in light of population aging. Pension spending is expected to rise on average by one percentage point of GDP, and over two percentage point of GDP in over nine countries (Figure 2). There’s also a chance that spending increases could be even higher than depicted in the chart above. Life expectancy has consistently outstripped projections — this is certainly a good thing, but it has added to the fiscal costs of pensions. In addition, some countries’ official projections are based on optimistic assumptions about productivity growth compared to the recent past. Spending could also be higher than we project if there is popular resistance to implement reforms that have already enacted, once they start kicking in. Fixing the problem Pension reform is a politically sensitive issue and each country will need to find its own solution. As I mentioned earlier, the range of measures includes raising retirement ages, cutting pension benefits, and increasing revenues. Among these options, gradually raising retirement ages would be an attractive option for many advanced economies: In countries where the tax burden is already high, further contribution hikes may jeopardize competitiveness and growth prospects. On the contrary, raising the retirement age can help boost GDP by increasing the number of years the average person spends working rather than in retirement. Raising retirement ages would help avoid even larger cuts in benefits than those already legislated, thus reducing the impact of reforms on elderly poverty. Gradual increases in retirement ages have already been legislated in many advanced economies. On average, these reforms are expected to increase the retirement age by about one year over 1990-2030. But this pales in comparison to the roughly five-year increase in life expectancy at retirement in this period. For these reasons, raising retirement ages may be easier for the public to understand than cutting pensions or increasing contributions. Over the long run, there is no reason why increasing the number of older workers would affect employment opportunities for younger generations — just like the large increase in the number of female workers has not resulted in fewer jobs for men over the last few decades. Raising retirement ages by another 2.5 years by 2030 — about 1.5 months per year — would reduce pension spending in advanced economies by an average of one percentage point of GDP. Of course, this kind of reform would need to be accompanied by adequate disability pensions and social assistance programs to protect those who cannot extend their work lives. We also need to keep in mind that longevity might not be increasing as fast for lower-income groups than for the rest of the population. As I mentioned, some countries could also consider reducing pensions where these benefits are high. However, benefit cuts for those close to the poverty line should be avoided. Others could consider raising payroll contributions where these rates are relative low. To minimize the impact on low income workers, measures such as raising the caps on contributions could be considered. Let’s not forget that as serious as the pension problem is, health care spending looms as an even bigger challenge. This is why tackling both pensions and health spending should be key components of countries’ fiscal adjustment plans. Advanced countries face difficult choices as they undertake fiscal adjustment. While pension reforms will certainly need to be part of the picture, we must keep in mind the vital role pensions play in reducing old-age poverty. Pension issues are no less important in emerging economies, and will be the topic of a future blog. From iMFdirect blog

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Obama Helps Woman With Husband’s Resume

February 1, 2012

WASHINGTON — President Barack Obama may help Jennifer Wedel’s husband find a job. Whether he gets her vote is another question. Two days after Obama talked with Wedel during an online town hall and offered to take a look at her unemployed husband’s resume, Wedel said the president has followed through. Wedel told The Associated Press in a phone interview Wednesday that she got a call from a White House deputy chief of staff, Alyssa Mastromonaco, who told her Obama had made a personal point of making sure the matter was taken care of. Mastromonaco said the resume was sent to contacts in the Dallas-Fort Worth area where the couple lives. Now Wedel’s husband Darin has been contacted by several recruiters, and Wedel said she’s grateful. But Wedel, a Republican, said that may not be enough to get her vote unless Obama also improves some of his job policies. “Just because he’s able to send a resume out, that’s not going to be a vote factor,” Wedel said. “We’re just one American,” she said. “There are thousands of Americans just like my husband with no job.” Wedel wants Obama to look at limiting the number of visas going to high-tech workers from foreign countries, the issue she raised with him Monday evening in the forum hosted by Google Plus. Wedel was able to question Obama in a live video chat room known as a Hangout. Obama expressed surprise during their exchange that Darin Wedel was out of work, saying that the word he was getting from industry was that fields like semiconductor engineering were in demand and Darin Wedel should be able to get a job. Obama also said he found the situation “interesting,” a comment Republicans have subsequently used to attack the president by suggesting he’s out of touch with the concerns of the unemployed. Jennifer Wedel said Wednesday that she felt like she was “hushed up a little bit” by Obama when they spoke, but that she also found him candid and appreciated his accessibility. “I don’t think any other president has shown that outreach,” Wedel said.

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Auction 2012: How The Drug Industry Games Washington

February 1, 2012

Auction 2012 is a weeklong series in collaboration with ” The Dylan Ratigan Show ” and United Republic . When he first ran for president, Barack Obama campaigned against the influence of lobbyists in Washington, exclaiming in one ad in which he excoriated the top lobbyist of the drug industry, “I don’t want to learn how to play the game better. I want to put an end to the game playing.” Then, Obama won the White House and sought to pass an ambitious health care agenda. To do so, he made nice with some of Capitol Hill’s most notorious influence peddlers. There are few industries with as much power in Washington as the pharmaceutical sector. Drug companies have spent $2.3 billion on lobbying and $183 million on campaign contributions since 1998, according to the Center for Responsive Politics. The industry also maintains a war chest for advertising and grassroots lobbying aimed at altering public opinion. The ready money serves as a strong deterrent against any legislative proposal that would lower costs for consumers and profits for the drug makers. “The industry clearly had established a war chest … to use on advertising on health care reform,” said Richard Kirsch, the national campaign manager for Health Care for America Now and the author of the forthcoming book “Fighting for Our Health.” “It was very clear that … if the administration and Congress pushed for negotiating drug prices for Medicare in health care reform, that the industry would vociferously oppose that.” Fearing the drug industry would use its money and lobbyists to torpedo the entire reform package, the Obama White House made a deal to kill at least two major provisions that would have saved consumers money when they filled prescriptions. In exchange, the industry unleashed a $20 million-plus ad campaign to support the bill. Senate Finance Committee Chairman Max Baucus (D-Mont.), a top recipient of campaign contributions from the health care industry, was put in charge of shepherding the bill to passage. But pharma’s influence didn’t start with the Affordable Care Act. The industry has been blocking pro-consumer drug policies for years. In 2003, Congress passed a prescription drug benefit for seniors known as Medicare Part D. However, thanks to industry involvement in writing the bill, the agency in charge of Medicare was barred from negotiating with drug companies to lower prices, as the Department of Veterans Affairs does. The author of that legislation was none other than Rep. Billy Tauzin (R-La.), who barely a year later would retire from Congress and land on K Street as president of Pharmaceutical Research and Manufacturers of America — in other words, the drug industry’s top lobbyist. When the Obama White House later sought support from the drug industry for health care reform, the administration had to shelve the idea of releasing Medicare from the negotiation ban. Studies indicate that keeping drug prices high for seniors adds $150 billion to $300 billion to drug industry profits over a 10-year period. The increased costs hit the pockets of both seniors and taxpayers. In Wisconsin, some seniors get a better deal. SeniorCare, a popular state program covering 91,000 Wisconsinites that was created by then-Gov. Tommy Thompson (R), sets much lower drug prices than Medicare’s prescription drug benefit. It only costs $522 on average to cover a senior through SeniorCare; it costs $1,690 on average under Medicare Part D. In 2009, SeniorCare saved seniors some $50 million. When Gov. Scott Walker (R) came into office last year, he proposed gutting SeniorCare. Wisconsin lawmakers from both parties joined together to remove this provision from the governor’s first budget. Click image to enlarge. Nino Amato, president of the Coalition of Wisconsin Aging Groups, told The Huffington Post that relying on Medicare Part D alone to hold down drug prices forces seniors to “make life decision trade-offs.” “Life decision trade-offs” can mean choosing between drugs or electricity or food. For millions of Americans, this is a real and growing problem. According to a 2010 Kaiser Family Foundation study , drug prescriptions rose by 39 percent while drug prices nearly doubled over the last decade. More and more individuals, hard pressed to pay for medications, are opting to abandon their prescriptions. In 2009, the number of patients who did not fill or pick up prescriptions increased by 23 percent from the previous year and 68 percent from 2006. Some Americans have tried to close the budget gap by quietly buying drugs from Canada, where government controls keep prices down. U.S. law, however, prohibits the reimportation of prescription drugs from other countries. Efforts were made to lift the ban as part of the health care overhaul — but the drug industry didn’t like that, and the Senate Democratic leadership fell in line. Despite having previously won the support of enough senators to become law, an amendment to permit prescription drug reimportation, offered by then-Sen. Byron Dorgan (D-N.D.), was defeated amid mass vote switching. After his amendment went down, Dorgan told reporters , “I believe seven days ago we had sufficient votes to pass it, but I think what is happening in the intervening period is other things developed. It’s a great disappointment because it seems to me very hard to do health care reform without doing something about the escalating prices for prescription drugs.” Sens. Debbie Stabenow (D-Mich.) and Olympia Snowe (R-Maine) are now trying again, co-sponsoring a bill that would legalize reimportation of drugs from certain countries. They argue that the bill would save taxpayers $19.4 billion and let millions of Americans pay drug prices that are 35 to 55 percent less. Beyond the health care deal, the pharmaceutical sector continues to fight other pro-consumer measures. During the last Congress, a provision attached to an appropriations bill would have banned “pay-for-delay,” when brand-name drug makers pay off generic drug makers to keep generics off the market. The Federal Trade Commission estimates that pay-for-delay costs consumers billions of dollars annually. The provision, which barely made it out of committee, was killed during the lame-duck 2010 Congress . Four Republican senators voiced their opposition to Senate Minority Leader Mitch McConnell (R-Ky.). The appropriations bill containing the provision was shelved, and Congress passed a continuing resolution to fund the government instead. Again, those supporting a more pro-consumer policy have not given up. Sen. Charles Grassley (R-Iowa) is currently co-sponsor of a bill in Congress that would give the FTC authority to stop pay-for-delay litigation settlements. In a November 2011 press release , Grassley argued, “When people across the country are having a hard time making ends meet, this could be a real boost to their bottom line.” Perhaps ordinary Americans will win the next fight over pharmaceutical policy. In the meantime, drug prices rise while the drug industry thrives, backed by its powerhouse lobbying presence in Washington. The Auction 2012 series explores the ways industries influence policymaking in five areas: banking, energy, health care, trade and education. Read Dylan Ratigan’s blog post introducing the series and his blog post on health care . Listen to a podcast from Dylan Ratigan’s show featuring Paul Blumenthal. Follow this diagram of the health care trade-off from Ratigan’s book “Greedy Bastards”:

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Matt Browner Hamlin: The GORUCK Challenge: Bringing People Together Under Really Big Logs

February 1, 2012

Outside Magazine recently ran a feature story on the explosion of obstacle racing in recent years. According to Nick Heil, in the last year, “roughly a million people signed up for events in the four most popular series: Spartan Race, Tough Mudder, Warrior Dash, and Muddy Buddy.” These extreme physical challenges certainly allow individuals to showcase their toughness and the events won’t be confused with a casual half-marathon on even pavement. Unmentioned in Heil’s piece is a challenge which, while substantially smaller than these mega brands, is showing explosive growth in its own right: the GORUCK Challenge . Organized by the military-style backpack company GORUCK , the Challenge is a team event, never a race, and up to 30 people participate in each class. And while the obstacle races above seek to replicate elements of the military’s basic training programs, the GORUCK Challenge strives to replicate elite forces training. Jason McCarthy, GORUCK’s founder, and lead cadre Brian Richardson, met during their Green Beret Selection course. It is this experience which the GORUCK Challenge most closely strives to replicate. The GORUCK Challenge markets itself as being “8-10 hours. 15-20 miles.” That said, their motto is “Under promise, over deliver.” Challenges have no set time and no announced course, but they will commonly go well over 10 hours and well over 20 miles (In fact, I’ve heard of recent Challenges going over 16 hours and as far as 27 miles). Unlike the larger obstacle races, there are no special obstacles that the people doing the Challenge must overcome. The Challenge moves from city to city and aims to profile the best parts of a location, be it monuments or bridges or famous beaches. There are, however, some common elements common to every GORUCK Challenge. The first is the ruck – everyone must bring a backpack (preferably a GORUCK bag) with them. If you’re under 150 pounds, you must have four bricks in the bag; if you’re over 150, the requirement is for six bricks (teams must also share an additional 25 pound-plus weight of their own choosing). Thus a 180 pound person doing the Challenge will carry a bag that could weigh close to fifty pounds, with drinking water. The second common element is that there will be a lot of the Challenge – whether you want to measure the Challenge in hours or miles to go before you sleep, you’re going to do a lot. Whether you’re running laps on the biggest set of stairs a city has to offer, doing PT exercises in shallow surf, or doing bear crawls on the beach, the Challenge will change your definition of intense. The third common element is perhaps the most defining one of the GORUCK Challenge: the log. Somewhere along the way, the team will be given a large log – a found object that could be a full-on tree, or a heavy railroad tie. The point is it’s big, it’s wooden and it will weigh hundreds of pounds. The team will be responsible for moving it for a significant portion of their Challenge. GORUCK founder McCarthy describes the importance of the log in the process of a Challenge. “The log is a great metaphor for the Challenge. When it begins, there’s total disbelief at how heavy it is. For the first hour, the class struggles against working together and assumes that they”ll be allowed to stop before long.” “During the second hour, there’s a slow acceptance and recognition of the need to work together.” McCarthy gets excited as he reaches the conclusion, “In the third hour, the class just doesn’t give a shit. They’ve figured out their system and how to implement it as a team.” And yes, in case you missed it, McCarthy is saying that the class will often have to carry logs that weigh more than 600-700 pounds for over three hours. The process is one where individuals must move past their breaking points and learn to work as a team. As a result, while being a muscular Super Man may work for something like Tough Mudder, it doesn’t guarantee success at the GORUCK Challenge. In the context of replicating the training of Special Forces operators, working together as a team is critical. Lead Cadre Brian notes that, “Leadership comes in different forms.” McCarthy adds, “Leadership isn’t just being able to push a tractor. Everybody has a strength.” Before Brian signed on to help lead the GORUCK Challenge, he was skeptical that anyone would actually want to participate in it. “I thought the GORUCK Challenge would be nonsense. I had to do this sort of training, but I was paid to do it. Why would someone pay to go through this?” Richardson then went to witness an early Challenge. He says, “I saw how the Challenge brought people together and I believed in it.” This sentiment is echoed by recent participants. Devin Maier, 31, the Managing Director of Balance Gym in Washington DC was in Class 095. He says his favorite part of doing his first Challenge was “the camaraderie and great sense of accomplishment once you finish.” Likewise, Collins Roth, a forty-one year old father of four, reflects, “It’s not for everyone – you have to be ready for a real mental and physical beat-down. But it was unbelievably fun.” McCarthy’s perspective on the Challenge shows his deep commitment to the idea that this is an experience that is valuable for the participants and something that they’ll want to share. “The ultimate goal is to bring people together and allow them into a community for organizing themselves.” Given how many people do multiple Challenges and how the Challenge has grown in popularity, McCarthy seems to be hitting his mark. GORUCK Challenge recently put on their 100th class. They’re expanding beyond the main event to include special, alumni-only events. This past summer Ascent brought GORUCK Tough alums to the Rockies, where they summited as many 14,000 foot peaks in four days as they could. Beached will put people through four days of survival in and around the waters of Key West. They’re also doing a spy craft style event called Trek and are now doing scavenger hunt events in a core set of major US cities. Each of these events seeks to replicate the field craft skill testing America’s elite military forces go through. As more and more people turn away from marathons and triathlons to more extreme obstacle races, expect the GORUCK Challenge to keep growing, as individuals seek to test themselves not just as athletes, but as team members and leaders. This is the second post of a three-part series. In my first post, I looked at the GORUCK brand history and its recent growth. The final piece will look at my own experience in GORUCK Challenge Class 110, this February in Baltimore.

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