Category Archives: The Economy

February 23, 2011 · 8:42 pm

Capitalism for the Long Term – Harvard Business Review

Interesting article from the Harvard Business Review…

I think it’s a little optimistic to think Business and Capitalism will reform themselves…

His suggestions seem to be to go back to the way we were…

What are the odds of that happening without Governmental reform and public outrage?

Not likely to happen as long as the Corporations own the Government….

Why reform when you can rig the system to your benefit?

In an ongoing effort that started 18 months ago, I’ve met with more than 400 business and government leaders across the globe. Those conversations have reinforced my strong sense that, despite a certain amount of frustration on each side, the two groups share the belief that capitalism has been and can continue to be the greatest engine of prosperity ever devised—and that we will need it to be at the top of its job-creating, wealth-generating game in the years to come. At the same time, there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results.

Most important, the dialogue has clarified for me the nature of the deep reform that I believe business must lead—nothing less than a shift from what I call quarterly capitalism to what might be referred to as long-term capitalism. (For a rough definition of “long term,” think of the time required to invest in and build a profitable new business, which McKinsey research suggests is at least five to seven years.) This shift is not just about persistently thinking and acting with a next-generation view—although that’s a key part of it. It’s about rewiring the fundamental ways we govern, manage, and lead corporations. It’s also about changing how we view business’s value and its role in society.

There are three essential elements of the shift. First, business and finance must jettison their short-term orientation and revamp incentives and structures in order to focus their organizations on the long term. Second, executives must infuse their organizations with the perspective that serving the interests of all major stakeholders—employees, suppliers, customers, creditors, communities, the environment—is not at odds with the goal of maximizing corporate value; on the contrary, it’s essential to achieving that goal. Third, public companies must cure the ills stemming from dispersed and disengaged ownership by bolstering boards’ ability to govern like owners.

via Capitalism for the Long Term – Harvard Business Review.

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February 23, 2011 · 8:37 pm

The Budget Smokescreen – Room for Debate – NYTimes.com

David Gergen is a true Washington insider, so his thoughts are always interesting as a representation of “inside the beltway” thinking…

The budget showdown shaping up in Washington is dramatic but depressing. What we are mostly seeing so far is a jockeying for political power rather than a serious attempt to rescue the nation’s finances.

Here’s the sad part: in the end, the amount of money being fought over is only a tiny fraction of the nation’s budget deficit.

On the surface, of course, the immediate issue is that the federal government will begin shutting down services next Friday unless Congress and the White House can agree on a fresh spending resolution. Compromise talks are underway and there are whispers of a short-term agreement.

But don’t count on it because the real struggle is beneath the surface — who can win over the public and potentially gain the upper hand for the political fights still ahead. And right now neither side knows for sure how public opinion will break.

via The Budget Smokescreen – Room for Debate – NYTimes.com.

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February 23, 2011 · 7:52 pm

I Love My Congressman…

How many people can say that?

I’m so glad Brad Miller is my Congressman…He is truly an outstanding Representative for our District.

That’s why I have to focus my criticisms on nearby Congressmen who are truly losers like Robert Hurt, Virginia Foxx and Howard Coble…

Here is Brad addressing Congress on the deficit, spending priorities and the Republican irresponsibility:

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February 22, 2011 · 8:18 pm

Top Obama Economic Aide: Social Security Reform Not A Part Of Discussion On Fiscal Future

Sounds like the White House and Democrats may finally be getting it….

The GOP never will…

WASHINGTON — Lost amid the budget battles in Congress and the anti-union legislation being considered in several states has been the White House’s deliberate decision to take the topic of Social Security reform off the deficit debate menu.

The latest move in that direction came on Tuesday, when Jason Furman, deputy director of the President Barack Obama’s National Economic Council, insisted that talk of Social Security reform “is not one you care about” if “you are worried about our long-run fiscal future.”

“The reason you care about it is because you want to strengthen Social Security,” Furman added in a speech at the progressive nonprofit group NDN. “It is such a critical part of our social insurance, the bedrock of retirement security for senior citizens, one of the leading anti-poverty programs for children, critical support for people with disabilities. And for all those reasons and the fact that its solvency … is another 26 years, till 2037, the real motivation is strengthening the program.”

Those remarks are a strong reflection of growing defensiveness on the White House’s part in response to calls to reform the longstanding entitlement program. During this year’s State of the Union address, Obama said he would “speak out against” plans to “target” Social Security should they materialize in Congress. Top adviser David Plouffe likewise said the president would neither slash nor reduce benefits while in office.

Furman’s comments are more assertive in their framing. Rather than merely ruling out drastic changes to the entitlement program, he is arguing that Social Security has no place in a debate over the deficit — a position directly at odds with the conclusions of the president’s own deficit commission.

via Top Obama Economic Aide: Social Security Reform Not A Part Of Discussion On Fiscal Future.

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February 22, 2011 · 7:21 pm

Social Security isn’t the problem – USATODAY.com

This is so simple, but the GOP has twisted it out of shape…

I repeat, for the 5 millionth time:  Social Security is not the problem.  It is sound!

Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries.

When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds — backed with the full faith and credit of the U.S. government — and are held in reserve for when revenue collected is not enough to pay the benefits due. We have just as much obligation to pay back those bonds with interest as we do to any other bondholders. The trust fund is the backbone of an important compact: that a lifetime of work will ensure dignity in retirement.

According to the most recent report of the independent Social Security Trustees, the trust fund is currently in surplus and growing. Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.

For years, the surpluses in the Social Security trust fund have helped to mask our deficits elsewhere. Now that we are paying Social Security back, the problem is not with Social Security, but with the rest of the budget. In 2001 and 2003, Washington cut taxes for the wealthiest Americans and later expanded Medicare without paying for it. Blaming Social Security for our fiscal woes is like blaming you for not saving enough in your checking account because the bank lost all depositors’ money.

via Opposing view: Social Security isn’t the problem – USATODAY.com.

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February 22, 2011 · 7:14 pm

One in four U.S. counties “dying”: Census Bureau – International Business Times

Danville/Pittsylvania County, VA is included in this list.

I checked…

Emphasis/Italics are mine…

One in four counties in the U.S. are ”dying” – meaning, they are recording more deaths than births – according to findings by the U.S. Census Bureau.

Demographers call this phenomenon a “natural decrease.”

The data shows that 760 of the nation’s 3,142 counties are in this category – exacerbated, analysts say, by an aging population the mortgage crisis, record high unemployment in many states and the ever-fragile economy.

These counties exist in all parts of the country, from the old Rust Belt areas of Pennsylvania and Ohio, to rural East Texas and even in the wine country of northern California.

West Virginia is the first state to experience this “natural decrease” statewide over the last decade. Maine, Pennsylvania and Vermont may soon be next, the Census data suggested.

“Natural decrease is an important but not widely appreciated demographic phenomenon that is reshaping our communities in both rural and urban cores of large metro areas,” said Kenneth Johnson, a sociology professor and demographer at the University of New Hampshire’s Carsey Institute.

Such areas typically have aging white people who are not having children, as well as grim job prospects that drive younger adults away. These locales also tend to have few Hispanic immigrants, who, on the whole, are younger and have more children.

Indeed, the population of the entire U.S. grew by only 9.7 percent since 2000, the lowest such decade-rate since the Great Depression.

via One in four U.S. counties “dying”: Census Bureau – International Business Times.

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February 22, 2011 · 6:33 pm

Ezra Klein – Wonkbook: Are Republicans overreaching? Or just negotiating effectively?

These are the questions I’m asking myself…

From the Washington Post:

In Washington, we’re getting closer and closer to a government shutdown. There’s now talk of a continuing resolution to push the deadline back by a couple of weeks, but Republicans will only accept it if it includes many of the cuts they’re asking for in their full spending bill. A shutdown isn’t a sure thing yet, but many who were dismissing the idea of it a month ago are taking it seriously today.

Republicans and Democrats, it seems, govern rather differently. Republicans are proving themselves willing to do what liberals long wanted the Obama administration to do: Play hardball. Refuse compromise. Risk severe consequences that they’ll attempt to blame on their opponent. The Obama administration’s answer to this was always that it was important to be seen as the reasonable actor in the drama, to occupy some space known as the middle, and to avoid, so much as possible, the appearance of dramatic overreach. This is as close as we’re likely to come to a test of that theory. In two cases, Republicans have chosen a hardline and are refusing significant compromise, even at the risk of terrible consequences. Will the public turn on them for overreach? Applaud their strength and conviction? Or not really care one way or the other, at least by the time the next election rolls around?

via Ezra Klein – Wonkbook: Are Republicans overreaching? Or just negotiating effectively?.

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February 22, 2011 · 6:30 pm

Poll: Whites Without College Degrees Especially Pessimistic About Economy

I’m not really surprised by this, but still don’t get why this group primarily votes Republican.

Well, I have some theories…

  1. They are particularly susceptible to the Republican disinformation campaign.
  2. Racial prejudice
  3. Most importantly, they have been hit hardest by the Economic downturn and don’t know where to turn.

My guess is this demographic was open to Obama and the Democrats, but was the first group to become disillusioned when the focus turned to Health Care, instead of Jobs, and no one was punished for the economic collapse.

These folks aren’t dumb.  They know the Rich and the Corporations have bought the government.

The Democrats need to work harder to make their case to this group and not let the GOP control the narrative.

It would also help if they acted like real Democrats instead of Republican Lites and delivered for this group…

From the Washington Post:

The deep recession has had a profound effect on virtually every segment of the country’s population. But if there is an epicenter of financial stress and frustration, it is among whites without college degrees.

By many measures, this politically sensitive group has emerged from the recession with a particularly dark view of the economy and the financial future. Whites without college degrees also are the most apt to blame Washington for the problems, and are exceedingly harsh in their judgment of the Obama administration and its economic policies.

These findings come from a new national survey conducted by The Washington Post, the Kaiser Family Foundation and Harvard University. The numbers represent a fresh look at the effects of the long recession on all Americans, but particularly “non-college whites,” a group of long-fought-over voters often considered a bellwether of the political ramifications of economic woes.

A mere 10 percent of whites without college degrees say they are satisfied with the nation’s current economic situation. Most – 56 percent – say the country’s best days are in the past, and more, 61 percent, say it will be a long time before the economy begins to recover.

Fully 43 percent of non-college whites say “hard work and determination are no guarantees of success,” and nearly half doubt that they have enough education and skills to compete in the job market.

Not everything is bleak in this group’s outlook, according to the survey. Nearly seven in 10 say they are mostly optimistic about their future, although that is somewhat lower than for whites with college degrees, and for most other groups in the population. More than six in 10 report feeling at least somewhat secure financially.

The survey also found differences in the outlooks of younger and older whites without college degrees. Those younger than 50 were more optimistic about the future than were those older than 50 and were somewhat less pessimistic about how long it will take the economy to recover.

via Poll: Whites without college degrees especially pessimistic about economy.

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February 21, 2011 · 8:52 pm

E.J. Dionne Jr. – The Tea Party is Winning

Great- and unfortunately very accurate- editorial from The Washington Post:

Thanks to the Tea Party, we are now told that all our problems will be solved by cutting government programs. Thus the House Republicans’ budget bill passed Saturday. They foresee nirvana if we simply reduce our spending on Head Start, Pell grants for college access, teen pregnancy prevention, clean-water programs, K-12 education and a host of other areas.

Does anyone really think that cutting such programs will create jobs or help Americans get ahead? But give the Tea Party guys credit: They have seized the political and media agenda and made budget cutting as fashionable as Justin Bieber was five minutes ago.

More striking is the Tea Party’s influence on Washington’s political elite, which looks down at the more extreme men and women of the right when they appear on Fox News but ends up carrying their water.

Lori Montgomery reported in The Post last week that a bipartisan group of senators thinks a sensible deficit reduction package would involve lifting the Social Security retirement age to 69 and reforming taxes, purportedly to raise revenue, in a way that would cut the top income tax rate for the wealthy from 35 percent to 29 percent.

Only a body dominated by millionaires could define “shared sacrifice” as telling nurses’ aides and coal miners they have to work until age 69 while sharply cutting tax rates on wealthy people. I see why conservative Republicans like this. I honestly don’t get why Democrats – “the party of the people,” I’ve heard – would come near such an idea.

More:  E.J. Dionne Jr. – The Tea Party is winning.

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February 21, 2011 · 7:48 pm

What the Right-wing Assault on Women, Unions, the Environment, Health Care and PBS Is All About | News & Politics | AlterNet

Another article from Alternet worth reading…

No one is looking at the underlying philosophical struggle– and that’s what is really going on.  This is a battle between two different world views:

In the 2008 campaign, candidate Obama accurately described the basis of American democracy: Empathy – citizens caring for each other, both social and personal responsibility-acting on that care, and an ethic of excellence. From these, our freedoms and our way of life follow, as does the role of government: to protect and empower everyone equally. Protection includes safety, health, the environment, pensions and empowerment starts with education and infrastructure. No one can be free without these, and without a commitment to care and act on that care by one’s fellow citizens.

The conservative worldview rejects all of that.

Conservatives believe in individual responsibility alone, not social responsibility. They don’t think government should help its citizens. That is, they don’t think citizens should help each other. The part of government they want to cut is not the military (we have 174 bases around the world), not government subsidies to corporations, not the aspect of government that fits their worldview. They want to cut the part that helps people. Why? Because that violates individual responsibility.

via What the Right-wing Assault on Women, Unions, the Environment, Health Care and PBS Is All About | News & Politics | AlterNet.

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