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Netflix Settles Class Action Suit

by AP on February 11, 2012

Huffington Post…

SAN FRANCISCO — Netflix pressed the rewind button on its fourth-quarter earnings after settling allegations that the video subscription service violated a consumer-privacy law. Accounting for the $9 million settlement resulted in a 14 percent decrease in the fourth-quarter net income that Netflix Inc. reported Jan. 25. The bottom line for the final three months of last year now comes to $35.2 million, or 64 cents per share, down from the previously reported $40.7 million, or 73 cents per share. The company, which is based in Los Gatos, disclosed the change in a regulatory filing late Friday. Netflix’s stock price has surged 23 percent since the fourth-quarter results were released, partly because the company’s earnings were substantially above analysts’ average estimate of 57 cents per share. But investors mostly were impressed with Netflix’s fourth-quarter gain of 600,000 subscribers – a number unaffected by Friday’s accounting adjustment The upturn in subscribers indicated that Netflix had bounced back from a public-relations nightmare triggered by a 60 percent increase in its U.S. prices last September. Netflix expects to sustain a loss this year as it pays higher licensing fees for video and establishes its service in Latin America, the United Kingdom and Ireland. The $9 million legal settlement rids Netflix of another potential headache. A lawsuit on behalf of Virginia residents Jeff Milans and Peter Comstock alleged Netflix had been breaking a 24-year-old law by retaining records of the DVDs and Internet video that its subscribers watched for up to two years after they cancelled their plans. The complaint, filed in San Francisco federal court, cited the Video Privacy Protection Act, which was passed in 1988 to prevent video rental services from sharing information about what their current and former customers have been watching. The class-action lawsuit asserted Netflix violated a section of the law requiring personally identifiable information to be destroyed within a year “from the date that the information is no longer necessary for the purpose for which it was collected.” Retaining former customers’ viewing records allows Netflix to restore their old video queues and make better recommendations if they reactivate their subscriptions. In a statement Friday, Netflix said it didn’t make any admission of wrongdoing in the settlement. No other details were disclosed in a settlement notice filed Friday in federal court. In most class-action settlements, attorneys filing the case usually are paid a large portion of any money that is paid out. Sean Reis, an attorney representing Milans and Comstock, didn’t immediately return phone calls Friday. Netflix has been lobbying Congress to revise the Video Privacy Protection so it can introduce a feature on Facebook’s online social network that would allow its U.S. subscribers to automatically let their family and friends know what they have been watching. Netflix already offers the Facebook tool in the 46 other countries it operates, but all but more than 90 percent of its roughly 26 million subscribers are in the U.S. “This matter is unrelated to the company’s concerns about the ambiguities contained in the VPPA,” Netflix spokesman Steve Swasey said. Netflix shares closed Friday at $123.93, down 91 cents.

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Netflix Settles Class Action Suit

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The States Where Companies Are Hiring

by Bloomberg on February 10, 2012

Huffington Post…

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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The States Where Companies Are Hiring

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House Dems: Drilling Fines Are ‘Pocket Change’ For Oil & Gas Companies

February 8, 2012

WASHINGTON (AP) — Federal policing of oil and natural gas drilling on public lands is lax and inconsistent, with only 6 percent of violations resulting in monetary fines over 13 years, House Democrats said in a report Wednesday. Fines over that time totaled less than $275,000, an amount that the Democratic staff of the House Natural Resources Committee characterized as little more than “pocket change” for oil and gas companies. The report said federal regulators issued no fines in the period studied, February 1998 to February 2011, in eight of the drilling states. The report, obtained by The Associated Press before its public release later Wednesday, said the government does little to ensure accountability or protect the environment, even as drilling on federal land has increased in recent years. The increase is driven in part by hydraulic fracturing, or “fracking,” a drilling technique that has allowed companies to extract oil and gas long locked underground. The report focuses on drilling activity that occurred on federal land in 17 states during three administrations, two Democratic and one Republican. A total of 2,025 citations for safety and drilling violations were issued to 335 companies, the report said, with 64 companies fined a total of $273,875 “It would be an overstatement to even call these fines a slap on the wrist. For oil and gas companies making billions from drilling on America’s public lands, this kind of inadequate oversight and enforcement is little more than a pin prick,” said Massachusetts Rep. Edward Markey, the committee’s top Democrat. Markey and Rep. Rush Holt, D-N.J., requested the report. “American citizens and workers should feel confident that oil and gas companies are conducting business in the safest manner possible, and when they don’t, that the U.S. government will step in and make sure they pay the price for their actions. This report indicates that confidence in the oversight of drilling on public lands should be limited, at best,” Markey said. The Obama administration is considering new rules for fracking at oil and gas wells on federal land. President Barack Obama said in his State of the Union speech last month that the Interior Department will require energy companies to publicly disclose chemicals used in drilling for natural gas on public lands. Federal rules for fracking on public lands are set to be released in a few weeks. Adam Fetcher, a spokesman for Interior Secretary Ken Salazar, said the department received the report Wednesday and will review it. At Obama’s direction, Interior is taking additional steps to ensure that domestic energy resources are developed safely and responsibly, “including measures to enhance public confidence in hydraulic fracturing on public lands, Fetcher said, referring to the new fracking rules expected in a few weeks. “It is essential that the public have full confidence that the right safety and environmental protections are in place,” Fetcher said. Officials said several large penalties have been assessed recently against drilling companies, including a $2.1 million civil settlement last year with Denver-based Berry Petroleum Co., after an employee disabled production gauges that could have affected royalty payments on more than 150 Utah oil wells. In fracking, millions of gallons of water, sand and chemicals are pumped into wells to break up underground rock formations, allowing oil and gas to escape. Energy companies have greatly expanded their use of fracking as they tap previously unreachable shale deposits, including the lucrative Marcellus Shale formation in Pennsylvania, New York and neighboring states. The drilling practice has also attracted increased attention from Congress and regulators, as private groups and government agencies research whether it poses a danger to drinking water. The report found that more than 2,000 violations were handed out by the Interior Department to oil and gas companies drilling on federal land. Of these, 549, or 27 percent, were classified by committee staff as a major environmental or safety violation. More than half the major violations stemmed from a nonfunctioning or missing blowout preventer, the same device that failed in the BP oil spill in the Gulf of Mexico, the report said. A total of 113 major violations cited inadequate well-casing or cementing, another problem that occurred in the BP spill. Onshore, well-casing and cementing are a key defense against groundwater contamination. On at least 54 occasions, oil and gas companies began drilling on federal land before receiving formal approval to do so, the report said. Despite those problems, monetary fines were rarely issued, the report said. In eight states — Alaska, Arkansas, Louisiana, North Dakota, Nevada, Ohio, South Dakota and West Virginia — no fines were issued for the period studied. Thirteen companies were cited for at least 30 violations over the period studied, topped by Oklahoma-based Williams Production RMT Co., which received 98 citations and seven fines totaling $6,000. Colorado-based Encana Oil & Gas Inc. received 63 citations and four fines totaling $11,000, while Texas-based Anadarko E & P Co. received 61 violations and one fine totaling $5,000. ___ Online: House Natural Resources Committee: http://naturalresources.house.gov/ ___ Follow Matthew Daly: Twitter.com/MatthewDalyWDC

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Feds: Offshore Wind Power Will Not Cause ‘Major Environmental Damage’

February 2, 2012

BALTIMORE (AP) — Offshore wind farms from New Jersey to Virginia took a big step closer to reality with the completion of a review that showed the renewable energy source would not cause major environmental damage, officials said Thursday. Obama administration Interior Secretary Ken Salazar also said his department also was trying to speed up the process for issuing renewable energy leases. Wind projects off the coasts of Maryland, Delaware, Virginia, and New Jersey are being studied. “There are a number of developers who are very interested in developing offshore wind here and our goal is to hold the auctions and be able to issue the leases now, in 2012,” Salazar said. “So, this is not something that’s going to be waiting around.” The Mid-Atlantic lease proposal follows the Cape Wind project in Massachusetts that was given the go-ahead in 2010 after years of federal review. That project is still in development and Salazar said the department had learned from that experience. “No developer should have to wait nine or 10 years,” for approval, Salazar said. Dominion Virginia Power said that it is interested in building up to 400 wind turbines in waters about 20 miles off Virginia Beach, but the cost of the power was an issue. The 2,000 megawatts the turbines could produce would generate enough power for 500,000 households. “If everything aligns and it makes good sense and we have our regulators on board, yes, we would be moving forward on a wind farm,” senior vice president Mary Doswell told The Associated Press. The Interior Department said before the waters would be opened, the public would have a chance to comment on the projects. Maryland Gov. Martin O’Malley, who appeared at the announcement with Salazar, said his administration had contacted Defense Department officials to discuss the possibility of the military using offshore wind energy. O’Malley, a Democrat, and Salazar both described the decision as a major step forward for offshore wind, and environmentalists agreed. Environment America Clean Energy Advocate Courtney Abrams said “tapping into the power of offshore wind along the Atlantic coast is vital to getting the region and the nation off fossil fuels without creating more pollution.” Sen. Tom Carper, D-Del., said the decision “just makes sense.” “It is a reliable, clean energy resource that will reduce our dependence on fossil fuels, curb harmful air pollutants, and create good paying American jobs in manufacturing and construction,” Carper said. Jim Lanard, president of the OffShore Wind Development Coalition, said the decision means that a lengthier environmental impact assessment for offshore power along the mid-Atlantic won’t have to be conducted, although reviews for individual projects will still have to be done. Lanard said that could shave two years off the review process. Michele Siekerka, the Assistant Commissioner of Economic Growth and Green Energy in New Jersey’s Department of Environmental Protection, said Thursday’s announcement will speed the building of offshore turbines by a year or more. Eleven developers have submitted proposals totaling 12,000 megawatts and are expected to be able to bid later this year for leases. The companies will still have to do environmental studies of their own areas, but could be producing power by 2016 or 2017, she said. “The key is the federal government is not doing another one,” Siekerka said. Lanard said legislation pending in the Maryland General Assembly could do a lot to entice developers. “If there’s a revenue stream, you’ll see a great deal of interest,” Lanard said. Lawmakers killed a bill last year that would have required utilities to enter into long-term power purchase contracts and O’Malley said it wasn’t clear how a toned-down bill would fare this year. Kit Kennedy, Clean Energy Counsel at the Natural Resources Defense Council, said offshore power holds the promise of clean energy that could also provide jobs, but it would watch the process carefully to make sure the environment is protected. Dominion’s Doswell said absent tax credits, power generated by towering wind turbines costs about 28 cents per kilowatt hour, while the state’s largest electric utility’s rates are now in the range of 11 to 12 cents per kilowatt hour. “So that’s what we’re battling,” Doswell said. “Wind is a great resource and you can do it with scale, but we’ve got to work on this cost equation.” ___ Associated Press writer Steve Szkotak in Richmond contributed to this report..

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Mark Yzaguirre: Don’t Blame Liberal Arts Majors for High Unemployment

January 31, 2012

Virginia Postrel recently wrote a piece at Bloomberg.com that is an important addition to current discussions about higher education. Postrel wrote her article in response to critics of higher education who argue that unemployment rates for recent college graduates (namely, liberal arts and humanities majors) justify a cutoff of student loan funding for such majors. One of the critics Postrel mentions, Bill Frezza, decided to target art history majors as the focus of his criticisms. Now, I’m not a fan of the current student loan system. I’ve written about the issue of student loan debt and the negative effects of high student loan debt on college graduates. There are others who have written on the topic as well and I suggest that anyone interested in this subject spend some time looking at the public policy questions that are at issue here, such as in those discussed in this Rortybomb piece from a few months ago. But Postrel is correct when she says that: There’s nothing like a bunch of unemployed recent college graduates to bring out the central planner in parent-aged pundits. While college students should take hiring practicalities into consideration in picking their majors, the idea that unemployment among recent college graduates is primarily a function of their choice of major is simply not true and the idea that over-education leads to unemployment isn’t supported by the facts. First of all, college graduates in general have a lower unemployment rate than non-college graduates. While this doesn’t argue against the need for more vocational and technical training opportunities for young people (and I strongly support the expansion of such training opportunities) it does undermine claims that there may not be a college premium anymore in the job market. Further, while unemployment rates for recent liberal arts graduates are slightly higher than those in business or engineering, the gap is not vast and frankly one would think the gap to be greater because business and engineering are touted as the prime “practical” degrees. (Has there ever been a time when it was thought that someone with a B.A. in philosophy has the same job prospects as someone with a B.B.A. in finance?) In fact, according to the Georgetown report that is linked in the previous sentence, the degree with the worst recent unemployment problem is architecture, which is a pre-professional degree. Also, as Postrel points out, most college students seek out pre-professional, job-oriented majors “and art history majors are so rare they’re lost in the noise.” Whatever one can say about art history or gender studies majors, they aren’t a large part of the college student pool and they certainly aren’t a prime driver of college graduate unemployment. To claim otherwise might say more about the cultural or ideological assumptions of the person making the claim than the apparent facts. None of this minimizes the issue of student loan debt and how it is a strain on both the lives of those who graduate as debtors and on the general economy. But going for a sort of central planning in which the government picks the winners for funding of college majors isn’t the right solution. The fact that the Frezza article mentions the education policies of the People’s Republic of China as an inspiration doesn’t exactly inspire confidence. One way to bring market discipline into this equation is simple — allow student loan debt to be dischargeable in bankruptcy, after a waiting period (perhaps five or seven years) to prevent people from racking up huge debts for degrees in lucrative fields and then declaring strategic bankruptcy. The Rortybomb article I cite above goes into detail about this and how it would simply be a return to the manner student loan debt was handled for decades. Allowing bankruptcy would make lenders look at individual debtors and make decisions on whether to fund their debt, rather than using the very blunt instrument of government selection of entire majors to support or not support as the tool to handle this issue. Central planning doesn’t have a good track record when it comes to determining how millions of people should live their lives and I don’t see any reason to think that it would be a good tool for determining what majors should receive student loan funding. One can definitely argue that the existence of federally-backed student loan debt creates market distortions and maybe we would be better off without it. I wouldn’t agree with that, but if we are going to have federally-backed student loan debt, turning it into an even bigger social engineering tool is an even more distortive act. I would agree, however, that it’s probably not a good idea for a student to rack up six figures of student loan debt to get a degree in an interesting but generally not lucrative humanities field from a middle-tier private liberal arts college. But that’s not where most student loan debt is coming from. For one thing, most college students go to public universities where one can get a great education at a lower cost. Furthermore, public universities have created innovative programs in recent decades to create an environment in which liberal arts and humanities majors can thrive and not feel lost in massive survey classes. There’s been an expansion of excellent honors colleges at state universities all over the country and students at such honors colleges can get a liberal arts college environment at a state university price, especially in-state students. This is an avenue for students who want to study whatever they want to have an opportunity to do so without incurring massive debt. And if students go to honors colleges at schools like the University of Oklahoma or Louisiana State University , they can read Aristotle during the week and go see top-ranked football teams on the weekend. Try doing that at an expensive New England liberal arts college. I suggest that exposure to a liberal arts and humanities education is good for all who engage in such study, regardless of what they eventually choose to do with their lives. Such an education is in many ways the most traditional form of education. The purpose of a liberal arts and humanities education is to teach young people how to think critically and become thoughtful citizens, separate from any particular job preparation that may develop. There’s nothing wrong with studying engineering or finance. Our society needs people who excel at both. But we also need historians, poets and writers in our society and an appreciation for such work among the general public. Let’s not allow current economic travails to pull American higher education even further away from encouraging learning for its own sake in favor of simple job training. While there’s plenty of room to improve higher education in the United States, attacking and defunding the liberal arts and humanities isn’t the way to improve higher education and it certainly isn’t the way to fight joblessness in any real capacity.

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6 Coal-Fired Power Plants Closing

January 26, 2012

AKRON, Ohio — FirstEnergy Corp. said Thursday that new environmental regulations led to a decision to shut down six older, coal-fired power plants in Ohio, Pennsylvania and Maryland, affecting more than 500 employees. The plants, which are in Cleveland, Ashtabula, Oregon and Eastlake in Ohio, Adrian, Pa. and Williamsport, Md., will be retired by Sept. 1. They have generated about 10 percent of the electricity produced by FirstEnergy over the last three years, the company said. In a statement James Lash, head of the company’s generation unit, indicated that a review of the company’s coal-fired plants determined it would not be cost-effective to get the older ones into compliance with environmental regulations the U.S. Environmental Protection Agency announced in December. The new standards are designed to reduce emissions of mercury and other toxic pollution from coal- and oil-fired power plants. An Associated Press survey found that the changes were likely to result in the mothballing of dozens of units in the Midwest and in the coal belt – Kentucky, West Virginia and Virginia. The Obama administration was under court order to issue a new rule, after a court threw out an attempt by the Bush administration to exempt power plants from controls for toxic air pollution. Two factors have made it easier for utilities to shut old coal plants in recent years. Power demand has been weakening in recent years because of the slow economy and energy efficiency programs. And natural gas prices, which have fallen to decade-low levels in recent weeks, have allowed utilities to switch from coal to natural gas without impacting customer bills. Meanwhile, demand from China and elsewhere has driven up the price of coal. FirstEnergy said its decision would directly affect 529 employees. Some of them could end up transferring to other FirstEnergy facilities and work sites, while others could take advantage of a retirement benefit being offered to employees 55 years and older, the company said. FirstEnergy has a total of 17 coal power plants, including those that will close by September. The plants targeted to shut down have been producing less power over the last few years, mainly during times of peak demand, the company said. Eastlake, a community of about 18,500 people and located alongside Lake Erie northeast of Cleveland, will lose $590,000 a year in taxes, or about 4.5 percent of its regular budget, Mayor Ted Andrzejewski said. With about 100 good-paying jobs, the plant was among the top employers in the community, according to the mayor. Most communities weren’t caught off guard by the decision to shutter the plants. “This wasn’t much of a surprise,” said Michael Beazley, city administrator in the Toledo suburb of Oregon where about 80 people will lose their positions. A message requesting comment from the Utility Workers Union of America in Cleveland was not immediately returned on Thursday. FirstEnergy’s electric system has 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and Virginia. Coal and nuclear power plants generate about 80 percent of the company’s output. The company employs about 17,000 people. The new EPA rules include setting standards for mercury and other toxic pollutants that billow out of smokestacks and reducing air pollution in states downwind from the power plants. FirstEnergy has taken steps at several of its coal-burning plants to make them cleaner for the environment. It said that once the closings are completed, nearly all of its power will come from low emission sources. Last month, an Associated Press survey found that more than 32 mostly coal-fired power plants in a dozen states will be forced to shut down and an additional 36 might have to close because of the new federal air pollution regulations. Together, those plants produce enough electricity for more than 22 million households, the AP survey found. _______ Energy reporter Jon Fahey in New York contributed to this report.

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Is Industry Pressure Delaying Safety Rule At White House?

January 25, 2012

WASHINGTON — A long-awaited federal rule designed to protect workers in the construction and mining industries has been tied up in red tape at the White House, leading scientists to worry that the rule has been left in limbo due to political concerns. The rule put forth by the Labor Department would limit workers’ exposure to crystalline silica, a dangerous breathable dust commonly found in sand, granite and other materials used in construction. For construction workers and sandblasters in particular, breathing the dust over the course of years has long been known to lead to silicosis , a respiratory disease linked to lung cancer and respiratory failure. Companies in the mining and construction fields are concerned the tighter regulations could lead to higher production costs. The silica rule has been under review by the White House’s Office of Management and Budget for more than 11 months. Such rules are supposed to be reviewed by the administration within 90 days and then undergo a public-comment period before being finalized. While this rule’s been at the White House, the budget office has held nine closed-door meetings on the issue with interested parties, many of them trade groups such as the National Association of Home Builders, the American Chemistry Council and the National Industrial Sand Association. Proponents of the rule have grown so worried about the holdup that more than 300 occupational health experts, public health advocates and labor officials signed a letter sent Wednesday to the White House urging President Barack Obama to release the rule for public comment. Laying out the scientists’ “serious concern” with the rule’s “extraordinary delay,” the letter notes that an estimated 1.7 million American workers are exposed to silica and roughly 200 die from silicosis each year, according to statistics from the Centers for Disease Control. “These closed door meetings with special interests are wholly inconsistent with your promise of openness and public participation,” the letter states. Those signing included officials from the American Medical Association, various occupational health and safety boards, and the nonprofit Union of Concerned Scientists, which advocates for sound science in policymaking. Several observers, some of who signed on to the letter, told HuffPost the White House may not want to release a rule that would annoy deep-pocketed interest groups just as Obama’s 2012 presidential campaign gets under way. In an email, OMB spokeswoman Meg Reilly declined to comment on the status of the rule. “It’s not uncommon for review periods to be extended for regulatory actions that require additional time for consideration of public comment and analysis by OMB and all the affected agencies,” she wrote. “I don’t know precisely when review will conclude.” “It affects a lot of industries, and they’ll say this could be a very expensive rule,” explained Celeste Monforton , a former Labor Department safety official now with the George Washington University School of Public Health. “That’s a legitimate point. But more important is to have time for the public dialogue, and not have the debate through these back-door meetings.” The debate over the silica rule highlights some of the dissatisfaction on the left with what they see as the Obama administration’s sluggishness on regulations . Although the president has been blasted by Republicans for his alleged regulatory zeal, the White House in reality has issued relatively few new rules, especially pertaining to labor and the workplace . In fact, many safety advocates feel that the administration bends too often to industry when it comes to putting workplace protections. According to Wednesday’s letter from safety experts, the administration has proposed “no new significant … worker safety and health rules” and “promised rules have been repeatedly delayed.” “The Obama administration has been bad on regulations in general,” said Justin Feldman, workplace safety coordinator for the watchdog group Public Citizen, which has tracked the silica issue for years. “There are people within the administration who held genuinely anti-regulatory views. I think [the silica rule] is up in the air.” Feldman said he’s concerned that the administration won’t release the rule before the election — and that Obama might possibly lose. “That’s what we’re worried about,” he said. “Romney or Gingrich would be very unlikely to publish this rule. The construction industry does not like it.” The silica rule isn’t the first politically sensitive safety regulation to undergo a lengthy review at the Obama White House. Controversial child labor rules that would limit the work activities children could perform on farms and in grain facilities were tied up at the White House for nine months, until finally being made available for public comment in August. Although workers’ and children’s advocates said the rules are decades overdue, many farmers oppose the federal encroachment. If the White House had political concerns, they were well-founded. One GOP candidate for Congress in Arkansas has gone so far as to make repealing the child labor rules a central part of his platform . According to Feldman, tighter silica rules have been under consideration by the Labor Department for at least eight years. Although few know the exact language of the proposed rule because it hasn’t been released, experts said it’s probably modeled on a California state law already on the books. That law requires that construction companies mitigate silica dust through better ventilation and so-called wet cutting — that is, wetting down the brick and concrete before cutting it to reduce the dust clouds commonly seen on construction sites. The dangers of intense or prolonged silica exposure have been known for decades. In the 1930s, hundreds of workers in West Virginia were believed to have died due to exposure to silica dust while building the Hawks Nest Tunnel , making silicosis a national issue at the time. Experts now liken it to the better-known black lung disease , or coal worker’s pneumoconiosis “It’s a silent disease in the sense that a lot of workers are exposed to silica dust and just feel it as an annoyance,” said Robert Harrison, M.D., a clinical professor at the University of California-San Francisco who has treated workers with silicosis. “It irritates the throat, but they don’t realize it has long-term effects. … It can cause disability, difficulty breathing, chest tightness, cough — it has a real impact on someone’s everyday life. And it’s also a carcinogen.” Among those now suffering from silicosis is Leonard Serafin, a California resident who worked for a railroad for 32 years. It was part of Serafin’s job as a trackman to lay out the ballast, or crushed rock and gravel, in which the tracks were placed. He often spent hours a day breathing in dust from the ballast cars, and he said he now suffers from chronic obstructive pulmonary disease and a host of other lung-related ailments. At the urging of an occupational health expert, Serafin drafted a letter explaining his condition and his support for a new silica rule. The Serafin family shared the letter with HuffPost. In it, Serafin writes that his chronic cough has affected “all aspects of my life,” making it difficult even to do household chores, let alone anything that requires exertion. “I never dreamed I would have to spend my retirement years in this debilitating manner,” Serafin writes. “I find it difficult to attend social events such as concerts and plays with my family because of my chronic cough. Even coughing while standing at a cash register line at a retail store causes people to distance themselves from me. … When I exert myself, my daily coughing becomes a spastic type of cough, which leaves me exhausted, breathless with chest pain.” In closing, Serafin urges the White House to conduct its review and draft a regulation as soon as possible. “You have the power to prevent thousands of new cases of silicosis,” he writes. “In good conscience, how can you put a price tag before the safety of U.S. workers?”

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More IKEA Workers Vote To Unionize In U.S.

January 19, 2012

WASHINGTON — Officials with the International Association of Machinists and Aerospace Workers (IAM) union announced Thursday that more than 350 workers at an IKEA distribution center in Maryland have voted to join the union. If the vote is certified by the federal labor board, the workers in Perryville, Md., will become the second American IKEA workforce to join the IAM’s ranks. The first group, which is employed by the IKEA-owned Swedwood Group at a furniture factory in Danville, Va., voted overwhelmingly over the summer to join the union, a move that American labor activists considered a high-profile victory. “I think they saw what happened in Danville and saw the deal we were able to negotiate there,” Rick Sloan, an IAM spokesman, said of the Maryland employees. “It certainly helped.” When the L.A. Times ran a story on the Virginia factory last April, the disgruntlement of some of the workers there shocked readers in the U.S. and abroad, given the furniture retailer’s cultish following among consumers and generally solid reputation among employees. The company was criticized for an apparent double standard: While it was progressive and union-friendly in Europe, it did not show American workers the same kind of respect, critics said. “IKEA is a very strong brand and they lean on some kind of good Swedishness in their business profile. That becomes a complication when they act like they do in the United States,” a Swedish union official told the paper . “For us, it’s a huge problem.” According to IAM official John Carr, who recently visited the Maryland site, the same workplace issues raised by employees in Virginia had cropped up in Maryland. In particular, workers wanted more of a hand in the scheduling, vacation and seniority systems. “These are things that are important in any place if you want to make a future and a career out of it,” Carr said. The National Labor Relations Board is expected to certify the vote within 10 days, Carr said. If it does, the union and the company will begin contract negotiations. IKEA could not immediately be reached for comment.

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‘It’s Just Math’: States Look To Hike Gas Taxes

January 19, 2012

In 2009, Virginia Gov. Bob McDonnell, a Republican, ran against Democrat Creigh Deeds in part by hitting his opponent over a vote to increase the state’s gas tax. Now, just two years later, McDonnell seems to be waffling. “It’s just math,” he told WRVA, according to the Washington Post . “You’re going to continue to have less revenue — and more demand for roads and more people driving them.” A McDonnell spokesman quickly backtracked on the statement, saying the governor would not raise the tax — but that legislators in the state would still like him to consider it. The state’s gas tax of 17.5 cents per gallon, one of the lowest in the country, has not changed since 1986 . States across the country are giving a longtime political hot potato, the gas tax, another look as revenues disappoint and road repair backlogs mount. Political leaders from both major parties in Iowa and Maryland are also considering raising state gas taxes. The move, which comes despite widespread public disapproval, illustrates the growing gap between gas tax revenues and transportation infrastructure spending needs. In recent years, Congress has actually been forced to transfer $34.5 billion of general tax revenues between 2008 and 2010 to cover the gap between what we take in and expenditures promised under the federal transportation bill. Americans are driving less and using more fuel-efficient cars when they do drive, meaning that gas tax revenues are down across the board. And the fact that the federal and most states’ gas taxes are not pegged to inflation means that the fixed amounts devoted to the tax — 18.4 cents at the federal level — are worth less in real terms every year. “What we’re seeing is the huge hole that exists right now for infrastructure funding is putting states in the positions of having to figure out some way to fix the gap,” said Rob Perks, the transportation advocacy director for the National Resources Defense Council. “I think the states are saying we have no choice. We cannot pay for the construction or repair work on bridges or roads that we already have,” Perks said. If they opt for gas taxes, however, politicians will likely be setting themselves up for a political backlash. Some 77 percent of Americans are against raising the federal gas tax, according to a December Reason-Rupe poll . Opposition cuts across party lines, with 66 percent of Democrats opposed. In Iowa, another Republican governor, Terry Branstad, said he would “definitely consider” raising the tax. Maryland Gov. Martin O’Malley, a Democrat, is also looking into it . Just a few months ago, the Blue Ribbon Commission on Maryland Transportation Funding recommended raising the gas tax by 15 cents over three years. As their thus-far hesitant language shows, politicians of both parties are approaching the subject gingerly for fear of angering voters. Many academics say, however, that from a policy perspective, raising the gas taxes has some surprising hidden benefits. Economist Christopher Knittel of MIT has found, for example, that increasing the gas tax would get Americans fuel-efficient cars more quickly and more efficiently than simply mandating tougher fuel efficiency standards, as the Obama administration has proposed. Carmakers have actually been extraordinarily successful in making a gallon of gas last longer over the last 30 years, he said. But those improvements have been funneled into bigger, heavier cars like SUVs. “Had we kept weight and horsepower at their 1980 levels, fuel economy would have increased by 60 percent instead of the 15 percent we observed,” Knittel said. So auto manufacturers could give us more efficient cars — if only there were more market demand. And Knittel said he believes the best way to foster that demand would be to put a price on gas. “Basic economics tells us that unless consumers are facing the right price, the social price of gasoline, you’re not going to get the efficient outcome,” he said. “All the levers that we want to push or pull are pooled with the gas tax, as opposed to a [fuel efficiency] standard, which ignores all the cars on the road,” he said. “Consumers shift to more fuel-efficient vehicles, they drive them less, the old Yukons and Explorers get retired faster.”

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Cities Getting Hit Hardest Since The Recession: Report

January 19, 2012

Official recovery or not, it turns out that cities around the world still have a long way to go to get back to where they were before the downturn. More than half of the world’s 200 largest cities have yet to return to their pre-recession levels in either income or employment, according to a new report from the Brookings Institute . Compared to the pre-recession years of 1993 to 2007, cities all around the world are struggling, especially in North America and Western Europe. In cities like Dublin and New Orleans, income growth rates decline last year. Chinese cities, which have generally fared much better through the recession, are also seeing a drop off. Industry hubs like Beijing and Guangzhou have seen growth rates drop by over half compared to pre-recession levels. “China took proactive steps last year to cool off its real estate market, which people were concerned was facing the same kind of bubble condition as in the U.S. and Europe prior to the recession,” Alan Berube, an author of the report told The Huffington Post. “In the process of doing that it managed to cool off the economy altogether.” The Brookings findings for U.S. cities mirror other reports. Brookings, which looked only at the 57 largest cities in the U.S., found that none “had fully recovered its recession induced losses by 2011,” while and IHS Global Insight report found that only 26 of the nation’s 363 cities had returned to pre-recession levels of employment. While the Brookings report notes significant employment growth declines in cities like Las Vegas, Berube said some cities have faired better than others, a pattern that will likely continue going forward. “In the United States it will be a mixed bag,” he said. “Some places will be back to where they were prior to the recession, growing their income and employment levels — not at a rapid rate — but one that should bring unemployment down. Others are still trying to escape the vortex leftover from the recession.” Here are the ten cities whose income growth has dropped most significantly since before the recession, according to the Brookings Institute :

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S&P Downgrades France And Italy As Investors Avoid Eurozone

January 13, 2012

Standard & Poor’s Ratings Services slashed the credit ratings of nine eurozone countries on Friday, marking a deterioration in confidence in the troubled eurozone. S&P stripped France and Austria of their gold-plated AAA ratings, downgrading them to AA+, and downgraded Italy and Spain two notches to BBB+ and A, respectively. It also downgraded Portugal and Cyprus to junk, or non-investment grade, ratings: BB and BB+ respectively. Slovenia was downgraded to A+ from AA-, Slovakia was downgraded to A from A+ and Malta was downgraded to A- from A. “The policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone,” S&P said in a statement on Friday. S&P emphasized that more downgrades were likely. S&P said that it has placed 14 eurozone countries on negative outlook, including France — the second-largest economy in Europe — Belgium, Italy, Spain and even the AAA-rated Netherlands and Finland. Just Germany and Slovakia escaped from a negative outlook. Some Northern eurozone countries avoided a downgrade, such as AAA-rated Germany, the AAA-rated Netherlands and AA-rated Belgium. Ireland’s BBB+ rating also did not take a further hit, though its outlook is negative. Unlike during S&P’s downgrade of the U.S.’s credit rating, which investors largely ignored as they continued to buy U.S. debt, European investors this time have preempted the rating cuts by already pulling investments out of the eurozone. Though the news had been expected for weeks, American and European stocks fell on Friday. The S&P fell 0.49 percent, the DAX in Germany fell 0.58 percent and the FTSE 100 in Britain fell 0.46 percent. The euro plunged 1 percent to $1.2684, near a 16-month low, according to Bloomberg. Investors also sold off Italian and Spanish government bonds, driving up the interest rate on 10-year Italian government debt to 6.74 percent as of 4:40 p.m. EST, according to The Financial Times . Investors told The Huffington Post that European leaders simply are not focused on the essentials for investor confidence — such as economic growth and a credible backstop for European governments — as the European Central Bank maintains its hardline stance against buying much government debt and the eurozone plunges into recession. Though the downgrade will hurt French national pride, the real issue is that eurozone countries are being cut off from market funding and may suffer from a prolonged recession, said Jonathan Lemco, principal and senior analyst at Vanguard, an investment company. “In the absence of clarity, why get involved?” Lemco said. He said plenty of safer government debt is being issued elsewhere, and as long as the European Central Bank does not provide backstop funding for governments and economic growth does not appear likely, investors will continue to avoid eurozone countries. Bart van Ark, chief economist at the Conference Board, said that investors are concerned that German leaders are pursuing priorities in the wrong order. He said that first, the European Stability Mechanism — a European bailout fund — should triple in size to 1.5 trillion euros, or $1.9 trillion, as a backstop for troubled governments, then the eurozone should become fiscally integrated. But instead, Germany is trying to implement tougher penalties for countries that exceed deficit limits. When someone is drowning, a lifeguard should not insist that the drowning person learn to swim before saving him, he said. “The timing of what they want to do is wrong,” van Ark said. Valentijn van Nieuwenhuijzen, head of macroeconomic strategy at ING Investment Management, said that three preconditions are essential for investors to be confident enough to invest in the government debt of countries such as Italy, Spain, Portugal and Ireland. Van Nieuwenhuijzen said that first, the ECB needs to act as a lender of last resort for governments, even if through another institution such as the International Monetary Fund. Second, the eurozone needs to be set on a path toward economic growth, ideally driven by a two-year stimulus in Northern European countries led by Germany, which would boost exports from Southern Europe to Northern Europe and support economic growth throughout the eurozone. Third, the eurozone needs to become more fiscally integrated and commit to implementing more economic reforms that would make Europe more competitive. “What is misperceived by a lot of policymakers and commentators is that investors only want fiscal reform,” van Nieuwenhuijzen said. “It’s still a very popular political ploy along with this fantasy that fiscal austerity will generate expansion in the real economy…. There is no global support of this theory in academia, but still it’s very popular.” But Germany still seems far from pursuing such a plan. Jens Weidmann, head of the German central bank, recently said that he wants Germany to do no new borrowing, even though investors now are paying Germany for some government bonds. Weidmann recently told the Tagesspiegel newspaper in Germany, ”We must quickly achieve a structurally balanced budget.” This story has been updated from its original version to reflect S&P’s official announcement Friday of its downgrades and outlook for eurozone countries.

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Dan Solin: 2011 Winners Can Make You a 2012 Loser

January 11, 2012

Everyone wants to be a stock market winner. There were some big winners in 2011. Investors in US TIPS did great. This index tracks U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade and have $250 million or more of outstanding face value. They were up 13.56%. Does that seem odd to you? The U.S. lost its triple A credit rating in August, 2011. Do you know of anyone who invested a significant portion of their portfolio in US TIPS? If you were an investor in almost any segment of the stock market, domestic or foreign, 2011 was rough sledding. With the exception of the S&P 500 (which posted a modest 2.11% gain), all other segments of the domestic stock market were flat or in negative territory. Many “experts” extolled the virtue of foreign stocks. Too bad. Foreign markets were clobbered in 2011. The MSCI World ex USA index measures the performance of stocks issued by companies located outside of the U.S. It was down 12.21% in 2011. Emerging markets fared even worse, losing 18.4% . With the benefit of hindsight, the best advice for 2011 investors would have been to avoid domestic and foreign stocks altogether and invest in US TIPS. If you had to pick one asset class of stocks, commercial REITS would have been a good bet. The Dow Jones US Select REIT Index was up 9.37%. Raise your hand if you received and implemented this advice. The stock picks of analysts fared no better. In a thoughtful blog , Brett Arends did an analysis of how Wall Street analysts’ top picks fared in 2011. He found they lost money and you would have been better off investing in the S&P 500 index. More surprising was his finding that “top 10″ analyst picks earned less than the S&P 500 index over the past six years. It gets worse. Arends looked at the “most hated” stocks with the most analyst “sell” recommendations. The top 10 of these stocks underperformed the most “loved” stocks by less than 1%. The overwhelming evidence that no one can predict which asset classes (much less which stocks or mutual funds) will perform well in the future has not deterred the same “experts” from making predictions for 2012. I want to get in on the action so here are my predictions: 1. A majority of investors will continue to believe brokers have the ability to pick outperforming stocks and actively managed mutual funds and to provide guidance on “what is happening” in the market; 2. A minority of investors will cancel their retail brokerage accounts and invest in a globally diversified portfolio of low management fee index funds in an asset allocation appropriate for them. 3. Over time, the returns of the minority of investors described in #2 are likely to outperform those of the majority of investors described in #1. 4. The primary beneficiary of perpetuating the myth that retail brokers and financial pundits can predict the future will be those dispensing this advice. The victims will be those relying on it. Dan Solin is a senior vice president of Index Funds Advisors. He is the New York Times bestselling author of The Smartest Investment Book You’ll Ever Read, The Smartest 401(k) Book You’ll Ever Read, The Smartest Retirement Book You’ll Ever Read and The Smartest Portfolio You’ll Ever Own. His new book, The Smartest Money Book You’ll Ever Read, was published December 27, 2011.The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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SAY IT AIN’T SO: SF Institutions Facing Closure In 2012

January 10, 2012

It’s a sad day in downtown San Francisco. According to SFist , Union Square’s favorite (and only remaining) dive bar, Gold Dust Lounge, is facing the axe. Inside Scoop reported that the iconic bar — founded in 1933 and loved for its cheap sticky drinks, ancient decor, live music and rowdy clientele — received an unexpected eviction notice and lease cancellation, even though the business still has three years left on the contract. The cause? The landlord wants to make way for enormous Chicago-based clothing company, The Limited. Since clearly that’s what Union Square is lacking. (SCROLL DOWN FOR PHOTOS) Owner Tasios Bovis (whose family has run the bar since 1965) told Inside Scoop that he plans to appeal the eviction. In the meantime, he’s offering $3.50 margaritas, Irish coffees and glasses of champagne every day (!) until 8:30 p.m. The Bovis family has launched an aggressive campaign to save the bar, which the family wisely pointed out, is older than the Golden Gate Bridge. Check out Gold Dust Lounge’s new Facebook page , Twitter Feed and website to help with the effort. Oh, and get in on those $3.50 cocktails. The Limited may have the final word, but not without a fight from the bar, the community and, according to Gold Dust press agent Lee Housekeeper , the ghost of Herb Cain. It’s been a tough year for business in San Francisco. Check out some other San Francisco icons fighting the good fight in 2012 in our slideshow below:

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David Macaray: Watchdogs and Underdogs

January 10, 2012

By now most people are aware that while Congress was in recess, President Obama, on January 4, appointed former Ohio Attorney General Richard Cordray to head the Consumer Financial Protection Bureau. The move drew considerable attention, with consumer advocates expressing their delight, and business groups predicting the demise of the free enterprise system. Then, only hours after Cordray, Obama recess-appointed three people to the NLRB (National Labor Relations Board), giving it a full complement of five members for the first time in almost a year. The new faces are Sandra Block, Richard Griffin and Terrence Flynn. They join current members Mark Pearce and Brian Hayes. Block, Griffin and Pearce are Democrats; Flynn and Hayes are Republicans. Despite the hype surrounding these appointments, it’s hard to know how much praise Obama deserves. After all, appointing qualified people to government posts is what a president is supposed to do. Why would it require kudos? And as to the “audacity quotient” of recess-appointments, that’s also been a bit inflated. Consider: Bill Clinton made 139 such appointments; George W. Bush made 171; and in 1903, Teddy Roosevelt made 160 of them… all in the same day. On the other hand — given that Republicans despise regulatory agencies, given that they’ve spent 75 years beating up on the NLRB, given that they’ve purposely kept it understaffed (a labor board with two members isn’t a quorum, and doesn’t have the authority to issue rulings), and given that, even with a 53-47 senate majority poised to approve Obama’s nominees, they’d promised to filibuster — Obama’s moves were, in fact, quite bold. Not only were they bold, they were way overdue. Credit organized labor for keeping the president’s feet to the fire. That reported $400 million they donated to the Democrats in 2008 finally bought them something. While Republicans regard the NLRB as “interfering with” and “restricting” business, the board views itself as providing the underdog with basic safeguards — safeguards, incidentally, that are written into our federal labor laws. The board merely enforces those laws. When people get fired for engaging in union activism, or when a workforce requests a union election but is denied, or when management negotiators refuse to bargain in good faith, it’s the NLRB that comes to the rescue. Although congressional Republicans are already threatening legal action and issuing hysterical statements, there’s not much they can do about it, which means the NLRB, at least through 2012, is going to have a fair amount of latitude in addressing workers’ concerns. One of those concerns will be union membership drives. According to surveys, upwards of 60 percent of American workers have expressed an interest in joining a union, attracted by across-the-board advantages in wages, benefits and working conditions. But national membership stands at barely over 12 percent. While part of that differential can be written off to the unreliability of surveys, the larger part is clearly due to management’s ability to keep the union out through the use of its two favorite weapons: stalling and intimidation. There are hundreds of documented cases of companies illegally attempting to dissuade workers from joining a union. They threaten, they lie, they cajole, they bully, they bribe, they spy, they hire professional goons to assist them. They also use legal tactics. I knew a retired woman who, on a whim, decided to take a part-time job at Walmart to augment her pension. She was astonished by the level of anti-union propaganda. As a new employee, she was immediately shown a 45-minute movie on the evils of labor unions. Consider the FDA (Food and Drug Administration, established way back in 1906). One can only imagine the extent of marketplace mischief if the FDA weren’t there to serve as watchdog. The same applies to the NLRB. Indeed, without the labor board, there would be no way to ensure workplace justice. Employees would be at the mercy of “management tyranny.” A healthy and active NLRB is not a luxury; it’s a necessity. David Macaray, a Los Angeles playwright and author (“It’s Never Been Easy: Essays on Modern Labor”), was a former union rep. He can be reached at dmacaray@earthlink.net

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Why Was Rupert Murdoch Tweeting About Arts Site? Oh, Right

January 10, 2012

In case you haven’t heard, Rupert Murdoch is on Twitter. Here, he says such cheerful and grammatically questionable statements as “Education only way to real equality. US a disgrace. Millions every year headed for underclass or worse. Half kids drop out in LA , others,” and “Re complaints about my spelling! Problem is my pathetic typing. Sorry, if anyone really cares” (touché, Mr. Murdoch). His latest zany message to his 123,428–and counting!–followers? “For those interested in art try beautiful new site art.sy.”

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Robert Reich: The Bain of Capitalism

January 10, 2012

It’s one thing to criticize Mitt Romney for being a businessman with the wrong values. It’s quite another to accuse him and his former company, Bain Capital, of doing bad things. If what Bain Capital did under Romney was bad for society, the burden shifts to Romney’s critics to propose laws that would prevent Bain and other companies from doing such bad things in the future. Don’t hold your breath. Newt Gingrich says Bain under Romney carried out “clever legal ways to loot a company.” Gingrich calls it the “Wall Street model” where “you can basically take out all the money, leaving behind the workers,” and charges that “if someone comes in, takes all the money out of your company and then leaves you bankrupt while they go off with millions, that’s not traditional capitalism.” Where has Newt been for the last 30 years? Leveraged buyouts became part of traditional capitalism in the 1980s when enterprising financiers began borrowing piles of money, often at high interest rates, to buy up the stock of ongoing companies they believe undervalued. They’d back the loans with the company assets, then typically sell off divisions and slim payrolls, and resell the company to the public at a higher share price — pocketing the gains. It’s a good deal for the financiers (the $25 billion buyout of RJR-Nabisco in 1988 netted the partners of Kohlberg, Kravis, and Roberts around $70 million each — and most of Mitt Romney’s estimated $200 million fortune comes from the same maneuvers), but not always for the company or its workers. Some workers lose their jobs when the company downsizes. Others, when the company, now laden with debt, can’t meet its payments to creditors and has to go into bankruptcy. According to the Wall Street Journal , of 77 companies Bain invested in during Romney’s tenure there, 22 percent either filed for bankruptcy or closed their doors by end of eighth year after Bain’s investment. But, hey, this is American capitalism — at least as it’s been practiced for the past three decades. Is Newt proposing to ban leveraged buyouts? Or limit the amount of debt a company can take on? Or prevent financiers — or even CEOs and management teams — from taking a public company private and then reselling it to the public at a higher price? None of the above. Rick Perry criticizes Romney and Bain pushing the quest for profits too far. “There is nothing wrong with being successful and making money,” says Perry. “But getting rich off failure and sticking someone else with the bill is indefensible.” Yet getting rich off failure and sticking someone else with the bill is what Wall Street financiers try to do every day. It’s called speculation — and at least since the demise of the Glass-Steagall Act, investment bankers have been allowed to gamble with commercial bank deposits, other people’s money. So is Perry proposing to resurrect Glass-Steagall? Not a chance. Gingrich, Perry, and others are putting particular focus on the people who lost their jobs as a result of Romney’s Bain Capital. Gingrich’s Super PAC will be running $3.5 million of ads featuring emotional interviews with some of them. But what, exactly, are Romney’s opponents proposing to do about layoffs that harm so many people? Millions of Americans have lost their jobs over the last four years — and as a result have often lost their health insurance, their homes, and their savings. Are Gingrich, Perry, and others proposing to expand health insurance coverage for jobless Americans and their families? All I hear from the Republicans is their determination to repeal the law that President Obama championed — which still leaves millions of Americans uninsured. Do Romney’s opponents have plans to keep people in their homes even when they’ve lost their jobs and can’t pay their mortgages? No. Do they propose expanding unemployment insurance? If memory serves, most of them were opposed to the last extension. I’m all in favor of reforming capitalism, but you’ll permit me some skepticism when it comes to criticisms of Bain Capital coming from Romney’s Republican opponents. None of these Republican candidates has exactly distinguished himself with new ideas for giving Americans more economic security. To the contrary — until the assault on Romney and Bain Capital — every one of them has been a cheerleader for financial capitalism of the most brutal sort. The party that has repeatedly saved capitalism from its own excesses and thereby preserved capitalism is the Democratic Party. So the only serious question here is what kind of serious reforms Obama will propose when, assuming Romney becomes the Republican nominee, Obama also criticizes Bain Capitalism. 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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Gambling Gains: Another Victory for Sports Betting, in N.J.

January 10, 2012

Fresh off a victory in his state on the path towards legalizing sports betting, New Jersey state Sen. Raymond Lesniak pledged Tuesday to take the fight nationwide. On Monday Lesniak, a Democrat, succeeded in rushing a sports-betting bill through the state legislature. The bill would allow wagering on pro and college games in Atlantic City and at the state’s racetracks if a federal ban on sports betting is reversed. Following an expected signature of the measure by Gov. Chris Christie, the New Jersey attorney general could file suit in federal district court as early as this month to try to overturn the federal prohibition, Lesniak said. The economic funk is empowering gambling proponents like Lesniak, who is also behind a state online gambling bill. New Jersey is bearing $10 billion of a collective $95 billion debt carried by U.S. states in 2012. And the Garden State is losing gambling revenue to Nevada and betting rings run by organized crime, Lesniak said. While other states are looking to generate revenue through casino gambling, New Jersey is taking the lead on sports betting. And it’s doing so without much help. “Other than mild encouragement, [other states] let us carry the ball for the rest of the country,” Lesniak said. If New Jersey’s challenge succeeds in overturning the 1992 Professional and Amateur Sports Protection Act, people could bet on the Super Bowl and other sporting events in any state that legalizes bookmaking. Four states — Nevada, Delaware, Montana and Oregon — are already exempt from that law. Americans bet $100 billion a year on sports, legally or otherwise, according to the University of California, Los Angeles gambling studies program. Lesniak believes that all that stands in the way of cash-hungry states getting their share though sports betting is persuading the court that the law is unconstitutional. States should be allowed to determine how they raise revenue, particularly when four states are already given the privilege, he said. New Jersey’s expected battle with the Justice Department would be a rematch of sorts. Lesniak, through his law firm, filed suit last year to strike down the ban. He firm handled the work pro bono, he said. But the federal appeals court threw out the suit, declaring that the state itself would have to file the action. Momentum has been building for pro-gambling forces. The Justice Department this month eased its interpretation of the Wire Act, opening the possibility for states to pursue online gambling for games such as poker. And Lesniak is optimistic about the upcoming challenge against the Sports Protection Act. He cited a letter in which the Justice Department objected to Congress’ passing the law because it violated states’ rights. The letter was addressed to Joe Biden, the current vice president who was then chairman of the Senate Judiciary Committee. Attorney Peter Dugas , director of government affairs for the Washington, D.C., firm Clark Hill, said no challenge has come close to eliminating the sports betting ban and that a different outcome was “really questionable.” Lesniak remains undaunted, saying if the court addresses substance over procedural issues, the outcome should be a no-brainer in favor of his side. “It should not take long in U.S. District Court to get a decision,” he said.

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Ian Fletcher: Greg Thanos Interviews Me on What’s Wrong With Free Trade

January 6, 2012

Here I am in a video interview with documentary filmmaker Greg Thanos on what’s wrong with free trade:

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New Gym Only Welcomes Overweight Clients, Skinny Uninvited

January 6, 2012

The fitness industry has long featured toned and perfect figures effortlessly gliding on a elliptical machine or treadmill. But at Downsize Fitness , skinny people aren’t welcome. Instead, eligible clients must be at least 50 lbs overweight, according to the company’s website . When members reach their goal, they “graduate” from the gym. With locations in Chicago and Las Vegas, the gym first opened its doors last fall with the goal of creating a non-intimidating environment where members can focus on working out, Headline News reported . Though some 42 million Americans joined health clubs in 2011 , according to a report by IBISWorld, the Chicago Tribune notes gyms are guilty of alienating obese members who most need the fitness industry’s help. So far, the gym’s members are happy with the atmosphere the club provides. Club member Tara Lawton told the Tribune she’s lost 20 pounds since joining in October. “I want to cry sometimes at how it changed my life,” Tara Lawton, 42, said in an interview with the paper . “My body is responding positively to being pushed.”

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Restaurant Hurt By Occupy Wall Street Closes, Donald Trump Takes Over

January 6, 2012

A local New York restaurant that saw business drop off as Occupy Wall Street protests erupted nearby has finally shut its doors — and will be taken over by the ultimate 1 Percenter, Donald Trump . The real-estate magnate, who owns the building at 40 Wall Street, where Milk Street Cafe was located, has retained the restaurant hall for “penny’s on the dollar,” according to a source close to the deal, and will turn the all-kosher cafe into a Trump Street Bar & Grille. In early November, Marc Epstein, owner of Milk Street, which had moved into the space in June, claimed that metal barricades police had erected in response to the nearby Occupy Wall Street protests were impeding access to his cafe’s front door. Amid slumping sales, Epstein was forced to lay off 21 of the restaurant’s 120 workers . Though police ultimately removed the barricades in front of the cafe, the barricades on the street remained, creating a “siege mentality” that continued to hurt foot traffic, Epstein said. “In the end we could not continue to lose money while foot traffic had dwindled down to that level,” Epstein recalled. “The barricades, which I’m told are still there, not directly in front of the space, but to the left and right down Broad Street, cut the legs out from underneath us,” he added. “Everyday that they’re still there reaffirms that I made the right decision to close.” Steve Lafiosca, Trump’s director of commercial properties, told the Tribeca Trib, a local news site, that operators of Trump Street Bar & Grille will try to retain as many of the employees as possible . Lafiosca didn’t mention the barricades on Broad Street, but told reporters that he suspects Milk Street Cafe’s all-kosher theme, which Trump will do away with, played a role in the restaurant’s downfall. Epstein, for his part, is now refocusing efforts on Milk Street Cafe’s 30-year old Boston location where he said business is fine. “I have no plans to expand beyond Boston any time soon,” he added.

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Bank Mistake May Cost Foreclosure Lawyer Her Home

January 6, 2012

Christine Jackson’s three-bedroom wood-frame home in Indianapolis is in danger of foreclosure. It’s not because she can’t afford her mortgage, but because of a bank error, she said. While millions of U.S. home loans have sunk into default or foreclosure since 2007 because owners can’t keep up with payments, Jackson’s situation is different. Thousands of homeowners from all walks of life have complained that the major banks that service their mortgages have made frequent errors in calculating their loans. These errors include slapping unnecessary inspection fees onto accounts, misapplying payments in violation of Fannie Mae and Freddie Mac guidelines and “force-placing” expensive insurance on homes that are already insured. Jackson knows all this all too well because she is a lawyer who represents homeowners trying to stave off foreclosure. Often, those clients have claimed that their bank or mortgage servicer made a mistake in tabulating the cost of their loan, triggering a wrongful default. Jackson, 54, a former fraud investigator for the Internal Revenue Service, now understands firsthand the frustration that her clients feel. JPMorgan Chase & Co., the bank that services Jackson’s mortgage, has declared her loan in default, blocked access to her online account and threatened foreclosure if she doesn’t pay late charges that she said are unwarranted. Her once sterling credit is ruined and she could lose her home if the mess isn’t resolved, Jackson said in a recent interview. Jackson blames her situation on an extra annual insurance premium that she said Chase deducted from her account in 2009 on top of her usual payment. The overcharge triggered a series of account miscalculations, eventually leading to default, according to Jackson. “I’m disgusted with the whole thing,” she said. “My credit is trashed. I have nothing at all to finance my business. I might have to file for bankruptcy.” Banks’ servicing arms manage all aspects of a borrower’s home loan, from collecting payments for the owners of the mortgage to pursuing a foreclosure if a loan is in default for too long. Since the housing market crashed in 2007, banks and some standalone mortgage servicers have struggled to keep up with an unprecedented wave of foreclosures, without much success. A group of state attorneys general is trying to craft a blanket settlement with several large financial institutions following allegations that these banks filed false and “robo-signed” affidavits in foreclosure proceedings. Also, the biggest banks and independent servicers agreed in November as part of a consent order with federal regulators to give homeowners with residences involved in a foreclosure action from Jan. 1, 2009, to Dec. 31, 2010, the option of an independent audit of their loan account to resolve cases like Jackson’s. Regulators have boasted that the move could grant more than 4 million borrowers a chance to have their accounts examined by qualified auditors. But Jackson doesn’t qualify for such a review because her troubles don’t fit within the designated time frame and her home hasn’t been foreclosed on. That’s also the case for many of the estimated 3 million U.S. homeowners whose loans are in default or some stage of foreclosure. Jackson, who with her husband had their house built in 1997, said in February 2009 the mortgage servicing arm of JPMorgan Chase withdrew $1,422 from her escrow account to pay her annual homeowners insurance premium. The next month, Chase withdrew $838 from her escrow — again to pay her annual insurance premium; the second amount was the correct amount, Jackson claimed. At the end of 2009, Chase recalculated the amount needed to fund the following year’s insurance premium, adding $1,422 and $838 together and incorrectly increasing Jackson’s required monthly payment, Jackson claimed. Since Jackson’s monthly payment was automatically deducted from her bank account, she did not notice until the end of 2010 that she was paying an extra $108 each month, she said. Jackson finally noticed the mistake when she logged onto her account online, she said, noting that she called a Chase representative who promised to fix the problem. Instead, things got worse. In January 2011 she received eight letters from Chase stating that her previous month’s payment was insufficient and that her loan was now in default. Jackson, whose clients have had similar problems, has coined a term for her situation: phantom default. Jackson has spent dozens of hours on the phone and sending letters in an attempt to resolve the problem with Chase, to no avail, she said. She is now ready to pay home loan payments she has withheld over the past year, provided the bank repair her credit, reimburse her for damages and costs, and waive all the late and default fees, which she estimated total several thousand dollars, she said. Thomas Kelly, a Chase spokesman, said that while he could not comment on the details of Jackson’s situation, “we work with customers individually when there is confusion or dispute about payments.” Other homeowners have also complained of banks making errors with insurance premium. In 2010, a Mississippi federal bankruptcy judge ordered American Home Mortgage Servicing to pay Glen Cothern’s legal expenses as a result of the “obvious mental anxiety, stress, and frustration” he suffered when the servicer charged him for insurance he didn’t need, triggering two wrongful foreclosures and a customer-care experience termed “Kafka-esque” by the judge. New Orleans bankruptcy attorney Greta Brouphy saw her monthly mortgage payment balloon after Chase deducted two $3,200 annual insurance premiums in one year and imposed costly forced-place insurance on top of that. Brouphy spent a year trying to get the situation sorted out at her local Chase branch. “The loan officer should invite me to his kid’s birthday party because I spent so much time with him,” Brouphy said. Finally, a federal judge intervened. “I’m about to choke somebody,” Brouphy recalled saying to New Orleans bankruptcy judge Elizabeth Magner after court one day. Magner, who has developed a national reputation for sanctioning servicers for their behavior, gave Brouphy the phone number of a Chase lawyer, who quickly cleared things up. Jackson hasn’t been as fortunate. “Regardless of my knowledge of the law and my connections, my account has not been corrected, all my credit has been reduced, and I cannot get any operating loans for my business, which is fatal when you work on a contingent basis,” she said. Bank of America Corp. and other lenders cancelled lines of credit for Jackson totaling more than $100,000 that she needs to finance cases. She closed her law office and moved into her home. She even canceled her $260 subscription to a legal research website. Jackson, who worked for the IRS for 18 years, said she has paired down her client roll to just 10 and is considering moving with her husband to Mexico and abandoning law altogether. That’s bad news for any Indiana homeowner who might have wanted to tap her experience in navigating this type of bureaucratic nightmare. The little apartment on Lake Chapala near Guadalajara that Jackson has rented several times for a few hundred dollars a month beckons, she said. “The stress has made me ill,” she said. “I don’t need this.” Here are some other awkward foreclosure stories from last year:

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Charles Kolb: The American Business Community’s Collective-Action Problem

January 6, 2012

The Occupy Wall Street movement has not been kind to the American business community. Among other things, OWS highlights the income disparity between the top 1% of U.S. income earners and the 99% “rest of America.” Guess who’s among that top 1%? Too many Americans see Wall Street and American business as gaming the system to promote personal profit. CEO compensation is now at least 400 times the average employee compensation in many companies. Thirty years ago, that multiple was 40. Certainly neither productivity nor performance explains this disparity, so populist rhetoric turns to the simplest rationale: greed. Many observers question whether today’s business leaders have a heart when it comes to their role in the country’s growing income disparity. Far too many business leaders also turn a blind eye to the nation’s urgent needs: on fiscal and deficit policy, health care, education, the environment, and our campaign finance system. A more appropriate question might be to ask whether they have a head. What is surprising is that the reluctance of business leaders to pay serious attention to these policy issues cuts against their own self-interest. Doesn’t every CEO care about the cost of capital, health care inflation, whether the workforce has sufficient skills, whether energy costs can be reduced, and whether their organizations are being shaken down by the taxpayer-funded professional politicians who dominate our Congress? (Insider trading can send business leaders to prison. In Congress, it appears to have been tolerated for years.) Now, Gillian Tett in the Financial Times observes that former Clinton White House Chief of Staff and North Carolina businessman Erskine Bowles — co-chair with former Republican Senator Alan Simpson of the Simpson-Bowles deficit-reduction panel created and then ignored by President Obama — has convened at Harvard a new “CEO fiscal reform council” to see if a business voice can help break the Washington political logjam. Erskine Bowles is an exceptionally thoughtful, energetic, patriotic, and optimistic business leader. He should be a model for every U.S. CEO, along with Honeywell’s CEO Dave Cote , who served on the Simpson-Bowles panel, and Dow Chemical’s CEO Andrew Liveris who is trying to address many of the issues highlighted above. For much of the last year, the 70-year-old Committee for Economic Development has been trying to mobilize American CEOs to address our fiscal-health challenges. We now have some 85 endorsers of the standards by which we felt the now defunct Super Committee should have been judged. These endorsers included Dave Cote, PIMCO’s Mohamed El-Erian, BlackRock’s Larry Fink, George Conrades of Akamai Technologies, former Blackstone co-founder Peter G. Peterson, and even Erskine Bowles himself. But the effort has been slow-going when it should have been much easier. Why the difficulty? The answer lies in what economists call the collective-action problem, where a wedge exists separating a company’s or a CEO’s private interests from their public interests. Cornell University economist Robert Frank explains how individual incentives often conflict with those of the larger group in a terrific new book, The Darwin Economy: Liberty, Competition and the Common Good . How the collective action problem plays out to frustrate CEO engagement in sound public policy can be seen clearly in the way one major business association addressed health care reform in 2009 and 2010. America’s employer-sponsored health care system has been a key factor in weakening the global competitiveness of our large companies. A few years ago, General Motors reported that more than $1,000 of a new car’s sticker price went to cover the health insurance costs of its existing and retired workforce. Today, fewer U.S. companies are offering health coverage, and the employer-sponsored system faces inexorable decline. It was clearly in the collective interests of all American businesses to move to an incentive-based, market-oriented health care system and jettison the model that emerged during World War II by accident as a way to skirt wartime wage and price restrictions. Instead of abandoning this anachronistic, uncompetitive approach to health care costs, this business association blocked reform and supported the status quo. The rationale offered for this position was interesting: since many of their member companies could afford the costly premiums, they saw providing gold-plated health insurance benefits as a way to compete for scarce talent in the workforce. If this zero-sum rationale was so compelling, then why did General Motors file for bankruptcy? On the day General Motors filed for bankruptcy protection, one of their former senior officers told me that two reasons accounted for the company’s sorry situation: taking the focus off quality and the consumer, and health care costs. In a private conversation, this association’s president admitted what everyone knew: that the employer-sponsored system was doomed but the association’s individual members preferred to stick with the shorter-term goal of attracting talent. They chose to ignore the longer term, more fundamental, competitiveness issues that are harming their interests. The collective-action problem explains why so many companies and their leaders often behave in this manner. Additionally, other factors reinforce this shortsightedness. Ms. Tett notes that many U.S. corporate leaders today think of their companies and employees as being more global than American. She writes: “American companies might spend heavily to lobby special interests; but it is unclear whether they have [a] similar incentive to change wider American policies.” The Committee for Economic Development is betting that they do — but the headwinds are, indeed, strong. Corporate leaders and their boards are still bewitched by quarterly earnings reports, and CEOs often face shorter tenures at the top. So much of short-term behavior in corporate America is rationalized in the name of “maximizing shareholder value.” Perhaps a rejuvenated shareholders’ rights movement can make a needed, and positive contribution by stiffening the spines of more CEOs and their boards to follow the splendid example of leaders like Dave Cote . We need more American business leaders who put their country first rather than bend to narrow short-term pressures. ______________________________________________________________________________ Charles Kolb is the President of the Committee for Economic Development in Washington, D.C. He served in the first Bush White House from 1990-1992 as Deputy Assistant to the President for Domestic Policy and in the Department of Education as Deputy Undersecretary for Planning, Budget and Evaluation (1988-1990). The views in this article are solely the author’s.

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The Law Moms All Over Have Been Waiting For

January 6, 2012

As part of Obama’s health care reform legislation, employers are now, for the first time, federally mandated to provide nursing mothers with breaks and a place to pump. If you’re thinking, “Huh? This didn’t exist yet?” you’re not alone. The Affordable Care Act was signed into law in March 2010 (which also seems late in the game, no?), but the government is now cracking down on employers who don’t comply. McDonald’s and Starbucks are among the 23 companies that have been cited by the Department of Labor, Sonia Melendez, a spokeswoman told MSNBC . Hard and fast rules haven’t been finalized yet, but the Wage and Hour Division fact-sheet gives us a sneak preview. According to the document: “[Employers are required to provide] reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth … [as well as] a place, other than a bathroom , that is shielded from view and free from intrusion from coworkers and the public.” The bold is ours because it bears emphasizing that bathrooms — even private ones — are not considered acceptable locations in which to feed a person. As mothers are fighting to nurse in public without being ridiculed (or worse), these guidelines may be the next step to align directives from doctors about breastfeeding (breast is best!) with the messages they get from employers.

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Maryland, Wells Fargo Settle On Adjustable Rate Mortgages

January 5, 2012

BALTIMORE — Maryland Attorney General Doug Gansler has announced an agreement with Wells Fargo relating to allegedly deceptive marketing of adjustable rate mortgages written by companies it acquired in 2008. Gansler said Thursday that the settlement involves mortgages written by Wachovia and Golden West Financial. Gansler says the settlement will create loan modifications for some customers. He also says Wells Fargo has agreed to pay about $940,000 for restitution to “Pick-a-Payment” borrowers who lost their homes in foreclosure. The attorney general’s Consumer Protection Division says Wachovia and Golden West did not fully explain to borrowers who chose a loan with payments that were less than the interest actually due that their minimum payments would not cover the full interest and that their principal debt would actually increase over time.

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Obama’s Latest Moves Face Legal Questions

January 5, 2012

By Jeremy Pelofsky WASHINGTON–President Barack Obama’s appointment of Richard Cordray to head the Consumer Financial Protection Bureau could become entangled in a legal battle over its legitimacy, though history and the Constitution appear to favor him, experts said. The White House said on Wednesday Obama would use his constitutional authority to install Cordray while Congress was not in session, drawing anger and criticism from rival Republicans who insisted Congress was not in formal recess. While the Senate resumes lawmaking only on January 23, it has been holding brief non-legislative “proforma” sessions every three days to try to keep Obama from making recess appointments without its consent. The last, on Tuesday, was for a minute; the next is on Friday. Infuriated Republicans denounced Obama’s action on Wednesday as unprecedented, but history shows similar appointments were made during the presidencies of both Democrat Harry Truman and Republican Theodore Roosevelt. White House lawyers determined the Senate was in recess as long as it was not conducting legislative business and Obama could therefore move ahead with Cordray’s appointment under the Constitution, presidential spokesman Jay Carney said. He said this was also the view during the George W. Bush administration. Also on Wednesday, Obama announced plans to “recess-appoint” three members to the National Labor Relations Board, potentially raising issues for that agency as well. While Republican Senate Minority Leader Mitch McConnell assailed the “uncertain legal territory” of the presidential action, it seemed unlikely the issue would be resolved anytime soon in the courts. Legal challenges of agency decisions often take months, if not years. But the U.S. Chamber of Commerce, which fiercely opposed creation of the consumer protection bureau, said it would not rule out a legal challenge to Cordray’s appointment and it could weigh heavily on future actions by the watchdog. “One of the lawyers we consulted on this said ‘if you are bringing a suit on a rule against this agency and you didn’t raise this issue you could be charged with legal malpractice,’” said David Hirschmann, head of the group’s Center for Capital Markets Competitiveness. Cordray told Reuters he was ready to get down to work and would not be distracted by possible legal challenges. “I can’t be distracted by that,” he told Reuters after flying to Cleveland on Air Force One with Obama. NOMINATION BATTLE The battle over nominations dates back to the Bush administration when Democrats kept the Senate in similar “proforma” sessions to try to block recess appointments by the Republican president, not leaving for more than three days. Under the Constitution, the House of Representatives and Senate must agree on any recess lasting longer than three days. Republicans who control the House have blocked any longer breaks in hopes that would prevent appointments by Obama. The nonpartisan Congressional Research Service said in a report last month the Constitution did not specify how long the Senate must be away for recess appointments to be made but Republicans pointed to a 1993 Justice Department legal brief that said they had to be away longer than three days. One law professor said that brief wrongly referred to the constitutional requirement that the two chambers have the approval from one another to break for more than three days and that the courts will likely be hesitant to intervene now. “There is no minimum time needed to trigger the president’s recess appointment authority,” said Catholic University Columbus School of Law professor Victor Williams, adding that he doubted the courts would look favorably on a legal challenge. “The courts are very reluctant to second guess the political branches when a duty has been given to political branches, explicitly, textually by the Constitution,” he said. The congressional report found two examples of appointments made during recesses of less than three days, though they were done after Congress completed a session and before they began the next one. President Theodore Roosevelt made some 160 appointments in 1903 when Congress was gone for less than a day, and the Truman administration made one appointment in 1949 when the Senate was gone for two days, the report said. “As far as can be determined, no succeeding president has made recess appointments under similar circumstances,” the CRS report said. “The shortest recess during which appointments have been made during the past 20 years was 10 days.” Republicans also pointed to an Obama administration official referring to the three-day recess precedent in a legal argument before the Supreme Court, but the justices did not address that issue and were rather focused on the legitimacy of decisions by a government agency that did not have a quorum of members. One banking industry consultant noted that with Cordray’s appointment, it may speed legal challenges to the financial regulatory reform law known as Dodd-Frank. “The issue is not so much Cordray, or whoever is the director, but the CFPB itself and some of the powers it has been given under Dodd-Frank,” said Bert Ely. (Additional reporting by David Henry in New York, Matt Spetalnick aboard Air Force One, Alexandra Alper and Richard Cowan in Washington. Editing by Howard Goller and Todd Eastham) Copyright 2012 Thomson Reuters. Click for Restrictions .

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Sporadic Health Insurance As Bad As No Health Insurance: Study

January 5, 2012

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

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Charities See Huge Increase In Foreclosed Home Donations

January 5, 2012

Forget collecting coins in a red kettle — charities are increasingly netting donated homes as a result of the foreclosure crisis. And the trend is likely to to continue. USA Today reports that Bank of America donated 150 homes in 2011 and plans to donate more than 1,200 next year. Wells Fargo donated almost four times as many homes this year compared to last. And Habitat for Humanity almost doubled the number of donated homes that it’s rehabbed in the year ending last June. “It’s a win, win, win” Rebecca Mairone, head of Bank of America’s donation program, told USA Today. Those three “wins” include one for the neighborhood where the house is located, one for the bank, and one for the investor. By donating homes — typically of low value — owners rid themselves of a mortgage and the expenses that go with upkeep, as well as earn tax breaks for their donation. Depending on who the home is donated to, it might be torn down, refurbished or rebuilt completely. In some places home donations are becoming too popular. CrainsDetroit.com reports that in Detroit, nearly 98 percent of homes offered are declined, as many are too rundown. And as home donation inquiries increase, some charities are still figuring out what they can and cannot accept. “We had to kind of look at our policy on accepting house donations,” William Brazier, executive director of the Society of St. Vincent de Paul Detroit, told CrainsDetroit.com . But saying “no” to that many home donations still puts most nonprofit organizations and banks ahead of the game. Nonprofit News reports that Real Estate Donations, a division of the West Dundee, Ill.-based nonprofit Restoration America, is still taking advantage of the upward shift in donations. By November, the group had closed on its 101st donated home of 2011. Charles Konkus, president of Real Estate Donations told the news source that was “way ahead” of the 73 last year.

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Fiat Increases Chrysler Stake

January 5, 2012

DETROIT — Fiat has added 5 percent to its majority ownership of Chrysler. The Italian automaker got the added stake by making a car in the U.S. that gets 40 miles per gallon of gas. With the added shares, Fiat now owns 58.5 percent of Chrysler. The U.S. government, which bailed out Chrysler and funded its 2009 restructuring under bankruptcy protection, gave Fiat a 20 percent stake in Chrysler in July of 2009 in exchange for Fiat’s management expertise and use of its technology. Fiat gradually raised its ownership by meeting performance goals and buying the government’s stake in Chrysler. Chrysler said early Thursday that a pre-production version of the new Dodge Dart compact got 40 mpg in testing by the Environmental Protection Agency in late December. Full testing for the mileage sticker that will go on the Dart’s window has not been finished. The window sticker testing is done under different standards and could be lower than 40 mpg. The added 5 percent stake came from shares held by a United Auto Workers trust fund that pays for retiree health care. The trust still owns 41.5 percent of the company. Chrysler is planning an initial public stock offering, perhaps this year, to help the trust convert its shares to cash. The Dart, to be built at a factory in Belvidere, Ill., goes on sale in the first half of this year as a 2013 model. It will be unveiled next week at the North American International Auto Show in Detroit. It’s based on the same underpinnings as an Alfa Romeo Giulietta. One of the Dart’s three engines will be a Fiat-designed 1.4-liter turbocharged powerplant that also goes into a high-performance version of the Fiat 500. Sergio Marchionne, CEO of both Fiat and Chrysler, said in a statement that the added 5 percent stake is another step in the integration of the two companies.

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Car Service: ‘Surge Pricing’ Shouldn’t Have Been A Surprise

January 4, 2012

WASHINGTON — The CEO and co-founder the smartphone app-enabled Uber car service has a message for all those shocked by their expensive rides home on New Year’s Eve: Get used to it. With its app, Uber lets you arrange pick-ups in fancy black sedans. It’s supposed to be more stylish, comfortable and convenient than conventional taxis. The service arrived in D.C. in December and is also available in New York, Chicago and San Francisco. On New Year’s Eve, Uber instituted a ” surge pricing ” system that was designed to keep cars available for the customers who really, really wanted them, by raising prices as demand grew. But prices went higher than expected for some customers. In D.C., Mark Krieger used the Twitter hashtag #happynewtears to describe his surprise $200 Uber ride on Saturday night. Uber’s CEO and co-founder, Travis Kalanick, is unrepentant. He contends that the surprise cost shouldn’t have been a surprise. Before New Year’s Eve, he blogged about surge pricing, he emailed customers about the pricing as far back as October. And on New Year’s Eve, customers had to click through a screen informing them that their price would be as much as six times the normal price when ordering a ride. Kalanick has made clear he’s open to suggestions about how to handle pricing, but also put up a blog post on Tuesday reiterating how Uber’s “surge pricing” system works . The post is pretty much an aggravated sounding lesson in economics 101: Without a surge pricing mechanism, there is no way to clear the market. Fixed or capped pricing, and you have the taxi problem on NYE — no taxis available with people waiting hours to get a ride or left to stagger home through the streets on a long night out. By *raising* the price you *increase* the number of cars on the road and maximize the number of safe convenient rides. Nobody is required to take an Uber, but having a reliable option is what we’re shooting for. As should come as no surprise, economist-types love Uber . But the company “fails marketing,” according to Venture Beat : Uber’s blog post does a reasonable job of explaining the economic theory behind its surge pricing, even providing an illustration of supply and demand curves. From the standpoint of economic theory, it makes perfect sense. But when people feel ripped off, they don’t want to hear about economic theory or the team of Ph.Ds you have developing optimal supply and demand mechanisms. Most people have a sense of what is “fair”. Study after study has shown that people will make suboptimal economic decisions in the name of fairness. Product and pricing decisions have to take that into account. The National Review got more academic, linking the Uber kerfuffle to economist and former Libertarian North Carolina gubernatorial candidate Michael Munger’s work on price gouging — Munger believes that anti-gouging laws harm consumers by limiting supply : This minor dust-up serves as a reminder of the embeddedness of economic transactions. People feel as though Uber was taking advantage of them, despite the fact that the service leapt in to fill the void created by an overregulated taxi marketplace. One is reminded of Michael Munger’s critique of anti-gouging laws and, more broadly, his work on evolutionary exchange. Relatedly, Munger links to a really thought-provoking essay by the democratic socialist philosopher Michael Walzer on the ethics of competition — it is one of the best critiques of market I’ve ever read, partly because it is so subtle and intelligent. Other critics of the market could learn a thing or two from Walzer. But they probably won’t. Washingtonian Dave Stroup tweeted a slightly more psychological take : “Yup, I like the service a lot; I’d just hate for NYE to be someone’s 1st experience and have it be confusing, etc.” Kalanick summed up his own take on the highs and lows of Uber’s New Year’s Eve emotions and prices in his blog post: The whole experience was at once exhilarating and a bit defeating. We knew to keep cars available, we had to let the price go where it needed to. But the higher the price, the more vulnerable we were to a customer support nightmare. The communications we sent in preparation were out there, (blogs, tweets, emails, etc.), the pricing notification was there, but people are simply not used to paying a lot of money for a reliable ride during a run on cars. Kalanick told The Huffington Post in an email that he thinks “folks will get used to ‘surge events’ on Uber and it won’t be newsworthy the next time around.” Flickr photo by Daquella manera,, used under a Creative Commons license.

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Judith Samuelson: Reducing Consumption in 2012 — An Inconvenient but Necessary Resolution

January 4, 2012

NEW YORK, NY — I was seriously into re-gifting for Christmas this year. Just ask my kids. My daughters, Anna and Sarah, and nieces Rachel and Leah, each received a notebook of favorite family recipes, decorated with old photos and watercolors from vacations past. Rachel loved the never-been-used colander that was taking up precious closet space. As for stuffing the stockings — which I threatened to cut off altogether now that the youngest is graduating from college — it became an exercise in finding a good home for various office supplies and surplus personal goods that were gathering dust. Anna, the diplomat, said the yellow highlighter was just what her boyfriend needed. A few days after Christmas, Sarah and I made up for my Scrooge-like sins by renting a car and driving out of the city for our annual blow-out at the mall, where we had to fight for a parking space. The question on my mind as I consider the year ahead, is whether it is un-American to commit to spending less and buying only what I really need. At this phase in my life, it’s not exactly a hardship to buy fewer things. Yes, some new clothes are needed from time to time, but the book shelves are already filled with books I haven’t yet read, and but for replacing some worn out towels, I am not exactly in a “need to have” phase of life. Our economy however, seems built on a set of habits that would suggest that if we all commit to the same resolution of buying less, the layoffs will only get worse. Welcome to the quandary of sustainable consumption. And yes, indeed we do have a problem — albeit, as Al Gore would say — an inconvenient one. Americans out-consume their neighbors around the world at levels that translate into unsustainable — let’s call it outrageous — over-consumption of energy and other natural resources. The statistic usually offered up is that with only 6% of the world population, Americans consume 25% of the natural resources. It’s time to get a grip. My parents, products of the Depression, valued buying many fewer, but higher quality goods. That would be a step in the right direction that could be good for the economy as well. There are many sources for such high-quality products. One of them is sportswear manufacturer and retailer Patagonia, whose legendary founder, Yvon Chouinard , is so committed to the idea of sustainable consumption that the company is partnering with Ebay to encourage reuse of Patagonia products. Hard to believe, but true. Patagonia sales people seem to have taken the pledge as well. “Dave” from customer service, who chatted with me on-line as I hunted for a pair of yoga pants, wasn’t aware of the partnership I was trying to research, but he agreed with it: Welcome to Backcountry. You are now chatting with Dave.. judith: I heard that Patagonia had started a program that prompts you to consider if your purchase is a “need” or a “want” and to consider buying a used version of your targeted purchase on Ebay. is this true? j Dave: hello there, I hadn’t heard that, but makes sense to me judith: Well, if YOU haven’t heard about it, I assume its not true! I was thinking about writing an article on it. Dave: yah I’d contact Patagonia to be sure, but sounds like an interesting basis for an article. what’s your angle? judith: Time for new year’s resolutions — and I have taken your Patagonia Common Threads pledge about reduce, reuse… etc. but I would like to put in something about the extra commitment by the company to make you think harder at Point of Purchase. Dave: hmm wish I knew more specifics, I know myself I try not to buy any of our products unless I need them. Mindless consumerism is a plague. Wow — I will remember this moment. A customer service rep chatting with a potential customer about “mindless consumerism?” I predict we will see many more retailers dig deeply into the balancing act of selling retail with the planet in mind. It means more investment in design of product for more efficient use and reuse of resources, on-site recycling , and, for the courageous ones, it will also mean pricing that embeds the true cost of the product, and testing some messages that challenge their customers to think about what they are doing at point of purchase. Happy New Year, we can all do our part. Take the pledge here .

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Ellen Bravo: Connecticut Workers Welcome Paid Sick Days

January 4, 2012

This time last year, Desiree Rosado, a school bus driver in Groton, Connecticut, was dreading flu season. “Working without paid sick days, you’re always worried about what will happen if you get sick,” she said. “When my kids caught the swine flu, I missed a week of pay to stay home and take care of them, and I’m still paying off the credit card bills I racked up.” But as of January 1, Desiree and hundreds of thousands of other Connecticut workers will begin to earn paid sick time under a new statewide paid sick days law — the first in the nation. She’ll be able to use that time if her kids are sick, if she herself falls ill, or to see a doctor for preventive care. In the process, Desiree says she’s gained “real peace of mind.” For Desiree and workers across Connecticut, paid sick days are one immediate way to see real economic relief, even in the aftermath of a severe recession. As someone who drives children safely back and forth to school every day, Desiree Rosado knows another benefit of paid sick days. The new Connecticut law, which applies to workers in the service sector, means those who serve our food and care for the young and the frail will not have to put the public at risk when they’re ill. “No one should have to choose between their family’s health and their job, and no one should get fired just for getting sick,” said Jon Green, Executive Director of Connecticut Working Families, a member group of Family Values @ Work Consortium and lead organization in the broad coalition which helped win this new law. “Beginning this year, hundreds of thousands of service workers will be able to earn paid sick days that so many of us simply take for granted. This is an important but modest step towards a smarter, healthier Connecticut.” Research confirms that the lack of paid sick days exacerbates the impact of a health crisis. According to a report by the Institute for Women’s Policy research, during the H1N1 (swine flu) outbreak of 2009, 8 million Americans came to work while infected with the virus, infecting another 7 million people in the process. Environmental health specialists have documented how loss of pay can influence workers to show up on the job even when they have vomiting or diarrhea. Green also emphasized the benefits of the law as a common sense victory for working people. “Now more than ever,” Green said, “we should seize every opportunity to strengthen conditions for people working so hard to support their families.” Connecticut’s win was the first of three in a row last year for paid sick leave proposals. Philadelphia City Council passed a measure a month after Connecticut. Although the mayor vetoed that law, the Council later voted 15-1 for a version that applies to businesses who receive contracts or subsidies from the City. Philly’s coalition plans to re-introduce the broader bill soon. And Seattle City Council overwhelmingly approved a bill adding that city to a growing list of places which recognize the value of ensuring workers can afford to stay home when they’re sick. 2012 will see a wave of similar campaigns across the country — because workers are desperate for relief and because small business owners and policymakers are increasingly seeing paid sick days as a modest step with significant impact that keeps people employed, at a time when holding on to a decent job is especially critical. According to a poll by Quinnipiac University, 72% of Connecticut resident support the paid sick days law. Hart Research Associates found a similar majority believe that tough economic times is exactly the right time to introduce such protections. They agreed with the statement that “workers are vulnerable now and cannot afford to lose income or risk being fired simply because they have the flu or a child needs medical care.”

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Lululemon Added To Goldman Sach’s List Of Top Stock Picks

January 4, 2012

NEW YORK — Lululemon Athletica Inc.’s stock rose more than 5 percent on Wednesday after Goldman Sachs added the Canadian fitness-wear company to its list of top stock picks, citing its sales growth and appealing stock price. Lululemon has been one of the hottest chains in retailing thanks in part to the popularity of its high-priced yoga pants and tank tops. Analyst Michelle Tan said in a client note that Lululemon’s annual revenue rose more than 30 percent and still has room to go higher as it “fulfills a need in women’s activewear apparel that parallels the need that brands like Nike and Under Armour cater to on the men’s side.” Tan said that investors had previously complained about Lululemon’s lofty stock price – which closed above $57 in early November – but that the shares now provide a compelling entry point after a recent pullback. Shares of Lululemon gained $2.54, or 5.4 percent, to $49.57, in midday trading. Over the last year, the stock has traded between $32.65 and $64.49.

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Esther Loewy: The 2012 Investor "UnList"

January 4, 2012

The start of the New Year brings resolutions and to-do lists ranging from personal fitness to career changes. In the investment and start-up arena, much focus has been placed on top trends, predictions and which companies will IPO in 2012. To veer in a different direction, I feel it equally important to cite an investor “UnList” for the coming year. The UnList is a suggested guide for investors on what not to focus on in 2012 when searching for the next groundbreaking technology to invest in. 1. Don’t play games. As a serial entrepreneur once mentioned to me, “a quick no is preferable to a slow maybe.” Investors who either say they’ll respond and don’t or just never make up their mind while requesting additional material from entrepreneurs are doing a disservice to the start-up community. To quote Mike Cassidy of Google, “Speed is the Ultimate Start-Up Weapon.” Mike was mostly addressing the entrepreneurs when he addressed our audience in Istanbul this past November but his comments on acting and responding expeditiously are just as relevant to investors. Decide within two weeks if you’re moving forward and communicate with the entrepreneur if it’s a go or no go. 2. Don’t be hasty. This does not contradict No. 1. Rather, when reviewing the initial executive summary, if something catches your eye but you’re not sure — why not invest in a six-minute phone call? In our BootCamp events, we work with entrepreneurs to design concise, focused presentations in six minutes, which is a sufficient amount of time to gauge initial interest. That could make the difference in the final determination. Bessemer’s “anti portfolio” has often been cited in the VC industry — where six minutes could have made the fund into a believer of Google. The conversation was passed, the opportunity lost, and the rest is history. It’s worthwhile for investors all across the spectrum — angels, strategic and venture capitalists — to reconsider the value of six minutes at the start of this year. 3. Don’t just say no. You’ll never know when that start-up will surprise you and you’ll want to join the next round of capital. Provide some rational to your thinking — it goes a long way in breeding good faith. Spend a few minutes to give a brief explanation on why you think the product, business model or team doesn’t suit your investment strategy. If you can refer them to an industry player, potential adviser or customer — why not? 4. Don’t be afraid. Take a chance. The dichotomy of how venture capitalists are often risk averse has been lamented often by entrepreneurs. This overly cautious state sometimes leads more nimble, non-VC players to jump in where VC’s fear to tread. It’s often ironic that venture capitalists, whose very name infers risk, are often risk averse and prefer to see what their colleagues are focusing on. Makes it hard to identify the next game-changing technology when one is in “follow” rather than “lead” mode. Innovation is the engine that spurs economic growth worldwide. Make 2012 the year to rethink and consider positioning one partner as the “risk” partner; the one to advocate and take that calculated risk when the metrics are aligned. 5. Don’t rule out intermediaries. Especially for non-American start-ups, many founders are primarily tech oriented. In countries such as Israel where great technology often comes from creative technology transfer — whether from the academia or the military — extraordinary and talented entrepreneurs know how to build their product but often need help navigating the capital raising and business development labyrinth. The need is even more apparent in emerging markets where there is a limited pool of both experienced entrepreneurs and available venture capital. There is a reason why Y Combinator, TechStars, SeedCamp, Start-up Lab and others have gained traction for the pre-seed round. Incubators and accelerators have provided a tremendous boost to the start-up ecosystem, but the arena also requires another medium to step in for those accelerator graduates — to help them scale, go global, gain the critical traction. They require help to clarify their business proposition, evaluate their value, identify key partners and of understand the language of investors from multiple geographies worldwide. That’s where companies, such as BootCamp Ventures, tries to step in to help promising tech companies in Israel, Turkey and other emerging markets scale and reach global markets. Esther Loewy is a founding partner at BootCamp Ventures, www.bootcampventures, a global innovation platform for aligning game changing technology start-ups with international investors, partners and customers. BootCamp Ventures provides professional support to early-stage, high-potential, high growth and technology oriented companies in every step of the process from business strategy to financing to help companies accelerate andand compete in the global marketplace. Their 18th global innovation summit will take place in Israel March 27-28, 2012.

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Edward Murray: Nobody Hates the Rich… But Everyone Hates the Bad

January 4, 2012

It seems that those nestled snugly in the crack of our nation’s ultra-wealthy are confused about why they seem to be unpopular in the media. Many are now publicly expressing their support of the financial-legislative complex, but still wondering why thousands of people all across the country are identifying with the Occupy movement. Maybe it has something to do with the disturbing mentality of the elite that asks with arrogantly wide-eyed obliviousness, “Is it too much to ask that everyone just sit down and be nice while we destroy the middle class?” In response to the protests, Chase CEO Jamie Dimon recently stated : “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it… Sometimes there’s a bad apple, yet we denigrate the whole.” Let’s clarify once and for all that the Occupy protests are not about targeting “successful” or “rich” people. Here, Dimon is twisting the issue by trying to equate “rich” with “I-teabag-senators wealthy.” When I was a kid, I thought my aunt and uncle were rich because they could afford to make their toilet water blue; however, I wouldn’t say that those successful people had anything to do with tanking our national economy. The Occupy protests are about singling out the top 1% that has seen their income triple over the last generation (while other wage classes have remained largely stagnant) and the Houses of Ill Finance that they run. Dimon implies that the economic collapse bugaboo must have been caused by a bad apple. I mean, a trillion-dollar crash snafu couldn’t have been caused by a good apple, right? A good apple would never engage in robo-signing (forgery) on foreclosure notices , or mislead (defraud) investors in a mortgage securities scandal , make illegal payments (bribe) civic officials , or leak false information (lie) when trying to overtake another bank . A good apple wouldn’t probably wonder aloud how in the hell it became the head of a multi-national financial conglomerate before going home to his kiwi. In response to the Occupy protests, John A. Allison IV, ex-CEO of BB&T bank said : “Instead of an attack on the 1%, let’s call it an attack on the very productive. This attack is destructive.” Allison’s words are the destructive force here, as they paint a disturbingly myopic portrait of working-class Americans and ring of class warfare. Allison, whose bank took $3 billion in TARP bailout funds , basically said “You’re an unproductive shlub who punches a timecard. Is that what they’re called? Timecards? Haha! Just kidding! I know what timecards are, I keep a fresh roll of them next to my crapper! And I got a picture of your momma at the bottom of the bowl!” Allison’s aggressively elitist words aren’t those of a good apple, but rather, the words of what is said when you try to hold your tongue and say the word ‘apple.’ Robert Rosenkranz, CEO of Delphi Financial Group defended the 1% by saying : “It’s simply a fact that pretty much all the private-sector jobs in America are created by the decisions of the 1% to hire and invest. Since their confidence in the future more than any other factor will drive those decisions, it makes little sense to undermine their confidence by vilifying them.” Actually, it makes a lot of sense to vilify those who created an unhealthy, unsustainable bubble of predatory lending that has, apparently, given the 1% the excuse to stop investing and hiring, which is clearly exhibited by the doubling of the unemployment rate between 2008 and 2009. (It would also really make sense to jail many of those people, as well, but we’ll explore that at another time.) The 13.3 million people who are currently unemployed and those who have been hit with an estimated 8 million foreclosure filings between 2009-2011 aren’t worried about offending the delicate sensibilities of the 1% or shaking their confidence. Rosenkranz’s defense not only makes him complicit in these matters, but it reeks of oblivious, ivory tower cocktail party chatter. It’s bad when a well-documented philanthropist like Rosenkranz stands up for his cronies rather than the marginalized majority. Leon Cooperman, chairman of Omega Advisors Inc. and former CEO of Goldman Sachs Group Inc. (GS)’s Money-Incubation Unit, recently wrote an open letter to President Obama in which he very thoughtfully and articulately lays out his legitimate concerns for the country. Unfortunately, his heartfelt evaluations boil down to simply chastising the president for framing the debate along partisan lines. The Occupy protests aren’t a partisan issue and the president doesn’t have the ability any more than you or I to make it one. This shows a severe disconnect between the situation as it stands and Cooperman’s perspective. Cooperman also said, without even the slightest hint of irony that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. I know how he feels; I can’t walk through the dining room of St. Andrews Country Club without being tackled and cuffed with the ol’ Exotic Brownie Shackles. “You’ll get more out of me,” Cooperman said, “if you treat me with respect.” I’m pretty sure that the billionaire is usually treated with a large amount of respect, which means that we’re already maxed out on what we’re going to get out of him. Again, this unfortunate obliviousness from the uber-wealthy shows that even when they speak out on the matter of the protests directed at the economic inequality gap in this country, they present themselves as comically out of touch with exactly what they are trying to address. It’s never a good sign for the health of a culture when the power brokers expose themselves to be woefully disconnected from the society they inhabit. And when Home Depot co-founder Bernard Marcus was asked about the protestors, his response was , “Who gives a crap about some imbecile? Are you kidding me?” Someone should tell Marcus that he’ll get more out of the imbeciles if he treats them with respect. Someone should also remind him those same imbeciles are the ones who made him rich because they thought they could save a few bucks building a backyard deck that was never quite level. Forget the bad apple theory here, Marcus sounds like a bushel of dick apples. I recently saw the film It’s a Wonderful Life for the 2011th time, and I couldn’t help but notice the parallels between the villainous Henry Potter, the richest man in Bedford falls, and the financial titans of today. Mr. Potter devoted his life to squeezing as much blood capital as he could from the stones of the middle class while our current financial heads devoted their lives to artificially inflating a housing bubble with toxic mortgages and then robo-signed millions of foreclosure notices with a complete lack of social conscience. Jamie Dimon, Bank of America CEO Brian T. Moynihan, Goldman Sachs CEO Lloyd Blankfein, as well as a bevy of high-ranking executives from AIG, Citi, Morgan Stanley, etc… are the equivalent of Mr. Potter, the foil to the hard-working George Bailey, and therefore represent the absolute embodiment of evil in American culture. George Bailey’s dad said that Potter was, “Oh, he’s a sick man… sick in his mind , sick in his soul , if he has one.” This statement echoes what many believe concerning those who reap the benefits of fleecing the American people amongst the highest wave of economic inequality since the Great Depression without an iota of humility to split amongst them. Jamie Dimon was right about the “bad apple” but something else he doesn’t understand is that nobody is upset simply with his personal success. It’s just that we, as a culture, are taught to harbor a disdain for people who aggressively exploit the many simply for the sake of material gain. We are taught that the Mr. Potters of the world are bad people. But the Potters of the world aren’t bad because they’re rich. They’re not bad because they’re successful. They’re bad because… they’re just simply bad.

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2.1 Million Fords Sold Last Year

January 4, 2012

DETROIT — Ford Motor Co.’s U.S. sales rose 11 percent in 2011 thanks to strong demand for its trucks and SUVs. Ford sold 2.1 million vehicles last year, a sign of the industry’s continuing recovery. It was the first time the Ford brand has passed the 2 million mark since before the recession in 2007. Strong sellers included the new Ford Explorer SUV, which more than doubled sales from 2010. The Escape small SUV and Ranger small pickup also posted big increases. Ford’s car sales rose 4 percent. Sales of the Fiesta subcompact nearly tripled over 2010, but Ford didn’t get much traction with its new Focus small car. Ford’s Lincoln brand sales were flat. Ford says December sales climbed 10 percent over the same month last year.

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Could Ohio Earthquakes Incite A Fracking Policy Shift?

January 3, 2012

COLUMBUS, Ohio — In Ohio, geographically and politically positioned to become a leading importer of wastewater from gas drilling, environmentalists and lawmakers opposed to the technique known as fracking are seizing on a series of small earthquakes as a signal to proceed with caution. Earthquakes caused by the injection of wastewater that’s a byproduct of high-pressure hydraulic fracture drilling, aren’t new. Yet earthquakes have a special ability to grab public attention. That’s especially true after Saturday’s quake near Youngstown, at magnitude 4.0 strong enough to be felt across hundreds of square miles. Gov. John Kasich, a drilling proponent, has shut down the wastewater well on which the quake has been blamed, along with others in the area, as the seismic activity is reviewed. “Drilling’s very important for our economy and to help us progress as a state, but every single person in the Mahoning Valley felt this earthquake,” said state Sen. Joe Schiavoni, a Youngstown Democrat who on Tuesday called for a public hearing. “I wouldn’t deem it as an emergency, but when you live in a place that you’re not used to earthquakes and you have 11 earthquakes, you’re concerned,” he said. “We need to give them some sort of confidence or security that this is going to be OK.” Fracking involves blasting millions of gallons of water, laced with chemicals and sand, deep into the ground to unlock vast reserves of natural gas, a boon both for energy companies and a public hungry for cheap sources of fuel. That process, though, leaves behind toxic wastewater that must be expensively treated or else pumped deep into the earth. The wastewater is extremely briny and can contain toxic chemicals from the drilling process – and sometimes radioactivity from deep underground. The practice of dumping underground has been controversial in light of scant research done on potential environmental dangers, highlighted by reports of contamination of aquifers in some communities in Pennsylvania and Wyoming. Some states are reconsidering it. A coalition of environmental groups is preparing a protest for next week’s return of the Ohio Legislature. Activists opposed to increased oil and gas drilling activity across Ohio, Pennsylvania, New York and West Virginia – where the Utica and Marcellus Shale formations are believed to hold vast quantities of gas – see trouble with the Ohio injection well. It took wastewater from fracking, as well as other forms of drilling. “What other business or industry isn’t held accountable for its full cradle-to-grave processes?” said Deborah Nardone, director of the Sierra Club’s Natural Gas Campaign. “They need to be responsible for the waste stream that they’ve created.” Ohio’s closure of the well will have little to no impact on drilling, said Travis Windle, a spokesman for the Marcellus Shale Coalition, an industry group based in Pennsylvania. Four of the five wells that Ohio shut down were not operational, Windle said. Pennsylvania’s drillers have turned in recent months to deep-well injection of millions of gallons of wastewater because of a voluntary state moratorium last year on dumping of waste at treatment plants where the partially treated liquids are discharged into rivers and streams that drinking water is taken from. Most drillers in Pennsylvania accepted a voluntary state moratorium last year on dumping of waste at treatment plants, which had discharged the partially treated mix into rivers and streams that supply drinking water. Many drillers now recycle the drilling fluid, and some turned to deep-well injection of millions of gallons of the wastewater. Pennsylvania has six deep injection wells that currently accept fracking fluid, said Amanda Witman, a spokeswoman for the Department of Environmental Protection. But some of its waste is trucked into Ohio, where the geology allows for more injection wells. Ohio’s willingness to accept the fracking leftovers amid a drilling boom in states to the east, south and west worries some residents and environmental advocates who say the science isn’t proven – and point to the earthquakes as evidence. The Ohio Petroleum Council, an industry group, says any public anxiety is misplaced. “Injection wells have worked well to protect public safety for decades, and a situation like the one in question near Youngstown is very rare,” executive director Terry Fleming said in a statement. Kasich told reporters over the weekend that he doesn’t believe the energy industry should be blamed for issues arising from disposal of their byproducts. That would be like blaming the auto industry for improper disposal of old tires, the first-term Republican said. Scientists have known for decades that drilling or injecting water into areas where a fault exists can cause earthquakes, said Paul Hsieh, a research hydrologist with the U.S. Geological Survey in Menlo Park, Calif. “That’s widely documented and accepted within the science community,” he said. “It’s seen all over the world.” Injection wells have also been suspected in quakes in Arkansas, Colorado and Oklahoma. Oklahoma’s sharpest earthquake on record, of magnitude 5.8 on Nov. 5, was centered on a county that has 181 such wells, according to Matt Skinner, a spokesman for the Oklahoma Corporation Commission, which oversees oil and gas production in the state and intrastate transportation pipelines. However, a study by the Oklahoma Geological Survey released earlier in 2011 found that most of the state’s seismic activity didn’t appear to be tied to the wells, although more investigation was needed. “It’s a real mystery,” seismologist Austin Holland said in November. “At this point, there’s no reason to think that the earthquakes would be caused by anything other than natural” shifts in the Earth’s crust. New York state’s Department of Environmental Conservation is wrapping up an environmental impact review and proposed new regulations for gas drilling. Permitting for new gas wells has been on hold since the review began almost four years ago. While the proposed permit guidelines do mention injection wells as a possible means of wastewater disposal, any shutdown of such wells in Ohio would have no effect on New York’s regulatory process, department spokesman Emily DeSantis said Tuesday. James Smith, spokesman for the Independent Oil & Gas Association of New York, said he knows of no drillers in the state who are shipping waste to Ohio and whether they would in the future is a matter of speculation. ___ Associated Press writers Kevin Begos in Pittsburgh, Mary Esch in Albany, N.Y., and Justin Juozapavicius in Tulsa, Okla., contributed to this report.

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Evidence Links Fracking To Ohio Earthquakes

January 3, 2012

CLEVELAND — A northeast Ohio well used to dispose of wastewater from oil and gas drilling almost certainly caused a series of 11 minor quakes in the Youngstown area since last spring, a seismologist investigating the quakes said Monday. Research is continuing on the now-shuttered injection well at Youngstown and seismic activity, but it might take a year for the wastewater-related rumblings in the earth to dissipate, said John Armbruster of Columbia University’s Lamont-Doherty Earth Observatory in Palisades, N.Y. Brine wastewater dumped in wells comes from drilling operations, including the so-called fracking process to extract gas from underground shale that has been a source of concern among environmental groups and some property owners. Injection wells have also been suspected in quakes in Ashtabula in far northeast Ohio, and in Arkansas, Colorado, and Oklahoma, Armbruster said. Thousands of gallons of brine were injected daily into the Youngstown well that opened in 2010 until its owner, Northstar Disposal Services LLC, agreed Friday to stop injecting the waste into the earth as a precaution while authorities assessed any potential links to the quakes. After the latest and largest quake Saturday at 4.0 magnitude, state officials announced their beliefs that injecting wastewater near a fault line had created enough pressure to cause seismic activity. They said four inactive wells within a five-mile radius of the Youngstown well would remain closed. But they also stressed that injection wells are different from drilling wells that employ fracking. Armbruster said Monday he expects more quakes will occur despite the shutdown of the Youngstown well. “The earthquakes will trickle on as a kind of a cascading process once you’ve caused them to occur,” he said. “This one year of pumping is a pulse that has been pushed into the ground, and it’s going to be spreading out for at least a year.” The quakes began last March with the most recent on Christmas Eve and New Year’s Eve each occurring within 100 meters of the injection well. The Saturday quake in McDonald, outside of Youngstown, caused no serious injuries or property damage. Youngstown Democrat Rep. Robert Hagan on Monday renewed his call for a moratorium on fracking and well injection disposal to allow a review of safety issues. “If it’s safe, I want to do it,” he said in a telephone interview. “If it’s not, I don’t want to be part and parcel to destruction of the environment and the fake promise of jobs.” He said a moratorium “really is what we should be doing, mostly toward the injection wells, but we should be asking questions on drilling itself.” A spokesman for Gov. John Kasich, an outspoken supporter of the growing oil and natural gas industry in Ohio, said the shale industry shouldn’t be punished for a fracking byproduct. “That would be the equivalent of shutting down the auto industry because a scrap tire dump caught fire somewhere,” said Kasich spokesman Rob Nichols. He said 177 deep injection wells have operated without incident in Ohio for decades and the Youngstown well was closed within 24 hours of a study detailing how close a Christmas Eve quake was to the well. The industry-supported Ohio Oil and Gas Association said the rash of quakes was “a rare and isolated event that should not cast doubt about the effectiveness” of injection wells. Such wells “have been used safely and reliably as a disposal method for wastewater from oil and gas operations in the U.S. since the 1930s,” the association’s executive vice president, Thomas E. Stewart, said in a statement Monday. Environmentalists are critical of the hydraulic fracturing process, called fracking, which utilizes chemical-laced water and sand to blast deep into the ground and free the shale gas. Critics fear the process itself or the drilling liquid, which can contain carcinogens, could contaminate water supplies, either below ground, by spills, or in disposed wastewater. Permits allowing hydraulic fracturing in Ohio’s portion of the Marcellus and the deeper Utica Shale formations rose from one in 2006 to at least 32 in 2011.

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‘We’re Just Ruining Ourselves.. Destroying Ourselves’

December 31, 2011

A decade ago, customers flocked to the store in the converted fire station on the east side of Toledo, Ohio, in pursuit of Old Glory. Howard Pinkley established Flags Sales & Repair in 1960, and runs it with his daughter, Wendy Beallas. In days after Sept. 11, 2001, customers lined up outside the door. Americans wanted to show their pride, their determination, their Americanism. It’s all a fading memory now. These days, folks are focused on paying bills. A new flag is a luxury, and the unvarnished patriotism of 10 years ago has been replaced by disgust with government. A recent Wednesday saw just two walk-in customers. Father and daughter have cut their payroll, but talk openly about whether they should give up. They’re no less dispirited than their neighbors. “I go home and I refuse to listen to the news because it’s frustrating,” Beallas says. “To me, it’s not coming together and getting things done.” When Ronald Reagan ran for re-election, his advertisements boasted that it was morning in America. Nearly three decades later, as another presidential campaign begins, it feels like twilight – or, if it is morning, it is the kind of gray winter daybreak when the sun is only a rumor and only an optimist clings to hope that the clouds will break. Listen to Americans in three closely contested states and you’ll hear the same plaintive echoes, not just about politics or the upcoming election, but about the unsettling predicament that is America in 2011. Republicans or Democrats, liberal or conservative, young or old, they lack confidence – in the country’s potential to be great again, in their elected leaders’ ability to do the right thing, in the economy and in themselves. It’s not that they feel incapable of doing what needs to be done, as much as they are uncertain about what that right thing is and whether anything they can do will have any real impact. In Mount Airy, N.C., where a quaint Main Street is merely a reminder of better days: “We need to get back to the `60s and the `50s, and we need to get ourselves back to where we used to be – standing on our own two feet,” says long-haul trucker Harry J. Moore, 57, punching a beefy fist into his open left hand to punctuate each syllable. “We’re losing our pride. Our pride’s gone away.” In North Las Vegas,, Nev., where the bursting of the housing bubble has forced hard choices: “People have lost a lot of spirit,” says Elmer Chowning, 70, who had hoped to slow down in his golden years, but is instead still working in real estate while raising his 8-year-old granddaughter. In Lima, Ohio, where people have seen America’s industrial might falter: “I’m just waiting for China or somebody to take us over. That’s the way it seems,” says Becky Jamison, 36, who has watched her 18-year-old son look unsuccessfully for work for months. “Because we’re just falling apart.” ___ If you look, you can find optimism in Ohio. The Armstrong Air & Space Museum is in Wapakoneta, hometown of Neil Armstrong, the first man to walk on the moon. It stands as a monument to an earlier, more hopeful time, and there are visitors who are convinced that those times can come again. To Stephen Andrasik, a foam salesman from Indianapolis who has stopped in to the museum on his way back home from a business trip, the U.S. remains resilient, facing problems that can be solved by new leaders in Washington who will allow Americans to live up to their potential. “I think we’re still the same people we were back then,” says Andrasik. He studies a display case filled with inventions that were spinoffs of the space program, everything from fireproof clothing to battery-powered hand tools. “I’m assuming it’s going to get better as long as the American people have the ability to do what they want, to invent things, to start new businesses, we’ll be as great as we’ve always been.” But standing before a model of the Apollo 11 command module at the edge of the museum’s parking lot, Jake Retter, a chimney cleaner from Blissfield, Mich., notes the irony of a country that once raced a communist rival to put a man on the moon and now relies on China to buy its debt. Rather than pursuing national goals, politicians chase their own divisive agendas, he says. A nation built on hard work and thrift has lost sight of what really matters. “This country’s been falling apart for the last 50 years. It’s taken time,” Retter says. “It’s not that capitalism is failing us. It’s that we’re failing capitalism.” For many years, this region provided the muscle of American capitalism. Its pride in its talent for making things is evident in Toledo place names such as Jeep Parkway and the Veteran’s Glass City Bridge. The long, slow decline of factory work has been a source of constant sorrow in the Rust Belt. Recent stirrings such as announcements by Chrysler and General Motors that they will add 1,400 new jobs at their plants in Toledo, and Ford’s plans to ramp up engine production in Lima have offered some reason to hope. “I can definitely feel like the forward momentum is there” – jobs at the union hall are picking up, says Kurt Kaufman, 31. A union electrician, he worked steadily until 2006. He has since spent as much as nine months between jobs. Still, he says, “I don’t think it’s ever going to be as good as it was around here.” But a bad economy, some say, is not at the core of what ails northwestern Ohio, and America. There have been hard times before, and there will be again. The real problem, they say, is in Americans and their leaders. “What’s different from this and the Great Depression is that the moral fiber has changed,” says Russ Terry, a retired postal carrier who lives outside Lima and has stopped in for a morning break at The Meeting Place on Market, a coffee and sandwich shop downtown. “The reason we can’t handle this is we don’t have the moral backbone, the stick-to-it-tiveness, the collective people working together.” Terry, who describes his politics as very conservative, blames the federal government for printing too much money in an attempt to stimulate the economy. But at its heart, the country’s failings reflect the will of individuals, he says. “The government is just a reflection of the people, is it not?” Just down the road from Toledo’s GM plant, Martin Ridener says his worries are based on more than 20 years of running a 16-unit apartment building he once thought would pay for his retirement. Instead, a building that used to generate a steady income is now barely covering its expenses, as many tenants lose jobs, fall behind on rent and move out. Ridener, who is 75 and votes Republican, can’t imagine voting for President Barack Obama given the state of the economy, but he can’t see how Republicans taking over the White House will make things any better. “I don’t consider either side wrong in what they’re doing. What I resent is that every Democrat thinks completely one way and every Republican thinks another way. They’re afraid to talk over it and do what’s best for the country.” Across town, most of the red-checked tables are full at the Hungarian hot dog purveyor Tony Packo’s. But between bites, Pat Shupe, a 72-year-old homemaker, says she worries about the world her 3-year-old granddaughter will inherit with seemingly limited opportunities. “I absolutely see no light at the end of the tunnel until something is done in this country to equalize opportunity for people to get a job,” Shupe says. While the 2008 election gave her hope that the country could work through its problems, the gridlock in Washington has robbed her of that brief optimism. “I think we’re just ruining ourselves,” Shupe says, “destroying ourselves.” Not everyone shares that bleak outlook. Terri Leary’s employer eliminated her job as a senior housing manager in 2009, six months after her husband lost work in construction management. Leary, 44, was convinced that her lack of a college degree had made her expendable, so she enrolled at Owens Community College’s campus in Perrysburg. Days before her graduation ceremony in early December, she sat in the commons area of College Hall and described the tough times of the past few years as an opportunity, an outlook entirely decoupled from politics. The job losses and belt-tightening, she is convinced, were “a good thing. It teaches the kids very valuable life lessons, you know, make good with what you have. … We learned we can do more with less and be just as happy.” There are lessons to be learned, agrees 29-year-old Erin Tupper. She and her husband, Marc, have much to be thankful for. They have been married just a week, they have a home of their own (albeit modest and worth less than it used to be), and Marc prizes his job as a police officer. But they look around, and see evidence of an America that has lost its way. Erin, recalling her father’s pride in his work as a truck driver hauling new Jeeps off the Toledo assembly line, says she and her friends talk now of employers who pile on hours while treating workers as expendable. When she drives near her childhood home, she is dismayed by the big homes on what was once farmland, a sign of misplaced values centered on instant gratification and overspending. People seem to be more concerned with themselves and their own narrow interests than in working together for the common good. “We’re learning a lesson,” she says. And if we don’t, “we’ll be right back to where we were.” ___ “Your Community of Choice,” reads the motto on signs spread around the city of North Las Vegas, and for a while it was. Once among the fastest-growing places in the country, the city saw thousands of stucco and tile-roof homes sprout up to accommodate retirees and a middle-class workforce coming for jobs in the booming casino and construction industries. The city added workers, increased revenue and embarked on ambitious plans for redevelopment projects to keep pace with the growth. Today the community is deeply in debt, cutting programs, laying off employees, fending off a possible state takeover and weighing still more difficult decisions that will directly affect the 220,000 people who live here. Talk to people on the street, in the library, at the recreation center, and seemingly everyone knows someone who is out of work. If they own a home, its value has decreased substantially and their neighborhoods are filled with forsaken properties. You can’t watch TV without seeing local commercials for help with loan modifications or from lawyers pledging to keep the banks from your assets. The Neighborhood Recreation Center sits in the old part of town, a lifeline for senior citizens in need and young people whose parents can’t afford fancy gyms. Over the summer, struggling to plug an overall $30 million budget deficit for the fiscal year and unable to reach a deal with police unions over cuts, the North Las Vegas City Council voted to close the center. People who consider it a second home revolted, descending on council meetings with signs and petitions in hand. The facility was saved only after the local police union agreed to defer for six months a cost-of-living increase and distribution of accumulated holiday pay. That was enough to keep the center open through next summer. Recreation supervisor Neil Gallant sits at a desk littered with spreadsheets as he works to find grant money or other ways to subsidize the center’s costs. He talks of his seniors feeling “abandoned” when the City Council voted to close the center and of a sense of disconnection between elected leaders and those they serve. The politicians don’t know the people, Gallant says. “They don’t see them.” That sentiment was echoed by so many in North Las Vegas, but especially Gallant’s struggling older clientele. They are women like Nita Hargis and Maxine Delisle, who live on meager Social Security checks and depend on the center’s $1.50 hot lunch (rising to $3 come January) and the companionship they find in ceramics class. One Thursday, instead of molding candy dishes, they vented about the state of their community and the country, and the overarching theme was one of neglect – a feeling that every level of government is ignoring their needs and has failed them, despite so many promises to do otherwise. For Hargis, a 65-year-old who has lived almost her entire life in North Las Vegas and worked a variety of jobs – painter, gift shop clerk, remodeler – recent efforts to attempt to modify her home loan left her exasperated and in worse shape than she started. “They ran me around for nine months. They ruined my credit. I even got one of these government guys that was supposed to help me, and all he did was say, `Well, call `em back, call `em back.’ He never did anything to help me,” she says. For Delisle, it’s the glaring imbalance between people like her and those in government that leaves her feeling alienated. She notes that there hasn’t been a cost-of-living increase in Social Security for three years, yet it took months of difficult negotiations to get the local police union to agree to forgo its adjustment for just six months. Nineteen-year-old Oscar Corral works the front desk at the recreation center. He’s a philosophical young man with an optimistic smile and outlook. Neither of his parents graduated from high school, and yet his mom is an accounting manager at a local cab company while his father works construction. His dad was laid off not long ago but soon found another job and is “hanging on a thread.” “There’s this thing about humans. When they’re pushed, I guess they go into survival mode and they really work hard,” says Corral, who studies audio production at The Art Institute of Las Vegas. He likens the many problems facing Americans right now to climbing a mountain. “From far away,” he says, “it looks impossible. But when you start getting close up, you see there’s cracks here that I can climb up and you just attack it little by little. … Sometimes we just get caught up in the big problem.” It’s true that in North Las Vegas, as is the case nationally, the problems are so big it’s hard not to get caught up in them. Short-term fixes and eventual union concessions kept the city afloat this fiscal year, but already officials are predicting a $15.5 million deficit for the next budget cycle. Says Elmer Chowning, the real estate agent: “We’re a fast society. We want things to happen. And this is a thing that is lingering, lingering, lingering.” It’s no wonder, he adds, that people have taken to streets and parks in the Occupy Wall Street protests. “There is a tremendous feeling of camaraderie,” he says, but also “hurt and madness.” A couple of weeks ago, North Las Vegas and its residents did their best to put all of that aside for a time. Hundreds gathered on an unusually blustery evening to celebrate the grand opening of a nine-story City Hall – a project launched when the city was flush – and watch as the town Christmas tree was lit. It was a night meant to represent a fresh start, the promise of tomorrow. Nita Hargis was there with some of her friends from the recreation center, wondering aloud why the city felt the need to hand out commemorative tiles and paperweights and what was the cost to taxpayers. The Chownings brought their granddaughter, and stood in the back as a children’s choir sang Christmas carols and ballerinas danced on the shiny new granite floor. Soon they, and everyone, were joining in the carols, applauding the entertainers, sipping hot chocolate. Soon, their worries seemed to fade. At least for one night, anyway. ___ By comparison, Mount Airy is a bit of fantasy in the foothills of the Blue Ridge mountains. The hometown of Andy Griffith, it is Mayberry – America as it used to be, or as we would like to believe it used to be, when the nation’s industrial and military might was unquestioned and seemed unbounded; when a man, even one without a high school diploma, could earn enough to own a house, buy a new car every couple of years and send his kids to college for a better life than even he’d enjoyed. Stroll down Main Street, and you expect to meet characters like Aunt Bea, Goober and Floyd the barber. They’re not here. Instead, you’ll find businessmen and women struggling to survive the recession by selling nostalgia, and real people eager to buy. “They’re looking for what we wish that times could be again,” says Debbie Miles, who moved here with her husband from southern Indiana five years ago and opened Mayberry on Main, where the walls and shelves are lined with items like Aunt Bea’s Kerosene Cucumbers and Otis’s Moonshine Jelly. “That’s the main thing that we hear. `We wish that it could be like that again – like it was on the show.’” Business is down about 10 percent from a couple of years ago. But Miles can’t afford that kind of pessimism. “You know, if you’re an optimistic person, you think there’s nowhere to go but up,” she says with a laugh. “It probably does try everyone, but I think you still have to be optimistic, you know? That’s what Americans are supposed to do – think for the future.” Darrel Miles – who, like his wife, is a registered Democrat but did not vote for Obama – finds it a bit harder to be hopeful. “I think they need to turn the whole upside down in Washington and shake it real good,” says Miles, who worked 32 years for a company that made soda and ice dispensers. “I think we might have the wrong government, the wrong people trying to fix certain things. There’s too many hands in the fire, as you would say. I mean they can’t even come to agreement even within their own parties to fix certain things, you know?” Across the street, at Snappy Lunch, business is down 20 percent or 30 percent over a couple of years ago, says Mary Dowell, whose husband, Charles, has owned the restaurant since 1960. “We still have tourists who come in, but the bus groups have dropped a little bit,” Dowell says over the sizzle of meat for the diner’s “famous pork chop sandwich.” “Last year, I did have to give everybody a day a week off, because we were so slow. And we’ll probably do that this year.” On this sunny afternoon, Jennifer Brown stands outside Snappy Lunch and peers through the window. Her parents, Steve and Diane, both have good jobs in manufacturing. But the 27-year-old Cleveland-area woman, who has an associate’s degree in office management, can’t find permanent employment. “I did telemarketing. I worked at a park. I even worked at a county fair for a week,” she says. “I’m doing side jobs, some retail. But nothing that I wound up being able to keep.” Her mother, whose company was recently bought out by a European firm, can’t help feeling that the U.S. is in decline. “Because the average person can’t graduate from high school and find a job,” she says. “It’s easier for somebody to come from another country and get started than it is for us who grew up here.” “Mmmm,” her daughter nods in agreement. Jennifer Brown motions to the street scene around her. “This is where it needs to go back to,” she says. “Like the American dream. America, not the socialist stuff that’s going on. And where you could just, you can get a job.” Around the corner from the bustle of Main Street, in front of the Andy Griffith Playhouse and Museum, Sheriff Andy Taylor and son Opie stride in bronze, hand in hand, rods over their shoulders, toward an imaginary fishing hole. A plaque at their feet reads, “a simpler time.” Inside the museum, the gauges on two vintage “ethyl” gas pumps are frozen at 17.9 cents a gallon. Oil worker Jeff Zwicker of Vacaville, Calif., poses for a photo with museum founder (and Griffith childhood friend) Emmett Forrest. Zwicker, 55, a 20-year Air Force veteran who served on cargo planes in Operation Desert Storm, is worried about the deficit and American indebtedness to foreign creditors such as China. But if Washington can get those things under control – and he’s confident it can – “I think the future’s great for our country.” “We’re a great nation,” he says. “We have a lot of smart people here, and if we put all the smart people on this and get it going. But you’ve gotta get serious about it, you know? You’ve gotta really do it. You’ve gotta WANT to do it.” Forrest isn’t so sure. The 84-year-old former electric company vice president says Obama has “taken us down the path to absolute ruin” and, if he’s re-elected, “there’ll be no recovery from it.” “Ten or 20 years ago, I think we were the shining star of the world, and our star has dimmed quite a bit,” he says. “I guess I’m just cornpone patriotic. I love this country and hate to see it go down.” But to Pablo Hernandez, these are good times. Hernandez, 45, came here from Mexico in 1987. He traveled the country, picking apples, oranges, tomatoes – “everything” – before landing a job at a chicken-processing plant in nearby Dobson. For the past five years, he and his wife, Salustria, 33, have operated La Sierrita Tienda Mexicana in a strip mall on a bypass outside downtown. They sell everything from black beans and dried chilies to CDs from groups like Los Rancheros and Fortunato y sus Cometas. Sure, Hernandez is concerned about the recent wave of anti-immigrant sentiment in places like Alabama and South Carolina. The couple’s two daughters – Lesley, 13, and Nadia, 6 – were born here, but the parents have their green cards. But he is not a pessimist. The American Dream “is still alive for me,” he says, as Nadia reads a picture book beneath a ceiling dangling with colorful pinatas. “Because I’m still here, you know.” ___ Pauline Arrillaga reported from North Las Vegas, Nev., Allen G. Breed reported from Mount Airy, N.C., and Adam Geller reported from Toledo and Lima, Ohio. They can be reached at features(at)ap.org.

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Office Cleaners, Building Owners Get To Yes

December 31, 2011

New York office cleaners and building owners reached a tentative four-year labor agreement late Friday, averting a potential New Year’s Day strike. The agreement, which covers more than 22,000 New York City office cleaners represented by the Service Employees International Union Local 32BJ, will give the cleaners a nearly 6 percent wage increase over the life of the contract. Each worker will also receive cash bonuses totally $1,100. The contract, which union members must ratify, maintains employer-paid family health care coverage. “The new contract is not just an important victory for office cleaners and their families, but for our economy and our city,” said Hector Figueroa, secretary-treasurer of SEIU Local 32BJ, in a statement. “In these tough times the workers who keep New York City’s corporate offices and landmark buildings clean and well maintained have stood up for the good middle class jobs our economy and our city needs.” Building owners had sought to create a two-tier wage system under which new hires would never earn as much as current union members. They also wanted to eliminate a system of automatic employee contributions to the union’s political fund. Neither proposal is part of the union’s final agreement with building owners, said Kwame Patterson, a spokesman with SEIU Local 32BJ. Unionized building workers clean and maintain about 1,500 buildings in New York, including landmarks such as Rockefeller Center, the MetLife Building, the Empire State Building, the Chrysler Building, Grand Central Station, the Port Authority and the Time Warner Center, along with educational institutions such as New York University and The New School. New York building cleaners had threatened to establish picket lines in major cities around the country and had collected pledges from unionized cleaners elsewhere and other organized labor not to cross those picket lines. Such tactics would have expanded the effects of a potential strike beyond New York City, left thousands of buildings without needed staff and involved at least 100,000 workers. “We are pleased to have reached a tentative agreement with the union that protects workers’ wages and benefits, and provides crucial cost-savings to building owners, who have been battered in this deep recession,” said Howard Rothschild, president of the Realty Advisory Board on Labor Relations, the group negotiating on behalf of building owners with the union. In the last three months, Local 32BJ has reached new, multi-year contracts for more than 50,000 workers in Connecticut, New Jersey and Virginia. In 2012, SEIU is set to renegotiate contracts for another 155,000 cleaners across the United States. With more than 120,000 members, including 70,000 in New York state, SEIU Local 32BJ is the largest property-service workers union in the country and the largest private-sector union in the state.

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Nuclear Power Play Reveals Washington’s ‘Ugly Underbelly’

December 29, 2011

WASHINGTON — A feud at the Nuclear Regulatory Commission, where five presidentially appointed commissioners oversee the safety of the nation’s nuclear power reactors, has broken out into full public view, with Chairman Gregory Jaczko’s fellow commissioners assailing his character and management style, both in a letter made public earlier this month and in the resulting testimony before Congress . Republicans have begun calling for Jaczko’s ouster. “The situation at the NRC sounds dire,” wrote Rep. Ed Whitfield (R-Ky.) in a letter to President Barack Obama , “leaving me very concerned that the Chairman is unable to lead the Commission in the fulfillment of its responsibilities.” On K Street, energy lobbyists have rallied to support the four other commissioners. So far, the White House is standing by Jaczko , one of the least industry-friendly leaders to serve at the Nuclear Regulatory Commission in a generation. For Washington’s tight nuclear policy circle, where scientifically trained political operatives move back and forth between the industry, the NRC, the Department of Energy and key congressional committees, it’s d&eacutej&agrave vu. Interviews with several senior officials who worked on nuclear energy policy in the 1990s reveal that at least two of those operatives — both with strong ties to the nuclear industry — were closely involved in the ouster of an earlier reformist regulator and are now involved in the current drama. What’s unfolding at the NRC is a textbook example of a little-discussed corporate tactic that is employed against public officials in extreme situations. Observers of the way Washington works tend to describe the corruption of the political system and the people within it in terms of action and reward: Do what industry wants, and benefit both professionally and personally. But when carrots aren’t enough, corporations have sticks to swing, too. Susan McCue, who served as chief of staff for Jaczko’s former employer and chief Democratic supporter, Senate Majority Leader Harry Reid (Nev.), wasn’t surprised to see the industry strategy at work. “They have a lot of power, and they wield it,” said McCue. “They can’t tell Chairman Jaczko what to do, and I think that frustrates them.” THE FIRST COUP The Clinton administration’s skepticism of nuclear power — driven in large part by then-Vice President Al Gore — reached its fullest and earliest expression in 1994 with the installment of Terry Lash at the top of the Department of Energy’s nuclear energy program. Lash was a former staff scientist with the Natural Resources Defense Council, a prominent environmental group, and his appointment rankled nuclear industry insiders and their Republican supporters on the Hill. It wasn’t long, say energy policy staffers involved at the time, before Lash’s critics began seeking ways to undermine his position inside the department. They got their chance after the White House struck a broad agreement with Russia, in which the U.S. would help Russia protect its nuclear stockpile. GOP appropriators had zeroed out funding for the program, and they instructed the administration not to use money set aside for other purposes. Lash funded the program anyway and failed to keep congressional appropriators fully apprised of his activity. He was promptly called before a House subcommittee and publicly excoriated for his failure to communicate with Congress. A subsequent investigation by the DOE’s inspector general concluded that Lash, while violating procedure, had not broken any laws. But according to multiple sources who recalled the incident, Lash’s gaffe was clearly being exploited in the service of a coup. These sources identified two men, Bill Magwood and Alex Flint, as being directly involved in Lash’s ultimate downfall. Magwood was Lash’s deputy. He had come to the DOE from the nuclear industry, and he would return to it at subsequent points in his career. Flint, meanwhile, was a clerk for Republican Sen. Pete Domenici, who steered billions of nuclear research dollars to his home state of New Mexico from his perch as chairman of the Senate Appropriations Subcommittee on Energy and Water Development. Democrats in the Senate and DOE who were involved at the time say that the House only found out about Lash’s funding of the Russia program because Magwood, a fellow Democrat, personally alerted Domenici. One source recalled that Magwood went directly to Flint. “I know that he talked to the Hill,” said one former senior Senate Democratic aide who worked directly with Flint and Domenici’s office at the time. “Whether he came to the Hill [physically], that’s how it was brought to Domenici’s attention, was through Magwood.” Lash, realizing too late that he was the likely target of a power play by his own deputy, fought back against Magwood by stripping him of staff. Congressional appropriators then rushed to Magwood’s defense. In an eerie echo of language that would later be used against Chairman Jaczko at the NRC, Rep. Joseph McDade (R-Pa.), who chaired the House subcommittee with nuclear jurisdiction, called Lash’s move against Magwood an “unprecedented action which I believe further demonstrates the willingness of the director to treat this office as his personal playground.” In the end, Lash was not fired from the DOE, but was instead moved to a top adviser position within what is now the National Nuclear Security Administration in May 1998 — evidence that Lash had been the victim of politics rather than guilty of wrongdoing. “The Secretary just felt it was better for Terry to step aside,” given the political pressure, said a former DOE official who worked with both Lash and Magwood. Magwood, meanwhile, took over for Lash as acting director of the Office of Nuclear Energy. When George W. Bush became president in early 2001, he asked for the resignations of top DOE officials. But Magwood had a patron in Domenici, and with the senator’s support, according to people involved at the time, Magwood was made permanent director of the program. The coup was complete. In an interview with The Huffington Post, Magwood denied that he’d orchestrated Lash’s overthrow, insisting that he had never spoken to Flint, Domenici or anyone else on the Hill about his former boss. “No, he did it all by himself,” Magwood said. “The problem back in the ’90s had to do with the allocation of appropriated funds. The House Appropriations Committee was very agitated about that and made a big deal out of that. That’s what led to his issues.” Lash’s career was effectively over. “It does change your life,” he told HuffPost. “It interferes with personal relationships, the ability to work with others who were not what you would call close, personal friends, but who were acquaintances. You could see in their mind that you have become tainted, and it just makes the whole thing less comfortable, and you never know who’s doing what and who believes what at some level.” THE SPOILS Magwood built a reputation at the Department of Energy as a sharp-elbowed operator. “He was a consummate inside player, a bureaucratic power player of the first order,” recalled a former Department of Energy colleague, who, like many others interviewed for this story, requested anonymity because his current work has him interacting regularly with industry clients. But that level of ambition is hard to contain over a long period of time in a relatively small industry. Every source to whom HuffPost spoke for this story referred to other players, whether friends or foes, by their first names. Magwood never understood it’s a small world. “He always struck me as a guy who thought he was playing in a bigger political pond than he was. I mean, there are about 50 people here in town who care about nuclear energy. So it seemed like a lot of politics for no good reason,” said one Democratic lobbyist who worked in the Senate while Magwood served in the Department of Energy. Flint is known as quite the operator as well. “I am telling you this, of all the appropriations clerks, House and Senate, all of them,” said a former senior Democratic aide who worked closely with him, “there was nobody as shrewd or full of guile or as politically calculating as Alex Flint. Before you would look at the tables of what you got in terms of earmarks and count ‘em up, I kid you not, you’d count your fingers, and you walked out of the room.” Three other former top Democratic Senate aides interviewed for this article who worked closely with Flint described him in similar terms. Flint has since put those skills to work in the private sector. The year Bush was elected, Flint left Domenici’s office for the lobby shop Johnston & Associates, which represented a host of nuclear companies, including the Nuclear Energy Institute. In 2001, Flint set up his own operation, racking up $510,000 in lobbying fees from nuclear clients in 2001 and 2002, according to disclosure records filed with the Senate. That came on top of the $2.125 million he pulled in for Johnston & Associates between 2000 and 2002 — including $260,000 from Westinghouse Electric Co., one of Magwood’s employers prior to arriving at the Energy Department. When Republicans retook the Senate in 2002, Domenici assumed the chairmanship of the Energy and Natural Resources Committee, and Flint took a nearly order-of-magnitude pay cut — earning just $150,000 a year, according to the salary tracker Legistorm.com — to return to Domenici’s staff. Meanwhile, the new vice president, Dick Cheney, made nuclear power a top priority, and subsidies for the industry exploded — eventually growing by 59 percent during the Bush administration, while giveaways for fossil fuels stayed roughly flat, the Government Accountability Office reported . Two decades removed from the Three Mile Island accident, a “nuclear renaissance” was under way. With Magwood working the Hill from his new perch at the Department of Energy, Flint pushing the staff effort and Domenici leading a number of Republican nuclear boosters on the Hill, Congress passed the Energy Policy Act of 2005. It included tremendous subsidies for the nuclear industry. Shortly afterward, Flint announced that he’d accepted the top lobbying job with the Nuclear Energy Institute, the largest industry lobbying group — although he stayed with the Senate committee for two more months . He cashed his final Senate paycheck in February 2006, the same month the NEI lists as his start with the group. In his lobbyist bio at the NEI, Flint now claims credit for implementing the very U.S.-Russia agreement that precipitated the Lash affair back in 1998. Magwood temporarily left public service at roughly the same time, stepping down from the DOE in 2005, nuclear subsidies safely in place. He set up his own consulting shop, which he called Advanced Energy Strategies, and began cashing in. Magwood had a wide range of nuclear clients, many of them in Japan, including the Federation of Electrical Power Companies in Japan, IBT Corp., Marubeni Corp., Mitsubishi Heavy Industries, RW Beck, Sumitomo Corp., CLSA Japan Equities Division and the Japan Atomic Energy Agency, according to financial documents Magwood provided as part of a later nomination and confirmation process, which were obtained by HuffPost. As HuffPost reported earlier , Magwood’s client list included the Japanese firm Tepco, which owns the Fukushima nuclear facility that melted down earlier this year following the devastating earthquake and tsunami. He confirmed the connection under Senate questioning. Magwood returned to regulatory work in 2009 — this time at the Nuclear Regulatory Commission. THE SAME PLAY The current fight against NRC Chairman Jaczko began with anonymous accusations that he was improperly asserting his authority to follow an administrative dictate, namely to shut down the planning for the Yucca Mountain nuclear waste repository, and that he’d been heavy handed with fellow commissioners, while failing to fully communicate in the wake of Fukushima — precisely the sort of charges leveled at Lash. An inspector general investigation was launched — step two — and, again, it found that the head of the federal office in question had acted within his legal authority and that he was carrying out administration policy. Step three in the playbook went public on Friday night, Dec. 9. Rep. Darrell Issa (R-Calif.), an industry ally whose fourth-largest campaign contributor is a company that owns a nuclear plant in his district, released a letter signed by Magwood, another Democratic NRC commissioner, and the two Republican commissioners attacking Jaczko. Internal emails released by Rep. Ed Markey (D-Mass.) show that staff for Magwood and Sen. James Inhofe (R-Okla.) closely coordinated the gathering of information damaging to Jaczko, information that the Markey emails later showed to be false. On the Monday after Issa released Magwood’s letter, Flint’s Nuclear Energy Institute issued a statement that echoed it, sometimes verbatim. Both the letter and the statement referenced “a chilled work environment,” and, while the statement didn’t explicitly call for Jaczko’s head, it left little room for doubt, saying that the industry was “confident that Congress and the White House will take the steps necessary.” (Despite the work environment charge, the NRC has routinely been rated as one of the best agencies to work for in the federal government, according to anonymous surveys of government employees.) David Lochbaum, a nuclear engineer and director of the Nuclear Safety Project at the Union of Concerned Scientists, said reformist commissioners at the NRC naturally tend to generate more conflict within the agency. “When you rock the boat and you disturb that status quo, that tends to be more of an irritant than if you don’t make waves,” Lochbaum said, adding that the last time there was this much internal static at the nuclear regulator was in the late 1990s, when Chairwoman Shirley Jackson famously tussled with her fellow commissioners — as well as with Domenici. The issue that most frequently provoked the commissioners under Jaczko, said Lochbaum, who worked briefly for the NRC himself in 2009 and 2010, had to do with the somewhat blurry line between what are considered day-to-day operations — the purview of the chairman — and matters of policy — which are supposed to be the province of the full commission. Who had what power was the animating criticism of Jaczko’s decisions to put the commission on emergency footing to study and upgrade safety at U.S. nuclear plants after the Fukushima disaster and to close out the NRC’s scientific review of the Yucca Mountain facility. The commissioners charged that Jaczko failed to consult them fully. A former senior Democratic aide who has worked with Jaczko, Magwood and Flint sees more political motivations at work behind the attacks on Jaczko. Magwood “and the industry hate Greg because they think he was put on the commission by Reid, who’s anti-Yucca, and he’s gonna be a Reid stooge. And you know what? They’re f*cking right,” the former aide said. “That’s exactly why he was put on there. But that commission and that agency were complete and total captives of the nuclear agency. One and the same. And what’s happening now is Alex is orchestrating this whole thing, and Magwood is.” For all its brazenness, a Democratic lobbyist and former senior Senate aide who worked on nuclear policy with Magwood and Flint sees the attack on Jaczko as a bit cowardly. “This whole thing is just a big proxy fight, where Greg is at the center of a fight where no one wants to take on the actual people you need to fight with, Harry Reid and Barack Obama, on Yucca Mountain. I mean, going after the civil servants, it’s just pathetic,” he said. Lochbaum, though, said he thinks the charge that the NEI is driving the turbulence goes too far, despite its well-known opinion of Jaczko. “The industry would certainly be pleased if Jaczko found another vocation,” Lochbaum said. “But I don’t think they are egging the other commissioners on. A lot of critics try to claim the industry controls the commission, but I really think they’re just smart people, and they feel their abilities aren’t being fully used.” Whether the NEI is leading from in front or behind, step four came the following Wednesday, Dec. 14, when Rep. Issa and fellow Republicans raked Jaczko over the congressional coals at a hearing of the House Oversight and Government Reform Committee. Later that day, the NEI blasted out a transcript of Issa’s hearing to key energy policymakers, according to one person who received it. It was the first time he’d ever received a hearing transcript from the industry. At the hearing, the full force of personal destruction was brought to bear. Magwood dropped an explosive charge that Jaczko had mistreated women at the agency. “These women remain very disturbed by these experiences,” Magwood said, declining to name the women or offer details. “A common reflection they all shared with me was, ‘I didn’t deserve this.’ One woman said she felt the chairman was actually irritated with someone else but took it out on her. Another told me she was angry at herself for being brought to tears in front of male colleagues. A third described how she couldn’t stop shaking after the experience. She sat talking through what had happened to her with her supervisor until she would calm down enough to drive home.” “Senior female staff at an agency like NRC are tough, smart women who have succeeded in a male-dominated environment,” Magwood continued. “Enduring this type of abuse and being reduced to tears in front of colleagues and subordinates is a profoundly painful experience for them. The word one woman used was ‘humiliated.’ I must note that none of these women want to have their names used publicly. As another woman told me, ‘It’s embarrassing enough I went through this. I don’t want to be dragged through the mud before some congressional committee.’” At least three House Republicans at the hearing called for Jaczko to step down. The New York Times led its story on the hearing with a reference to the charge that Jaczko mistreated women. But unlike 1998, Republicans don’t control both chambers. The next day, the five commissioners appeared again before Congress, but this time Sen. Barbara Boxer (D-Calif.), an aggressive environmentalist known for chopping down witnesses, held the gavel. Senate Republicans — including Sens. Inhofe, the ranking member of the Environment and Public Works Committee, David Vitter (La.) and John Barrasso (Wyo.) — hammered away at the abusive-toward-women charges, but Boxer and her allies were quick to deflect the accusations. “Senator Vitter opened up the issue of treatment of women so I’m going to take that up, because what is said here reminds me of the days — gosh, am I dating myself — of Joe McCarthy. ‘I have in my pocket a list of three people who said this and this and they’re anti-American,’” Boxer mimicked. Boxer told the panel that she had queried women at the NRC about Magwood’s claims and heard nothing but warm words from women who worked with Jaczko, who noted at the hearing that 10 of his 15 long-serving personal staff members are women — an unusually high number in a male-dominated field — and none has complained. Susan McCue and another woman Jaczko worked closely with, Carolyn Gluck, both strongly rejected the notion that Jaczko mistreats women. “Anyone who knows Senator Boxer knows she would never defend anyone guilty of mistreatment of women,” said Gluck, who has been with Reid since the ’90s and handles women’s issues for him. “If she thought there was even the slightest possibility any of the claims made about him were true, she would be one of his most vocal critics rather than one of his strongest defenders.” Capitol Hill is dominated by a happy hour culture that often leads to inter-office romances that can last just moments or a lifetime. But not for Jaczko, said Gluck, who shared a fake wall with him when they both worked for Reid. “He met the woman who is now his wife on our staff, but he never even considered asking her out on a date until she left the Senate, because he didn’t want to do anything that could make her uncomfortable or be construed as inappropriate,” Gluck said. At the hearing, Sen. Bernie Sanders (I-Vt.), who challenged Magwood on his connections to Fukushima, compared the charges to the trick question, “When did you stop beating your wife?” He asked the other commissioners if they’d ever lost their temper at work. “No,” said Magwood. “Wow. That’s interesting,” Sanders said. He asked the Republican senators on the committee if they’d ever lost their temper at staff, and several smiled sheepishly. The White House, for its part, isn’t buckling. On Dec. 12, White House Chief of Staff Bill Daley sent a letter to Issa and the commissioners laying out his support for Jaczko and declining Issa’s request to send a witness to his hearing. Daley suggested the commissioners seek mediation. THE UGLY UNDERBELLY Jaczko, through a spokesman, declined to comment for this article, but one former top Democratic Senate staffer suggested the attacks against the chairman are the flip side of the spreading of corporate largesse. “This is the ugly underbelly of large corporate lobbying,” said the former staffer, who has worked with the men at the center of both controversies and is now a corporate lobbyist himself. “It really is by any means necessary.” Gluck, Jaczko’s former colleague, pointed to the accusations about his treatment of women by way of example. “He’s the kind of guy who invites his sister to his bachelor party at a bowling alley because all he really wanted to do to mark the occasion was spend an afternoon with his closest friends,” she said. “I imagine that the fact that his wife, sister and mother have had to witness these outrageous personal attacks has been just devastating for him.” Lash said he knows what Gluck is talking about. “It’s not only hard on the individual. Your family suffers through this infamy,” he said. “People have spouses, they have children, and it’s not always easy to explain this to your family members.” Lash, 69, is now retired. “It’s very hard, and it does take a while,” he told HuffPost, when asked how long it took him to come to terms with what happened in the ’90s. “Maybe I never fully put it behind me.” Magwood, meanwhile, told HuffPost that any suggestion that he and Flint have worked together to smear Jaczko is false and that his work in the nuclear industry has had no influence on his service at the NRC. “I haven’t talked to Mr. Flint in probably three or four years,” he said, adding, “There’s nothing in my background that I believe suggests that I can’t act as an independent agent. I don’t have a special connection with Tepco or other Japanese companies. I did minor things for them, just wrote a couple of reports.” Whatever the full story behind the attacks on Jaczko, Gluck thinks they will backfire. “It’s such an overreach that I think they’ve severely miscalculated,” she said. If Jaczko’s opponents have judged wrong this time, that doesn’t mean there won’t be another attempt. One former Senate Democratic aide turned lobbyist, who followed both coups, marveled at the hubris: “How much trouble can you stir up in one tiny industry?”

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Mainstream GOP Voters Consider Candidate On The Fringe

December 28, 2011

SAN ANTONIO — Ron Paul wants to legalize pot and shut down the Federal Reserve. He thinks the federal government has no authority to outlaw abortion, no business bombing Iran to keep it from acquiring a nuclear weapon, and no justification to print money unless it’s backed up by gold bars. And he might win the Iowa caucuses. The closer the first votes of the 2012 presidential campaign get, the more competitive the Texas congressman has become. It’s a moment his famously fervent supporters have longed for. Plenty of others are asking: What’s Ron Paul about, again? As in his two prior quixotic campaigns for president, Paul has toiled for months as a fringe candidate best known for staking out libertarian positions. As every other Republican candidate lined up to attack President Barack Obama’s health care law and to promise tax cuts, Paul again demanded audits of the Federal Reserve and a return to the gold standard. Leading in some state polls, Paul is getting a look from mainstream voters in Iowa, where the 76-year-old obstetrician has emerged as a serious contender in the Jan. 3 caucuses – and in other early voting states, should he pull off a victory. The sudden rush of attention to Paul’s resume hasn’t been kind. He’s spent the past week disowning racist and homophobic screeds in newsletters he published decades ago, including one following the 1992 riots in Los Angeles that read, “Order was only restored in L.A. when it came time for the blacks to collect their welfare checks three days after rioting began.” “Everybody knows I didn’t write them and they’re not my sentiments, so it’s sort of politics as usual,” Paul said during a recent Iowa campaign stop. Looking to cut into Paul’s support, rivals laid into him on Tuesday. In an interview on CNN, Newt Gingrich said Paul holds “views totally outside the mainstream of virtually every decent American.” And Rick Santorum chided, “The things most Iowans like about Ron Paul are the things he’s least likely to accomplish and the things most Iowans are worried about about Ron Paul are the things he can accomplish.” Paul returns to Iowa on Wednesday, giving his impressive grass-roots organization in the state a last chance to present, and perhaps defend, positions he’s staked out over a long political career and reiterated during the 13 Republican debates held this year. Paul has served a dozen terms in Congress as a Republican, but he espouses views that have made him the face of libertarianism in the U.S. He blames both Republicans and Democrats for running up the federal debt and opposes any U.S. military involvement overseas. He wants to bring home all troops from all U.S. bases abroad. He vows to do away with five Cabinet-level departments – Commerce, Education, Energy, Housing and Urban Development, and Interior – and repeal the amendment to the Constitution that created the federal income tax. He opposes federal flood insurance and farm subsidies and wants to remove marijuana from the federal list of controlled substances while allowing states to decide how to regulate it. He says he’ll cut $1 trillion out of the first budget he offers as president. He doesn’t believe in a border fence but says illegal immigrants shouldn’t get a free education in public schools. He’s reliably described by political pundits as non-establishment, quirky, unorthodox. During a Republican debate in Sioux City, Iowa, earlier this month, Paul defended his views and rejected the idea that they make him unelectable. “The important thing is, the philosophy I’m talking about is the Constitution and freedom, and that brings people together,” Paul said. “It brings independents in the fold and it brings Democrats over on some of these issues.” Paul doesn’t always side with the most extreme conservative proposals. When it comes to Gingrich’s suggestion that judges could be hauled before Congress to explain their rulings, Paul joined other Republicans in dismissing the idea. Paul’s recent surge in Iowa isn’t the first time the GOP establishment has been forced to pay attention to him. A fundraising blitz that netted $5 million in one day in 2008 led Republican operatives to weigh whether he was a bigger threat to siphon votes than previously thought. Now he may be in his best position yet to do more than just steal votes. “I see this philosophy as being very electable, because it’s an American philosophy, it’s the rule of law,” Paul said.

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Will Bankrupt Toll Road Bankrupt The Feds?

December 28, 2011

When federal officials finalized a loan to a consortium building a toll road through open country in San Diego County near the Mexican border in 2003, they had high hopes for the project: the South Bay Expressway. Taking advantage of the Transportation Infrastructure Finance and Innovation Act, the investors behind the four-lane highway sought to prove that the private sector had a role to play in America’s transportation infrastructure. Unlike other so-called “brownfield” acquisitions of existing toll roads like the Chicago Skyway, the South Bay Expressway was supposed to serve as evidence that private industry could build “greenfield” highways with a little help from the feds. The $140 million in federal money loaned to the highway, Bush Transportation Secretary Norman Mineta said at the time, was “a TIFIA success story, demonstrating how innovative federal financing tools can attract private investment to critical transportation projects.” Officially owned by the California Department of Transportation, the road would be leased to a group of private backers until 2042. The toll road’s backers — including an assortment of some of the world’s leading banks and the Macquarie Infrastructure Group, a major player in the burgeoning world of such so-called “public-private partnerships,” (PPPs) — expected that the then-seemingly unstoppable suburban growth near San Diego would repay their investment handsomely. Eight years later, after $635 million in construction costs, disappointing traffic revenue, the housing crash and bankruptcy, the South Bay Expressway is something less than a monument to “innovative” financing methods and private industry. Instead, the the toll road, which emerged from Chapter 11 bankruptcy in April, was officially sold to the San Diego Association of Governments on Dec. 21. Macquarie, the Australian infrastructure investment company, simply wrote the road off as a loss . In the meantime, the bankruptcy tested one of key provisions of the TIFIA program: the so-called “springing lien” that jumps the federal government to the head of the line of creditors looking to recoup their investments. The bank lenders on the project will all lose money, but the federal government, which saw its initial $140 million loan to the company running the toll road chopped down to $94.2 million during the bankruptcy period, says that it will still break even on the South Bay Expressway because of higher interest rates paid on its loan. “I think in the end we were able to construct a deal that was good for both the region and TIFIA,” said Marney Cox, chief economist for the new owners, SANDAG. At the same time, Cox said, negotiations over how to construct the deal in such a way that the federal government wouldn’t lose money were difficult. “To have the first one go bad on you wouldn’t have been a good sign for the program over all,” Cox said. “So I think they were trying to figure out a way to save that program from going under.” Under a new arrangement with SANDAG, the Federal Highway Administration says, it may even have a shot at making more than the original principal and interest it predicted it would when it made the loan in 2003 — as long as traffic exceeds conservative estimates. The road’s tortured history, and especially its journey through bankruptcy court, are enough to convince critics of PPPs that this is one bet the feds never should have made. “Private toll roads are backed by expectations about increased driving volume,” said Phineas Baxandall of the U.S. federation of state Public Interest Research Groups. The decision to build any road is based in part on projections of future traffic volumes, which are notoriously tricky to calculate. In the case of toll roads with private investors, however, when the government gets involved, the government’s ability to break even is dependent on how accurately those private investors have judged the market. Baxandall thinks the Federal Highway Administration should have taken a harder look at the South Bay Expressway’s traffic projections. He also argues that projects like Los Angeles’s “30/10″ expansion of its mass transit program, which promises to build 30-years’-worth of subway and transit expansions in just 10 years, are a better bet for taxpayers. “Local transit projects like LA’s expansion or Denver’s light rail program are backed by local taxes, which are more reliable and can be tweaked to produce more revenue, so they should protect federal taxpayers’ TIFIA dollars better,” Baxandall said. Proposed legislation in the Senate could do away with mass transit’s edge in the TIFIA selection process. In San Diego, critics also raised eyebrows at the $341.5 million that SANDAG, the league of municipal governments, agreed to pay for the roads. That was significantly more than the road’s assessed value of $287 million during the bankruptcy. But Cox said the company in charge of the toll road after its bankruptcy was able to convince SANDAG that its business was worth the larger amount, because of arguments that it might be able to extend its lease on the road, chop executives’ salaries and reduce its property taxes. Carolyn Chase of the San Diego chapter of the Sierra Club said it was a case of misplaced priorities. “They love freeways,” Chase said. “Honestly. When you ask to use money for a better transit system, for instance, they’ll say ‘oh no, we can’t do that.’ But when it comes to a freeway, they find the money.”

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Richard Geldard: Romney’s War on "Entitlement"

December 27, 2011

It’s an old theme by now, going back to Reagan and his war on welfare, but this time it’s Romney’s war on entitlement. His new campaign refrain is to blame the poor for feeling “entitled,” for saying, “They owe me, I’m entitled,” while they sit back with their big screen HDTVs, their delivery pizza, laughing at the poor suckers who are getting up at six and working for a living. It’s Reagan’s campaign theme from 1980: “Send the welfare bums back to work.” This season’s entitlement theme came from a Tea Party sign that read “You Are Not Entitled To What I Earn.” Romney’s handlers took that sign and are running with it, refining Reagan’s equally blunt slogan with more subtle rhetoric : Will the United States be an Entitlement Society or an Opportunity Society? In an Entitlement Society, government provides every citizen the same or similar rewards, regardless of education, effort and willingness to innovate, pioneer or take risk. It’s an obvious distortion of langauge to say that the government provides every citizen the same or similar rewards. “Rewards?” Really? What is he talking about? As a Senior Citizen I have both Medicare and Social Security, one I pay something for and the other I earned by 40 plus years of teaching. It’s not a reward in any shape or form, and I resent the implication. Also, at one point in my life I needed unemployment insurance for a short time, and that wasn’t a reward either. It was help I needed to provide for my family until I could find another position. Romney wants to blame entitlements for our debt crisis and then to tout opportunity as the path to recovery. Well let’s look at opportunity as a theme. I’m all in favor of “America as Opportunity,” but Romney isn’t talking about real opportunity. He won’t talk about what opportunity requires: (1) guaranteeing a level playing field for all citizens to work hard and find success; and (2) having health care for all so that illness doesn’t prevent a person from fulfilling his or her dreams; (3) providing a quality and affordable education for every citizen so that he or she can successfully enter into and succeed in an innovative marketplace; and (4) it means making sure that our vanishing middle class can recover and be the true strength of American leadership in the world. Then and only then will “America as Opportunity” be realized. Every reasonably educated person knows full well what the word “entitlement” signifies to the impressionable electorate, and Romney will use a negative spin to strike fear and loathing into the hearts of those who resent paying taxes to help those who need support and a real opportunity to get ahead. Killing so-called “entitlements” is not a plan for American recovery. Putting the middle class on a solid economic footing is the key to recovery, and that will take a combination of higher taxes for the wealthy and renewed investment, which means getting mountains of cash off the sidelines and into the game and then creating a culture where all Americans have a chance to fulfill their dreams.

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Ann Brenoff: Long-Term Caring Means Insurance

December 27, 2011

This may scare the bejesus out of you. And I hope so. Lately, I’ve been spending too much time in the company of boomers who act like we’re invincible. According to a Met Life survey of long-term care costs , it will take more than $87,000 to spend a year in a nursing home, $42,000 for an assisted living place (plus a myriad of extras if you actually need any assistance with your living) and a death-defying $184,000 a year for home health aides working around the clock in eight-hour shifts if you delusionally think you can keep Mom or Pop at home. Oh, and p.s.: Eight out of 10 people over 85 will need this kind of help. Got that much cash? Didn’t think so; few of us do. What the Met Life study doesn’t say — this is the company whose spokesman is Snoopy, right? — is that getting old is not only hard on the body, but staying alive when the parts start to fail can seriously suck. And a lot of us are now learning this the hard way as we care for elderly parents and relatives who didn’t bother getting long-term care insurance. What were they thinking? That we’d let them die peacefully in their sleep? Sorry, but modern medicine doesn’t really allow for that. We bestow the civility of a compassionate death on our house pets, but insist on employing the full arsenal of the big medicinal guns for the humans we purport to love. No, this isn’t an ode to the memory of Jack Kevorkian, just a friendly reminder that long-term care is an insurance benefit you are more likely to find useful than life insurance since life insurance requires that we actually allow someone to die before a nickel is paid out. So make your own choice here, or better still, as a gift to your children, get yourself a living will and just ponder these numbers, brought to you courtesy of the Long Term Care National Advisory Center. http://www.longtermcareinsurance.org/ By 2030, one in five Americans will be a senior citizen and estimates are that those needing long-term care insurance will skyrocket to more than 23 million Americans. And each one of them is looking at a projected long-term care costs of about $300,000 a year. Those who merely need an assisted living arrangement — where your mom rents an overpriced room in a place and is supposed to be able to make her own way down to the communal dining room — can expect to spend an additional $352 a month on help getting dressed in the morning and another $307 a month for help getting in and out of the shower. Set aside another $530 a month on top of that if she needs help eating or suffers incontinence or needs a helpful arm to get up off the couch. Medication monitoring? Another $370 a month for when the little calendar pill boxes don’t do the trick anymore. Here’s the real catch: While it may be too late for your 80-year-old mother who didn’t take out a policy when she was younger, it likely isn’t too late for you — assuming you are still healthy and can accept the idea that even though you look and feel terrific today, you may not down the road. The insurance isn’t cheap though and as the boomer bulge ages, is getting even less so. The average new policy costs 25% to 30% more than it did five years ago, says the American Association for Long-Term Care Insurance. While no one likes writing a check with a lot of zeroes in it, without a policy, the alternative is that you’ll pay out of pocket until you’ve nearly exhausted your assets and can qualify for Medicaid. That or become a burden to your kids, and too many of us already know what that feels like.

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Woman Arrested After Punching Walmart Employee In The Face

December 26, 2011

People: we know holiday sales are great, but they’re not worth spending the night in jail. A New York woman was charged with two counts of second-degree assault after punching a 70-year old Walmart employee in the face. Jacquetta Simmons, 26, assaulted Grace Suozzi on Saturday night after the Walmart greeter asked to see her receipts, according to authorities. Simmons quickly fled the scene, but employees and customers chased her until she was surrounded. Not long after, police arrived and arrested her. Police reported that when they checked Simmons’ bags, she had receipts for all of the merchandise. WATCH:

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US- Gingrich suffers setback in Virginia

December 26, 2011

(MENAFN – Arab News) Â Presidential hopeful Newt Gingrich may be leading in polls of Republican voters in Virginia, but his name won’t appear on the state’s primary ballot, a significant setback for …

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High School Worker Fired For Porn Launches Own Porn Company

December 24, 2011

After being fired from a school board job she held for nearly a decade, a Quebec office assistant who moonlighted as a porn actress has wholly embraced the industry that got her into hot water in the first place. The woman — who prefers to go by her porn moniker Samantha Ardente — set tongues wagging in the spring when her off-hour escapades came to light after a student recognized her in an adult film. Months after she sparked widely varying opinions on her activities, Ardente started a production house for adult films and starred in the company’s debut flick. “I feel positive about everything that happened,” Ardente said through a translator. “It was a life experience but I came out a bigger and better person.” Founding her own adult film company was a step Ardente took only after gaining the approval of her 12-year-old daughter, who had previously been unaware her mother did porn on the side. “I didn’t have the time to tell my family what happened, they got to know it through the media,” she said, adding that it was hard to deal with the impact her uninvited fame had on her loved ones. “The name of my family was involved in a scandal.” Ardente was suspended from her job at a Quebec City-area high school in March after a student spotted her in a porn video on the Internet. While she didn’t deal with students in her job, the spicy contents of her videos turned her into quite the celebrity among them. School board officials fired Ardente after they were unable to reach agreement on her transfer to another job. They acknowledged Ardente hadn’t done anything illegal but said her cinematic activities don’t correspond with the values being taught at the school. Ardente had initially offered to put an end to her pornography career but said the board also wanted to impose working conditions that she felt would be too restrictive. After filing a grievance she eventually reached an out-of-court settlement with her employer. After a rollercoaster ride encompassing both negative and positive reactions to her previously hidden life, Ardente said her supporters inspired her to push ahead with the very actions that touched off the controversy in the first place. “I just continued with my life,” she said. Ardente said the production company she launched in August currently only makes tasteful “soft core” movies with couples. In her own film, she stars alongside her boyfriend and business associate Derek Tyler, but says she also has other projects with prominent porn stars in the works. Ardente is already featured in a calendar that can be found in select Quebec stores and has plans to launch a lingerie line in the future. “My life has changed in the sense that people who didn’t know me before recognize me in the street as Samantha,” she said. “They say that they’re happy to see I kept my head up and that I kept going forward instead of looking back.”

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New Air Jordans Launch Spurs Shopping Stampedes, Assaults

December 24, 2011

SEATTLE — Fights, vandalism and arrests marked the release of Nike’s new Air Jordan basketball shoes as a shopping rush on stores across the country led to unrest that nearly turned into rioting. The outbursts of chaos stretched from Washington state to Georgia as shoppers – often waiting for hours in lines – converged on stores Friday in pursuit of the shoes, a retro model of one of the most popular Air Jordans ever made. In suburban Seattle, police used pepper spray on about 20 customers who started fighting at the Westfield Southcenter mall. The crowd started gathering at four stores in the mall around midnight and had grown to more than 1,000 people by 4 a.m., when the stores opened, Tukwila Officer Mike Murphy said. He said it started as fighting and pushing among people in line and escalated over the next hour. Murphy said no injuries were reported, although some people suffered cuts or scrapes from fights. Shoppers also broke two doors, and 18-year-old man was arrested for assault after authorities say he punched an officer. “He did not get his shoes; he went to jail,” Murphy said. The mayhem was reminiscent of the violence that broke out 20 years ago in many cities as the shoes became popular targets for thieves. It also had a decidedly Black Friday feel as huge crowds of shoppers overwhelmed stores for a must-have item. In some areas, lines began forming several hours before businesses opened for the $180 shoes that were selling in a limited release. As the crowds kept growing through the night, they became more unruly and ended in vandalism, violence and arrests. A man was stabbed when a brawl broke out between several people waiting in line at a Jersey City, N.J., mall to buy the new shoes, authorities said. The 20-year-old man was expected to recover from his injuries. In Richmond, Calif., police say crowds waiting to buy the Air Jordan 11 Retro Concords at the Hilltop Mall were turned away after a gunshot rang out around 7 a.m. No injuries were reported, but police said a 24-year-old suspect was taken into custody. The gun apparently went off inadvertently, the Contra Costa Times reported. Seventeen-year-old Dylan Pulver in Great Neck, N.Y., said he’s been looking forward to the release of the shoes for several years, and he set out at 4:30 a.m. to get a pair. After the first store he tried was too crowded, he moved on to a second location and scored a pair. “I probably could have used a half a size smaller, but I was just really happy to have the shoe,” he said. The frenzy over Air Jordans has been dangerous in the past. Some people were mugged or even killed for early versions of the shoe, created by Nike Inc. in 1984. The Air Jordan has since been a consistent hit with sneaker fans, spawning a subculture of collectors willing to wait hours to buy the latest pair. Some collectors save the shoes for special occasions or never take them out of the box. A new edition was launched each year, and release dates had to be moved to the weekends at some points to keep kids from skipping school to get a pair. But the uproar over the shoe had died down in recent years. These latest incidents seem to be part of trend of increasing acts of violence at retailers this holiday shopping season, such as the shopper who pepper-sprayed others at a Wal-Mart in Los Angeles on Black Friday and crowds looting a clothing store in New York. Nike issued a statement in response to the violence that said: “Consumer safety and security is of paramount importance. We encourage anyone wishing to purchase our product to do so in a respectful and safe manner.” The retro version of the Air Jordan 11 was a highly sought-after shoe because of the design and the fact that the original was released in 1996 when Jordan and the Bulls were at the height of their dominance. Pulver said they were a “defining shoe in Jordan’s career.” Other disturbances reported at stores in places like Kentucky and Nebraska ranged from shoving and threats to property damage. In Taylor, Mich., about 100 people forced their way into a shopping center around 5:30 a.m., damaging decorations and overturning benches. Police say a 21-year-old man was arrested. In Toledo, Ohio, police said they arrested three people after a crowd surged into a mall. In Lithonia, Ga., at least four people were apparently arrested after customers broke down a door at a store selling the shoes. DeKalb County police said up to 20 squad cars responded. In Northern California, two men were arrested at a Fairfield mall after crowds shoved each other to get in position for the Nikes, police said. In Stockton, Detective Joe Silva said a person was taken into custody at Weberstown Mall on suspicion of making criminal threats involving the shoes. Police also were investigating an attempted robbery in the mall’s parking lot. The victim was wrongly believed to have just purchased Air Jordans. In Tukwila, Officer Murphy said the crowd was on the verge of a riot and would have gotten even more out of hand if the police hadn’t intervened. About 25 officers from Tukwila and surrounding areas responded. Murphy said police smelled marijuana and found alcohol containers at the scene. “It was not a nice, orderly group of shoppers,” Murphy said. “There were a lot of hostile and disorderly people.” The Southcenter mall’s stores sold out of the Air Jordans, and all but about 50 people got a pair, Murphy said. Shoppers described the scene as chaotic and at times dangerous. Carlisa Williams said she joined the crowd at the Southcenter for the experience and ended up buying two pairs of shoes, one for her and one for her brother. But she said she’ll never do anything like it again. “I don’t understand why they’re so important to people,” Williams told KING-TV. “They’re just shoes at the end of the day. It’s not worth risking your life over.” ___ AP Business Reporter Sarah Skidmore contributed to this report from Portland, Ore. AP Writer Michelle Price contributed from Phoenix.

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National Security Advisers To GOP Presidential Candidates Tied To $40 Billion In Federal Contracts

December 24, 2011

National security advisers to the Republican presidential candidates have ties to defense, homeland security and energy companies that have received at least $40 billion in federal contracts since 2008.

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‘Extreme Couponing’ Masters Face-Off

December 23, 2011

Some of TLC’s most ferocious savers from ” Extreme Couponing ” will be put to the test in “Extreme Couponing All-Stars,” a new reality competition series debuting Tues., Dec. 27 at 10 p.m. EST. In the new seven-part series, 12 “Extreme Couponing” veterans go head-to-head. Each episode will feature two couponers as they race around a store trying to get $500 worth of items in 30 minutes. The catch? Nothing can be full price. The couponers will donate their entire haul to a local food bank and the winner will be determined by whoever has the highest percentage of savings. “Saving money can be like a sport these days — taking careful planning and unwavering commitment. The cast of ‘Extreme Couponing’ are very serious about being the best shoppers, and this will be a fun way to see who has what it takes to save the most,” Amy Winter, GM of TLC, said in a statement. In this exclusive sneak peek, Michelle, described as a “buck-hunting super-saver,” takes on Chris. The two have very different shopping methods: Michelle plays quick and dirty and Chris plans meticulously. It’s sort of like “Super Market Sweep” on crack.

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