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Unlike the labor market collapse that killed millions of U.S. jobs in a matter of months, the nation's return to peak employment will not be nearly as uniform nor as swift.
While signs indicate that the worst of the recession may be over, only six metropolitan areas across the country are expected to regain their pre-recession employment levels by the end of 2009, according to projections from IHS Global Insight, a leading economic forecaster. Read more & view larger, interactive map.
Hundreds of Pennsylvanians say they refuse to wait for a nationwide solution to the problem of finding affordable health care. Thursday morning, they took their fight to Harrisburg.
It's called the Family and Business Healthcare Security Act. It's a single-payer option to healthcare. But this option is not without its critics. These protesters are demanding that PA take the lead in single- payer Healthcare. The rally, lead by Health Care for All PA, made their voices heard in the Capital Rotunda in Harrisburg. Pedro Rodriguez is the statewide organizer. Read more.
Swindlers, con men, and thieves could siphon off as much as $50 billion of the government's planned stimulus package as the money begins flooding the economy in coming months, according to David Williams, who runs Deloitte Financial Services Advisory and counsels clients on fraud prevention.
Williams predicted that about $500 million of the total $787 billion stimulus would be channeled into the traditional procurement network for government contracts, while the rest will be spent directly by the government or outside the corporate network.
"The rule of thumb typically is that of the about $500 billion worth of money that's going to run through the procurement process, somewhere between 5% and 10% of that usually finds it way into potential problems," Williams said. "That's sort of the benchmark that I use."
Companies will face increased pressure to try to stem the tide, and need to be prepared to safeguard data as well as the cash, according to Williams.
Williams said this week that the money flowing from the current stimulus package is particularly vulnerable to fraud because almost all movement of money is now done electronically. Read more.
By STEPHEN C. WEBSTER, Raw Story
After months of activism and lobbying by Congressman Ron Paul’s supporters, House Resolution 1207, the Federal Reserve Transparency Act, will move out of committee to be debated by the full House of Representatives.
In a show of cross-party unity, Ohio Democratic Congressman Dennis Kucinich became the bill’s 218th co-sponsor, pushing it over the threshold for debate in Congress.
The bill, which achieved co-sponsorship by 222 members of the House on Thursday, has been in consideration by the House Financial Services Committee since Feb. 26.
Congressman Kucinich, along with Rep. Edolphus Towns (D-NY), announced Tuesday that the House Financial Services Committee will subpoena the Federal Reserve to ascertain the details of the Fed’s agreements with Bank of America in the institution’s acquisition of Merrill Lynch.
By Danny Schechter
Can it possibly be true that Congress can’t walk and chew gum at the same time? This question is prompted by the announcement that financial reform is being pushed back as health care becomes the priority.
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Dollar’s Reserve Status May Deteriorate, Roubini Says
By Natalie Weeks and Mark Deen | Bloomberg
The dollar’s status as the world economy’s sole reserve currency may deteriorate, said Nouriel Roubini, the New York University economics professor who predicted the financial crisis.
“We may see complementary reserve currencies,” Roubini said at a conference today in Athens. While it’s “not going to happen overnight,” the development “will diminish the role of the dollar over time.”
The dollar’s status has come into question as leaders of Brazil, Russia, India and China discuss substituting other assets for their dollar holdings amid a ballooning budget deficit that keeps the U.S. dependent on foreign financing. China alone owns about $744 billion of U.S. Treasury bonds among its $2 trillion of foreign-exchange reserves. Read more.
Give America a choice. We support healthcare reform that allows individual Americans to choose either a universally available public healthcare option like Medicare or for-profit private insurance. A public option is the only way to guarantee healthcare for all Americans and its inclusion is non- negotiable.
Any legislation without the choice of a public option is only insurance reform and not the healthcare reform America needs. Read more, sign petition.
KBR Inc. wasted billions of dollars through inefficiencies, lax oversight and poor management of its contract to support U.S. troops in Iraq and Afghanistan, according to an independent, bipartisan panel.
The contract -- to provide housing, food, laundry, mail delivery and fuel for U.S. troops -- was ultimately worth $31.7 billion, with most of the work being done in Iraq and Kuwait.
“The services could have been delivered for billions of dollars less,” the commission stated in a report released today at a hearing of the House Oversight and Government Reform’s national security panel. “Substantial evidence supports the view” that KBR’s services “cost too much.”
The Wartime Contracting Commission, in its first report since Congress established it last year, gives the most critical assessment to date of the contract that Houston-based KBR, then a unit of Halliburton Co., won in December 2001, shortly after the U.S. invaded Afghanistan. Read more.
Jean Johnson is 81 years old and suffering from diabetes. But instead of relaxing in retirement, she recently started a new job.
"I need money. My social security check just doesn't make it, with rent and the gas bill to pay," said Johnson, who took a job in March at a library in Danforth, Illinois. "I need to work."
Amid the economic downturn, shrinking retirement accounts, increasing costs for food and medicine, and stiff competition for even entry-level jobs, evidence is building that the dream of a comfortable retirement is dying for many Americans.
The ranks of the elderly looking for work has swelled more than 120 percent to more than 1.8 million in the last year. Among that group, those who were 75 and older increased by 80 percent, according to data from the National Council on Aging.
There are some 29 million seniors - those 55 and older - employed or actively looking for work in the United States, which is about 18 percent of the civilian labor force.
And their numbers are expected to grow. Read more.
By Dave Lindorff
My bank, a small regional institution that was not involved in sub-prime lending, and that was not a recipient of any TARP bailout money, cut off my home equity line of credit two weeks ago. They did it abruptly, with no notice—I only discovered it had happened when I tried to get a $500 advance from it to cover a payment I was making on my credit card. When I asked what was going on, the local branch manager informed me that “we are closing out a lot of credit lines while we reassess the value of houses in this region, which have been falling.”
This ersatz capitalism, where losses are socialised and profits privatised, is doomed to failure. Incentives are distorted. There is no market discipline. The too-big-to-be-restructured banks know that they can gamble with impunity — and, with the Federal Reserve making funds available at near-zero interest rates, there is ample money to do so. Some have called this "socialism with American characteristics". But socialism is concerned about ordinary individuals. By contrast, the US has provided little help for the millions of its people who are losing their homes. Workers who lose their jobs receive only 39 weeks of limited unemployment benefits, and are then left on their own. And, when they lose their jobs, most also lose their health insurance.
With all the talk of "green shoots" of economic recovery, America's banks are resisting efforts to regulate them. While politicians talk about their commitment to regulatory reform to prevent a recurrence of the crisis, this is one area where the devil really is in the details — and the banks will muster what muscle they have left to ensure that they have ample room to continue as they have in the past.
The old system worked well for the banks so why should they embrace change? Indeed, the efforts to rescue them devoted such little thought to the kind of post-crisis financial system we want, that we will end up with a banking system that is less competitive, with the large banks that were "too big to fail" even larger.
It has long been recognised that the US banks that are too big to fail are also too big to be managed. That is one reason the performance of several has been so dismal. When they fail, the Government engineers a financial restructuring and provides deposit insurance, gaining a stake in their future. Officials know that if they wait too long, zombie or near-zombie banks — which have little or no net worth, but are treated as if they were viable institutions — are likely to "gamble on resurrection". If they take big bets and win, they walk away with the proceeds, if they fail, the Government picks up the tab. Read more.
House Oversight and Government Reform Committee Subpoenas Federal Reserve to Obtain BofA-Merrill Lynch Documents
Towns, Issa, Kucinich Demand Documents for Hearing This Week
Washington D.C. (June 8, 2009) -- House Oversight and Government Reform Committee Chairman Edolphus Towns (D-NY) and Ranking Member Darrell Issa (R-CA) today served a subpoena on the Federal Reserve (the Fed) to compel it to turn over documents related to Bank of America’s acquisition of Merrill Lynch.
The full committee and Domestic Policy Subcommittee, under the leadership of Chairman Dennis Kucinich (D-OH), have been investigating the circumstances surrounding the federal government’s bailout of the Bank of America-Merrill Lynch transaction. Specific documents subpoenaed include emails, notes of conversations and other documents.
Financial regulator seeks powers to curb excess speculation
By Kevin G. Hall | McClatchy Newspapers
If Congress grants the commission's wishes, big Wall Street players such as Goldman Sachs, Morgan Stanley, JP Morgan Chase and others would be subject to capital requirements, new business-conduct rules and more extensive reporting and recordkeeping requirements.
Firing the opening shot in a likely battle with Wall Street, the federal regulator who's overseeing the trading of oil contracts asked Congress on Thursday for broad powers to regulate the exotic private contracts that are thought to contribute to rising oil prices and the global financial crisis.
Testifying before the Senate Agriculture Committee, Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers that he needs broad authority to bring all derivatives contracts under regulatory supervision. Derivatives involve bets that derive their value based on future prices of some underlying asset, such as oil contracts, interest rates, currency or even bonds and other forms of credit.
The new commission chief also called for an additional set of rules for swaps dealers, big global financial institutions that dominate activity in these markets. These rules would force players on both sides of a transaction in these markets to set aside cash to cover potential losses.
The global financial system nearly collapsed during the last four months of 2008 after the Federal Reserve and the Treasury Department rescued insurance giant American International Group. AIG was rescued because it had issued trillions of dollars in insurance-like private derivatives contracts and had insufficient reserves to cover its losses.
"The current financial crisis has taught us that the derivatives trading activities of a single firm can threaten the entire financial system and that all such firms should be subject to robust federal regulation," Gensler said. Read more.
The Great U-Turn: Global Migration Flows Reverse for the First Time Since the Depression as Work in the Rich World Dries Up
The Great U-Turn: Global Migration Flows Reverse for the First Time Since the Depression as Work in the Rich World Dries Up
By Patrick Barta and Joel Millman | WSJ
Brígido de Jesús González lived in Queens, N.Y., for the past 20 years, working as a landscaper to support his wife and kids back in El Salvador. But with the recession clobbering his business, the illegal immigrant decided to pack up and return to his native country -- for good.
"I was thinking [of opening] a mechanic's shop for cars, or maybe a gas place, where my neighbors can come and fill up their propane tanks," says Mr. González, 50. The new businesses could be a good way to help his two sons, who now live in New York, if things get worse north of the border. "I can give them jobs if they want to come home," he says.
The developed world, which for decades has offered a difficult but promising path to upward mobility, appears to be losing its allure. Unemployment is rising, and backlashes against foreign workers are mounting.
The result is potentially the biggest turnaround in migration flows since the Great Depression, economists say. Read more.
Though employment losses have slowed in May, many have already lost large numbers of jobs over this recession and therefore have fewer jobs left to lose.
The economy lost another 345,000 jobs in May. For the first time in a year, there were upward revisions to the past months’ data, with March and April’s combined employment revised upward by 72,000 jobs. The establishment survey reports 1.5 million jobs lost over the last three months. With this report, employment is now down 6.0 million jobs from its peak in December 2007— the 4.3 percent decline reflecting the largest relative loss of jobs in over 50 years. With fewer jobs left to lose, job loss is now occurring only at the fast pace of September and October of 2008.
The household survey showed a sharp rise in the unemployment rate to 9.4 percent from 8.9 percent in April—the highest rate in nearly 26 years. After showing a gain of 120,000 jobs in April, the household survey showed a loss of 437,000 jobs in May....
Adjusted for age composition and survey, the unemployment rate would now be equal to 10.7 percent, compared to a post-World War II peak of 10.8 percent in 1982. When internationally comparable data is released next month, the rate of unemployment in the United States will almost certainly be higher than that in the Euro Area.
WE DON'T NEED THE GENERAL MOTORS CORPORATION
by Mike Ferner
Times are anxious indeed, but simultaneously we are face-to-face with an extremely rare chance to replace our transportation system with something we can literally live with.
To take advantage of this uncommon opportunity we will have to do something far more profound, yet less costly, than a government bailout or an act of Congress. We will have to, as Paul Newman said in Cool Hand Luke, "get our minds right" on one simple fact: what we need is reliable, sustainable transportation. That does not mean we need General Motors Corporation or even cars. Contemplate the freedom implied in that statement for just a moment: we do not need General Motors Corporation.
The results of eight years of Bush-Cheney at the helm make the demise of the Republican Party an easy call. Our financial system is on life support. The major banks are insolvent, according to banking and legal authority William K. Black. If they’re not, they’re in intensive care. No matter how many trillions of dollars worth of infusions they receive, they’re not making loans. The economy is in a free fall with growth down 6% a quarter and job losses running at nearly 600,000 a month. We’re stuck in two catastrophic wars. Despite President Obama’s election, we’re viewed with suspicion and disregard throughout the world.
Saturday, June 6th, 5-7 pm Central, Truth Jihad Radio, presents:
Brad Friedman of BradBlog.com and Andy Worthington, author, The Guantanamo Files
Saturday, June 6th, 5-7 pm Central (6-8 p.m. Eastern), on American Freedom Radio:
First hour: Brad Friedman, The Brad Blog, discussing efforts to expose and rectify the Bush Administration's bogus prosecutions of its political enemies, including Alabama Governor Don Siegelman; disbar the torture lawyers; and restore justice at Justice. See: Velvet Revolution US, Restore Justice at Justice.
Second hour: Andy Worthington, author, The Guantanamo Files: http://www.andyworthington.co.uk/
A short foreward from TomDispatch:
Here's a snapshot in words of Treasury Secretary Tim Geithner when he was still president of the New York Federal Reserve Bank from a recent portrait in the New York Times:
"He ate lunch with senior executives from Citigroup, Goldman Sachs and Morgan Stanley at the Four Seasons restaurant or in their corporate dining rooms. He attended casual dinners at the homes of executives like Jamie Dimon, a member of the New York Fed board and the chief of JPMorgan Chase. Mr. Geithner was particularly close to executives of Citigroup, the largest bank under his supervision. Robert E. Rubin, a senior Citi executive and a former Treasury secretary, was Mr. Geithner's mentor from his years in the Clinton administration, and the two kept in close touch in New York."
Small world, don't you think? This catches something of the lifestyle of Wall Street's rich and financially powerful as well as those who "regulate" them. It's no longer news that the revolving door from Wall Street to Washington and back now spins endlessly. Hence, the increasingly popular moniker "Government Sachs."
"Crony capitalism" was once a term applied to the powerful oligarchs of "emerging economies" or -- a term not heard so much these days -- banana republics. Now, however, as economist Simon Johnson has written, the U.S. is beginning to look startlingly more like one of those "emerging economies" in meltdown. And overseeing the response to the crisis are, of course, representatives of the same crony capitalists and oligarchs who helped create it.
Not surprisingly, the "solution" to the crash of '08 crafted by former Goldman Sachs chairman Henry Paulson, Jr. -- Rubin held the same job before going to Treasury in the Clinton years -- and former New York Fed chief Tim Geithner (who made Mark Patterson, a former Sachs lobbyist, his chief of staff and kept on Sachs alum Neel Kashkari to lead the bailout effort) is clearly meant to staunch the wounds of their world, not ours. TomDispatch regular Andy Kroll, who's read all the latest economic reports so you wouldn't have to, suggests below just what an instrument of Wall Street their rolling bailout program has really been. Tom
The Greatest Swindle Ever Sold
How the Financial Bailout Scams Taxpayers, Subsidizes Wall Street, and Props Up Our Broken Financial System
By Andy Kroll
On October 3rd, as the spreading economic meltdown threatened to topple financial behemoths like American International Group (AIG) and Bank of America and plunged global markets into freefall, the U.S. government responded with the largest bailout in American history. The Emergency Economic Stabilization Act of 2008, better known as the Troubled Asset Relief Program (TARP), authorized the use of $700 billion to stabilize the nation's failing financial systems and restore the flow of credit in the economy.
Time to Look Past Obama’s Words and Face-up to His Actions
U.S. Foreign Policy Continues Rapidly in the Wrong Direction
The Peace Movement Needs to Escalate Anti-War Actions
By Kevin Zeese | Voters for Peace, Prosperity Agenda.US
There is long-time saying about politicians: you cannot trust their words, but must judge them by their actions.
President Obama is very good with words, perhaps the best communicator we have seen in the White House in a generation. But now he has been in office long enough that he should be judged on his actions.
The direction of U.S. foreign policy is moving rapidly in the wrong direction on many fronts. It is time for the peace movement to step up its activities throughout the country and demand a change in course.
By Dave Lindorff
Just imagine for a moment that you are a retired contractor, struggling to get by on your pathetically shriveled 401(k). when your ne-er-do-well child suddenly comes to you saying he’s got this idea to start buying derelict homes and rehabbing them for resale. He asks you to stake him with a $100,000 loan (about half of what you’ve got left in your retirement fund), promising to repay you when he sells his first couple of houses. You know the kid’s flat busted and has been laid off from his job as a dishwasher, so you want to help, but you’ve also seen his carpentry skills: The doghouse he build in high school fell apart on a windy day, and his own house has a leaking roof, needs repainting, and all the plumbing leaks. You’ve also seen his business skills: He plays the Lotto excessively, hasn’t saved a penny, and buys most of his supplies at the local 7-Eleven.
Would you front this kid half your money?
Amendment Would Open the Books of the Federal Reserve’s Recent Intervention in Financial Markets
Washington D.C. (June 4, 2009) – Congressman Dennis Kucinich (D-OH) today won adoption of an amendment to H.R. 2646, The Government Accountability Office (GAO) Improvement Act of 2009. The Kucinich amendment would grant the GAO the authority to audit the Federal Reserve’s response to the financial crisis. The amendment was adopted unanimously in a committee markup of H.R. 2646 by the Oversight and Government Reform Committee.
General Motors Corp. took a key step toward its downsizing on Tuesday, striking a tentative deal to sell its Hummer brand to a Chinese manufacturer, while also revealing that it has potential buyers for its Saturn and Saab brands.
China's Sichuan Tengzhong Heavy Industrial Machinery Co. said Tuesday afternoon that it reached an agreement to acquire the brand from GM for an undisclosed ammount. The Detroit automaker had announced Tuesday morning that it had a memorandum of understanding to sell the brand of rugged SUVs, but it didn't identify the buyer.
Sichuan Tengzhong deals in road construction, plastics, resins and other industrial products, but Hummer would be its first step into the automotive business.
GM said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships. Tengzhong said it will assume GM's existing agreements with Hummer dealers.
"We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S," Chief Executive Yang Yi said in a statement.
As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, La., assembly plant would continue to contract to assemble the H3 and H3T through at least 2010, GM said. AM General LLC in Mishawaka, Ind., makes the larger H2 under contract for GM. Read more.