MAW: December 2010

Wednesday, December 29, 2010

Health insurance company lobbyists have launched a new line of criticism against President Obama's health care overhaul, claiming the AARP got preferential treatment in regulations released this week.

The Department of Health and Human Services on Tuesday proposed a set of regulations to ensure that large insurance rate increases are "thoroughly reviewed" at either the state or federal level. The rules would exempt so-called Medigap policies -- supplemental insurance plans meant to fill gaps in Medicare coverage. And AARP, which endorsed the health care overhaul, sells these policies on behalf of a private insurer.

The White House called the claim that AARP is getting a break "categorically untrue." Medicare expert Gail Wilensky, who ran Medicare and Medicaid under former President George H.W. Bush, says the regulation exemption is an early surprise in a complex law.

"There are just hundreds and hundreds of provisions that most people, even those who think they're informed, don't know about it," she said. "You can count on every year, for the next six or seven years as this unfolds, that we are going to discover provisions that no one was aware was in that legislation."

The FDA Is Evading the Law

This year, the Food and Drug Administration rejected the only medicine capable of treating the rare and fatal lung disease known as idiopathic pulmonary fibrosis. Pirfenidone, which has been available in Japan since 2008 and was just approved in Europe, was spurned by the FDA because the drug only showed efficacy in a single big trial—not the two large studies the FDA now requires. The decision to ban the drug is one of a rash of recent decisions that shows the FDA is making it more and more difficult for promising drugs to reach severely ill patients…

It wasn’t supposed to be this way. In 1997, Congress passed the FDA Modernization Act, which gave the FDA broad discretion to reduce the quantity and rigor of clinical data needed to approve drugs targeting grave illnesses. The purpose of the law was to save lives by reducing the cost and time needed to launch such medicines.

Economics and finance links

Get It Straight: Consumer Spending is *not* 70% of GDP

Where are the Jobs? For Many Companies, Overseas. Debate here.

Gary Schilling: And Now House Prices Will Now Drop Another 20%. Debate here.

Work Longer: A Silver Bullet for the Silver Tsunami

U.S. changes how it measures long-term unemployment

So many Americans have been jobless for so long that the government is changing how it records long-term unemployment.

Citing what it calls "an unprecedented rise" in long-term unemployment, the federal Bureau of Labor Statistics (BLS), beginning Saturday, will raise from two years to five years the upper limit on how long someone can be listed as having been jobless.

The move could help economists better measure the severity of the nation's prolonged economic downturn.

The change is a sign that bureau officials "are afraid that a cap of two years may be 'understating the true average duration' — but they won't know by how much until they raise the upper limit," says Linda Barrington, an economist who directs the Institute for Compensation Studies at Cornell University's School of Industrial and Labor Relations.

2010

Here Are 10 Of The Most Offensive Protest Signs Of 2010

"Tired Gay Succumbs To Dix In 200 Meters" Is Reuters.com's Most Popular Story Of 2010

YouTube's Most-Watched Sports Videos Of 2010

ESPN Year in Photos

One outrageous year in sports

The 15 Best Sports Photos Of 2010

An excellent column that shows how ridiculously partisan politics has become

How did obesity become a partisan fight?

Is Elmo a Kenyan, too? Or maybe a Socialist? He is awfully red, after all.

I ask because the Sesame Street puppet recently visited the White House to support "Let's Move," first lady Michelle Obama's campaign against childhood obesity. And that campaign has become, in one of the more striking political stories of the past year, the latest battleground in the left-right culture wars.

It's never easy for the spouse of a president, who so far has always been a wife, to settle on a signature issue. Choose something trivial, and she'll be accused of frothiness unworthy of strong and independent womanhood. Choose something more controversial, and people immediately demand, "Who elected you?"

In that context, the first lady's campaign would seem to have struck Goldilocks perfection. The obesity epidemic is a genuine public health emergency, with vast implications for the nation's well-being, economy and even national security. And yet, could anyone really be against children eating healthier food and getting more exercise? Could anyone really object to White House assistant chef Sam Kass trying to interest Elmo in a vegetable-laden burrito?

Well, yes, if Michelle Obama is for it, someone will be against it. Someone like Glenn Beck, for example, who was moved to rail against carrot sticks, or Sarah Palin, who warned that Obama wants to deprive us all of dessert.

The Senate (still) needs to be reformed

Nearly One In Nine Federal Judgeships Are Now Vacant

The Senate adjourned earlier this week, even though it confirmed only half of the 38 judicial nominees awaiting a vote on the Senate floor. And the overwhelming majority of the blocked nominees cleared the Senate Judiciary Committee without a single negative vote.

This failure to confirm even many of the most uncontroversial nominees is the culmination of a concerted GOP strategy to delay as many of President Obama’s judges as much as possible, and it leaves Obama with fewer judges confirmed than any recent president:

The Senate’s failure to even hold a vote on these nominees leaves the federal judiciary with record vacancies — approximately one in nine federal judgeships are now vacant.

Notably, three of these vacancies are on just one court. Of the four active judgeships on the United States District Court for the Central District of Illinois, three are presently vacant, leaving the court’s chief judge as its only active member. Two of President Obama’s nominees to this court, James Shadid and Sue Myerscough, were unanimously approved by the Judiciary Committee for this excessively overburdened court. Yet none of Obama’s nominees to the Central District of Illinois received a vote in the 111th Congress.

This failure to confirm anyone to this Illinois court may be the most reckless legacy of the right’s obstruction of Obama’s judges, but it isn’t even the most absurd. One of the president’s blocked nominees, District of Oregon nominee Marco Hernandez, was previously nominated for the exact same job by President George W. Bush. Somehow, now that he’s an Obama nominee, the GOP has suddenly decided to throw up roadblocks before his confirmation.

This article highlights the problems with the revolving door between business and government

From the Boston Globe

Among the Globe findings:

■ Dozens of retired generals employed by defense firms maintain Pentagon advisory roles, giving them unparalleled levels of influence and access to inside information on Department of Defense procurement plans.

■ The generals are, in many cases, recruited for private sector roles well before they retire, raising questions about their independence and judgment while still in uniform. The Pentagon is aware and even supports this practice.

■ The feeder system from some commands to certain defense firms is so powerful that successive generations of commanders have been hired by the same firms or into the same field. For example, the last seven generals and admirals who worked as Department of Defense gatekeepers for international arms sales are now helping military contractors sell weapons and defense technology overseas.

■ When a general-turned-businessman arrives at the Pentagon, he is often treated with extraordinary deference — as if still in uniform — which can greatly increase his effectiveness as a rainmaker for industry. The military even has name for it — the “bobblehead effect.’’

Terrible news: income inequality is at an all-time high

From the Huffington Post

Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression, according to a recently updated paper by University of California, Berkeley Professor Emmanuel Saez. The paper, which covers data through 2007, points to a staggering, unprecedented disparity in American incomes.

Though income inequality has been growing for some time, the paper paints a stark, disturbing portrait of wealth distribution in America. Saez calculates that in 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000.

As of 2007, the top decile of American earners, Saez writes, pulled in 49.7 percent of total wages, a level that's "higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the 'roaring" 1920s.'"

Beginning in the economic expansion of the early 1990s, Saez argues, the economy began to favor the top tiers American earners, but much of the country missed was left behind. "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007," Saes writes.

I don't know, but it sure seems like tax rates make a difference in income inequality based on the chart above.

China update

China Now Has A Missile U.S. Aircraft Carriers Can't Defend Against

China's new anti-aircraft carrier missile, capable of striking U.S. warships, now has "initial operational capability," according to U.S. Admiral Robert Willard.

The missile uses satellites and unmanned drone aircraft to target ships, according to the FT.

For Auto Industry, Questions About Beijing’s Road Ahead

One of the uncertainties in the auto industry lies in how much longer Chinese authorities will allow the country’s remarkable sales boom to go on and whether China will export a flood of cars if the authorities do clamp down.

Automakers have been struggling for years to keep up with demand in China, as sales have climbed at a pace never seen in a major auto market. The number of cars and light trucks sold in China was one-tenth of that in the United States in 2000. This year, sales in China have been more than 50 percent higher than in the depressed American market.

The result has been traffic jams in the largest Chinese cities, particularly Beijing. And that has elicited an unexpectedly strong response from policy makers.

...

Auto executives and industry analysts say that the market will continue to expand in 2011. But they forecast that the growth rate is likely to fall to 10 percent after averaging 25 percent a year for the last decade.

China's Trade With Africa Just Exploded To $115 Billion

China's trade with Africa has soared to $114.81 billion in the first 11 months of 2010, according to the Chinese government's first white paper on its economic and trade cooperation with Africa. To put that huge number in perspective, the paper pointed out that China-Africa bilateral trade volume was a mere $12.14 million in 1950. The trade relationship between the two has increased of 43.5% year-on-year. That number is expected to increase as Chinese demand for oil, gas, iron and other raw materials continues.

The report did not address criticism that Chinese control of Africa's resources has led to local African communities not being allowed to reap economic rewards from the trades or arguments that the continent's natural resources are being plundered. It also did not choose to put a spotlight on local disputes such as this past October when two Chinese mine bosses in Zambia were charged with attempted murder after shooting miners over a compensation dispute.

A Personal Tour Of China's Eerily Vacant Commercial Real Estate

By now, you’ve probably heard of China’s ghost cities.

Great news! Conservative leaders are abandoning anti-gay groups

From the Huffington Post

Two large social conservative groups have added their names to a growing boycott of next year's Conservative Political Action Conference over the organizers' decision to include gay Republican group GOProud as a "participating organization" for the second year in a row.

WorldNetDaily reports that the Family Research Council and the Concerned Women for America are the latest associations to add their names to the list of boycotters.

"We've been very involved in CPAC for over a decade and have managed a couple of popular sessions. However, we will no longer be involved with CPAC because of the organization's financial mismanagement and movement away from conservative principles," FRC Action senior vice president Tom McClusky told WND.

Concerned Women for America president Penny Nance similarly told WND that the group had "decided not to participate in part because of GOProud."

What Is in Fast Food? A Newly Discovered Reason to Avoid Fast Food

From The Huffington Post

A new study shows that toxicperfluoroalkyls, which are used in surface protection treatments and coatings to keep grease from leaking through fast food wrappers, are being ingested by people through their food and showing up as contaminants in blood.

Perfluoroalkyls are a hazardous class of stable, synthetic chemicals that repel oil, grease and water.

As reported by University of Toronto researchers, the chemicals studied in human blood, urine and feces were polyfluoroalkyl phosphate esters (PAPs), which are the breakdown products of the perfluorinated carboxylic acids (PFCAs) used in coating the food wrappers. Scientists said the exposure to humans through this means "should be considered as a significant indirect source of PFCA."

How lazy are teenagers today?

From NPR

A decade ago, the Army started to notice that new recruits were, in general, getting weaker — their endurance was down, so they were more prone to injury.

"America's Army is very proud of the fact that we reflect our society," says Maj. Gen. Richard Stone, the Army's deputy surgeon general. "But since we reflect our society, we also absorb society's problems."

The Army's problem, Stone and others say, is that most current enlistees grew up on the couch, playing video games, rather than horsing around outside. And public schools have cut gym classes.

"You'd be surprised, the soldiers that we get today," says Frank Palkoska, who directs the Army's fitness school. "They can't do simple motor function movements, like a shoulder roll, the ability to skip — so we've got to lay a base of foundational fitness, without injuring them."

...

Palkoska has completely revamped basic training at all posts, starting with, well, the basics: stretching and holding; mastering simple, precise movements.

Soon, athletic trainers and physical therapists will join these workouts at Fort Leonard Wood to help soldiers avoid injuries and to quickly treat those that occur.

Drill Sgt. Travis Bammer says old-school soldiers initially chafed at the change in training philosophy.

From the Austerity Files

Federal programs on hold along with spending bill

Congress' failure to pass a massive spending bill — opting instead to fund the government with a temporary measure — has left dozens of federal programs in budgetary limbo.

Without a secure budget for fiscal year 2011, some agencies have suspended projects long on the books, including a 27-year-old program that helps support food pantries and homeless shelters across the country. A pilot program aimed at helping the elderly stay in their homes also is on hold, and an AIDS drug assistance program will leave thousands on waiting lists.

Lawmakers kept the federal government operating under a so-called continuing resolution that, with a few exceptions, keeps government agencies operating at 2010 funding levels until March.

...

Meanwhile, federal agencies are prohibited from funding some grant programs before a full-year budget is approved.

"This ended up being the worst of all worlds for us," said Steve Taylor, vice president of public policy at United WayWorldwide, which administers a federally funded grant program for food pantries and shelters. The program's 2011 allocation has been put on hold.

"People who are in desperate need of shelter and food assistance are not going to get it because of the way this is done," he said.

...

The resolution specifically prevented layoffs at the Veterans Administration and the agency that advises the president on telecommunications policy. It protected Pell Grant scholarships to low-income students and some loans to small businesses. It froze salaries for most federal workers for two years.

...

It also put a hold on all funding for "nondisaster" grants, programs that would have received $4.5 billion under the omnibus bill, according to the Department of Homeland Security. That includes grants to boost security at ports and railroads, and money to states to improve law enforcement response to terrorist threats.

The resolution also froze funding at last year's level for Head Start early childhood education programs. Without an increase in 2011, 65,000 children could be denied services, according to Senate Democrats, who called the resolution random and irresponsible.

Yet another reason why we need immigration reform

UC San Diego doctoral candidate granted year's reprieve from deportation

Mark Farrales, a 31-year-old Harvard graduate and doctoral candidate at UC San Diego, has been granted a one-year reprieve from his deportation to the Philippines and has been released from a Lancaster detention facility.

Farrales, who was brought to the United States illegally at age 10 in 1990, was arrested by Immigration and Customs Enforcement agents at his home in Reseda last month. He was released from custody last week after Rep. Brad Sherman (D-Sherman Oaks) urged ICE to defer action on the deportation order and allow the Board of Immigration Appeals to revisit the case.

"Much to their credit, they agreed," Sherman said.

A Congressman must beg the Immigration and Customs Enforcement to not deport a doctoral student. Absolutely insane!

The new GOP led house trying to find loopholes to its own restrictions

The irony is funny, but the hypocrisy is maddening. Apparently earmarks are bad, but "lettermarking" is great

Like many Republicans, Sen-elect Mark Steven Kirk vigorously opposes earmarks--those "pork-barrel" spending items that are tacked onto legislation in order to direct funds to pet projects in home districts. He isn't, however, adverse to "lettermarking"--a process that allows him to proposition a federal agency to direct funds to pet projects in his home district. What's the difference? That's the question that The New York Times' Ron Nixon floats in a report documenting the alternative methods to supplant the use of the now-"demonized" earmarks.

These tools detailed by Nixon include the aforementioned lettermarking, phonemarking (calling a federal agency to "request financing" for a project), and soft earmarks ("making suggestions" about where money should go). Many of these alternate "marking" efforts have been used by Congressmen who have held up earmarking as a symbol of wasteful federal spending. Naturally--as when a Hotline reporter found that Tea Party legislators had requested over a $1 billion dollars in earmarks--there have been some charges of "hypocrisy" in light of Nixon's report:

The the above link has a good discussion on why earmarks might not be so bad.

Japan is sooo screwed

From the Business Insider

Back in 2001 I wrote an article describing Japan's Runaway Debt Train: 40% of its annual budget was borrowed, and much of its tax revenues were gobbled up by interest payments on its mind-boggling public debt.

Nine years later, nothing has changed: welcome to perpetual motion. Japan's government approved a record 92.4 trillion yen ($1.1 trillion) budget for the 2011 fiscal year, of which 44 trillion is borrowed, 7 trillion is lifted from various trust funds and a mere 41 trillion is tax revenues.

So roughly half (48%) of Japan's Central State spending is borrowed.

Japan has borrowed almost half its government expenditures for a decade or so. Even at super-low bond yields of around 1%, it now costs 21 trillion yen to service that ever-growing mountain of debt. So 23% of the government's budget is spent on servicing debt. Roughly half of all tax revenues (51%) are devoted to paying interest on public debt.

The more Japan borrows, the more revenue must be devoted to paying interest.

Japan's total bond issuance in fiscal 2011, including roll-over of existing bonds and the additional 44.3 trillion, is 169 trillion yen--184% of the entire annual budget.

Despite a decade of vast "pump-priming," prices are still declining in Japan: the core consumer price index, which doesn’t include volatile fresh-food prices, was 0.5% lower in November than in the year-earlier period. Compared to October, the core CPI lost 0.1%. (Apparently the Japanese government has adopted the useful legerdemain of "core" and "non-core" consumer price indices.)

Some of the best quotes of the year from ESPN's Page 2

From ESPN
"If you're coming to get me, can you bring me some smokes?"
-- A 33-year-old resident of Lundar, Manitoba, who was told he would be arrested after repeatedly calling 911 to demand that the NHL return to Winnipeg

Page 2 spin: In a stunning turn, alcohol apparently was involved.

"Its a official dat i am leavin skool and enterin draft. ... i aint doin anotha yr."
-- Oklahoma point guard Tommy Mason-Griffin, declaring his career choice via Facebook

Page 2 spin: School will always be there, but you'd better take the opportunity to play in the D-League when it's available.

"Are you the stripper?"
-- A security guard at the Masters, to a female spectator

Page 2 spin: Guards at the tournament actually carried sheets with the mug shots of Tiger Woods' alleged mistresses in order to prevent potential disturbances. We thought only the TSA resorted to such tactics.

"Nobody is going to ask what Andray [Blatche] did to deserve it."
-- Magic guard Gilbert Arenas, on defecating in a former teammate's shoe

Page 2 spin: Lo and behold, someone did ask Arenas, and here's how he answered.

"I'm addicted to perfection. Problem with my life is I was always also addicted to chaos. Perfect chaos."
-- Former heavyweight champion Mike Tyson

Page 2 spin: As it turns out, Perfect Chaos is the name of a Finnish death metal band. So there's that.

Politics and government links

The US Government Can't Account For Billions Spent In Afghanistan

In its bid to win the hearts and minds of Afghanistan’s teeming population, the United States has spent more than $55 billion to rebuild and bolster the war-ravaged country.

That money was meant to cover everything from the construction of government buildings and economic development projects to the salaries of U.S. government employees working closely with Afghans.

Yet no one can say with any authority or precision how that money was spent and who profited from it. Most of the funds were funneled to a vast array of U.S. and foreign contractors. But according to a recent audit by the Special Inspector General for Afghanistan Reconstruction (SIGAR), there is no way of knowing whether the money went for the intended purposes.

“The audit shows that navigating the confusing labyrinth of government contracting is difficult, at best,” SIGAR said in releasing the audit. “USAID, the State Department and the Pentagon are unable to readily report on how much money they spend on contracting for reconstruction activities in Afghanistan.”

...

Another report found that the United States has spent nearly $200 million on Afghan security service buildings that cannot be used. SIGAR also found that the U.S. Agency for International Development (USAID) couldn’t account for nearly $18 billion that was paid to some 7,000 U.S. and Afghan contractors for development projects. Afghan contractors often pay kickbacks to local warlords, like Ahmad Wali Karzai, the president’s brother and the so-called “King of Kandahar.” Their actions often undermine the work of the coalition.

Some Right, Some Wrong in “60 Minutes” Story on State Budgets

Last night’s CBS “60 Minutes” piece on state budgets made some important points but also — through some big mistakes and omissions — gave a deeply misleading impression of the state budget situation.

The test case for conservative seriousness about federalism was Raich v. Gonzales, the medical marijuana case. Justices Scalia and Kennedy flubbed that opportunity, ruling that a woman growing a plant in her backyard was engaging in interstate commerce and that this activity could therefore be regulated by the federal government. If Scalia and Kennedy now vote with the majority to strike down portions of ObamaCare, it will be pretty obvious that they regard federalism as little more than a flimsy pretext for invalidating statutes they don’t like. Or, worse, for giving a president they don’t like a black eye.

Enlisting the Dying for Clues to Save Others

Health Wonk Review: Year-End Holiday Edition

American Medical Schools Are "Only In It for the Money" Say Their Faculty

Why We Still Kill Patients: Invisibility, Inertia, And Income

California politics update

Killing in L.A. drops to 1967 levels

For the first time in more than four decades, Los Angeles is on track to end the year with fewer than 300 killings, a milestone in a steady decline of homicides that has changed the quality of life in many neighborhoods and defied predictions that a bad economy would inexorably lead to higher crime.

As of mid-afternoon on Sunday, the Los Angeles Police Department had tallied 291 homicides in 2010. The city is likely to record the fewest number of killings since 1967, when its population was almost 30% smaller.

Excellent graphic here

How Bell hit bottom

In 1993, 39-year-old Robert Rizzo arrived in town trailing the vague whiff of scandal. For a time he seemed like the man the working-class city needed — until he became an 'unelected and unaccountable czar.'

Restoring California's Promise

China update

Andy Xie: Either America Or China Will Crash In 2011

Andy Xie's latest sees the liquidity war getting worse in 2011.

America will continue to pump the financial system with liquidity via tax cuts and quantitative easing. China will keep the yuan cheap and avoid clamping down on inflation.

The tense equilibrium can't last for long, as either sovereign debt or inflation gets too heavy to bear. Whoever lasts longer, wins.

China Is Poised To Rise - And Things Could Get Violent

America is still the richest and most powerful country on earth thanks to geography says historian Ian Morris, but if history is any guide then China will be next—and things could get violent.

The West is finding it harder to get its own way in the world.

The people of Europe and North America still produce two-thirds of the world’s GDP, spend more than two-thirds of its R&D dollars, and own almost all of its nuclear weapons and aircraft carriers.

8 Reasons China May Be Destined For An Economic Hard Landing

Hot money inflows

Huge property bubble

Can NASA change in order to survive?

From the Los Angeles Times

Early this month, Hawthorne-based rocket venture SpaceX launched an unmanned version of its Dragon capsule into orbit, took it for a few spins around Earth and then brought it home with a splashdown in the Pacific Ocean.

The total cost — including design, manufacture, testing and launch of the company's Falcon 9 rocket and the capsule — was about $800 million.

In the world of government spaceflight, that's almost a rounding error. And the ability of SpaceX to do so much with so little money is raising serious questions about NASA.

An excellent opinion on the revolving door between government and business

From a blog at The Economist

LAST July Peter Orszag stepped down from his post as the head of the Office of Management and Budget. As budget director, Mr Orzsag helped shape the first stimulus package and, more visibly, the health-care reform legislation. Apparently, the market values this sort of experience. Last week, Mr Orszag accepted a senior position at the investment-banking arm of Citigroup, an institution that exists in its present form thanks to massive infusions of taxpayer cash. Exactly how much Citigroup pay Mr Orszag is not public knowledge, but swapping tweed for sharkskin should leave him sitting pretty. Bankers who spoke to the New York Times ballparked his yearly salary at $2-3m.

James Fallows rightly observes that not only is the revolving door between Washington and Wall Street unseemly, its frictionless gliding action suggests corruption is built right into the interface between our government and our great profit-seeking institutions. Mr Fallows hesitates to impugn Mr Orszag's personal character. Who can blame a fella for throwing open the door when extravagent opportunity knocks?!

But in the grander scheme, his move illustrates something that is just wrong. The idea that someone would help plan, advocate, and carry out an economic policy that played such a crucial role in the survival of a financial institution—and then, less than two years after his Administration took office, would take a job that (a) exemplifies the growing disparities the Administration says it's trying to correct and (b) unavoidably will call on knowledge and contacts Orszag developed while in recent public service—this says something bad about what is taken for granted in American public life.

When we notice similar patterns in other countries—for instance, how many offspring and in-laws of senior Chinese Communist officials have become very, very rich—we are quick to draw conclusions about structural injustices. Americans may not "notice" Orszag-like migrations, in the sense of devoting big news coverage to them. But these stories pile up in the background to create a broad American sense that politics is rigged, and opportunity too.

Mr Fallows hits the nail on the head, but what this structural injustice means, politically and ideologically, remains unclear. In my opinion, the seeming inevitability of Orszag-like migrations points to a potentially fatal tension within the progressive strand of liberal thought. Progressives laudably seek to oppose injustice by deploying government power as a countervailing force against the imagined opressive and exploitative tendencies of market institutions. Yet it seems that time and again market institutions find ways to use the government's regulatory and insurer-of-last-resort functions as countervailing forces against their competitors and, in the end, against the very public these functions were meant to protect.

We are constantly exploited by the tools meant to foil our exploitation. For a progressive to acknowledge as much is tantamount to abandoning progressivism. So it's no surprise that progressives would rather worry over trivialities such as campaign finance reform than dwell on the paradoxes of political power. But it really isn't the Citizens United decision that's about to make Peter Orszag a minor Midas. It's the vast power of a handful of Washington players, with whom Mr Orszag has become relatively intimate, to make or destroy great fortunes more or less at whim. Well-connected wonks can get rich on Wall Street only because Washington power is now so unconstrained. Washington is so unconstrained in no small part because progressives and New Dealers and Keynesians and neo-cons and neo-liberals for various good and bad reasons wanted it that way. So, what is to be done? Summon a self-bottling genie-bottling genie?

The classically liberal answer is to make government less powerful. The monstrous offspring of entangled markets and states can be defeated only by the most thorough possible separation. But public self-protection through market-state divorce can work only if libertarians are right that unfettered markets are not by nature unstable, that they do not lead to opressive concentrations of power, that we would do better without a central bank, and so on. Most of us don't believe that. Until more of us do, we're not going far in that direction. And maybe that's just as well. Maybe it's true that markets hum along smoothly only with relatively active government intervention and it's alsotrue that relatively active government intervention is eventually inevitably co-opted, exacerbating rather than mitigating capitalism's injustices. Perhaps the best we can hope ever to achieve is a fleeting state of grace when fundamentally unstable forces are temporarily held in balance by an evanescent combination of complementary cultural currents. This is increasingly my fear: that there is no principled alternative to muddling through; that every ideologue's op-ed is wrong, except the ones serendipitously right. But muddle we must.

So what is to be done about the structural injustice spotlighted by Peter Orszag's passage through the revolving golden door? How exactly do we tweak the unjust structure? If the system is rigged, how exactly do we unrig it? In which direction can we muddle without making matters worse?

More here, and here

Well, this will help create a environment for compromise in Congress

Inside The GOP's Plan To Stifle Obama's Executive Branch Power

In the nearly two months since the November midterms, the conventional wisdom has centered on the idea that President Obama's agenda will be largely protected from an influx of Republicans by the Senate's arcane rules and his own veto pen. With 47 members in the 112th Congress, the GOP will lack a majority, let alone a supermajority, to pass the legislation they'd need to pass to undo Obama's accomplishments and blunt his progress -- as if he'd sign those bills anyway.

But Republicans are all too aware of this conundrum, and have been looking for ways around it. What they found is an obscure authority provided by a 1996 law called the Congressional Review Act. It provides Congress with an expedited process by which to evaluate executive branch regulations, and then give the President a chance to agree or disagree.

House Republicans will have carte blanche next year, and will be able to pass as many of these "resolutions of disapproval" as they want. The key is that a small minority in the Senate can force votes on them as well, and they require only simple-majority support to pass. If they can find four conservative Democrats to vote with them on these resolutions, they can force Obama to serially veto politically potent measures to block unpopular regulations, and create a chilling effect on the federal agencies charged with writing them.

Republicans are not fiscally responsible

Quantitative Easing Explained

A funny video: Hi, I'm a Tea-Partier

A Very Scary Light Show: Exploding H-Bombs In Space

The article is here.

Sunday, December 26, 2010

What will the healthcare individual mandate do?

If all 50 states end up like Massachusetts, which had the first healthcare individual mandate, the results will be fantastic (at least in terms of covering more people). The link is here

How dysfunctional has the Senate been this year?

From Ezra Klein

During Johnson's three terms as majority leader, from 1955 to 1961, there was only one time when a vote was called to break a filibuster. In the past two years, there have been 84

Here's another fact from Ezra Klein

As the first congressional session of Obama's presidency draws to a close, what began as a slow process of confirmation has ballooned into a full-blown judicial crisis. The Senate has overseen the slowest pace of judicial staffing in at least a generation, with a paltry 39.8 percent of Obama's judges having been confirmed, according to numbers compiled by Senate Democrats. Of the 103 district and circuit court nominees, only 41 have been confirmed.

By this time in George W. Bush's presidency, the Senate had confirmed 76 percent of his nominees. President Clinton was working at a rate of 89 percent at this point in his tenure.

While the confirmation process is slower now (a function of a packed legislative calendar and Republican obstruction), Obama's nominating pace also lags behind his predecessors. His 103 total nominations compare to 142 by Clinton and 131 by Bush at this same juncture.

Economics and finance links

The great bank heist of 2010: Commentary: Wall Street wins, Main Street pays — again

This was the year America finally took on the power and greed of the Wall Street banks.

And the banks won.

They dodged the bullet of real reform, probably for all time. They bounced back to post huge profits, helped by legal theft from the middle class. They completed their takeover of both political parties — and bought themselves a new Congress even more pliable than the old one.

Middle-class America is flattened, devastated and broke. The bankers that caused it all have escaped punishment. They’re raking in huge profits. Oh, and the tax cuts just got extended for high earners, too!

Wall St. Computers Read the News, and Trade on It

The number-crunchers on Wall Street are starting to crunch something else: the news.

Math-loving traders are using powerful computers to speed-read news reports, editorials, company Web sites, blog posts and even Twitter messages — and then letting the machines decide what it all means for the markets.

The development goes far beyond standard digital fare like most-read and e-mailed lists. In some cases, the computers are actually parsing writers’ words, sentence structure, even the odd emoticon. A wink and a smile — ;) — for instance, just might mean things are looking up for the markets. Then, often without human intervention, the programs are interpreting that news and trading on it.

A Secretive Banking Elite Rules Trading in Derivatives

How Superstars’ Pay Stifles Everyone Else

A few articles on the population of the United States

Rural America gets even more sparsely populated

The majority of the nation's sparsely populated rural counties lost even more residents in the last decade, though some of the counties — particularly those in the Mountain West — saw population gains that may be the result of retirees striking out for areas that are both scenic and affordable, according to a Times analysis of figures released by the Census Bureau on Tuesday.

The data offer the first detailed portrait of heartland America in a decade, covering the roughly 1,400 counties of fewer than 20,000 people. The numbers also show a growing Latino presence in these counties.

Such data had been hard to come by previously. Concentrated from the Mississippi River to the Rocky Mountain region, the counties constitute half of the United States by area, but were too sparsely populated to provide meaningful statistics as the Census Bureau rolled out a new yearly national survey in the mid-2000s.

Teen birthrate at lowest in decades

Teenagers are giving birth at the lowest rates noted in seven decades of record-keeping, according to government statistics released Tuesday.

The National Center for Health Statistics report doesn't speculate on why the birthrate has fallen, but two decades of public-health initiatives to curb teenage pregnancy may be paying dividends. Outside experts said the economy, too, could be a factor.

The report shows that the teen birthrate fell to 39.1 births per 1,000 girls ages 15 to 19 in 2009. That's a 6% drop from 2008 and the lowest rate since 1940, when the government began keeping track. In 1991, by contrast, the rate was 61.8 per 1,000.

Washington D.C. now larger than Wyoming, but still powerless in Congress

The Real Census Story: A Hispanic Voter Boom

We now know which states will lose and gain representation next year, but the real Census-politics story won't be written for a few months, when we find out how many Hispanic voters the country has gained.

The answer will affect more than just House seats: It could put typically red Sun Belt states in the blue column for presidential elections to come.

Census officials have been predicting a sharp rise in the Hispanic population, based on the 2000 population numbers, for the past few years. They'll release the 2010 race/origin breakdowns in February or March, confirming or denying their yearly best guesses.

Republicans should be happy about reapportionment, at first glance.

The big story is that Texas, a bright red state, which gained four House seats and Electoral College votes, while Rust Belt states and Democratic strongholds lost them. Ohio and New York each lost two; Michigan and Pennsylvania each lost one.

The national population shifts, however, bear the clear marks of a Hispanic population boom, meaning the political ramifications are more complicated than a simple net-plus for the GOP. Including Texas, the states to gain population are, by and large, states with already high and growing Hispanic segments: Florida, Arizona, and Nevada.

Has Al Qaeda sowed the seeds of its own demise?

Peter Bergen argues that they have

Is al-Qaeda simply going to wither away? Yes, with a little help, though not in the short term. History shows that small, violent groups can sustain their bloody work for years on end with virtually no public support. However, embedded in the DNA of groups such as al-Qaeda are the seeds of their own destruction.

To begin with, al-Qaeda and allied groups have launched terrorist campaigns from Iraq to Indonesia that have killed thousands of Muslim civilians. For groups that claim to be defending Muslims, this is not an impressive achievement. It is a particular problem for al-Qaeda, with its claim to the Islamist high ground, because the Koran specifically forbids the killing of civilians and the killing of Muslims. In Saudi Arabia, al-Qaeda lost a great deal of support after a campaign of attacks in 2003 that killed mostly Saudis. Saudi society, which had once been a cheerleader for bin Laden, turned against him. By 2007, only 10 percent of Saudis had a favorable view of al-Qaeda. In Pakistan, where bin Laden is presumably hiding out, his popularity is down to 18 percent, compared with 52 percent five years ago. Key Muslim clerics have formally withdrawn their endorsements.

At the same time, al-Qaeda and its allies—in contrast, for instance, to Hezbollah—do not offer a positive vision of the future. We know what bin Laden is against. What is he for?Ordinary Muslims ask themselves this same question. There are no al-Qaeda social-welfare services or schools. An al-Qaeda hospital is a sinister oxymoron. If you were to ask bin Laden, he would say that al-Qaeda seeks the restoration of “the caliphate.” By this he does not mean the restoration of something like the last caliphate—the Ottoman Empire, a relatively pluralistic polity—but rather the imposition of Taliban-style theocracies in a broad belt from Africa to Asia. Many Muslims may admire bin Laden because he “stood up” to the West, but that does not mean they want to live in his grim Islamist utopia. They do not.

Finally, the jihadist militants are incapable of turning themselves into a genuine mass political movement because their ideology prevents them from making the kind of real-world compromises that would allow them to engage in normal politics. Indeed, rather than cut deals with new friends, bin Laden has kept adding to his list of enemies, including any Muslim who doesn’t precisely share his ultra-fundamentalist worldview. The enemies list grows and grows. Al-Qaeda has said it is opposed to all Middle Eastern regimes; the Shia; most Western countries; Jews and Christians; the governments of India, Pakistan, Afghanistan, and Russia; most news organizations; most humanitarian organizations; and the United Nations. This is no way to increase market share.

Mr. Bergen also makes the point that I posted earlier today:

Third, citizens in the West must come to understand—and their leaders must drive the point home—that although terrorist attacks, including attacks by al-Qaeda, will continue to happen, the real damage is done by the panic and lashing out that follows. This is the reaction that al-Qaeda craves—and it is why terrorism works. It’s easy to understand the emergence of a culture of paranoia coupled with a rhetoric of vengeance. Prudence, calmness, and patience seem almost pusillanimous by comparison. But they work. Rare is the threat that can be defeated in large measure simply by deciding that we will not unduly fear it. Terrorism is one such threat.

Healthcare update

Placebos Can Work Even When You Know They're Fakes

There's little doubt that the placebo effect's real, but it has always been argued that a person feels better because they think the pill is the real deal. But what if it works even when you know it's a fake?

According to Ted Kaptchuk at Harvard Medical School and his colleagues at least one condition can be calmed by placebo, even when everyone knows it's just an inert pill. This raises a thorny question: should we start offering sugar pills for ailments without a treatment?

In the latest study, Kaptchuk tested the effect of placebo versus no treatment in 80 people with irritable bowel syndrome. Twice a day, 37 people swallowed an inert pill could not be absorbed by the body. The researchers told participants that it could improve symptoms through the placebo effect.

While 35 per cent of the patients who had not received any treatment reported an improvement, 59 per cent of the placebo group felt better. "The placebo was almost twice as effective as the control," says Kaptchuk. "That would be a great result if it was seen in a normal clinical trial of a drug."

Obama Returns to End-of-Life Plan That Caused Stir

When a proposal to encourage end-of-life planning touched off a political storm over “death panels,” Democrats dropped it from legislation to overhaul the health care system. But the Obama administration will achieve the same goal by regulation, starting Jan. 1.

Under the new policy, outlined in a Medicare regulation, the government will pay doctors who advise patients on options for end-of-life care, which may include advance directives to forgo aggressive life-sustaining treatment.

Congressional supporters of the new policy, though pleased, have kept quiet. They fear provoking another furor like the one in 2009 when Republicans seized on the idea of end-of-life counseling to argue that the Democrats’ bill would allow the government to cut off care for the critically ill.

Medical Schools in Region Fight Caribbean Flow

For a generation, medical schools in the Caribbean have attracted thousands of American students to their tiny island havens by promising that during their third and fourth years, the students would get crucial training in United States hospitals, especially in New York State.

But in a fierce turf battle rooted in the growing pressures on the medical profession and academia, New York State’s 16 medical schools are attacking their foreign competitors. They have begun an aggressive campaign to persuade the State Board of Regents to make it harder, if not impossible, for foreign schools to use New York hospitals as extensions of their own campuses.

The changes, if approved, could put at least some of the Caribbean schools in jeopardy, their deans said, because their small islands lack the hospitals to provide the hands-on training that a doctor needs to be licensed in the United States.

The dispute also has far-reaching implications for medical education and the licensing of physicians across the country. More than 42,000 students apply to medical schools in the United States every year, and only about 18,600 matriculate, leaving some of those who are rejected to look to foreign schools. Graduates of foreign medical schools in the Caribbean and elsewhere constitute more than a quarter of the residents in United States hospitals.

With experts predicting a shortage of 90,000 doctors in the United States by 2020, the defenders of these schools say that they fill a need because their graduates are more likely than their American-trained peers to go into primary and family care, rather than into higher-paying specialties like surgery.

John Goodman argues that the healthcare individual mandate is unnecessary and penalties/fees can have the same effect

Mirror-Image Cells Could Transform Science — or Kill Us All

Will Health Care Reform Reduce Medical Bankruptcies?

Health Insurers to Be Required to Justify Rate Increases Over 10 Percent

Random Links

Check Out All The Shell Companies Google Uses To Dodge Taxes

Where Do Dust Bunnies Come From?

Birds Do It ... We Do It ... and No One Knows Why

This $271 Million Telescope Is Buried Under the South Pole

Top 10 Tech Disasters That Haven't Happened... Yet

Happy Birthday, World Wide Web

You Can't Multitask, So Stop Trying

Los Angeles' Most Interesting Streetart of 2010

What Happens When You Steal a Hacker's Computer

This is an awesome kitten

Is anyone surprised by this?

Lawmakers seek cash during key votes

Numerous times this year, members of Congress have held fundraisers and collected big checks while they are taking critical steps to write new laws, despite warnings that such actions could create ethics problems. The campaign donations often came from contributors with major stakes riding on the lawmakers' actions.

For three weeks in June, for instance, the members of a joint House and Senate committee worked to draft final rules for regulating the financial industry in the wake of its 2008 meltdown. During that time, the 35 members of the drafting committee collected $440,000 in donations from that same industry, which was then lobbying heavily for looser rules.

Earlier this month, the chairman of the Senate committee overseeing tax policy, Sen. Max Baucus (D-Mont.), gave himself a birthday-party fundraiser - on the same day that the chamber took its first vote on an $858 billion tax package that would provide breaks to wealthy citizens and business interests.

Members of Congress contacted for this article declined to answer questions about ethics rules and the possible appearance of impropriety. Instead, they stressed that their votes can't be bought.

"Money has no influence on how Senator Baucus makes his decisions," Baucus spokeswoman Kate Downen said. "The only factor that determines Senator Baucus's votes is whether a policy is right for Montana and right for our country."

...

The issue of the timing of donations came up this summer when reports surfaced that eight members were under investigation by the independent Office of Congressional Ethics. They had solicited hundreds of thousands of dollars in donations from financial firms just before a critical House vote last December on new regulations for Wall Street. The ethics office was looking at whether they should have avoided those donations because of the potential for or appearance of impropriety.

Three cases, involving Reps. John Campbell (R-Calif.), Tom Price (R-Ga.) and Joseph Crowley (D-N.Y.), were referred to the House ethics committee, which last week asked for more time to investigate. All three have said that they complied with House ethics rules.

But just as the public learned of the ethics office's probe in June, a conference committee of House members and senators met to draft a compromise bill on landmark Wall Street reform. The measure would force firms to follow new rules for previously secret and risky transactions that were blamed for the 2008 market meltdown. Over the course of three weeks in June, the 35 conference committee members collected $440,000 in donations from the financial industry. Sen. Charles E. Schumer (D-N.Y.), a member of the Senate banking committee and a powerful conferee, collected the most that month - about $90,000 from financial interests.

If the federal government used the same accounting standards as corporations, the national debt would be much higher

According to Bruce Bartlett:

The most important difference between the Financial Report and the federal budget is that the former calculates costs on an accrual basis, whereas the latter only measures cash flow. Thus if the federal government incurred a debt that would not be paid until some time in the future, that cost would not be part of the conventionally measured national debt. It would only add to the debt when cash had to be expended to cover the expense that had been incurred. It’s worth remembering that private corporations are required to use accrual accounting and corporate executives would be jailed for using the sort of accounting that the federal government routinely uses.

The difference in accounting methods is most easily grasped in terms of Social Security. It has a liability over the next 75 years of $8 trillion more than the projected revenue from payroll taxes and interest on the Social Security trust fund. In every meaningful sense of the term, this is part of the national debt, but is excluded from the official debt figures.

Another consequence of ignoring future liabilities in calculating the national debt is that programmatic changes that save money in the future are similarly ignored. Thus, according to the Financial Report, Medicare had estimated liabilities in excess of future revenues over the next 75 years of $38 trillion at the end of fiscal year 2009. However, in the meantime, Congress enacted the Affordable Care Act, which contains significant cost controls on future Medicare spending. As a consequence, Medicare’s long-term liabilities fell by $15 trillion in 2010.

An example of the ridiculous power that unions sometimes have

Here is the link:

The Carnegie stagehands' pay was something else again, but not, as it turns out, unique. At Avery Fisher Hall and Alice Tully Hall in Lincoln Center, the average stagehand salary and benefits package is $290,000 a year.

To repeat, that is the average compensation of all the workers who move musicians' chairs into place and hang lights, not the pay of the top five.

Across the plaza at the Metropolitan Opera, a spokesman said stagehands rarely broke into the top-five category. But a couple of years ago, one did. The props master, James Blumenfeld, got $334,000 at that time, including some vacation back pay.

How to account for all this munificence? The power of a union, Local 1 of the International Alliance of Theatrical Stage Employees. "Power," as in the capacity and willingness to close most Broadway theaters for 19 days two years ago when agreement on a new contract could not be reached.

A window into the private equity world

Who wins? The wealthy investors who pay themselves enormous salaries and fees. Who loses? The employees and their pensions. This is yet another story about the decline of the middle class in America. Here's the link to the article and here's a link to an article about the CEO. I highly recommend the video, it helps explain private equity and the whole process very well.

Several links to amazing essays

If air travel worked like healthcare

Beware of Greeks bearing bonds

Inside the secret world of Trader Joe's

The James Franco project

Solitude and Leadership, If you want others to follow, learn to be alone with your thoughts

The end of men

Offensive Play, How different are dogfighting and football?

Keeping America's edge

The Rubber Room, The battle over New York City’s worst teachers

Shock Waves, A blast in Baghdad tests the endurance of a soldier and his family

Some very sad statistics about poverty and inequality

From the New York Times

According to the National Center for Children in Poverty, 42 percent of American children live in low-income homes and about a fifth live in poverty. It gets worse. The number of children living in poverty has risen 33 percent since 2000. For perspective, the child population of the country over all increased by only about 3 percent over that time. And, according to a 2007 Unicef report on child poverty, the U.S. ranked last among 24 wealthy countries.

15 Mind-Blowing Facts About Wealth And Inequality In America

Thomas Friedman tells it like it is

From his Sunday column at the New York Times:

Make no mistake, President Obama has enacted an enormous amount in two years. It’s impressive. But the really hard stuff lies ahead: taking things away. We are leaving an era where to be a mayor, governor, senator or president was, on balance, to give things away to people. And we are entering an era where to be a leader will mean, on balance, to take things away from people. It is the only way we’ll get our fiscal house in order before the market, brutally, does it for us.

Here are several more reasons the United States cannot police the world

From the New York Times

The Drug Enforcement Administration has been transformed into a global intelligence organization with a reach that extends far beyond narcotics, and an eavesdropping operation so expansive it has to fend off foreign politicians who want to use it against their political enemies, according to secret diplomatic cables.

In far greater detail than previously seen, the cables, from the cache obtained by WikiLeaks and made available to some news organizations, offer glimpses of drug agents balancing diplomacy and law enforcement in places where it can be hard to tell the politicians from the traffickers, and where drug rings are themselves mini-states whose wealth and violence permit them to run roughshod over struggling governments.

Diplomats recorded unforgettable vignettes from the largely unseen war on drugs:

In Panama, an urgent BlackBerry message from the president to the American ambassador demanded that the D.E.A. go after his political enemies: “I need help with tapping phones.”

In Sierra Leone, a major cocaine-trafficking prosecution was almost upended by the attorney general’s attempt to solicit $2.5 million in bribes.

In Guinea, the country’s biggest narcotics kingpin turned out to be the president’s son, and diplomats discovered that before the police destroyed a huge narcotics seizure, the drugs had been replaced by flour.

Leaders of Mexico’s beleaguered military issued private pleas for closer collaboration with the drug agency, confessing that they had little faith in their own country’s police forces.

Cables from Myanmar, the target of strict United States sanctions, describe the drug agency informants’ reporting both on how the military junta enriches itself with drug money and on the political activities of the junta’s opponents.

An excellent sentence to ponder

From Doyle McManus at the Los Angeles Times:

Californians know what to do in an earthquake, and Kansans know what to do in a tornado, but the U.S. as a whole is prepared only to overreact to even a small act of terrorism.

Here is the point he's trying to make and I couldn't agree more:

Terrorists aim to damage their opponents partly by provoking reactions bigger than the original attack. Osama bin Laden spent less than half a million dollars on the Sept. 11, 2001, attacks in New York and Washington, but he caused billions in damage by prompting a shutdown of financial markets, air travel and other chunks of the U.S. economy -- not to mention the war in Afghanistan and the other counterterrorist campaigns that ensued.

But if a society is prepared for terrorist attacks, makes sure its citizens know how to react when they happen, and protects its transportation, communications and utilities networks from being paralyzed by local disruptions, the impact of terrorism is reduced. It's still a problem, but it's no longer an existential threat.

"As a practical matter we should be far better prepared for these events and make them far less disastrous," says Stephen E. Flynn, a former Coast Guard counterterrorism expert who now runs a think tank called the Center for National Policy.

We can't control everything, Flynn notes, but "we are in control of how we react."

California politics and education update

Audits of Bell were 'rubber-stamp,' state controller says

A prominent accounting firm's audits of Bell's city finances amounted to a "rubber-stamp," according to a state controller's study concluding that much of the alleged wrongdoing would have been detected earlier had the firm done its job.

The long-awaited report is being closely watched because Mayer Hoffman McCann audits the books of dozens of government agencies in California and has 30 offices nationwide. Officials at several agencies, including California's public employee retirement board, have said they were awaiting the controller's study to help determine whether they would consider changes in their auditing contracts.

The controller's office found that MHM failed to comply with 13 of 17 "fieldwork auditing standards" when reviewing Bell's books in the 2008-09 fiscal year. The firm focused mostly on comparing financial numbers year to year rather than looking at potential for inappropriate or illegal activities, the controller's report said.

MHM's review gave clean audits to Bell, where eight current and former city officials were charged this fall in what prosecutors called a widespread corruption scheme that occurred over several years. The controller's report said that MHM did not find any city funds that had "significant deficiencies." The report said auditors did not explain why deficit balances of three funds totaling $8.89 million "were not considered significant."

Want more say over UC? Pay up

As The Times notes in its Dec. 17 editorial, California legislators -- who increased state funding to the University of California system this year in exchange for greater control over finances -- are incredulous over the university's recent tuition increases. Their outrage is ill-informed.

While they complain about rising costs, they fail to recognize that what has changed dramatically is not the cost of higher education but rather who pays -- the student or the taxpayer. Some realities:

The real cost of educating a student in the UC system has declined by nearly 20% over the last decade.

..

It is paradoxical that the very individuals who have contributed to the rise in tuition by budgeting less public money for higher education are now complaining about the effects on students and parents of tuition increases. What, did legislators think they could decrease their share public education funding by more than 50% and not have an effect? How does the Legislature think the UC system should react when such a large hole is left in its budget?

L.A. lags behind other big cities on spending of federal stimulus funds

When the federal stimulus program was launched in early 2009, the city of Los Angeles was in dire straits, facing a shortfall of $427 million and the possibility of mass layoffs. City officials scrambled at the new source of funds, ultimately netting more than $630 million in stimulus grants.

But nearly two years later, the city has spent only about a quarter of that money, a rate of spending that trails that of New York, Chicago and several other large California cities. Though the bulk of L.A.'s stimulus money was awarded by last March, the city had completed only eight of its 108 projects by mid-October.

L.A. officials say they have been hampered by a painful irony. As millions of federal stimulus dollars flowed in the door, the city was reeling from cost-cutting measures that led to the exodus of 2,400 experienced workers through an early retirement program and more than 360 layoffs. On top of that, many city workers, including some who are handling stimulus projects, are forced to be on furlough 16 to 26 days a year.

A salve for California's financial woes -- if voters will buy it

This new gasoline high came just as crude oil also reached a two-year high as traders bid it up after U.S. Energy Dept. reported a week-on-week inventory draw, while unusually cold weather in the United States and Europe has also helped.

Oil futures for February delivery rose to $90.48 a barrel, the highest since Oct. 3, 2008. Prices have climbed 14% this year, and up about 26% since late August. And by the way crude oil prices are climbing; you’d think there’s a supply shortage. Totally not so:

The week-on-week crude inventory draw was largely due to refiners’ year-end strategy to minimize potential taxes on year-end inventory.

Despite a weekly draw, crude oil, along with products inventories (except distillate), all saw a year-over-year increase (Fig. 2). Crude inventory level is still above the average range (Fig. 2), while gasoline inventory is also close to the high end of the average range.

If there’s strong demand elsewhere around the globe, as many have suggested, there should not be such a build in the domestic inventory.

The global physical oil market also tells a similar story. WSJ reported that the International Energy Agency (IEA) estimates OPEC spare capacity is around 6.4% of global demand, nearly double the level of late 2007. Data from Oil Market Intelligence also indicate the world oil inventories stood at 20 days worth of demand, up from 14 days in November 2007.

Wednesday, December 29, 2010

Monday, December 27, 2010

Sunday, December 26, 2010