Live chat at 11:30 on the old/young job gap
Live chat at 11:30: Why employment among older workers is RISING (hint: check their 401k balances and home values) while unemployment among younger workers is near all-time highs.
Live chat at 11:30: Why employment among older workers is RISING (hint: check their 401k balances and home values) while unemployment among younger workers is near all-time highs.
Stop back here at 11:30. We'll be live-chatting about this and any other aspect of the recession you want to talk about. You can leave questions/comments in the comments section or ask live during the chat.
Piece from the NYT over the weekend:
Unemployment for middle-aged workers like Mr. Blattman is the highest it’s been since data was first collected 60 years ago. According to the Bureau of Labor Statistics, joblessness is worse for men over 45 (7.7 percent in July) than women the same age (6.9 percent). And while the middle-aged are still more likely to have jobs than younger workers, once people Mr. Blattman’s age are laid off, finding a new job is harder. In 2008, laid-off people over 45 were out of work 22.2 weeks, versus 16.2 weeks for younger workers.
But this is only part of the picture. Unemployment is going up among older workers because those 55 and over who had previously retired are flooding back into the job market. Unemployment is defined as those who are actively looking for work but can't find it. Thanks to the collapse in their home and 401(k) values, there are many, many more older folks looking for work these days. Many are not finding it, but many are. The number of people 55 and over who are employed today is greater than it was a year ago. Meanwhile employment for every other age group has fallen.
Meanwhile, employment among younger workers is close to all-time highs. Why? Older folks aren't getting out of the way as they once did to make room for new talent. See the whole story here in my piece from Sunday's paper.
Monday on the Rodricks show on WYPR (FM-88.1) at 1:00 we'll be discussing the budget problems facing Maryland and Baltimore and this post I made last week: Union should be thrilled with furloughs, not outraged.
Talk about it here. Or call us on air after 1:00 at 410/662-8780. Here is some homework to put things in perspective and give you some ideas.
-- State spending will decline for the second year in a row for the fiscal year that ends in June, to under $14 billion for the General Fund. Two years ago it was $14.6 billion.
-- Gov. O'Malley has cut more than $4 billion in spending since he took office. (The slide says $3.5 billion, but it has gone up.)
-- Until now he has cut more than 2,000 positions with state government, but hardly any were layoffs. Last week the Board of Public Works approved layoffs for a couple hundred state workers as well as more extensive furloughs for those who remain.
-- Even with the cuts announced last week, there is probably still a gap between projected revenue and projected spending.
-- To avoid layoffs and reduce furloughs, the government employees union wanted the legislature to approve combined tax reporting for businesses.which reduces companies' opportunity to game one state's tax system against another's. But the assembly can't do that until next year, and O'Malley faces a budget crisis now. Combined reporting would raise between $40 million, on the low end of estimates, to more than $100 million a year, on the high end. In a vacuum, combined reporting is a decent idea, but O'Malley already signed off on huge tax increases two years ago, including on corporations. It'll be tough to raise corporate taxes again now.
-- After the 2007 increases, Maryland's state and local tax burden is 4th highest in the nation, according to the Tax Foundation.
Liz Kay writes about the continuing plunge in natural gas prices and quotes experts who suggest you should lock in with a long-term natural gas contract instead of using BGE's standard offering, in which the gas price more or less floats with the market from month to month. I'm skeptical; the offerings don't let you lock in for more than two years, and the prices aren't that great. Here is my earlier post on this.
But in any event here are links to the natural gas vendors she mentioned. BGE will continue to deliver the gas through its pipes and charge a delivery fee, no matter who your supplier is. For a lot more on this, scroll down to the "Categories" box on the right and click on "BGE/electricity."
Almost every Friday is failure Friday for the FDIC. This week it's Towson's Bradford Bank. The usual reassurances apply: deposits are safe up to the insured limits etc. etc. Here is the FDIC release. Now all we need is the haiku from Soylent Green is People.
Bradford Bank, Baltimore, Maryland, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Manufacturers and Traders Trust Company (M&T), Buffalo, New York, to assume all of the deposits of Bradford Bank.
The nine branches of Bradford Bank will reopen on Saturday as branches of M&T. Depositors of Bradford Bank will automatically become depositors of M&T. Depositors will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until M&T can fully integrate the deposit records of Bradford Bank.
This evening and over the weekend, depositors of Bradford Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
UPDATE: As promised. SGP, who has become the poet laureate of bank failures, writes haiku for every institution seized by the federales.
Summer heat scorches
Three...four hundred...one thousand???
Bradford bank now toast.
by Soylent Green is People
As of June 30, 2009, Bradford Bank had total assets of $452 million and total deposits of approximately $383 million. In addition to assuming all of the deposits of the failed bank, M&T agreed to purchase essentially all of the failed bank's assets.
The FDIC and M&T entered into a loss-share transaction on approximately $338 million of Bradford Bank's assets. M&T will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-640-2693. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/bradford-md.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $97 million. M&T's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. Bradford Bank is the 82nd FDIC-insured institution to fail in the nation this year, and the second in Maryland. The last FDIC-insured institution closed in the state was Suburban Federal Savings Bank, Crofton, on January 30, 2009.
Natural gas prices hit their lowest levels in seven years on Thursday following a new government report on how much of the stuff is building up in pipes, unburnt. Idle factories and slower-running electricity generators have caused a plunge in demand that would have been unimaginable a year ago, when prices were four times higher. That's bad for gas producers and good for consumers who will use it to heat their homes this winter.
Thanks partly to large new wells tapped in recent years, natural gas prices refuse to rise as the economy starts to recover. This quote from a Bloomberg story tells the tale:
“I’ve tried to guess a bottom on this market a thousand times and it just keeps getting crushed,” said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. “We have a lot in storage. I don’t know what will turn it.”
For BGE customers, natural gas prices more or less float from month to month, and they'll probably bump up a bit from today's level before the cold months. They usually do. But they promise to stay far below levels of a year ago. BGE has already stocked up some gas at prices slightly higher than today's. So far we've avoided a major Gulf Coast hurricane, which was really the only thing that could cause a return to 2008 levels.
The question, as always after prices drop like this, is: Should you lock in a long-term natural gas deal with Washington Gas Energy Services? So far I haven't done so. At 85 cents per therm for a two-year deal, WGES is still way above today's prices. (BGE is charging 56 cents this month.) And it's probably above what prices will be all this winter.
There's a chance BGE's price will be more than 85 cents for the winter of 2010-2011 if the economy recovers in a decent way. But it might not be. And even if it is, I'm betting the money I save this winter by sticking with BGE's lower, floating price will be at least equal to any extra I might have to pay for the second winter. And if natural gas prices continue to fall, the longer-term deals from WGES and other alternative suppliers should improve.
From the Florida papers, stories on the attendance by a top Public Service Commission manager at a Derby Day party thrown by FPL vice president Ed Tancer. FPL Group, the utility's parent, tried to buy BGE owner Constellation Energy a few years ago.
The Public Service Commission delayed the start of hearings on FPL's request for a rate increase for about two hours after Commissioner Nathan Skop raised the issue.
Ryder Rudd, director of the panel's Office of Strategic Analysis and Governmental Affairs, had told at least three of the five commissioners over the weekend that he and his wife had attended a Ketucky Derby party in May at the home of FPL Vice President Ed Tancer in Palm Beach Gardens.
Skop said Rudd should resign.
"Such inexcusable conduct undermines the public trust and confidence in the regulatory process and impugns the integrity of this commission," Skop said. "These are not allegations, but admissions by this employee."
Ironic that Dunne, much of whose career involved writing about the Kennedys, died the day after Teddy Kennedy did. Interesting that none of the Dunne obits I have seen mentions his unethical hounding of Kennedy cousin Michael Skakel, who was convicted and imprisoned for the murder of Martha Moxley, which fair accounts suggest he probably didn't commit. If you want to read a compelling account of irresponsible journalism and what sounds like justice miscarried, read Bobby Kennedy Jr.'s piece in the Atlantic Monthly in 2003.
The writer Dominick Dunne, a driving force behind Michael Skakel's prosecution, continually accused the Skakel family of using its power and Kennedy connections to intimidate the Greenwich police "to protect one of their own." In 1991 Dunne wrote in Vanity Fair, "It is thought in the community and
elsewhere that Kennedy influence was brought to bear." In 1996 he told a UPI reporter, "The [Skakel] family is so powerful that since the first night the police have never been able to question family members." In 2000 Dunne said on CNN, "The Skakels were able to hold off the police all these years ... If this was a family of lesser stature, that simply would not have happened."
Reporters who conducted serious investigations into Dunne's charges found them to be false...
Many people have wondered why, after years of uncertainty and inaction, Connecticut officials decided to pursue Michael with sudden ferocity. The answer is Dominick Dunne.
Connecticut regulators have complained that BGE parent Constellation Energy and another company manipulated the wholesale electricity market in that region and collected more than $50 million in excess revenue as a result. The complaint was filed with the Federal Energy Regulatory Commission in April, but the identities of the companies weren't revealed. Now FERC has agreed to hear the complaint, and it has come out that Constellation and somebody called Brookfield Energy Marketing are the respondents.
The alleged improprieties took place on the New England grid and involved the "capacity" market, in which electricity users pay to reserve future generation time. The capacity market is questionable even when legal, as it pays gajillions of dollars to generators just for existing. Connecticut is alleging something worse.
"Two energy companies that received more than $50 million in ratepayer money to provide power never delivered the electricity," says Gov. M. Jodi Rell's press release.
But in the Reuters story a Constellation spokesman said grid operators reversed previous statements that the juice had not been delivered:
"ISO-New England has retracted initial statements that power bid into the forward capacity markets was not delivered, finding that requests for power were never made," spokesman Lawrence McDonnell said in an emailed statement.
That doesn't address another point made by Connecticut, namely that energy producers gamed the market with a strategy of selling capacity that minimized the likelihood they would ever have to deliver. In any event it's great that the Obama FERC is looking into this. Under Bush, FERC swept multiple allegations of electricity shenanigans under the carpet, including some involving the Mid-Atlantic grid that includes Maryland. FERC has jurisdiction over the interstate wholesale electricity market, which is where all the action and money is. Let's hope this is the beginning of a long process of turning on the lights at the Federal Energy Regulatory Commission.
Today's column is on the big myths of health care reform -- the conservative myth and the liberal myth. The conservative myth is that malpractice lawsuit reform will do much to restrain soaring costs. The liberal myth is that preventive care will save money for the system as a whole. We need tort reform AND more investment in preventive care. But to pretend that either is the solution to out-of-control costs is disingenuous.
The Washington Post's Charles Krauthammer has joyfully discredited the liberal myth.
However, prevention is not, as so widely advertised, healing on the cheap. It is not the magic bullet for health-care costs.
You will hear some variation of that claim a hundred times in the coming health-care debate. Whenever you do, remember: It's nonsense -- empirically demonstrable and [Congressional Budget Office]-certified.
But the guy keeps yammering on about tort reform as the fix for health-care costs. What he doesn't mention is that tort reform, too, as a significant health-care solution, is also the subject of a negative CBO verdict. Such is the nature of the health-care debate. From my column:
The nonpartisan Congressional Budget Office, as usual the best source for this kind of analysis, says malpractice costs make up only 2 percent of health care spending. "The evidence available to date does not make a strong case that restricting malpractice liability would have a significant effect," the CBO says.
I hope Patrick Moran, Maryland head of the American Federation of State, County and Municipal Employees, is profusely thanking Gov. Martin O'Malley behind the scenes after having blasted him publicly for cost-cutting plans emerging this week.
The union is "incredibly disappointed" that O'Malley will
furlough lay off a couple hundred employees and furlough 70,000 others for a few days, Moran told WBAL TV. O'Malley decided to "balance the budget on the backs of state workers and residents," he said on the union's Web site. "Even in these tough times, it is essential that we remember our priorities in Maryland, and that the people of this state come first."
The people of this state! The people of this state face a 7.4 percent unemployment rate. About 224,000 are unemployed. That's over 100,000 more than two years ago. The people of this state got one of the biggest tax increases in history two years ago, when O'Malley increased the sales tax, the income tax, the cigarette tax, the corporate income tax and the vehicle titling tax all at the same time. The people of this state have seen the value of their houses plunge, medical costs rise and take-home pay go flat.
And yet as the recession has deepened O'Malley has bent himself into curlicues to avoid reducing state government employment, which is one of the biggest expenses and a natural place to look for crucial savings. State government has been immune to the kind of layoff pain that has been routine at manufacturers, banks and construction companies. The economy is shrinking. Tax revenue is plunging. What O'Malley is doing is the minimum. Moran ought to be thrilled.
UPDATE: A commenter notes correctly that O'Malley has eliminated 2,700 positions already, which I should have mentioned. But most of these did not involve layoffs, and in the grand scheme such action is still pretty minimal. Look at what's going on in California.
The White House announced its reappointment of Ben Bernanke, chairman of the Federal Reserve, the nation's central bank. He deserves it.
He was the No. 1 player in the world in avoiding another Great Depression. The financial collapse last year was the most extraordinary capitalistic event in 80 years. Bernanke was slow to recognize its severity, and the Fed under Bernanke could have done more to prevent it in the first place. He became chairman in early 2006, when there was still time for Fed regulators to stop much of the mortgage madness.
But if the Fed is to blame for the meltdown, most of the burden falls on Bernanke's predecessor, Alan Greenspan. Bernanke was the guy who steered the rescue between the Bush and Obama administrations. He took what really might have been a grievous, decade-long slough and turned it into what we have today: A severe recession, with employment pushing 10 percent, continuing massive job loss and a hugely uncertain fiscal situation for the country. We'll take it.
Part of the problem with evaluating Fed chairman is that what they sow often doesn't get reaped for years and years. People thought Greenspan was doing a wonderful job until after he left, when the damage from creating a money-bubble with lack of regulation became clear. Bernanke has created another money bubble, and his legacy will rest on how skillful he is at deflating it without terrible effects. Bernanke's expertise was in preventing a Depression. He knows far less about how to execute an exit strategy after bailing out the economy because nobody has done it successfully in history. Still, I don't see anybody else out there who seems more likely to succeed.
Barney Frank made a comment that has been widely quoted on blogs recently, on the difference between politicians and economists:
Not for the first time, as an elected official, I envy economists. Economists have available to them, in an analytical approach, the counterfactual. Economists can explain that a given decision was the best one that could be made, because they can show what would have happened in the counterfactual situation. They can contrast what happened to what would have happened. No one has ever gotten reelected where the bumper sticker said, "It would have been worse without me." You probably can get tenure with that. But you can't win office.Bernanke can truly say, "It would have been worse without me." That's not enough to get elected. But enough to get reappointed.
As Jamie Smith Hopkins reported last week, the Maryland economy continues to perform much better than that of the country as a whole. We seem to be adding a few jobs while other states are still shedding them. Dig below the surface and you see a familiar story: The health care sector continues to pull twice its weight.
This is why the changes being discussed in Washington are so crucial to the Maryland and Baltimore economies. If the country really does get a handle on medical cost control, local growth in the industry will stop or slow.
Below are tables showing the change in total Maryland jobs and the change in health-care and social-assistance jobs compared with the level three months previously. (I prefer the 3-month change because it smooths out ups and downs that can come with monthly figures that, even for the Maryland economy as a whole, are based on less-than optimal samples.)
The figures are seaonally adjusted. As you can see, the overall nonfarm economy added 8,500 jobs between April and July, while the health-care sector added 3,300. The figures below are for three month growth, in thousands. So "8.5" means 8,500 new jobs. The upshot: Health care accounted for nearly 40 percent of total job growth -- even though it makes up less than 20 percent of the economy. And you can see from the lower chart that there were hardly any three-month periods in the last 10 years when Maryland health-care employment didn't increase.
"This symphony has a long way to go," I wrote six months ago about the desperate attempt by Laurel Racing, the Maryland Jockey Club and Magna Entertainment to ask for a do-over in their botched bid for a slots license. We're now up to -- oh -- the third movement. Molto lacrimoso.
The companies (or somebody. Maybe it's Joe DeFrancis and other partners who stand to make a mint if Laurel Park gets slots) are wasting more money on lawyers to try to get the state to reopen slots bidding. Their argument: Since the state is taking modified offers from qualifying bidders, it should start over and let everybody submit new packages.
Nice try. Here is the way to think about this. Imagine you're buying a house. It is customary to put up earnest money -- $1,000 or so. This demonstrates that you have at least a minimum amount of scratch, a small token of solvency implying that you can consummate your offer. That's when the negotiating begins. The seller makes a counteroffer, you reciprocate etc. Without the earnest money you don't even get to sit down at the table.
Laurel Racing and the Jockey Club didn't put up the earnest money. They were supposed to front $28.5 million for their bid. Now they're accusing the state of changing the slots award rules in the middle of the game. Actually, the rules were quite clear, and Laurel Racing didn't abide by them. There was reason to think that the entities that ran Pimlico and Magna into the ground would not be good bidders. When they failed to put up the bidding deposit, they proved that proposition correct. The system worked.
Paul Krugman repeats the claim heard over and over crediting Bill Clinton with the prosperity of the late 1990s. It's true that by addressing the deficit Clinton kept interest rates low and capital markets healthy. But the 1990s boom resulted, more than anything else, from the fulfillment of the computer and technology promise that was made years previously. The productivity gains from spreadsheets, cell phones, SAP inventory-control programs, electronic publishing, intranets etc etc. drove the 1990s prosperity. Clinton was lucky enough to be president at that time.
Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.
Jim Surowiecki in the New Yorker notes two well-known psychological wrinkles that make people prone to resist change -- even if it's for their own good.
Most of us, for instance, are prey to the so-called “endowment effect”: the mere fact that you own something leads you to overvalue it. A simple demonstration of this was an experiment in which some students in a class were given coffee mugs emblazoned with their school’s logo and asked how much they would demand to sell them, while others in the class were asked how much they would pay to buy them. Instead of valuing the mugs similarly, the new owners of the mugs demanded more than twice as much as the buyers were willing to pay.
What this suggests about health care is that, if people have insurance, most will value it highly, no matter how flawed the current system.
Compounding the endowment effect is what economists dub the “status quo bias.” Myriad studies have shown that, even if you set ownership aside, most people are inclined to keep things as they are...
As noted in a previous post, the endowment effect in Medicare seems to be especially strong.
Obama is increasingly hearing that he should cut health care reform into two parts. Let's get fiscal conservatives on board by dealing with out-of-control medical costs now, the advice goes. Worry about expanding coverage to the uninsured later. I think this is a losing tactic, as I'll explain below.
David Ignatius laid out the case in the Washington Post on Saturday.
If liberals really want to show they are serious, they should begin with our existing single-payer behemoths, Medicare and Medicaid... the White House should mandate that, within three years, these programs will shift from the current fee-for-service approach to a system that pays for value -- that is, for delivering low-cost, high-quality care.
Joe Lieberman picked up the theme on CNN yesterday.
I think great changes in our country often have come in steps. The civil rights movement occurred -- changes occurred in steps. Let’s focus now on how to reduce costs. That’s been a central theme of the president.
Problem: The idea of reducing costs -- and that idea alone -- is responsible for huge amounts of the resistance to the Democrats' plan at the town hall meetings and elsewhere. The outcry isn't just from those who object to government expansion and don't think we can afford extending coverage. It's from folks -- mainly seniors -- who have already been let into the government-paid health-care club and are worried that reform will limit the virtual carte blanche they now get under Medicare.
Ross Douthat wrote about this in the NYT last week.
If the Democratic Party’s attempt at health care reform perishes, senior citizens will have done it in, not talk-radio listeners and Glenn Beck acolytes. It’s the skepticism of over-65 Americans that’s dragging support for reform southward. And it’s their opposition to cost-cutting that makes finding the money to pay for it so difficult.
I've heard from these folks myself. The nutty "death panel" talk resonates with them. Many of them talk a good game about the dangers of big government. But at heart what they're worried about is that more health care for the uninsured or cost-control in any form will mean less health care for them. Plain and simple. That sort of "I want mine" sense of entitlement is, as conservatives know, one of the most powerful forces in politics.
Obama doesn't want half a loaf. He wants health cost control AND health coverage expansion. But I'm skeptical that tackling the first part by itself will be any easier politically than going for the whole thing.
On Friday at 10 I’ll be live-chatting about health-care reform, Maryland health-insurance prices and whether it’s a good idea to launch a government-run, ‘public-option’ medical plan to compete with existing insurers. Feel free to leave questions in the comments section of this post.
As we await the outcome of the battle over Fed transparency, we should ponder a recent conclusion of Carnegie Mellon’s Allan Meltzer. As the author of the authoritative A History of the Federal Reserve, he has observed that the Fed responds “decisively to the unemployment rate but not to the inflation rate.” As long as unemployment remains elevated, expect loose monetary reins and more inflation.
Protect yourself with some exchange-traded funds. Buy SPDR Gold Shares (GLD, 93; expense ratio, 0.4%), which tracks the metal. I also recommend diversified commodity ETFs like the iShares S&P GSCI Commodity-Indexed Trust (GSG, 30; 0.75%) and PowerShares DB Commodity Index Tracking Fund (DBC, 23; 0.75%).
Some great comments over at Consuming Interests on the comments on health reform by Whole Foods boss John Mackey and the resulting boycott effort by people who objected. In a piece in the WSJ, Mackey wrote: "A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That's because there isn't any. This 'right' has never existed in America."
Many of Whole Foods' liberal customers are mad. But the other question is, what does the Whole Foods board think? Mackey probably just cost the company millions in sales and gave it big black eye among its core customers.
Unlike most boycotts, this one doesn't have to reach a mass market to be successful. Whole Foods sells to a niche demographic, and that demographic is precisely the one most likely to respond to the boycott. Whole Foods customers are politically aware, well-off and heavily wired, which means they're also easy for boycott organizers to reach.
This is after years of sock puppeting by Mackey on Yahoo message boards, pumping his own company and trashing rivals while pretending to be somebody else. A Consuming Interests commenter asks a good question:
How many times can this guy screw up? One day he's on yahoo boards pumping his stock and gloating over himself, then onto 'conservative capitalism'... no he's offended 14,000 customers. He's a lose cannon and why I would never invest. I like to store, but their mission is just too mixed.
UPDATE: Here's the headline from RetailWire: "Time for John Mackey to Resign."
UPDATE 2: Interesting discussion going on in comments. Yes, this is America, and the First Amendment hasn't been repealed. But how far should a CEO go in expressing honest but controversial comments when they might hurt the business? Most CEOs shut their traps -- to a fault. Mackey's outspokenness is refreshing. But by speaking out, has he violated his duty to shareholders?
This is going out from Bruce Lindsey, CEO of the William J. Clinton Foundation, via another guy. They're asking everybody to send Bill Clinton birthday greetings in the wake of his trip to North Korea recently to free two U.S. journalists. What's great about it is that the letter's bootlicking tone of worship and personality cult is exactly what's required of the people who work for Kim Jong Il in North Korea.
Dear Jay, We were all thrilled and moved when former President Bill Clinton brought journalists Laura Ling and Euna Lee safely home to their families from North Korea.
Let's send birthday greetings to President Clinton to thank him for his tireless humanitarian efforts.
In the 40 years that I’ve known President Bill Clinton, he continues to amaze me every day with his intellect, compassion, and energy.
Since leaving office, he’s never taken a break from working on the issues he deeply cares about – both here in the U.S. and across the globe.
To show President Clinton your appreciation, I invite you to send him a personal note for his birthday today.
Your birthday e-card will make his special day -- August 19 -- even happier. After you send your note, you’ll receive email updates from Bill Clinton, as well as ways to get involved in the work of the Clinton Foundation.
Thanks to President Clinton’s extraordinary vision and the involvement of caring individuals like you, the Clinton Foundation makes a significant impact in the lives of hundreds of millions of people around our world. For example:
• Two million people in developing countries now have access to low-priced HIV/AIDS medicine, and we’ve just negotiated new pricing agreements that will enable better, cheaper treatments for more patients in the developing world. • Thousands of schools across the United States have put healthy-eating and exercising programs into practice, so that more children are leading healthier lives. • To combat climate change, 40 of the world’s largest cities are making progress in reducing their carbon footprint.
Will you take a moment today to thank President Clinton for creating positive change around our world?
In honor of Bill Clinton’s birthday, send an e-card today with your personal note.
I know your birthday e-cards and donations will mean a whole lot to President Clinton.
Chief Executive Officer
William J. Clinton Foundation
Perhaps on the theory that a little revenue to book against fixed costs is better than zero revenue, the luxury Rancho Berando hotel of San Diego has revamped its price schedule to include sharply discounted rooms with sharply degraded amenities. The more spartan the accommodations, the less you pay. The standard rate is $219 a night. Reports Reuters:
For their one-and-only family getaway this year, the Billingtons checked in to an upscale San Diego resort on Sunday with many of the usual vacation accessories -- bathing suits, board games and golf clubs. But they also brought flashlights, sleeping bags and an inflatable mattress because the pool-side room they booked for just $19 comes with a tent where the beds normally would be. They even had to pack their own toilet paper. The most basic version: a room for $19 with no bed, toilet paper, towels, air-conditioning or "honor bar," and only a single light bulb in the bathroom for safety. The next level up adds in a bed -- sans sheets -- for $39 a night. For a bed plus toiletries and toilet paper, the rate is $59.
Apparently the Brits are having a bit of trouble grokking what one British critic dubbed "the mumbled patois" of Baltimore, spoken, as the Independent puts it, by "black American drug dealers and street-wise detectives" on the TV series The Wire. So they're resorting to subtitles. But just in case the Independent provides a helpful phrasebook.
Baltimore talk Lost in translation?
*The hopper from Balmer carrying a burner
A child drug dealer from Baltimore is carrying a disposable mobile telephone used by drug dealers to stop the police monitoring their conversations.
*Crew up with corner boys for a re-up
An instruction to form a team of young men who can sell drugs on a street corner when a re-up, or a re-stock package from drugs wholesalers, arrives.
*The G pack
A wholesaler's package of 100 vials of cocaine
*He's a Yo
Police term for a corner boy.
*The civilian's carrying weight
An ordinary person who is neither a drug dealer nor an addict who has been served a custodial sentence.
Life of a drug dealer in which the dealer accepts a distinct set of ethics in which even apparently minor transgressions may be punishable by death.
*There's been a humble
An arrest or search of a corner boy on flimsy or no evidence, intended merely to humiliate.
A heavily guarded property in which drugs are stored and cut.
*Those Red tops/blue tops/yellow tops are worth a lot of cheese
The colour-coded vials of cocaine (use to identify quality) are worth a lot of money.
*He's not a fiend, he's slinging
He's not a drug addict, he's selling drugs.
Petty cash used by corrupt politicians for the purposes of persuasion on election day.
Ross Douthat, the New York Times' new conservative columnist, says:
In this future, somebody will need to stand for the principle that Medicare can’t pay every bill and bless every procedure. Somebody will need to defend the younger generation’s promise (and its pocketbooks). Somebody will need to say “no” to retirees.
That’s supposed to be the Republicans’ job. They should stick to doing it.
From the Friday Hancock column:
"We don't have unlimited resources to spend on health care," says Dr. Sean Tunis, head of the Center for Medical Technology Policy in Baltimore. "And we're already neglecting other important social needs because there's simply not enough money."
Republicans are supposed to get this. They're supposed to be the party that understands waste, limits, cost/benefit trade-offs and what happens when you let people (patients and doctors) spend somebody else's money (insurance companies' and taxpayers').
These days they sound like their own caricature of a Democrat, pretending that resources are endless, that everybody gets what they want and that measuring efficiency is the same as euthanasia.
Modern health care needs administration, priorities, choices and direction. It needs the best information on what works and what doesn't. Hysteria that blocks such information hurts patients, taxpayers and especially future taxpayers - our poor grandchildren who will get stuck with most of the bill.
From Brad DeLong:
Parliament had reassembled on January 27[, 1377,] with [Crown] Prince Richard [of Bordeaux] and John of Gaunt [Duke of Lancaster] presiding.... [D]isturbing rumors that John of Gaunt was a changeling were causing "great noise and great clamor."... They appear to have been spread by the banished [Bishop] William of Wykeham... in a bid to topple the duke.... It was asserted that... Queen Philippa actually gave birth to a daughter but overlaid and suffocated her. Fearful of confessing this to King Edwards, she substituted... a living boy, the son of a Ghent laborer, butcher, or porter... smuggled into St. Bavoon's Abbey... named him John and brought him up as her own. Philippa was said to have admitted this in confession to [Bishop] William of Wykeham on her deathbed in 1369k insisting that should there ever arise any prospect of John succeeding to th throne the bishop must break the seal of the confessional and publicly reeal the truth...
Alison Weir (2009), Mistress of the Monarchy: The Life of Katherine Swynford, Duchess of Lancaster (New York: Ballantine: 9780345453255), p. 161.
So Dylan is wandering around Long Branch, N.J., in the rain, looking like a homeless person, and he gets picked up by a cop. "I'm Bob Dylan," he says. She thinks he just escaped from the state hospital. She indulges him by driving him in her patrol car to where he *says* his tour buses are waiting. Now how many stars would have gone along humbly, as Dylan did, and not thrown a tantrum?
"He was really nice, though, and he said he understood why I had to verify his identity and why I couldn't let him go," Buble said. "He asked me if I could drive him back to the neighborhood when I verified who he was, which made me even more suspicious.
"I pulled into the parking lot," she said, "and sure enough there were these enormous tour buses, and I thought, 'Whoa.'"
UPDATE: Just for the record, I don't buy the parallels being made by commenters between Dylan's encounter with cops and Henry Louis Gates Jr.'s. If Dylan were arrested and handcuffed in his own house, don't you think he might have reacted a little differently?
UPDATE2: I should have credited ABC News, to whose Dylan story I linked and which I excerpted.
Pulled from comments. A bit of testimony to counter the Republican lies, fear-stoking and hysteria over health-care reform proposals.
I'm British and living in the UK but work with a USA based company and have an American wife. I'm sick of ill informed Americans latching on to a few bad experiences and skewed comments regarding healthcare in the UK.
A friend of mine died a couple of months ago but had been fighting cancer for several years. Her ongoing treatment by the NHS prolonged her life in the face of a terrible prognosis and her treatment would have bankrupted even an insured American with a good health plan. Healthcare in the USA is bloated and corrupt and the NHS in the UK is a nightmare of overspends and excess administration.
No system is perfect but far more of my friends and family have been ruined by the system in the USA than our 'socialised' system - whatever the hell that is supposed to mean. For the record, even routine treatment is very quickly referred to a specialist if required and the NHS is vastly improved and unrecognisable from the way it operated a few years ago.
Impressive job by Rick Perlstein in the Washington Post of showing how the crazy "death panel" talk and other far-right ire are of a piece with paranoia we've been hearing since after World War II. The only difference was that the nuts who thought that Eisenhower was a traitor or that fluoridated water was a communist plot didn't have Fox News to give them a megaphone.
In the early 1950s, Republicans referred to the presidencies of Franklin Roosevelt and Harry Truman as "20 years of treason" and accused the men who led the fight against fascism of deliberately surrendering the free world to communism. Mainline Protestants published a new translation of the Bible in the 1950s that properly rendered the Greek as connoting a more ambiguous theological status for the Virgin Mary; right-wingers attributed that to, yes, the hand of Soviet agents. And Vice President Richard Nixon claimed that the new Republicans arriving in the White House "found in the files a blueprint for socializing America."
When John F. Kennedy entered the White House, his proposals to anchor America's nuclear defense in intercontinental ballistic missiles -- instead of long-range bombers -- and form closer ties with Eastern Bloc outliers such as Yugoslavia were taken as evidence that the young president was secretly disarming the United States. Thousands of delegates from 90 cities packed a National Indignation Convention in Dallas, a 1961 version of today's tea parties; a keynote speaker turned to the master of ceremonies after his introduction and remarked as the audience roared: "Tom Anderson here has turned moderate! All he wants to do is impeach [Supreme Court Chief Justice Earl] Warren. I'm for hanging him!"
Before the "black helicopters" of the 1990s, there were right-wingers claiming access to secret documents from the 1920s proving that the entire concept of a "civil rights movement" had been hatched in the Soviet Union; when the landmark 1964 Civil Rights Act was introduced, one frequently read in the South that it would "enslave" whites.
Megan McArdle, who once went door to door raising money for PIRG, the U.S. Public Interest Research Group (or maybe a state affiliate) that was inspired way back when by Ralph Nader, does not seem to care for the organization.
Have I mentioned recently that I hate PIRG? Well, I hate PIRG with the kind of blackhearted distilled rage that normally characterizes the breakup of a thirty year marriage. They, and their whole canvassing operation, are a vile beast that subsists on dishonor, greed, and the rapidly disintegrating idealism of impressionable young people.
Chicago papers keep reporting that Sam Zell will soon no longer be running Tribune Co. and the papers and TV stations it owns, including The Sun. That was always a given once Tribune sought protection from creditors in bankruptcy court last year. Zell put up hardly any money in the deal to start with; he's certainly not going to be calling the shots once creditors take over the ownership. The only question is: What will the creditors do with the company? Will they try to keep it together, preserving present management's vision of a national chain in several major markets? Or will they sell it off in pieces?
Today's report in the Chicago Sun-Times contains this line suggesting the option "B" is preferred:
The creditors, including investment banks owed $8.6 billion from Zell's Tribune takeover, would stage a takeover of their own and sell off the company's newspapers and broadcast stations as they see fit.
There is no further reference to breaking up the company.
This year's Lincoln pennies look different. Each 2009 version, of course, includes the familiar right-facing bust of Lincoln. The backs depict varying aspects of life for the country lawyer, one-time House member and unsuccessful Senate candidate who went on to become the country's first Republican president and the first assassinated.
One new penny shows the late president as a beardless, gangly young man sitting on a log reading a book, which he no doubt walked several miles to return by its due date.
This month's new penny portrays Lincoln standing in front of the old Illinois state capitol in Springfield to commemorate where Barack Obama would one later day announce his own successful presidential candidacy from a different party. A third version depicts a simple log cabin, which was in 19th century American politics a standard political symbol of personal origin showing a candidate to be a regular man of the people much like, say, a Harvard Law School degree has become today.
The fourth Lincoln penny, due out in November, will show a topless U.S. Capitol building, not because it was blown off during nearby Civil War fighting but because it was being built during Lincoln's presidential terms. In fact, despite the war Lincoln insisted on continuing construction as a symbol of imperative national union.
The wise and calm Tyler Cowen delivers new words of sagacity.
The topic is the now-famous brainless editorial by Investor's Business Daily, which said famed disabled physicist Stephen Hawking "wouldn't have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless." Hawking, of course, has lived in the U.K. his whole life and has since said he owes his life to the National Health Service.
But how relevant is this to the wider debate on health care? Says Cowen:
The more you bash the idiots, the more you are playing into the hands of...the idiots.
True, I don't have a Nobel in economics. But I don't understand why Neil King's and Jonathan Weisman's phrase, "yields on different forms of credit relative to the risk," is not an OK, offhand reference to credit spreads in a newspaper story where credit spreads aren't the central topic.
Paul Krugman gets his boxers all in a bunch about it.
This paragraph is gibberish. What are “yields on different forms of credit relative to the risk”? I don’t know. I suspect that Jared Bernstein was talking about risk spreads — corporate debt versus Treasuries. You might excuse Weisman for getting this garbled — except that Weisman has specialized in reporting on economic issues.
Maybe ""how credit yields varied according to risk" would have been more precise. But geez.
The Federal Reserve's Federal Open Market Committee, which tightens or loosens the faucet on the money supply, decided today to keep the taps almost wide open, maintaining the target for a key short-term interest rate at close to zero. But it is starting to throttle down its campaign to hold down long-term interest rates. It said it will wind down a $300 billion program to buy Treasury securities by October even as it continues to buy mortgage-related debt through the end of the year.
It also said "economic activity is leveling out," a more optimistic appraisal than the Fed's June 24 report that "the pace of economic contraction is slowing."
Otherwise the committee tweaked its statement to reflect that time has passed since the last meeting in June. But it's basically the same. No sign that the Fed will increase short-term rates anytime soon, which is what Wall Street was mainly worried about.
In June financial markets had "generally improved," said the official statement. Today it said markets "have improved further in recent weeks."
June: "Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit." Today: "Household spending has continued to show signs of stabilizing but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit."
They added "sluggish income growth" to the list of weights on the economy.
For June and today, the language on the outlook is identical: "Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability."
UPDATE: from T. Rowe Price chief economist Alan Levenson, in a note to clients:
In our view, the Committee is not going to raise rates until the unemployment rate has rolled over, which is the better part of a year away. And policy makers would rather not signal that they're even thinking about raising the funds rate ("removing accommodation") until the economy has moved broadly into expansion, including a trend of rising monthly increases in payroll employment (as opposed to the current trend of diminishing rates of decline).
Tribune, owner of The Sun, wants a bankruptcy judge's approval to pay top managers up to $70 million in bonuses even as the company has laid off journalists and pared back its papers. The Washington-Baltimore Newspaper Guild (full disclosure: I'm a member) opposes the bonuses. Says the Associated Press:
Judge Kevin Carey said details about the proposed bonus plan should be provided on a limited basis to attorneys for the Washington-Baltimore Newspaper Guild, which represents 225 workers at the Tribune-owned The (Baltimore) Sun and opposes the bonuses.
The judge agreed to allow the Chicago-based company to keep under seal a compensation consultant's report underlying the bonus plan and said information to be shared by the Tribune will be restricted.
"It's going only to the Guild," Carey ruled, denying the Guild's request to share the information with other unions, including those that joined in its objection to the bonus plan. Only the Guild made a formal objection in the case; the others joined in the Guild's petition.
If the reports are true that she was offered a $2 million salary plus $1.5 million for expenses while Simon Cowell is pulling in $30 million a year and Ryan Seacrest will get $10 million a year, she did the right thing for herself and her gender by walking away.
Goofy Paula was as much a part of Idol as the other two. The only explanation I can think of for such a pay disparity is sexism. Idol producers have proven very canny in preserving their franchise for this long. But they just blew it.
Laura Smitherman reports that lawmakers are talking again about an "Internet sales tax" in Maryland that would apply to online merchants not now collecting the 6 percent sales tax that state-based stores must remit.
An Internet sales tax is another proposal that has drawn support. Backers say that such a tax would ensure fairness. Under the current system, some online purchases are subject to state sales tax and others are not. An Internet sales tax could generate an estimated $7.8 million a year, according to fiscal analysts.
Nice try, but the Supreme Court has ruled that under current law states cannot tax Internet or catalog sales when the merchants have no physical presence in the particular state. The case is is Quill Corp. v. North Dakota, 1992. Amazon and other big Internet merchants own zero property in Maryland. (Internet sellers such as Land's End or L.L. Bean, which do have Maryland stores, must collect Maryland sales tax on their Web sales.)
New York, California and other states are trying to get around this by treating independent Amazon affiliates in their states as an Amazon presence, and requiring a tax. (When you buy less-than-mainstream merchandise on Amazon -- say, cookware -- the order often comes from an outside vendor piggybacking on Amazon's software.) Amazon has challenged this in court but is also severing ties with affiliates in California and other states that have made this move. Here is good background from blog.fed.tax.net.
A small state like Maryland probably has few affiliates of Amazon or other Internet sellers, so that route is probably blocked. And an outright attempt to flout the Supreme Court precedent would lead to challenges, bad press and not much revenue. Maryland needs to wait until Congress passes a law requiring Internet merchants to collect and remit sales for customers in every state.
From the Staunton News Leader of Virginia, a report that a judge has revoked Dominion Virginia Power's emissions permit for a new coal-powered generation plant. The plant is already under construction. It'll probably end up getting finished, but the ruling demonstrates the challenges to building new generators of any kind, especially coal. It's why conservation has turned into Job No. 1 for the Mid-Atlantic grid.
This AP story is a little weird. GM says the Chevy Volt will get 230 mpg. Well, yeah, it runs mainly on electricity, not gas. Publishing miles per gasoline-gallon figures for vehicles that don't run on gasoline is a little off. Golf carts get even better mileage. So do roller blades, bicycles and scooters. They get infinity miles to the gallon. There is a free lunch! "Mileage" figures are great, but only as long as they reflect all the energy used.
WARREN, Mich. (AP) -- General Motors Corp. said Tuesday its Chevrolet Volt rechargeable electric car should get 230 miles per gallon of gasoline in city driving, more than four times the mileage of the current champion, the Toyota Prius.
The Volt is powered by an electric motor and a battery pack with a 40-mile range. After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles. The battery pack can be recharged from a standard home outlet.
GM came up with the 230-mile figure in early tests using draft guidelines from the U.S. Environmental Protection Agency for calculating the mileage of extended range electric vehicles, said Tony Posawatz, GM's vehicle line director for the Volt.
If the figure is confirmed by the EPA, which does the tests for the mileage posted on new car door stickers, the Volt would be the first car to exceed triple-digit gas mileage, Posawatz said.
Hey CNBC producers. Check out this guy. He's "edgy." He goes "against conventional wisdom." He says unemployment will top 20 percent. He's wrong. But who cares. He's edgy! Book him, Maria!
"Economic Downturn to Worsen" Warns Multi-Millionaire Trader
Critical Insight on Where to Invest and How to Protect Assets Offered
(MMD Newswire) August 11, 2009 - - Multi-millionaire trader, Vince Stanzione, predicts a lot more doom before the next boom. This veteran trader is warning stock market investors that the worst is yet to come.
"The markets and property markets are heading lower, much lower.
Unemployment is going up 20%+, and living standards will not return to the 2007 levels for at least 20 years, if ever. Recent moves up in the stock market are nothing more than manufactured short term gains," warns Vince Stanzione. He continues, "I have no desire to scare people or give false hope; I trade as I see it and share my information. I am not the most conventional trader, as I'm not afraid to bet against the crowd. I have an eye for spotting the next big trends."
Vince Stanzione is Available for Interview
Vince Stanzione will share his amazing insight into the next big trends as well as explaining how to protect assets against future economic downturns. Vince has extensive experience giving TV, radio and print interviews. His views on the financial markets are interesting because they are edgy and go against conventional opinions.
UPDATE: I'm not wrong, says Vince. Vince Stanzione, who seems to think net worth = credibility, emails:
Stupid release?, when your a multi millionaire with a track record like mine then you can maybe criticise.
Why I am wrong that US unemployment will not reach 20%?, if you worked it out truthfully it would not be far off it now.
32 million on food stamps.
Unlike you and most I put my money where my mouth is.
"Town hall meetings" have always been a bit of a charade. Politicians rub sleeves with/pretend to listen to constituents and then go back to to Capitol Hill and vote the way lobbyists or the party leadership or -- sometimes! -- their consciences tell them. But now the tables have been turned. There may have been people in the audience at Towson University last night with genuine, reasoned concerns about health-care legislation, but it's hard to tell from the news coverage. "Obama Lies, Seniors Die"?? Ellen Sauerbrey, matriarch of Maryland Republicans, wearing a homemade "Euthanasia" button? The charade last night was in the audience, not at the lectern.
I thought we were talking about a plan to offer widespread medical coverage the way other developed nations do. These folks' health is threatened a lot more by their own bile and high blood pressure than anything going on in Washington.
UPDATE: Here is a sensible observation from RavensFan59. I suspect s/he is right. Pulled from comments:
" Canada, South America, or anywhere in Europe, you would be treated immediately either for free or for a nominal sum. The U.S. is the only industrialized nation on Earth where you have to pay out of pocket for health care."
The citizens of those nations pay for it in the form of higher taxes. Conservatives aren't the only ones lying about health reform. Obama and every Legislator who says that this reform won't cause significant tax increases down the road for all Americans in lying as well. At the end of the day someone has to pay.
What this blog is about, according to Wordle:
Greg Mankiw, former chairman of Bush II's Council of Economic Advisers, repeats his longstanding call for a carbon tax in a piece in Sunday's New York Times. But he faults the legislation moving through Congress because it doesn't charge enough for carbon emissions permits that will be dealt out to industry. This deprives the government of revenue, Mankiw argues, that could be used to finance tax cuts in other areas.
The numbers involved are not trivial. From Congressional Budget Office estimates, one can calculate that if all the allowances were auctioned, the government could raise $989 billion in proceeds over 10 years. But in the bill as written, the auction proceeds are only $276 billion.
The price of carbon allowances will eventually be passed on to consumers in the form of higher prices for carbon-intensive products. But if most of those allowances are handed out rather than auctioned, the government won’t have the resources to cut other taxes and offset that price increase. The result is an increase in the effective tax rates facing most Americans, leading to lower real take-home wages, reduced work incentives and depressed economic activity.
Note that his differences with the Democratic legislation are over whether to offset a carbon tax with other tax cuts -- not over whether anthropogenic climate change is real or whether we need to do something about it.
Obama finally admits it: He can't solve all the world's problems in his first 300 days. Only 90 percent of them. The president's statement that immigration reform will have to wait till next year is the first indication I have seen from the administration that, yes, political and legislative capacity are scarce resources, too. Just like oil and the environment.
Jamie Smith Hopkins reports that the number of Baltimore-region home sales rose in July compared with those for July 2008. That was the second monthly, year-over-year gain in a row. In July 2,240 homes sold in Baltimore and surrounding counties, a 9.9 percent increase from July 2008. In June 2,375 units changed hands, a 2 percent increase from June 2008.
Those figures are better than declines and probably indicate that the crisis is nearing its end, at least locally. But let's put it in perspective. There will be no return to a hot regional real estate market for a long time. Consider the data from MRIS:
-- In July 2005 4,362 homes changed hands. Last month's volume wasn't much more than half of that.
-- Prices are still falling. Last month's average sales price of $297,948 was 7 percent lower than the average selling price for July 2008.
-- The lumber is still sitting on the market for a long time -- more than three months on average -- before it sells.
-- Sellers still aren't getting anywhere close to what they're asking. Even two years ago sellers were getting 95 percent, on average, of the list price. Last month it was down to 91 percent.
-- There is still plenty of inventory to move -- 18,869 houses, condos and other listings. That's down from nearly 21,000 a year ago, but it's still a decent overhang.
In June 2009, Washington-Baltimore area consumers paid more than the U.S. city average for utility (piped) gas (10.9 percent) and electricity (13.6 percent) but less than the national average for gasoline (-4.4 percent) as measured by the Consumer Price Index, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Sheila Watkins, the Bureau’s regional commissioner, noted that the 13.6 percent gap between local and national electricity prices was the largest difference in June in the last 10 years.The fact that the regional-national electricity gap has
Washington Gas Energy Services is still offering its cheaper alternative to BGE's standard product. Here's a recent interview I did with Jeff Salkin on MPT about it.
Lloyd Grove asks on the Daily Beast: What happened to Lou Dobbs?
Just how did a respected financial-news guru turn into an immigrant-hating, birther-supporting zealot?... What a difference three decades make. In 1980, Dobbs launched his brilliant career as a whip-smart Harvard grad who practically invented television business news at the fledgling cable network CNN, founding CNNfn while winning friends and influencing people among the corporate elite...
"Lou’s a longtime friend and I admire him as a great pioneer for business and economic news, making it vital and meaningful for a new audience of television viewers,” said Paul Steiger, chief of the investigative journalism organization ProPublica and former managing editor of The Wall Street Journal. “But as he’s gone beyond business news, he’s become enamored of causes, particularly fear of foreigners and immigrants, that I don’t find to be in keeping with the high intelligence that I know he possesses.”
The answer is simple, and it's all about the economics that Dobbs is supposed to know something about. Economics is about how incentives change behavior. The incentives for Dobbs, Bill O'Reilly, Glenn Beck, Ann Coulter etc. are to say outrageous things that attract a fringe, disaffected and not especially well-educated audience. The audience is a minority in the American polity, but it's large enough to support a very nice living for the screamers. Ratings, power and money are more than enough incentive to push stuffed shirts to pander to the fringe by saying things even they themselves probably have trouble believing are true or justified.
Of course in the meantime they surrender their dignity and any reason to command respect. But obviously for some folks that's just not as important.
There are plenty of intelligent, thoughtful conservative commentators who make good points in good faith. David Brooks. Greg Mankiw. Geroge Will. Bruce Bartlett, etc. Lou Dobbs is no longer in their company.
Today's column said:
The monthly jobs report may show that unemployment topped 10 percent last month for the first time since 1983. It'll probably disclose that U.S. payrolls shrank by another 300,000 jobs or so, bringing cumulative losses over the last two years to nearly 7 million jobs.
The results are out, and they weren't that bad. Unemployment fell slightly in July -- from 9.5 percent to 9.4 percent. That was the first dip in 15 months. National employment dipped by 247,000 jobs, not the expected 300K or so. That was the "best" result since August 2008, just before the financial markets fell off a cliff. And more "good" news from AP:
Also heartening: job losses in May and June turned out to be less than previously reported. Employers sliced 303,000 positions in May, versus 322,000 previously logged. And, they cut 443,000 in June, compared with an earlier estimate of 467,000.
Heartening compared with the Great Depression, that is. Anytime the economy sheds 200,000 or 300,000 jobs is not a good month. But the lack of another surprise bad report -- like the one from June, should give hope that things are at least moving in the right direction and dampen "the stimulus is a failure" talk. Says T. Rowe Price economist Alan Levenson in a note to clients:
Unemployment rate still headed to 10%. The downtick in the unemployment rate (to 9.4%) was the first since April 2008, but does not signal an end to the upward trend... Indeed, the unemployment rate will rise further in the early stages of labor market recovery, during which employment gains fall short of labor force growth.
In other words, the jobless ranks will swell further, but that doesn't mean the economy isn't improving. Unemployment is a "lagging" indicator, which means it says more about where the economy has been than where it is going. None of this, however, changes the point of the column: We're in for a long, slow, "jobless" recovery, similar to those after the previous two recessions.
I like to know how left-brained people consume art, beauty and other right-brain material. Tyler Cowen of Marginal Revolution is very generous with cultural opinions/recommendations. Brad DeLong and Paul Krugman come through with the occasional historical novel or sci-fi pick. I think Lynne Kiesling of Northwestern likes Arctic Monkeys. This is from Greg Mankiw, Harvard prof and former chairman of Bush II's Council of Economic Advisers:
I went to a great Jason Mraz concert last night. (Great, that is, except for the drunken couple with seats directly behind us--talk about negative externalities!) If you don't know who Jason Mraz is, click here.
But the real surprise of the night was an excellent warm-up act, K'Naan.
I believe he's a huge Vampire Weekend fan also.
UPDATE: PS. These are all economists, the left-brained folks I am most familiar with .
Pulled from comments: More reports from the job wars.
Thanks all for the advice and wisdom. I just got laid off last friday after almost 9 years with my company and 20 years since undergrad. I have heard similar stories form numerous people that echo the comments above, that it is just brutal out there, oh wait, I meant "out here."
Conversely, I've heard that there are opportunities, it is just a vastly different game to play now. It takes dilligence, patience, confidence, and using professional networks to uncover those opportunities.
All options are under consideration right now between looking for a new, full time opportunity, picking up contract work, going back to school, or starting my own business.
Good luck to all of us now in the new game.
David Sokol, the guy who just pried more than $1 billion out of Constellation Energy Group for a few months' work, just got an added task within Warren Buffett's Berkshire Hathaway and is being tipped as Buffett's possible successor. Says Reuters:
Buffett's naming on Tuesday of David Sokol as chairman and interim chief executive of Berkshire's NetJets Inc unit has renewed speculation that Sokol could be the internal executive in line to replace Buffett in running the Berkshire empire.
Sokol is also chairman of Berkshire's MidAmerican Energy Holdings Co unit. He is 52, several years younger than others whom analysts say could also be heirs apparent, insurance executive Ajit Jain and Geico Corp chief executive Tony Nicely.
State-by-state unemployment rates, from the Labor Department. The key is hard to read, but anything green is over 10 percent. Purple is 7.0 percent to 9.9 percent. Brown is 6.0 to 6.9 percent. Red is 5.0 to 5.9 percent.
From Michael Mandel:
A new academic paper makes a credible argument that stock option contracts for executives can cause excessively large swings in the economy. The paper, which I think is destined to become a classic, has a great title: "Some Unpleasant General Equilibrium Implications of Executive Incentive Compensation Contracts. "
The idea is that bubbles are driven by "self-fulfilling fluctuations in the manager's expectations," according to the paper by John Donaldson, Natalia Gershun and Marc Giannoni. And the pay of those managers is disproportionally driven by the growth of the firm, so they're prone to overexpand. The thinking among economists until recently was that computers had eased booms and busts. When Walmart's cash registers can instantly talk to the factories of Walmart's vendors, the thinking went, the risk of production gluts and the resulting slumps should be less. That still makes sense. But maybe heavily incentivized and self-deluded executives are now a countervailing force.
The paper's conclusion:
These results suggest that the early twenty-first century explosion in the incentive compensation among financial firms may have unforeseen consequences. We are only now beginning to see what these consequences are.
Pulled from comments: An inspiring story from Geof -- thanks for taking the time to share and congratulations on pulling yourself through challenging times. The bottom line:
Keep the faith folks. Even the worst storms, though long, can't last forever. You'll get through this period with determination, focus, persistence, and faith. Things won't happen for you at the times you may want them to, and you will have to weather a lot of difficulties on the way, but have confidence in yourself, your abilities, your talents, that there is an opportunity out there for you; there's an ocean of them and you just need to land one.
Here is the whole post:
To buoy folks' perspective on things, I'm a professional in my mid-thirties, 12 years experience, was laid off in January of last year.
Had a lot of troubles last year: was laid off a few months before my first child was born, my mother in law died suddenly and unexpectedly (about a month before our daughter was due), my wife lost her job the day she came back from maternity leave, and to top it off, I needed emergency back surgery. (Fortunately, that issue cropped up while my wife still had her health benefits--she was given three months insurance as part of her severance.)
Having been laid off in prior slowdowns (post 9/11, and then the plague of corporate scandals in '04) through it all, I was determined that I was going to come out better off
on the other side and would refuse to take a position which would lead to nowhere and being back where I started: laid off. I briefly took a temp job for a few weeks during the summer, sweated out depletion of my savings, my wife and I endured the scam that is individual insurance (try it out and you'll see why the health care system is broken as the policy covered dr's visits for our daughter, but not her necessary immunizations during those visits).
Well, my wife's layoff was just what she needed as she had long been unhappy with work and I'd been encouraging her to look for a more fulfilling position for years. As luck would have it, one of the premier institutions in our area (in the world) had an opening and she was quickly interviewed and hired, with a better salary, better quality of life, better profile for her career.
In all, my wife was able to get six months with our baby and I was able to get a year.
I actually turned down one promising prospect which would have resulted in just a lateral move and ended up with two offers at great offices locally, both more diverse in work and opportunities, and offering significantly more salary than my prior job. Since joining a few months ago, it's been a great move.
I was out of work for fifteen months. Slogged through a lot of personal strains and disappoinments--the toughest time was probably the day after my surgery when I was lying in a hospital bed, in a lot of pain (despite the strong medication I was one), unable to get comfortable enough to sleep, unable to perform the basic dignity getting out of bed and walking 15 feet to use the restroom without the need of a walker. I called my wife in the middle of the night crying and scared about whether this was going to be the way things were from now on.). But life is better on the other side. (Through it all, I was able to meet financial obligations which was difficult but I thought was necessary.)
Keep the faith folks. Even the worst storms, though long, can't last forever. You'll get through this period with determination, focus, persistence, and faith. Things won't happen for you at the times you may want them to, and you will have to weather a lot of difficulties on the way, but have confidence in yourself, your abilities, your talents, that there is an opportunity out there for you; there's an ocean of them and you just need to land one. Through all the disappointments--and trust me, I had a several of them--never lose confidence in yourself. Hope this has been helpful to somebody out there.
Shortbus begs to differ with BGE parent Constellation Energy's report of "adjusted" earnings of $1.82 per share for the second quarter. This figure is supposed to reflect ongoing profits and doesn't include irregular, extraordinary costs that distort the future picture.
However, as Shortbus points out, irregular and extraordinary are absolutely routine at Constellation Energy Group.
In other words, the non-GAAP [adjusted] earnings omit non-recurring charges in order to provide a picture of "normal" operations. In Constellation's case, the exception is the rule and a quarter without extraordinary charges would be an anomaly. Clearly, these figures are used being used to justify senior management's looting of the treasury and to deceive unwary investors.
[This is Jay. I don't know for a fact that the pay of Mayo Shattuck and other execs is tied to non-GAAP measures. I've asked CEG for comment.]
On the other hand, perhaps I'm being narrow-minded with respect to Constellation's accounting practices. Since I have a current $128 Constellation electric bill in front of me, I can't think of a better opportunity to practice some of Shattuck's "outside the box" methodology. Thus, I see no reason not to submit $4.74, which is a 27 time reduction that represents, in the judgement of Shortbus management, a truer picture of my power consumption.
UPDATE: CEG spokesman Rob Gould refers us to a regulatory document that talks about why the company reports adjusted earnings per share. He doesn't directly address the question of whether management is paid at least partly based on adjusted results, so presumably the answer is yes. The excerpt below implies that they are, saying, "adjusted EPS is an appropriate measure for senior executives..."
In the attached link, go to page 28…..it lays out in the middle of the page………”Adjusted EPS is publicly reported quarterly by CEG. We believe this view of adjusted EPS reflects results that are comparable among periods since it excludes the impact of items such as workforce reduction costs or gains and losses on the sale of assets, which may recur occasionally, but tend to be irregular as to timing. We believe this view of adjusted EPS is consistent with how our investors view our business, and that adjusted EPS is an appropriate measure for senior executives given their company-wide responsibility.”
Buried in Monday's report from the Conference Board on help-wanted ads were several encouraging new measurements showing that Baltimore and Maryland continue to lead the nation in job openings.
The Conference Board counts online job openings from state to state and month to month and matches them up against unemployment rates -- ie. supply vs. demand. The latest figures add to the good news delivered by Indeed.com on the Maryland employment market in the second quarter, which I wrote about last week. The hiring picture was decent then; it's even better now.
"Modest strength for the last few months seen in several large states in the South including North Carolina, Virginia and Maryland" was one of the deck heads in the press release. Maryland, for example, listed 3,300 more openings in July than in June -- about a 3 percent increase, the private research group said. Nationally there were virtually no month-to-month growth.
Maryland had the best ratio in the nation of the number of jobs listed compared with unemployed people seeking work; to wit, there are two people looking for work for every one help-wanted posting. Not perfect, but compare that with Michigan, where there are 10 people looking for work for every opening listed. In Pennsylvania there were nearly five unemployed folks for every opening.
On a metro level, Baltimore was No. 9 nationwide for the total number of ads. (New York is No. 1, but only because it's huge.) Metro Baltimore was No. 2 for the number of ads measured against population and No. 3 for ads measured against the number of unemployed people.
All this suggests that the Maryland economy is set to grow in the next few months, if maybe only gradually. That's good news for everybody including the state pols who are trying to make the budget balance. For more on the Baltimore jobs outlook see Friday's Hancock column.
The Securities and Exchange Commission has reached a $33 million settlement with Bank of America for allegedly misleading its shareholders about bonuses paid to Merrill Lynch employees late last year. Bank of America and CEO Ken Lewis asked shareholders to approve the purchase of Merrill as the financial markets caved, giving cooing reassurances about bonuses. In fact it was a bonus jackpot.
So: The government that pressured Lewis to go through with the Merrill acquisition is now penalizing Bank of America for allegedly hiding information that might have caused shareholders to reject the deal. Damned if BAC does/doesn't. Such is the legal confusion when the law is abused as it was last fall. And who has to pay the $33 million? Bank of America shareholders -- the ones who were suppoesdly the victims.
WASHINGTON (AP) — Bank of America has agreed to pay a $33 million penalty to settle government charges that it misled investors about Merrill Lynch's plans to pay bonuses to its employees.
In seeking approval to buy Merrill, Bank of America told its shareholders that Merrill agreed not to pay year-end bonuses without Bank of America's consent. But the Securities and Exchange Commission says Bank of America had authorized New York-based Merrill to pay $5.8 billion in bonuses.
Sometimes you get the best picture when you step back and get some perspective. NGOs and governments spend millions of dollars trying to measure gross domestic product and other economic indicators in developing nations with no or rudimentary statistical agencies of their own. Three academics at Brown University have proposed a cool alternative way of gauging growth in Africa and elsewhere: Track changes in night lighting as seen from space.
In this paper we explore the usefulness of a different proxy for economic activity: the amount of light that can be observed from outer space. More particularly, our focus will be on using changes in “night lights” as a measure of economic growth...
Most significantly, night lights data are available at a far greater degree of geographic fineness than is attainable in any standard income and product accounts. As discussed later, we can map data on light observed from space on approximately one-kilometer squares and aggregate them to the city or regional level. This makes the data uniquely suited to spatial analyses of economic activity. Economic analysis of growth and of the impacts of policies and events on cities and regions of many countries is hindered by a complete absence of any regular measure of local economic activity...
Note also that data from satellites are available at a much higher time frequency than standard output measures. Thus they are available well in advance of income measures from national accounts and provide an early signal of country growth changes.
The paper is by J. Vernon Henderson, Adam Storeygard and David N. Weil.
The National Security Agency has long been the economic development enigma of Anne Arundel and Howard counties and, indeed, the whole state of Maryland. Exactly how many spooks are out there? The NSA is the government's worldwide electronic eavesdropping agency, supplying "sig-int(elligence)" to supplement the CIA's "hum-int."
Nice job by the Baltimore Business Journal of finding the NSA's notice in the Federal Register that it plans to add up to 11,000 jobs and 5.8 million square feet of office space over the next 20 years. Nice job by The Sun's Jamie Smith Hopkins in reporting the likely explanation: Much of this may be consolidation of satellite offices now surrounding NSA's Fort Meade headquarters, not net expansion.
But intelligence historian Matthew M. Aid, author of The Secret Sentry: The Untold History of the National Security Agency, thinks the NSA plans signal relocation more than expansion. The agency employs some 5,000 people in offices near Fort Meade but off the Army post, a security concern and a leasing expense, he said. He thinks the agency's priority will be to move workers onto its campus - bad news for the companies that own offices in the area. The NSA also has 50-year-old buildings at its headquarters that it will probably want to replace, he said.
Let's hope Maryland new-car dealers are getting a decent amount of this cash-for-clunkers action. They need it. Not only have sales of all cars plunged in this state. The portion of new-car sales is down, too.
In 2000 four cars out of every 10 sold in the state was new. The ratio has been falling steadily since then, and this year it went through the floor, according to figures from the Motor Vehicle Administration. For the year to date through June, only 27 percent all sales were new cars. A few years ago Maryland dealers were selling 1,300 or 1,400 new cars a day in June. Last month they sold a little more than 800 a day -- a total of 24,509, the worst performance in at least a decade.
The first $1 billion of clunker cash quickly got used up. It looks like another $2 billion is on the way. If all $3 billion gets spent that'll mean about 670,000 new cars moved off the lot across the country. Maryland's share of that ought to be about 10,000 cars, based on our vehicle population. As the program intended, that could make a huge difference for dealers. And it'll improve the environment.