A $9 trillion federal deficit over 10 years may be too hard to comprehend. But this part is easy: Such unwieldy amounts of debt could have an impact on Americans' bottom line one way or the other -- if not tomorrow, then the day after.
The U.S. government has been spending a great deal more than it has been taking in, and it is on track to do so well beyond the next 10 years. It has been borrowing money to make all that spending possible and it has to pay the money back with interest. How, you ask? By borrowing more.
The solution is straightforward if unpleasant: Shy of finding a fairy willing to leave trillions under Uncle Sam's pillow, lawmakers will have to raise taxes and cut spending.
The more the country lives on a credit card, the more it makes itself beholden to the demands of its creditors -- many of which are overseas. The danger is that buyers of U.S. debt could become concerned that the country is running too high a balance. If so, they will demand higher interest rates -- thereby making the country's debt problem worse -- or they'll put their money elsewhere.
At that point, things would get ugly.
"Taxes would rise to levels that would make a Scandinavian revolt. And the government would not be able to provide anything but the most basic public services. We would no longer be a great power (or even a mediocre one), and the social safety net would evaporate," tax policy expert and Syracuse University professor Len Burman wrote in a recent op-ed cheerfully titled "Catastrophic Budget Failure."
That's why acting sooner rather than later makes sense. But acting too soon could cause its own set of problems since the economy is only beginning to lick its wounds from a punishing recession.
Economists and tax experts, no matter their ideological position, agree raising taxes when the economy is down is self-defeating.
But as the economy finds a solid footing, the hard choices will have to be made.
The economy got stimulated. That was Act I. in Act II it is going to be smothered. Tech companies won big when the money was being dished out, with $37 billion of the February stimulus set aside for health information technology, smart electric grid and broadband investments. They'll also be a prime beneficiary if Congress adopts President Barack Obama's bid to make the research and experimentation tax credit permanent at a cost of $74 billion over a decade. But at the Technology CEO Council, Executive Director Bruce Mehlman says his "number one, two and three" priority these days is to block a Treasury proposal to wring $210 billion more in taxes over the next decade from multinationals' offshore profits. "We found the Obama Administration a great partner on infrastructure and research and we hope the distraction of populist tax policies can be shelved so we can help enable a long-term recovery," says Mehlman, whose members include the honchos of IBM, Intel, Dell, HP and Motorola. When Washington was putting trillions in bailouts and stimulus on Uncle Sam's credit card, many business leaders applauded (or at least stuck out their hands for the cash). Now, with the economy seemingly back from the brink, the cheering has stopped and the defensive game is on. Someone, after all, must pay for all that emergency deficit spending; for the $46 trillion (net present value) of Medicare and Social Security benefits already promised but not funded under current law; for renewing some of the expiring Bush tax cuts and containing the growth of the dreaded alternative minimum tax. Moreover, someone must pay for the Democrats' expensive shopping list: covering 46 million Americans without health insurance; mandating paid sick leave; moving to a low-carbon economy; and adopting tougher consumer, worker and investor protections. The stock market, now trading at 134 times trailing earnings, can be justified only with the presumption that profits will snap back to pre-2008 levels as soon as the recession ends. That may be a naive presumption. No sooner will there be a recovery in corporate profits than Congress will find ways to snatch them away. "Once the economy looks a little better, we move on to higher taxes, more regulations--all the punitive things that had to be put on the shelf as we saved the economy," says longtime Washington analyst Gregory Valliere, now at Soleil Securities. "It's going to be a modest recovery with all sorts of political risk," he adds. Candidate Obama promised no tax hikes on families earning less than $250,000, so Democrats are coming after upper-income folks and big business first. Assuming an economic recovery, rates for the better off will rise in 2011 as the Bush tax cuts expire. Clint Stretch, managing principal of tax policy at Deloitte Tax, speculates Congress might consider following the lead of states such as California, New York and Maryland and creating an even higher rate that kicks in at $500,000 or $1 million. The moral justification for such tax grabs is "pay as you go" budgeting--meaning if Congress wants to give a tax break or a new benefit to one group it must raise taxes or cut benefits for another. The nature of politics is such that over time tax raises are more likely than benefit cuts.
The Grand Old Party needs a new credo. New credos are best forged in non-election years. So instead of blowing up their marriages, Republicans might try blowing up their party platform.
The single most-profitable franchise for the Republican Party is growth, the kind of growth that sustains the relative competitiveness of the U.S. Instead of being the GOP, the Republicans should become the POG, the Party of Growth.
This growth franchise is Republicans’ for the taking because the Democratic Party leadership is in hot pursuit of other franchises -- the green biz, civil rights and their dearest goal, more government health care.
The growth franchise is also valuable because a lot of people, including many Democrats, recognize that a growth agenda is the only way to preclude a crisis worse than the current one. That crisis is the currency crisis that will occur if the world no longer wants to invest here.
How to make the GOP a POG? Four suggestions:
Stop Moralizing -- Junk the social conservatism.
Can’t Outgrow Deficit -- Take budget-balancing seriously.
Bondholder Rights -- Stand up for property rights.
If all the GOP is doing is looking to start somewhere, it might want to start with thinking about jettisoning the social conservatism from its program. The GOP ails. Long live the POG.
Iranian Opposition Leader Calls New Government 'Illegitimate'
The semiofficial Fars news agency said Wednesday that the militia — known as supreme leader Ayatollah Ali Khamenei's street enforcers — sent the prosecutor a letter accusing Mousavi of taking part in nine offenses against the state, including "disturbing the nation's security," which carries a maximum penalty of 10 years' imprisonment.
Iran's regime says 17 protesters and eight Basiji were killed in two weeks of unrest that followed the June 12 election. Mousavi insists the vote was tainted by massive fraud and that he — not incumbent President Mahmoud Ahmadinejad — is the rightful winner.
The powerful Guardian Council, Iran's top electoral oversight body, pronounced the election results valid earlier this week — paving the way for Ahmadinejad to be sworn in later this month for a second four-year term.
"Whether he wanted to or not, Mr. Mousavi in many areas supervised or assisted in punishable acts," said the Basij letter, which also accused Mousavi of bringing "pessimism" into the public sphere.
Mousavi has slipped from public view in recent days, and he did not immediately respond to Wednesday's allegations.
In another sign of a tightening government clampdown on anyone challenging Ahmadinejad, a reformist political group said Wednesday that authorities banned a newspaper allied to presidential candidate Mehdi Karroubi after he denounced Iran's government as "illegitimate" because of claims of voting fraud.
Navy Positions Destroyer For Possible Intercept of North Korean Ship Suspected of Proliferating Missiles, Nukes
Friday, June 19, 2009
The U.S. military is preparing for a possible intercept of a North Korean flagged ship suspected of proliferating weapons material in violation of a U.N. Security Council resolution passed last Friday, FOX News has learned.
The USS John McCain, a Navy destroyer, is positioning itself in case it gets orders to intercept the ship Kang Nam as soon as it leaves the vicinity off the coast of China, according to a senior U.S. defense official. The order to inderdict has not been given yet, but the ship is moving into the area.
"Permission has not been requested. Nor is it clear it will be," a military source told FOX News. "This is a very delicate situation and no one is interested in precipitating a confrontation."
The ship left a port in North Korea Wednesday and appears to be heading toward Singapore, according to a senior U.S. military source. The vessel, which the military has been tracking since its departure, could be carrying weaponry, missile parts or nuclear materials, a violation of U.N. Resolution 1874, which put sanctions in place against Pyongyang.
The USS McCain was involved in an incident with a Chinese sub last Friday - near Subic Bay off the Philippines. The Chinese sub was shadowing the destroyer when it hit the underwater sonar array that the USS McCain was towing behind it.
This is the first suspected "proliferator" that the U.S. and its allies have tracked from North Korea since the United Nations authorized the world's navies to enforce compliance with a variety of U.N. sanctions aimed at punishing North Korea for its recent nuclear test.
The ship is currently along the coast of China and being monitored around-the-clock by air.
Scheiner, 71, was Obama's doctor from 1987 until he entered the White House; he vouched for the then-candidate's "excellent health" in a letter last year. He's still an enthusiastic Obama supporter, but he worries about whether the health care legislation currently making its way through Congress will actually do any good, particularly for doctors like himself who practice general medicine. "I'm not sure he really understands what we face in primary care," Scheiner says.
Scheiner takes a few other shots too. Looking at Obama's team of health advisors, Scheiner doesn't see anyone who's actually in the trenches. "I have a suspicion they pick people from the top echelon of medicine, people who write about it but haven't been struggling in it," he says.
Scheiner is critical of Obama's pick for Health and Human Services secretary--Kansas Gov. Kathleen Sebelius, who used to work as the chief lobbyist for her state's trial lawyers association.
"He doesn't see all the pain, it's so tragic out here," he says. "Obama's wonderful, but on this one I'm not sure if he's getting the right input."
What should the president be focused on? Scheiner thinks that a good health reform would be "Medicare for all," a single-payer system where the government would cover everyone and pay for it by cutting out waste in the system. "A neurosurgeon gets paid $20,000 for cutting into the neck of my patient. Have him get paid $1 million a year instead of $2 million or $3 million. He won't starve," Scheiner says.
Only 6 percent of Jewish Israelis consider the views of American President Barack Obama's administration pro-Israel, according to a new Jerusalem Post-sponsored Smith Research poll.
The poll, which has a margin of error of 4.5%, was conducted among a representative sample of 500 Israeli Jewish adults this week, following Prime Minister Binyamin Netanyahu's speech in which he expressed his support for a demilitarized Palestinian state.
Another 50% of those sampled consider the policies of Obama's administration more pro-Palestinian than pro-Israeli, and 36% said the policies were neutral. The remaining 8% did not express an opinion.
The numbers were a stark contrast to the last poll published May 17, on the eve of the meeting between Netanyahu and Obama at the White House. In that poll, 31% labeled the Obama administration pro-Israel, 14% considered it pro-Palestinian and 40% said it was neutral. The other 15% declined to give an opinion.
House passes first approps bill after long day of votes
By Walter Alarkon
House Appropriations Committee Chairman David Obey (D-Wis.) has laid out a detailed schedule that seeks to get the House to approve the 12 spending bills before the August recess. Senate Democrats have also said they wish to pass the bills on time — before the start of the next fiscal year, Oct. 1 — but the Senate has yet to get its first bill onto the floor. Congress hasn't passed all of the spending measures before the start of the fiscal year since 1994.
Obey had slated the Commerce, Justice and Science measure for House passage Wednesday, but it stalled over a debate over how many amendments Republicans could offer on the floor.
Obey and Democrats limited the amendments to 33, down from the total of 127 initially offered. Republicans had offered more than 100 amendments, most of them aimed at reducing spending. While Republicans protested the lack of open debate, Obey criticized the GOP strategy of trying to throw up procedural obstacles to the Democrats' agenda.
The GOP frustration spilled over into Thursday, as Republicans forced Democrats to take vote after vote on the amendments. Voting started at 10:30 in the morning and continued until 6:30 in the evening.
China Orders Google to Suspend Foreign Site Searches
by Owen Fletcher
China has ordered Google to suspend its foreign Web site search service after warning that the company's filtering of pornography was too weak, state media said Friday.
Google was also ordered to revamp its service immediately and remove all links to pornographic and "vulgar" material, the official Xinhua news agency said.
The Google function that suggests search keywords as users type stopped working on google.cn during the day on Friday, though it still worked in the country on google.com. Google was also ordered to remove that ability, the report said.
The function was shown to recommend suggestive terms based on mundane inputs during a news program broadcast by state-owned CCTV a day earlier. The station showed Google suggesting "illicit mother-son relations" as a search phrase in Chinese when a user typed in the word "son."
A government-backed Internet watchdog also condemned Google for "disseminating pornography and vulgar information" from abroad on Thursday.
Xinhua did not explain the demand to end search services for foreign Web sites.
A Google spokeswoman confirmed the company had met with Chinese officials Thursday to discuss problems with its China search service.
A new NBC/Wall Street Journal poll shows President Obama's favorability ratings still sky-high but slipping slightly, while former vice president Dick Cheney, seen here during at recent appearance at the National Press Club, appears to be improving his image
Of those responding, 60% had a very or somewhat positive view of the president, comparedÂ with 66% in January, when Obama took office. Cheney's numbers moved up from 21% in December to 26% today. As our Gannett Washington Bureau colleague Chuck Raasch recently pointed out, the former veep has been on a full-court public relations press lately defending the foreign policy and national security efforts of his boss, former president George W. Bush.
Ayatollah Ali Khamenei addressed a crowd at Tehran University in a sermon during Friday prayers.
His speech was greatly anticipated amid massive protests from supporters of opposition leaders such as Mir Hossein Moussavi, who disputed the government's assertion that Ahmadinejad won in a landslide.
While Khamenei called on those who don't believe the results to use proper legal avenues, such as requesting the recounting of ballots in their presence, he did not issue a call for a new vote.
He also criticized the street protests and said those who caused violence during demonstrations would be held accountable.
Khamenei said Ahmadinejad got more than 24 million votes, defeating Moussavi, his main challenger.
"Eleven million votes difference? Sometimes there's a margin of 100,000, 200,000, or 1 million maximum. Then one can doubt maybe there has been some rigging or manipulation or irregularities," Khamenei said.
"But there's a difference of 11 million votes. How can vote rigging happen?" he asked.
He lauded the election as a "political earthquake."
"The 10th presidential election was actually a great show in which people indicated their responsibility towards the destiny of their country. It was a great manifestation of people's participation in the affairs of their country. It depicted very well people's solidarity with their establishment," he said.
Khamenei praised the 85 percent voter turnout of about 40 million people, but said that some critics "wanted to indicate that as a doubtful victory. Some even wanted to show that this is a national defeat.
Indeed, the entire premise of the Social Security system is that Americans will continue to innovate and the economy will grow so that the current generation of workers will be able to fund current retirees' benefits. But because of shifting demographics and the added stress of the recession, when the baby boomers begin to retire in 2016, the benefits being paid out will start to exceed the amount being taken in. After the trust fund is depleted in 2037, beneficiaries will be able to receive only what current workers are paying in, which will be about three quarters of the scheduled benefits, unless changes are made.
"It's very much a Ponzi scheme where the next generation will get stuck holding the bag," says Laurence Kotlikoff, author of The Coming Generational Storm and a longtime advocate of reform. "We have a huge generational imbalance."
The justice of the situation is up for debate. David Walker, former U.S. comptroller general, says that Social Security was never designed to be a quid-pro-quo system. It was designed to provide extra income to lower-income groups at the expense of those with higher incomes, so analyzing the rate of return for current workers doesn't make much sense, he says. "I hear young people saying, 'I'm not getting a good deal.' That's technically right, but it doesn't reflect the nature of what Social Security is," he explains.
Besides, while workers in their 20s and 30s may not get a full return on their payments, they do benefit from older workers' and retirees' innovations, says Bernard Wasow, senior fellow and economist at the Century Foundation. "The premise that there shouldn't be any transfer between generations doesn't make much sense. All the inventions, improvements, and technology that my generation generates will be passed on to my kids," he says. Plus, he adds, retirees often face poverty and need the financial support. "We can't just tell old people they should have saved more and should sleep under bridges," he says.
With people in their 50s and 60s getting ready to retire just as the stock market has taken a big hit, plenty of workers in their 20s and 30s are just as concerned about their parents' financial well-being as their own. "I don't think, 'Grandpa's getting this much and I'm getting this much, and that's not fair,' " says Anya Kamenetz, author of Generation Debt: Why Now Is a Terrible Time to Be Young. "My worry is, how do you get benefits to people who need it? That's the bigger issue. I have parents who are turning 60 soon, and they'll be relying on 401(k)s that aren't as strong, so I want to know the [Social Security] benefits are there."
The baby boom generation "has seen much of its retirement savings wiped out at a point when it's too late for many to recover. So the new context is, the elderly are going to be the fastest-growing poverty group in the United States...so we're going to have to spend a lot of money on the elderly," says Phillip Longman, author of Born to Pay: The New Politics of Aging in America and a senior fellow at the New America Foundation.
I'd say we have substantial empirical evidence that we are not going to control the health care cost inflation which is busting Medicare's budget, much less the new costs the administration is planning to add. We have been trying to control health care costs since the 1970s made it clear that Medicare was going to get really, really expensive. And any idea that you care to name, from comparative effectiveness research to healthcare IT to preventive medicine . . . these have all been on the table for more than thirty years, under one name or another. They haven't happened.
The answer that those promising magical cost reductions need to ask is "Why haven't they happened?" and "What has changed to make them feasible now?" But when I ask this question, I get angry demands that I put forward my plan for cost control, rather than merely critiquing everyone else's. This seems rather like demanding that I put forward my design for a perpetual motion machine before I am allowed to point out problems in the US energy market.
To those who say, pretty reasonably, "Why not demonstrate that you can control these costs in Medicare before asking us to believe you can do it with a broader program?" the response is something like a snapped, "But I don't want to just control Medicare costs! I want universal coverage!" Ah. Well, Republicans don't want to maximize tax revenue; they want to cut taxes. This does not make their now-deliberate wishful thinking any prettier. Nor obligate the rest of us to fulfill their desire at the expense of sound budget policy.
Both Medicare cost control and Republican tax cuts are like the Red Queen's strategy in Alice in Wonderland: "Jam yesterday, and jam tomorrow, but never jam today". They promise sweeteners to sell their favored policies, but when the day actually arrives, time and time again we're left holding an empty jar.
As the "cheerleader in chief" for stimulus spending, Biden's been touring local communities to give an "all politics is local" pitch for the benefits of the program. But if voters are looking at high unemployment next year, the promise of a $1.7 million replacement bridge over Conodoguinet Creek in Carlisle, Pa., isn't going to make them feel much better.
It's not just Republicans who are complaining about the stimulus package. The U.S. Conference of Mayors, meeting this weekend in Providence, R.I., complained that cities have been shortchanged when it comes to federal stimulus money.
Some congressional Democrats, especially those facing unpalatable votes on health care reform (i.e. raising taxes), will be tempted to vote against the president to avoid being pulled down in 2010. But with their party in control of Congress and the White House, it's going to be really hard for any Democrat to run as a "lone wolf," especially if that member is a freshman without an established identity back home. This isn't to suggest that Democrats should simply follow Obama lockstep. But as we've seen with Republican moderates the last two cycles, if the brand goes bad, sometimes it doesn't matter how you voted.
For now, Obama still has a reservoir of good will built up with the public, and his high approval numbers may help insulate members of his party.
Ultimately, though, watching Democrats these days reminds me of the kids' board game "Don't Break the Ice." In that game, a plastic polar bear was placed on top of an elevated board made up of individual cubes of "ice." The goal of the game was to knock out as many pieces as possible without sending the polar bear crashing to the ground. Sometimes the polar bear came down after one piece was knocked out; sometimes he could still be standing even as his ice world crumbled all around him.
Senate Majority Leader Harry Reid said Wednesday that this is the last time Congress will go through the ordeal of passing an expensive, unpaid-for war spending bill. It may also be one of the more difficult.
The House, with almost no Republican support, on Tuesday barely approved a $106 billion emergency spending measure that includes $80 billion to sustain military operations in Iraq and Afghanistan through this budget year ending Sept. 30.
Republicans supported the war funds but objected to other parts of the bill, particularly $5 billion to open up a U.S. line of credit for an International Monetary Fund loan program for poorer countries hit by the world recession.
The war spending bill sailed through the Senate on a 86-3 vote last month, but passage of the House-Senate compromise worked out last week will be more of a challenge.
Sen. Judd Gregg, R-N.H. is expected to raise a point of order against a provision inserted in the compromise providing $1 billion for a "cash for clunkers" program that gives consumers government rebates when they trade in old vehicles for more fuel efficient models.
Recession boosts global human trafficking, report says
By Elise Labott
The global financial crisis has increased the worldwide trade in trafficked persons, says a State Department report released Tuesday.
The State Department's annual Trafficking in Persons Report also says trafficking has increased in Africa and slaps six African nations on a blacklist of countries not meeting the minimum standard of combating trafficking.
The report, mandated by Congress, features data and statistics from 175 countries around the world regarding the amount of human trafficking that goes on within their borders.
The report cites the International Labor Organization, which estimates that at least 12.3 million adults and children are victims of forced labor, bonded labor and sex slavery each year.
"This is modern slavery. A crime that spans the globe, providing ruthless employers with endless supply of people to abuse for financial gain," Secretary of State Hillary Clinton said as she announced the report. "With this report, we hope to shine the light brightly on the scope and scale of modern slavery, so all governments can see where progress has been made and where more is needed."
The report says the global economic crisis is boosting the demand for human trafficking because of a growing demand for cheap goods and services.
"A striking global demand for labor and a growing supply of workers willing to take ever greater risks for economic opportunities seem a recipe for increased forced labor cases of migrant workers and women in prostitution," it says.
President Obama will sign a presidential memorandum on Wednesday to extend benefits to same-sex partners of federal employees, administration officials said Tuesday evening, but he will stop short of pledging full health insurance coverage.
Mr. Obama, in an Oval Office announcement, is expected to offer details about which benefits will be provided. It is the most significant statement he has made on gay issues, and it comes as he faces intense criticism from several gay rights leaders over what they suggest has been a failure to live up to campaign promises in the first months of his presidency.
Mr. Obama will be weighing in for the first time on one of the most delicate social and political issues of the day: whether the government must provide benefits to same-sex partners of federal employees. While he will announce a list of benefits, officials said, they are not expected to include broad health insurance coverage, which could require legislation to achieve.
The initial reaction from some gay rights advocates was mixed.
“Extending benefits to partners of gay federal employees is terrific, but at this point he is under enormous pressure from the gay civil rights community for having promised the moon and done nothing so far,” Richard Socarides, an adviser to the Clinton administration on gay issues, said Tuesday evening. “So more important now is what he says tomorrow about the future for gay people during his presidency.”
Lockheed Martin Sees Sales Of Up To 6,000 Joint Strike Fighters
U.S. defense contractor Lockeed Martin Corp. (LMT) said Wednesday it has received 31 firm orders for its Joint Strike Fighter plane and foresees potential sales coming to 6,000.
"We have 31 production airplanes in backlog - that means in contract," Thomas Burbage, executive vice president of the JSF program, said at the Paris Air Show underway in Le Bourget.
Most of the orders have been placed by the U.S. government, along with two from the U.K., he added,
The JSF, or F-35, is a joint project grouping industries in the U.S., Britain, the Netherlands, Canada, Denmark, Norway, Australia, Turkey and Italy.
The $300 billion program is to replace the fleet of F-16 and F-18 fighter jets now in service in the second half of the next decade.
"Amongst the partnership, we are predicting somewhere around 3,100 airplanes," Burbage said. "Outside of that ... the potential for sales, which is problematical right now to estimate what that is, but it quite likely is somewhere between a thousand and more."
Sweden’s Koenigsegg, the maker of luxury sportscars, has agreed to buy Saab from bankrupt General Motors Corp.
The deal, announced Tuesday, is expected to close by the end of the third quarter of 2009 and includes an expected $600 million funding commitment from the European Investment Bank (EIB) guaranteed by the Swedish government. Additional support is to be provided by GM and Koenigsegg Group AB to fund Saab’s operations and product program investments, according to statements from the companies.
Barack Obama to end carrot-and-stick dance with North Korea
by Brad Norington
Taking an uncompromising stand, Mr Obama vowed to "pursue denuclearisation on the Korean peninsula vigorously".
The strong language from the White House suggests the US might be willing to use force if necessary against Pyongyang, following concerns over two nuclear tests and a belief the rogue state has enough weapon-active plutonium for up to six atom bombs.
But it remained unclear yesterday if Mr Obama meant he was willing to back his threat with war to stop Pyongyang having any form of nuclear program.
After meeting South Korean President Lee Myung-bak at the White House, Mr Obama said he wanted to end a cycle of allowing North Korea to manufacture crises and then get rewarded to stop developing nuclear weapons.
"This is a pattern they've come to expect," he said. "We are going to break that pattern."
North Korea warned that its military would launch "one hundred or one thousand-fold retaliation" against the US and its allies if provoked or attacked.
Pyongyang accused Mr Obama of being a hypocrite for advocating a nuclear-free world while the US developed new weapons.
Mr Obama said North Korea's track record of threatening other countries and exporting dangerous nuclear technology around the world meant it could not be recognised as a legitimate nuclear power, even for peaceful means.
When crude oil prices spiked to $147 a barrel, there was no question that speculation played a significant role in getting it there. But speculation also played a role in getting it to $38 a barrel, too.
In the end, for oil and just about everything else, it all comes down to supply and demand. We’re in a recession, and demand continues to slacken. OPEC’s response has been to cut supply, with the thought that - everything else being equal - prices would eventually stabilize at some level.
But everything else isn’t equal: The Federal government has been dumping cash into the financial system at unprecedented levels. It’s caused the dollar to drop in value with respect to other world currencies and with respect to gold.
Since oil on all the world markets is priced in dollars, its price rises as the value of the dollar declines. It’s one of the reasons many oil-producing countries have suggested that the price of oil be tied to a basket of currencies instead of just to the dollar.
Unfortunately, there aren’t any other currencies that are as abundant or - more importantly - strong enough to handle the sheer volume of the transactions that occur daily in the oil market.
So we have demand and supply destruction in a race downward here in the United States that’s kept oil inventories high - up until a few weeks ago. Add to that steadily rising demand coming from emerging markets around the world. Throw a declining dollar into the mix and stir.
The result is rising oil prices - in all likelihood heading to $80 a barrel or possibly even higher by the end of the year.
Waste Management to Offer New Solar Powered Trash Compactor
Waste Management (NYSE: WMI - News) today announced that it has entered into an agreement with BigBelly Solar under which Waste Management will provide WM Solar Powered Trash Compactors to its customers including municipalities and high-traffic facilities. Under the agreement, Waste Management has become the exclusive waste and environmental services company distributor of BigBelly solar compactor technology in North America.
The new service offering was officially launched at the U.S. Conference of Mayors in Providence, Rhode Island, with a solar powered compactor present at the conference.
"We know busy intersections, public parks, city streets, sporting events and other public spaces can be magnets for trash," said Dave Aardsma, senior vice president of sales and marketing for Waste Management. "Ordinary trash barrels can easily overflow and become eyesores. The Waste Management solar powered trash compactor can provide a number of solutions in those uses, by reducing waste collection frequency, lowering costs for our customers and ensuring a greener, cleaner environment."
WM Solar Powered Trash Compactors are completely self-powered, using built-in solar panels to compact trash. About the same size as a standard 35-gallon trash barrel, each compactor provides five times the capacity of a traditional trash receptacle. When the unit reaches capacity, sensors trigger an internal compactor that flattens the contents, converting 180 gallons of waste into easy-to-collect bags. A wireless system then signals that the unit is ready to be picked up. This cuts the need for trash pickup by up to 80 percent, which reduces collection costs, fuel use and greenhouse gas emissions. The compactors also include receptacles for collecting plastic bottles, newspapers, glass and other recyclables.
Stimulus Spending: So Effective That It Works Before It Happens
Monday, June 15, 2009
By Jacob Sullum
One problem with attributing America's slightly less bad economic news to the Obama-backed $787 billion stimulus package is that very little of the money actually has been spent. As of a month ago, less than 6 percent of the stimulus money had gone out, and only 25 percent is expected to make its way into the economy by the end of the year. Assuming the spending is spread evenly over that period, less than 9 percent has been spent so far. That's not even one-tenth of an amount that Treasury Secretary Timothy Geithner suggested would prove inadequate.
In the 13th paragraph (the traditional burial spot for crucial concessions), the Times alluded to the problem of effect preceding cause, allowing that "it is impossible to know how much the apparent, if nascent, stabilization of the American economy comes from the stimulus spending and how much from moves like propping up the banking and credit systems, especially because much of the stimulus money has yet to make it to the economy." I'd say 91 percent is a bit more than "much."
As the Iranian election aftermath unfolded in Tehran--thousands of demonstrators took to the streets to express their anger at perceived electoral irregularities--an unexpected hashtag began to explode through the Twitterverse: "CNNFail."
Even as Twitter became the best source for rapid-fire news developments from the front lines of the riots in Tehran, a growing number of users of the microblogging service were incredulous at the near total lack of coverage of the story on CNN, a network that cut its teeth with on-the-spot reporting from the Middle East.
For most of Saturday, CNN.com had no stories about the massive protests on behalf of Mir Hossein Mousavi, who was reported by the Iranian government to have lost to the sitting president, Mahmoud Ahmadinejad. The widespread street clashes--nearly unheard of in the tightly controlled Iran--reflected popular belief that the election had been rigged, a sentiment that was even echoed, to some extent, by the U.S. government Saturday.
"The Obama administration is determined to press on with efforts to engage the Iranian government," The New York Times cited senior officials as having said Saturday, "despite misgivings about irregularities in the re-election of President Mahmoud Ahmadinejad."
Yet even as word of the urban strife, seemingly led by those posting to Twitter, spread next around the world on news networks like the BBC, NPR, and the Times, CNN remained mostly mute. Even when the network's Internet site finally posted a story late Saturday, the network's first "story highlight" was, "Ahmadinejad plans rally after winning second presidential term."
Increasingly, Twitter has become the go-to source for breaking news about any kind of notable event, be it an earthquake, terrorist attacks in Mumbai, or post-election riots in Tehran. Yet many Twitter users found CNN's lack of attention to what could end up being one of the biggest stories in years appalling.
"CNN just loops the same stories endlessly, while ignoring the biggest story," posted Twitter user MediaButcher.
"CNN needs to talk about the important things like Ms. California and who Paris Hilton is (sleeping with)," wrote Twitter user ArchivalQuality.
Don't Call What Happened in Iran Last Week an Election
By Christopher Hitchens
Iran and its citizens are considered by the Shiite theocracy to be the private property of the anointed mullahs. This totalitarian idea was originally based on a piece of religious quackery promulgated by the late Ayatollah Ruhollah Khomeini and known as velayat-e faqui. Under the terms of this edict—which originally placed the clerics in charge of the lives and property of orphans, the indigent, and the insane—the entire population is now declared to be a childlike ward of the black-robed state. Thus any voting exercise is, by definition, over before it has begun, because the all-powerful Islamic Guardian Council determines well in advance who may or may not "run." Any newspaper referring to the subsequent proceedings as an election, sometimes complete with rallies, polls, counts, and all the rest of it, is the cause of helpless laughter among the ayatollahs. ("They fell for it? But it's too easy!") Shame on all those media outlets that have been complicit in this dirty lie all last week. And shame also on our pathetic secretary of state, who said that she hoped that "the genuine will and desire" of the people of Iran would be reflected in the outcome. Surely she knows that any such contingency was deliberately forestalled to begin with.
In theory, the first choice of the ayatollahs might not actually "win," and there could even be divisions among the Islamic Guardian Council as to who constitutes the best nominee. Secondary as that is, it can still lead to rancor. After all, corrupt systems are still subject to fraud. This, like hypocrisy, is the compliment that vice pays to virtue. With near-incredible brutishness and cruelty, then, the guardians moved to cut off cell-phone and text-message networks that might give even an impression of fairness and announced though their storm-troop "revolutionary guards" that only one form of voting had divine sanction. ("The miraculous hand of God," announced Supreme Leader Ali Khamenei, had been present in the polling places and had announced a result before many people had even finished voting. He says that sort of thing all the time.)
The obvious evidence of fixing, fraud, and force to one side, there is another reason to doubt that an illiterate fundamentalist like Mahmoud Ahmadinejad could have increased even a state-sponsored plebiscite-type majority. Everywhere else in the Muslim world, in every election in the last two years, the tendency has been the other way. In Morocco in 2007, the much-ballyhooed Justice and Development Party wound up with 14 percent of the vote. In Malaysia and Indonesia, the predictions of increased market share for the pro-Sharia parties were likewise falsified. In Iraq this last January, the local elections penalized the clerical parties that had been making life a misery in cities like Basra. In neighboring Kuwait last month, the Islamist forces did poorly, and four women—including the striking figure of Rola Dashti, who refuses to wear any headgear—were elected to the 50-member parliament. Most important of all, perhaps, Iranian-sponsored Hezbollah was convincingly and unexpectedly defeated last week in Lebanon after an open and vigorous election, the results of which were not challenged by any party. And, from all I hear, if the Palestinians were to vote again this year—as they were at one point supposed to do—it would be highly improbable that Hamas would emerge the victor.
Health-Care’s Fate May Be Shaped by Party Elders: Albert Hunt
by Albert R. Hunt
Don’t blink: The fate of the world’s most costly health-care system will be shaped in the next six weeks. A leading indicator will be reactions to a report in a few days by people who have no vote on it.
If a major overhaul of the U.S. health-care system, now President Barack Obama’s top priority, doesn’t clear the House or Senate -- the two bodies are jockeying over who goes first - - by the early August congressional recess, prospects of anything happening are dim.
“The probabilities are not great,” says Donna Shalala, who was secretary of the Department of Health and Human Services during the ill-fated Clinton health-care effort 15 years ago and is now president of the University of Miami. “But they are good.”
On Wednesday, a bipartisan study group headed by former Senate leaders Tom Daschle, a Democrat, and Republicans Bob Dole and Howard Baker will release recommendations. These will displease interest groups on all sides, and may also form a realistic basis for any final compromise.
Barring snags, the committee will call for universal coverage and a radical change in the system of reimbursements, while offering only a minimal, perhaps fallback, plan for a public insurance entity, and spelling out ways to pay for it. These would include taxing employer-provided health benefits that exceed the generous federal health plan. That would raise more than $400 billion over the next decade, or one-third of the cost.
The group will espouse other tax increases, such as those on sugary drinks, and savings of about $350 billion. That would achieve about two-thirds of the cost of the health-care reform. The panel will simply lay out options to consider for the difficult, final $400 billion.
If liberals, unions and industry interest groups pronounce this unacceptable, the prospects for the whole enterprise may blow up. If these groups offer conditional support, it may be a catalyst for the political and policy tradeoffs that will ensue.
“Conservatives” Are Single-Largest Ideological Group
Thus far in 2009, 40% of Americans interviewed in national Gallup Poll surveys describe their political views as conservative, 35% as moderate, and 21% as liberal. This represents a slight increase for conservatism in the U.S. since 2008, returning it to a level last seen in 2004. The 21% calling themselves liberal is in line with findings throughout this decade, but is up from the 1990s.
These annual figures are based on multiple national Gallup surveys conducted each year, in some cases encompassing more than 40,000 interviews. The 2009 data are based on 10 separate surveys conducted from January through May. Thus, the margins of error around each year's figures are quite small, and changes of only two percentage points are statistically significant.
To measure political ideology, Gallup asks Americans to say whether their political views are very conservative, conservative, moderate, liberal, or very liberal. As has been the case each year since 1992, very few Americans define themselves at the extremes of the political spectrum. Just 9% call themselves "very conservative" and 5% "very liberal." The vast majority of self-described liberals and conservatives identify with the unmodified form of their chosen label.
Here’s one thing Sarah could learn from Hillary: Cheerfulness is more impressive than resentment. Is the secretary of State lugging around a Palin-size grudge about having to play a subservient role to the man who humbled her at the polls? Doesn’t Clinton have a better reason to resent Obama than Palin has to bang on about Letterman? I mean, if it weren’t for Barack, Hillary would now be president of the United States. How’s that for “hurtful”? Yet the president and his highest-ranking Cabinet officer seem to be getting along like Nick and Nora Charles. Or that‘s how Hillary’s playing it anyhow.
Here’s something Palin could learn from Letterman: Leave the jokes to the comedians. Does anyone believe that Palin really, truly thought Letterman’s sexual joke was about her 14-year-old daughter, Willow, not her 18-year-old, Bristol—who, after all, actually did get knocked up? My reading is she didn't believe it, but she was happy to have you believe it. Happy to have people—too many of them, unfortunately, who only pay attention with one ear—be her target audience.
The governor of Alaska doesn’t object to every wisecrack that relies for its punchline on a mental picture of a Palin daughter having sexual intercourse with an older man, even when the daughter is the one who’s still a minor. Here’s the statement Palin spokeswoman Meghan Stapleton issued after Dave invited the governor and her husband to come on the air with him: “The Palins have no intention of providing a ratings boost for David Letterman by appearing on his show. Plus, it would be wise to keep Willow away from David Letterman.” Just to ensure that her youngest daughter wouldn't enjoy a weekend without embarrassment, Sarah Palin launched into a fresh tirade to CNN's Wolf Blitzer about Letterman's "crude, sexist, perverted joke about a 14-year-old being 'knocked up' by Alex Rodriguez."
Letterman’s joke may not have been his finest hour, but at least he swiftly apologized. Meanwhile, the nation’s hockey mom scores another goal for intellectual dishonesty.
The global economy is set to contract by close to three percent this year, worse than the previous estimates for a 1.75 percent decline, World Bank President Robert Zoellick said on Thursday.
In a statement ahead of the Group of Eight finance ministers meeting in Italy at the weekend, Zoellick said poor countries were the hardest hit by the global crisis.
"Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks," Zoellick said ahead of the Group of Eight finance ministers meeting in Italy.