Friday, May 21, 2010
Factoids That You Can Use
Recent research from a variety of sources underscores the glacial shift from wired to untethered telephone usage. Cell phones are so pervasive that 234 million Americans or 78 percent of the total population now subscribes to service. Meanwhile, the Federal Communications Commission estimates that land lines or wired telephone subscribers have dipped by 37 percent since 2000. This trend is unlikely to reverse, since demographic research indicates that those 30 years of age and younger are most likely to dump their land line for exclusive mobile service. The mobile phone manufacturers and operators are ramping up advertising and marketing to take advantage of the trend. Over the next five years, ABI research predicts expenditures will grow at a compounded annual rate of more than 40 percent. In the battle between the country's two largest wireless operators, Verizon held the largest market share at 31.1 percent. However, the firm lost share to AT&T during the most recent quarter. AT&T raised its market share to 25.2 percent. Developments to watch: more than 30 percent of all subscribers are using web browsers on their mobile devices, while 28.6 percent have downloaded applications for their phones. No question both will drive higher usage, straining already overtaxed networks.
Thursday, May 20, 2010
What Happens in Greece, Won't Stay in Greece
When the financial meltdown blistered Greece, the European Union stepped into the breech with an emergency plan designed to confine the damage. The EU's governing body ponied up a staggering $1 trillion rescue package to stabilize the region. In the aftermath of the bailout, there is fresh evidence the financial contagion will likely spread, despite efforts to stem the economic virus.
Among the most foreboding of signs is what happened in Greece after the EU announced its plan. Government and union workers took to the streets, condemning the austerity measures demanded by the EU in exchange for the rescue. The scenes made for ugly television images broadcast around the globe. It also underscored how difficult it will be for elected officials to take away benefits from voters. Decades of irresponsible spending and spiraling budget deficits are to blame. The protests are just a symptom of why Greece is in such dire straits.
Greeks have gotten use to a pliant government that provides generous pension benefits, cradle-to-grave health care and bloated welfare programs. But while criticism of Greece mounted, some observers began to realize that most of Europe is saddled with the same social model that is crimping Greece's treasury. Greece just happens to be the first to be exposed because its financial house was in worse shape than its European neighbors.
However, it is only a matter of time before Spain and Portugal come to the EU trough. Next up might be Ireland. Lurking somewhere in the shadows is the United Kingdom, which is suffering from years of Labor Party rule that has enhanced social welfare programs, leading to record debt levels. Already, the UK deficit is approaching that of Greece at almost 12 percent of the country's economic output. With a coalition government now ruling the UK, significant reductions in spending will be next to impossible. Few coalition politicians, already on shaky footing in the power-sharing arrangement, have an appetite for the kind of austerity measures needed. Expect higher taxes and precious little budget cutting. If a crisis strikes the UK, as it surely will, no country is safe on the continent.
Despite a united facade, EU partners are facing an angry public. In Germany, where the government forked over billions to save Greece, the public is growing restless. A mass circulation German newspaper recently ran a front page headline that screamed, "We are Europe's fools again!" A leading newspaper in France minced few words when it declared, "The emergency plan will bring down the fever but won't cure the patient." Ordinary people are waking up to the fact that the Greek bailout has weakened their own country's finances, imperiling their own social programs.
Most Americans are not paying any attention to Greece. They should. California Governor Arnold Schwarzenegger recently compared his state's $19.1 budget shortfall to the unfolding crisis in Greece. California is a poster child for what happens when governments refuse to cut budgets, choosing instead to use the state treasury as a political slush fund to keep public workers and their unions happy. State legislators are loathe to adopt austere measures even in the face of financial collapse. As evidence, last year when California was on the ropes, irresponsible legislators chose to issue IOU's to creditors to close a $60 billion budget gap instead of trimming budgets to reduce the deficit.
While California tops the list of egregious spenders, New York is not far behind. Both are experiencing the double whammy of declining tax revenues and increased entitlement spending. Unless the economy miraculously recovers soon, expect the two states to wind up in Washington, pleading for bailouts from the federal government. The only question is one of timing. Does it happen before or after November's elections?
Not far behind in the race to financial turmoil is the United States. The country's federal deficit as a percentage of Gross Domestic Product (GDP) was 9.9 percent in 2009. It is now approaching the double-digit levels of Greece. Yet there have been few alarm bells sounded by those in charge at the national level. For his part, President Obama has appointed a blue-ribbon panel to study the problem and report back after the November elections. Meanwhile, the deficit grows at a staggering rate.
But the deficit numbers tell only part of the story. A better measure is total indebtedness, which never receives much media attention. The country's total debt is now 92.1 percent of its GDP. Think about that. The money the country owes to its creditors is nearly equal to the nation's total annual economic output. That's scary.
If that still leaves you unworried, then consider this: Germany, France, China, India, Canada and even the United Kingdom have lower total debt percentages than the United States. Greece weighs in a 124.3 percent and Italy is close behind at 115.5 percent. Japan tops the list. Its debt stands at 222 percent of its economic output. Those numbers should frighten every American, especially the fifty-percent of people who pay taxes.
Given the current cast in Washington, no one can realistically expect any meaningful cuts in the federal budget, particularly entitlement programs. Taxes are already on the drawing board as a remedy. The problem is increasing taxes will tank spending and harm the fragile economy. That will lead to declining tax revenues. Unless spending is reduced, total indebtedness will continue to soar.
That's why it is so important for policy makers to learn from Greece's mistakes, which have been repeated throughout Europe. Unless elected officials tackle the deficits immediately, the United States is assuredly on the road to becoming not just another Greece, but a financially wounded country with no union ready with a handout.
Among the most foreboding of signs is what happened in Greece after the EU announced its plan. Government and union workers took to the streets, condemning the austerity measures demanded by the EU in exchange for the rescue. The scenes made for ugly television images broadcast around the globe. It also underscored how difficult it will be for elected officials to take away benefits from voters. Decades of irresponsible spending and spiraling budget deficits are to blame. The protests are just a symptom of why Greece is in such dire straits.
Greeks have gotten use to a pliant government that provides generous pension benefits, cradle-to-grave health care and bloated welfare programs. But while criticism of Greece mounted, some observers began to realize that most of Europe is saddled with the same social model that is crimping Greece's treasury. Greece just happens to be the first to be exposed because its financial house was in worse shape than its European neighbors.
However, it is only a matter of time before Spain and Portugal come to the EU trough. Next up might be Ireland. Lurking somewhere in the shadows is the United Kingdom, which is suffering from years of Labor Party rule that has enhanced social welfare programs, leading to record debt levels. Already, the UK deficit is approaching that of Greece at almost 12 percent of the country's economic output. With a coalition government now ruling the UK, significant reductions in spending will be next to impossible. Few coalition politicians, already on shaky footing in the power-sharing arrangement, have an appetite for the kind of austerity measures needed. Expect higher taxes and precious little budget cutting. If a crisis strikes the UK, as it surely will, no country is safe on the continent.
Despite a united facade, EU partners are facing an angry public. In Germany, where the government forked over billions to save Greece, the public is growing restless. A mass circulation German newspaper recently ran a front page headline that screamed, "We are Europe's fools again!" A leading newspaper in France minced few words when it declared, "The emergency plan will bring down the fever but won't cure the patient." Ordinary people are waking up to the fact that the Greek bailout has weakened their own country's finances, imperiling their own social programs.
Most Americans are not paying any attention to Greece. They should. California Governor Arnold Schwarzenegger recently compared his state's $19.1 budget shortfall to the unfolding crisis in Greece. California is a poster child for what happens when governments refuse to cut budgets, choosing instead to use the state treasury as a political slush fund to keep public workers and their unions happy. State legislators are loathe to adopt austere measures even in the face of financial collapse. As evidence, last year when California was on the ropes, irresponsible legislators chose to issue IOU's to creditors to close a $60 billion budget gap instead of trimming budgets to reduce the deficit.
While California tops the list of egregious spenders, New York is not far behind. Both are experiencing the double whammy of declining tax revenues and increased entitlement spending. Unless the economy miraculously recovers soon, expect the two states to wind up in Washington, pleading for bailouts from the federal government. The only question is one of timing. Does it happen before or after November's elections?
Not far behind in the race to financial turmoil is the United States. The country's federal deficit as a percentage of Gross Domestic Product (GDP) was 9.9 percent in 2009. It is now approaching the double-digit levels of Greece. Yet there have been few alarm bells sounded by those in charge at the national level. For his part, President Obama has appointed a blue-ribbon panel to study the problem and report back after the November elections. Meanwhile, the deficit grows at a staggering rate.
But the deficit numbers tell only part of the story. A better measure is total indebtedness, which never receives much media attention. The country's total debt is now 92.1 percent of its GDP. Think about that. The money the country owes to its creditors is nearly equal to the nation's total annual economic output. That's scary.
If that still leaves you unworried, then consider this: Germany, France, China, India, Canada and even the United Kingdom have lower total debt percentages than the United States. Greece weighs in a 124.3 percent and Italy is close behind at 115.5 percent. Japan tops the list. Its debt stands at 222 percent of its economic output. Those numbers should frighten every American, especially the fifty-percent of people who pay taxes.
Given the current cast in Washington, no one can realistically expect any meaningful cuts in the federal budget, particularly entitlement programs. Taxes are already on the drawing board as a remedy. The problem is increasing taxes will tank spending and harm the fragile economy. That will lead to declining tax revenues. Unless spending is reduced, total indebtedness will continue to soar.
That's why it is so important for policy makers to learn from Greece's mistakes, which have been repeated throughout Europe. Unless elected officials tackle the deficits immediately, the United States is assuredly on the road to becoming not just another Greece, but a financially wounded country with no union ready with a handout.
Monday, May 17, 2010
Pope in a Box
The news media is sharpening its knives to carve up the Catholic Church again over the sex abuse scandal that has rocked the denomination for more than a decade. While the current reports have all the earmarks of previous coverage, there is one difference. This time the media has painted a big bulls eye on Pope Benedict XVI in an attempt to link him to cover ups of priestly misconduct.
This latest offensive was fueled by a New York Times barrage of news stories, columns and editorials fingering the Pope as responsible for failing to vigorously investigate and prosecute abuse in the U.S. The Times dug up a Wisconsin case, where the abuse occurred from 1950 to 1974, and tried it to hang it around the neck of Cardinal Joseph Ratzinger. When the case finally reached the Vatican, the year was 1996 and the future Pope was head of the Vatican's doctrinal office.
For its material, The Times drew extensively from documents obtained from cooperative lawyers, who are suing the church on behalf of sexual abuse victims. It is very easy to understand the motivation of the attorneys. They would like nothing better than to link the cover up of abuse all the way to the Vatican. That would open the Vatican's coffers to settlements that would easily dwarf the financial resources of local dioceses. To these attorneys, the Vatican's bank accounts are the Holy Grail.
The media is the willing accomplice in this moral play because they view the Pope as too conservative for their tastes. If the media can raise questions about his handling of sexual abuse cases, it will undermine the Pope's moral authority on issues such as right-to-life, stem cell research and same sex marriage. The media wants to neuter the Pope to the point where the public dismisses the church's position on controversial matters.
Some in the media, including The Times, have called for the Pope to step down in the wake of the latest news reports. Their editors must have the Vatican confused with Congress. Popes don't just resign because of allegations in the media. Deaths end their papacy. The whole notion of a Pope resigning because of unsubstantiated charges in a news articles and columns may be the most preposterous suggestion, even for The Times.
An unbiased reading of the record suggests that the Pope, far from being an enabler in this scandal, has been an outspoken advocate of reporting any evidence of sexual crimes to civil authorities. For the first time, the Pope recently put into place standards and practices to help bishops deal with these abuse cases. These are clear signs Benedict will not sweep abuse under the rug. Now he should be judged on what he does, not just what he says.
What's so interesting to watch is that the media never mentions Pope John Paul II, who served during the height of revelations about the sexual abuse. His papacy began in 1978 and spanned 26 years until his death in 2005. To be charitable, he was gravely ill during the final years of his reign. However, the Pope never appeared to grasp the severity of the crisis. He relied on American bishops to deal with the cases with little guidance from Rome. His record was spotty at best. Yet the media has given him a pass, primarily because news organizations saw Pope John Paul as a modern vicar with a progressive agenda. Never mind that he was even more of a doctrinaire than his successor, Pope Benedict XVI.
The blame for lack of action and cover ups belongs squarely on the shoulders of the bishops, who shielded abusive priests from facing criminal charges. Once the scandals became media fodder, the bishops hid from view and relied on lawyers' advice to clam up. It was a costly mistake. They should have handed over their files on abusive behavior to the authorities and pledged cooperation to prosecute the guilty.
Many Catholics watched helplessly as their church turned a deaf ear to public demand for full accountability. For its reticence, the church was rightfully dragged through the media muck for its painful past mistakes. Once the lawsuits started and the scope of the problem became apparent, Pope John Paul II should have hauled the American bishops to the Vatican and promised to defrock any leader found guilty of protecting abusive priests. Then he should have followed up with an inquiry that would have rid the church of these derelict bishops. To now blame Pope Benedict for this mess seems a stretch even for lawyers intent on collecting millions more in fees.
The thread the media and lawyers are using is the role Cardinal Ratzinger played as head of the Vatican's arcane doctrinal office. The Times and others broad brush his role to insinuate that somehow every new abuse allegation was elevated to Cardinal Ratzinger for handling. The truth is that the Vatican office deals almost exclusively with issues of church doctrine. If abuse cases would have come before the office, it likely would have been in a tangential way. For example, the office might be expected to grapple with the issue of sex abuse as it relates to church doctrine on the celibacy of priests. However, the media has painted a picture of cases files being delivered daily to Cardinal Ratzinger's office desk for his action. That's nonsense. The media either misunderstands the role of the doctrinal office or more likely they are deliberately out to destroy Pope Benedict's credibility.
None of this is to diminish the horror of the sexual abuse scandal. Catholics were again reminded of this ugly chapter in church history this month when the Diocese of Vermont agreed to pay $17.6 million to dozens of former altar boys who alleged sexual abuse by priests. The alleged abuse took place in the 1970's. Most of the cases involved one priest, who has since been defrocked under Pope Benedict's papacy.
Yet even in these dark hours for the church, there seems to be a light. Last year, there were six new cases of abuse reported to authorities. While even one case is too many, at least the perpetrators are slowly being weeded out. By comparison, during the five-year period from 2001-2005, some 2,570 teachers in the country had their credentials revoked, denied or sanctioned because of sexual misconduct.
The decline in reported abuse cases is a sign of hope for a church faithful who have endured some of the most damning revelations about the priests they trusted and then had to cough up funds to pay for their diocese's mistakes. At least now it seems there is a Pope who grasps the enormity of the situation and has pledged to do something about it.
This latest offensive was fueled by a New York Times barrage of news stories, columns and editorials fingering the Pope as responsible for failing to vigorously investigate and prosecute abuse in the U.S. The Times dug up a Wisconsin case, where the abuse occurred from 1950 to 1974, and tried it to hang it around the neck of Cardinal Joseph Ratzinger. When the case finally reached the Vatican, the year was 1996 and the future Pope was head of the Vatican's doctrinal office.
For its material, The Times drew extensively from documents obtained from cooperative lawyers, who are suing the church on behalf of sexual abuse victims. It is very easy to understand the motivation of the attorneys. They would like nothing better than to link the cover up of abuse all the way to the Vatican. That would open the Vatican's coffers to settlements that would easily dwarf the financial resources of local dioceses. To these attorneys, the Vatican's bank accounts are the Holy Grail.
The media is the willing accomplice in this moral play because they view the Pope as too conservative for their tastes. If the media can raise questions about his handling of sexual abuse cases, it will undermine the Pope's moral authority on issues such as right-to-life, stem cell research and same sex marriage. The media wants to neuter the Pope to the point where the public dismisses the church's position on controversial matters.
Some in the media, including The Times, have called for the Pope to step down in the wake of the latest news reports. Their editors must have the Vatican confused with Congress. Popes don't just resign because of allegations in the media. Deaths end their papacy. The whole notion of a Pope resigning because of unsubstantiated charges in a news articles and columns may be the most preposterous suggestion, even for The Times.
An unbiased reading of the record suggests that the Pope, far from being an enabler in this scandal, has been an outspoken advocate of reporting any evidence of sexual crimes to civil authorities. For the first time, the Pope recently put into place standards and practices to help bishops deal with these abuse cases. These are clear signs Benedict will not sweep abuse under the rug. Now he should be judged on what he does, not just what he says.
What's so interesting to watch is that the media never mentions Pope John Paul II, who served during the height of revelations about the sexual abuse. His papacy began in 1978 and spanned 26 years until his death in 2005. To be charitable, he was gravely ill during the final years of his reign. However, the Pope never appeared to grasp the severity of the crisis. He relied on American bishops to deal with the cases with little guidance from Rome. His record was spotty at best. Yet the media has given him a pass, primarily because news organizations saw Pope John Paul as a modern vicar with a progressive agenda. Never mind that he was even more of a doctrinaire than his successor, Pope Benedict XVI.
The blame for lack of action and cover ups belongs squarely on the shoulders of the bishops, who shielded abusive priests from facing criminal charges. Once the scandals became media fodder, the bishops hid from view and relied on lawyers' advice to clam up. It was a costly mistake. They should have handed over their files on abusive behavior to the authorities and pledged cooperation to prosecute the guilty.
Many Catholics watched helplessly as their church turned a deaf ear to public demand for full accountability. For its reticence, the church was rightfully dragged through the media muck for its painful past mistakes. Once the lawsuits started and the scope of the problem became apparent, Pope John Paul II should have hauled the American bishops to the Vatican and promised to defrock any leader found guilty of protecting abusive priests. Then he should have followed up with an inquiry that would have rid the church of these derelict bishops. To now blame Pope Benedict for this mess seems a stretch even for lawyers intent on collecting millions more in fees.
The thread the media and lawyers are using is the role Cardinal Ratzinger played as head of the Vatican's arcane doctrinal office. The Times and others broad brush his role to insinuate that somehow every new abuse allegation was elevated to Cardinal Ratzinger for handling. The truth is that the Vatican office deals almost exclusively with issues of church doctrine. If abuse cases would have come before the office, it likely would have been in a tangential way. For example, the office might be expected to grapple with the issue of sex abuse as it relates to church doctrine on the celibacy of priests. However, the media has painted a picture of cases files being delivered daily to Cardinal Ratzinger's office desk for his action. That's nonsense. The media either misunderstands the role of the doctrinal office or more likely they are deliberately out to destroy Pope Benedict's credibility.
None of this is to diminish the horror of the sexual abuse scandal. Catholics were again reminded of this ugly chapter in church history this month when the Diocese of Vermont agreed to pay $17.6 million to dozens of former altar boys who alleged sexual abuse by priests. The alleged abuse took place in the 1970's. Most of the cases involved one priest, who has since been defrocked under Pope Benedict's papacy.
Yet even in these dark hours for the church, there seems to be a light. Last year, there were six new cases of abuse reported to authorities. While even one case is too many, at least the perpetrators are slowly being weeded out. By comparison, during the five-year period from 2001-2005, some 2,570 teachers in the country had their credentials revoked, denied or sanctioned because of sexual misconduct.
The decline in reported abuse cases is a sign of hope for a church faithful who have endured some of the most damning revelations about the priests they trusted and then had to cough up funds to pay for their diocese's mistakes. At least now it seems there is a Pope who grasps the enormity of the situation and has pledged to do something about it.
Wednesday, May 12, 2010
Health Care News Guaranteed To Make You Sick
During the heated debate over Health Care, President Obama pledged to veto a reform bill with a price tag of $1 trillion or more because it would be too expensive. Democrats patted themselves on the back when they managed to keep the ten-year cost figure at $940 billion. They based the number on the Congressional Budget Office's gross cost estimate in March before the passage of the reform bill. The net cost estimate was $788 billion. Now the other shoe has dropped and Democrats are doing some serious backpedaling.
On Tuesday, the CBO revisited its estimates in response to a request from California Rep. Jerry Lewis. After more study, the CBO tacked on another $115 billion in discretionary spending over ten years, sending the cost of the Health Care Reform bill soaring into the stratosphere. The overhaul now will likely exceed $1 trillion. Remember this is only a guess. In nearly all cases where long term projections are required, the CBO has a lousy track record. It usually underestimates the expenditures by wide margins.
Now Democrats are trying to bury the $1 trillion figure under a mound of political double talk. Some preached the mantra of deficit reduction when the reforms are implemented. This argument holds that the higher the health care reform price tag the bigger the reduction in bloated federal spending. Only someone with absolutely no understanding of a budget would fall for that one. Other Democrats trotted out the argument that since many programs in the bill are discretionary, the funds won't necessarily have to be spent. That is just a cover up. Of course, the money will be spent. Check to find out the last time Congress failed to fund any entitlement program. Never has happened.
Health Care Reform, already a burning issue in Congressional elections, just became a blazing hot iron that can be used to brand Democrats as big spenders intent on saddling the voters with a mountain of debt. Months ago the Democrats scrapped their strategy of touting Health Care Reform passage in the wake of polls that showed how deeply unpopular the bill was with the public. Republicans should hang the $1 trillion price tag around the neck of every Democrat running for election.
Meanwhile, a federal district judge in Florida has promised to fast track the legal challenges filed by 18 states, claiming the Health Care Reform bill is unconstitutional. The challengers pinpointed the the reform provision that mandates individuals must purchase health care insurance beginning in 2014. Hearings are expected to begin in November at the earliest. The Justice Department, which will defend the bill, can be counted on to delay any proceedings until after the November elections.
Amongst all the legal and political wrangling, the clock is ticking on tax changes scheduled to soon begin hitting the pockets of Americans. There are 16 tax changes related to health insurance that are scheduled to be implemented from January 1, 2011 through 2020. Not all taxes, such as increases in Medicare taxes, are assessed directly on individuals. But the tab for billions of dollars in new fees to be imposed on pharmaceutical manufacturers and health insurance firms will be passed through to consumers in the form of higher charges. Only someone in government can't figure out that every dollar a business gets comes from a consumer or another firm. Unlike the federal government, businesses cannot simply print money to pay higher fees imposed by the legislation.
Democrats tried to shield themselves from an angry public by fashioning Health Care Reform in a way that delays taxes until after November's elections. No doubt the party thought it was a clever move. However, as the elections draw nearer, it is becoming clearer that Democrats are only fooling themselves. Health Care Reform is an albatross that will send many elected Democrats into an early retirement.
On Tuesday, the CBO revisited its estimates in response to a request from California Rep. Jerry Lewis. After more study, the CBO tacked on another $115 billion in discretionary spending over ten years, sending the cost of the Health Care Reform bill soaring into the stratosphere. The overhaul now will likely exceed $1 trillion. Remember this is only a guess. In nearly all cases where long term projections are required, the CBO has a lousy track record. It usually underestimates the expenditures by wide margins.
Now Democrats are trying to bury the $1 trillion figure under a mound of political double talk. Some preached the mantra of deficit reduction when the reforms are implemented. This argument holds that the higher the health care reform price tag the bigger the reduction in bloated federal spending. Only someone with absolutely no understanding of a budget would fall for that one. Other Democrats trotted out the argument that since many programs in the bill are discretionary, the funds won't necessarily have to be spent. That is just a cover up. Of course, the money will be spent. Check to find out the last time Congress failed to fund any entitlement program. Never has happened.
Health Care Reform, already a burning issue in Congressional elections, just became a blazing hot iron that can be used to brand Democrats as big spenders intent on saddling the voters with a mountain of debt. Months ago the Democrats scrapped their strategy of touting Health Care Reform passage in the wake of polls that showed how deeply unpopular the bill was with the public. Republicans should hang the $1 trillion price tag around the neck of every Democrat running for election.
Meanwhile, a federal district judge in Florida has promised to fast track the legal challenges filed by 18 states, claiming the Health Care Reform bill is unconstitutional. The challengers pinpointed the the reform provision that mandates individuals must purchase health care insurance beginning in 2014. Hearings are expected to begin in November at the earliest. The Justice Department, which will defend the bill, can be counted on to delay any proceedings until after the November elections.
Amongst all the legal and political wrangling, the clock is ticking on tax changes scheduled to soon begin hitting the pockets of Americans. There are 16 tax changes related to health insurance that are scheduled to be implemented from January 1, 2011 through 2020. Not all taxes, such as increases in Medicare taxes, are assessed directly on individuals. But the tab for billions of dollars in new fees to be imposed on pharmaceutical manufacturers and health insurance firms will be passed through to consumers in the form of higher charges. Only someone in government can't figure out that every dollar a business gets comes from a consumer or another firm. Unlike the federal government, businesses cannot simply print money to pay higher fees imposed by the legislation.
Democrats tried to shield themselves from an angry public by fashioning Health Care Reform in a way that delays taxes until after November's elections. No doubt the party thought it was a clever move. However, as the elections draw nearer, it is becoming clearer that Democrats are only fooling themselves. Health Care Reform is an albatross that will send many elected Democrats into an early retirement.
Saturday, May 8, 2010
When Numbers Lie: Unemployment Data Exposed
Headline writers had a heyday bannering the latest employment numbers. The media, speaking with one voice, proclaimed the new data from the Labor Department was proof that the economy was off life support and on the road to recovery. In fact, Reuters went so far as to report that "government support" was the reason the employment figures experienced an uptick.
Apparently, it didn't dawn on anyone in the media to read the entire report from the Labor Department. Had any of these lazy journalists bothered to do a little digging, it would have become apparent that the employment numbers exposed the soft under belly of the Obama recovery scheme. Unemployment actually rose, but you would never know by reading or listening to news reporters and anchors, the vast majority of whom know nothing about economics.
First, let's set the record straight. According to the Bureau of Labor Statistics, unemployment in April climbed from 9.7 percent to 9.9. percent. In human terms, 15.3million Americans are out of work. That fact was intentionally buried on page three of the previously cited Reuters story. Page three! I recall the days when any hike in the unemployment number was greeted with screaming headlines on the front page.
As you pore over the data, there are other statistics that practically leap off the spreadsheet. For example, the number of people who have been out of work more than 27weeks now represents a staggering 45.9 percent of the total unemployed. That is the highest it has even been since the Bureau of Labor Statistics began keeping records. It means that as people lose their jobs, they are finding it nearly impossible to find opportunities in this economy.
Even the 9.9 percent unemployment figure disguises the true health of employment. The Bureau of Labor Statistics does not include in that percentage those workers who have quit looking for a job. Nor does it add in the those who want full time employment, but are forced to accept part-time work to make ends meet. If you include those two segments of the population, the actual unemployment percentage rose to 17.1 percent from 16.9 percent in March. This is a broad measurement that more accurately reflects the country's jobless situation.
Yet despite this overwhelming evidence the economy remains sick, every single news organization led off their reports with the fact that employers added 290,000 jobs in April. Most news headlines prattled about how employment surged last month. In its employment summary, the Bureau of Labor Statistics credited the payroll increase to Federal government hiring and the addition of temporary Census workers. These two facts are no where to be found in the Reuters story, nor in most other media accounts.
All of this proves that numbers do not lie. But there can be no doubt that the news people who write and speak about these issues do use figures to conceal the truth. When the supposed truth-tellers in our society, the news media, contrive to use statistics to paint a lie about the country's economy, the public is not served. It is little wonder that public distrust of the media grows wider each day. More than anything else, that explains why news media providers are dying.
Apparently, it didn't dawn on anyone in the media to read the entire report from the Labor Department. Had any of these lazy journalists bothered to do a little digging, it would have become apparent that the employment numbers exposed the soft under belly of the Obama recovery scheme. Unemployment actually rose, but you would never know by reading or listening to news reporters and anchors, the vast majority of whom know nothing about economics.
First, let's set the record straight. According to the Bureau of Labor Statistics, unemployment in April climbed from 9.7 percent to 9.9. percent. In human terms, 15.3million Americans are out of work. That fact was intentionally buried on page three of the previously cited Reuters story. Page three! I recall the days when any hike in the unemployment number was greeted with screaming headlines on the front page.
As you pore over the data, there are other statistics that practically leap off the spreadsheet. For example, the number of people who have been out of work more than 27weeks now represents a staggering 45.9 percent of the total unemployed. That is the highest it has even been since the Bureau of Labor Statistics began keeping records. It means that as people lose their jobs, they are finding it nearly impossible to find opportunities in this economy.
Even the 9.9 percent unemployment figure disguises the true health of employment. The Bureau of Labor Statistics does not include in that percentage those workers who have quit looking for a job. Nor does it add in the those who want full time employment, but are forced to accept part-time work to make ends meet. If you include those two segments of the population, the actual unemployment percentage rose to 17.1 percent from 16.9 percent in March. This is a broad measurement that more accurately reflects the country's jobless situation.
Yet despite this overwhelming evidence the economy remains sick, every single news organization led off their reports with the fact that employers added 290,000 jobs in April. Most news headlines prattled about how employment surged last month. In its employment summary, the Bureau of Labor Statistics credited the payroll increase to Federal government hiring and the addition of temporary Census workers. These two facts are no where to be found in the Reuters story, nor in most other media accounts.
All of this proves that numbers do not lie. But there can be no doubt that the news people who write and speak about these issues do use figures to conceal the truth. When the supposed truth-tellers in our society, the news media, contrive to use statistics to paint a lie about the country's economy, the public is not served. It is little wonder that public distrust of the media grows wider each day. More than anything else, that explains why news media providers are dying.
Wednesday, May 5, 2010
Letters From O.H. Bama
Dear Mr. B. Petroleum:
As oil continues to gush from your company's well in the Gulf of Mexico, I must protest British Petroleum's handling of this crisis. Your firm dawdled and dilly dallied while the ocean turned chocolate. While you fretted about what to do, I was "monitoring" the situation on CNN. While channel-surfing, I was able to catch the last few innings of a White Sox game. As you can tell, I was right on top of the crisis.
But what really gets me steamed is that BP continues to rake in millions of dollars in evil profits during the crisis. Now is not the time for making money. In fact, I consider it my civic duty to assist BP in going broke. Its the least I can do for a company that is obviously too big to ever fail without my assistance.
Remember, I don't like anything big. Big executive pay. Hate it. Big profits. Yuck! Big successful firms. Can't stand them. Big oil. Double detest. And most of all, I cringe every time I see the First Lady's big rear end. You'd think Jenny Craig would deliver meals to the White House, of all places.
I think what we have here is a teachable moment. When something goes boom in the middle of the ocean, you need to pay attention. Duh! Unless of course, that sound is just one of those noisy Tea Bagger..I mean Tea Party..rallies filled with hateful speech. (In that case, I'd say let them drown in their own oily rhetoric.)
At the first sign of trouble, BP should have capped the oil flow. By my reckoning, an intelligent CEO would have anticipated this accident and never drilled in the first place. As I have so often demonstrated, doing nothing usually carries the day when you are faced with a decision. The key is to talk about action while sitting on your hands. You may get butt cheek impressions on your knuckles, but Speaker Pelosi claims there is surgery to remove the stubborn wrinkles. She should know.
Now, I know what you are thinking: "But Mr. Bama, British Petroleum was a big contributor to your senatorial and presidential campaigns, to the tune of $77,000. How about cutting BP some slack?" This is the beauty of my public berating of your company. No one will suspect that I'm actually in the tank for BP. Believe me, the media is too busy genuflecting before my official presidential photo to notice. And forget the voters. They are so stupid most actually believed that whole hope and change thing.
It was my hired gun Rhamm who actually suggested I tell the press that I had my "boot on the throat of BP." I thought that was a clever way of showing the size of my presidential scrotum. However, some have suggested the image might conjure up visions of jack-booted dictators with funny mustaches. That's nonsense. I plan to shave off the Charlie Chaplin mustache tomorrow.
Since I am never one to waste a good crisis, I checked with my sidekick Joe "Plugs" Biden about what else we could do to stick it to BP. In the course of the conversation, Plugs said something really poignant. (Yeah, I know. I was shocked too. Who knew Plugs could even spell poignant?)
Plugs said that the two states currently threatened by the growing oil slick are Mississippi and Louisiana. He reminded me that both states went for John McCain in the presidential contest. That got Plugs to thinking. What poetic justice it would be if oil wiped out wide swathes of obviously disenchanted voters?
I think Plugs is on to something. Go ahead and drench Mississippi, Louisiana, Alabama and Texas with your BP oil spill goo. Drill and spill, baby. Drill and spill. However, you got to protect Florida's coast. I carried that state you know. We must do all we can to protect the fragile environment.
Your President In Chief,
O.H. Bama
As oil continues to gush from your company's well in the Gulf of Mexico, I must protest British Petroleum's handling of this crisis. Your firm dawdled and dilly dallied while the ocean turned chocolate. While you fretted about what to do, I was "monitoring" the situation on CNN. While channel-surfing, I was able to catch the last few innings of a White Sox game. As you can tell, I was right on top of the crisis.
But what really gets me steamed is that BP continues to rake in millions of dollars in evil profits during the crisis. Now is not the time for making money. In fact, I consider it my civic duty to assist BP in going broke. Its the least I can do for a company that is obviously too big to ever fail without my assistance.
Remember, I don't like anything big. Big executive pay. Hate it. Big profits. Yuck! Big successful firms. Can't stand them. Big oil. Double detest. And most of all, I cringe every time I see the First Lady's big rear end. You'd think Jenny Craig would deliver meals to the White House, of all places.
I think what we have here is a teachable moment. When something goes boom in the middle of the ocean, you need to pay attention. Duh! Unless of course, that sound is just one of those noisy Tea Bagger..I mean Tea Party..rallies filled with hateful speech. (In that case, I'd say let them drown in their own oily rhetoric.)
At the first sign of trouble, BP should have capped the oil flow. By my reckoning, an intelligent CEO would have anticipated this accident and never drilled in the first place. As I have so often demonstrated, doing nothing usually carries the day when you are faced with a decision. The key is to talk about action while sitting on your hands. You may get butt cheek impressions on your knuckles, but Speaker Pelosi claims there is surgery to remove the stubborn wrinkles. She should know.
Now, I know what you are thinking: "But Mr. Bama, British Petroleum was a big contributor to your senatorial and presidential campaigns, to the tune of $77,000. How about cutting BP some slack?" This is the beauty of my public berating of your company. No one will suspect that I'm actually in the tank for BP. Believe me, the media is too busy genuflecting before my official presidential photo to notice. And forget the voters. They are so stupid most actually believed that whole hope and change thing.
It was my hired gun Rhamm who actually suggested I tell the press that I had my "boot on the throat of BP." I thought that was a clever way of showing the size of my presidential scrotum. However, some have suggested the image might conjure up visions of jack-booted dictators with funny mustaches. That's nonsense. I plan to shave off the Charlie Chaplin mustache tomorrow.
Since I am never one to waste a good crisis, I checked with my sidekick Joe "Plugs" Biden about what else we could do to stick it to BP. In the course of the conversation, Plugs said something really poignant. (Yeah, I know. I was shocked too. Who knew Plugs could even spell poignant?)
Plugs said that the two states currently threatened by the growing oil slick are Mississippi and Louisiana. He reminded me that both states went for John McCain in the presidential contest. That got Plugs to thinking. What poetic justice it would be if oil wiped out wide swathes of obviously disenchanted voters?
I think Plugs is on to something. Go ahead and drench Mississippi, Louisiana, Alabama and Texas with your BP oil spill goo. Drill and spill, baby. Drill and spill. However, you got to protect Florida's coast. I carried that state you know. We must do all we can to protect the fragile environment.
Your President In Chief,
O.H. Bama
Tuesday, May 4, 2010
HP Acquisition: Palms Down
With the full blessing of Wall Street's geniuses, Hewlett-Packard has trumpeted its $1.2 billion acquisition last week of Palm, the wireless handset maker. However, if you sift through the corporate chest thumping, this deal makes no economic or strategic logic. The prediction here is that the maneuver will flop like a beached whale.
The deal underscores what happens when a firm with a large cash horde panics. As the money pile climbed to nearly $14 billion, questions must have arisen about what to do with the stash. The M&A folks were dispatched. The result was a mad grab for an asset that appears cheap only because it has lost so much value. However, even a cursory examination of Palm and the smart phone market should have set off alarm bells.
For instance, Palm has a tiny almost insignificant slice of the booming smart phone market. Palm, which recently introduced its slick Palm Pixi Plus, has a 4 percent smart phone market share, ranked by operating system. Even worse, it is losing share to the Goliaths, Apple and Google, who are relatively newcomers to wireless. Apple's share is 24 percent, while Google's Android comes in at 19 percent. Research in Motion (RIMM), with its Blackberry, occupies first place with a 44 percent market share. As the dwarf of the smart phone litter, how can Palm even hope to compete without massive research and development spending? Did HP sign up for that?
As distressing as those numbers are for Palm, there are even more depressing figures if you own HP stock. By one estimate, Apple's installed base is about 85 million, compared to Palm's puny 2.5 million. While the numbers of smart phone users are growing double digits, Palm is falling further behind. During the most recent quarter, Palm's shipments rose, but its sell-through dipped 29 percent from the previous quarter. Does Palm sound like the right platform to capture this growth market? It makes you wonder if the M&A Department at HP is staffed by Dumb and Dumber.
One reason for the dismal numbers is that Palm was late to the smart phone party, a sad commentary when you consider the revolutionary Pilot and Treo products of years past. Although Palm is trying hard to catch up, the firm is chasing deep-pocketed tech giants, like Apple, RIM, Nokia and Goggle. It is a race they are destined to lose. While every smart phone maker can boast some gee whizz features, the future is all about the applications that run on the unit. Here is where Palm has ceded too much ground, having only opened its app catalog in June of last year. If you are an app developer, does Palm even show up on your radar screen?
But that's not even the worst news. Palm's financials are bleeding red ink, burning through cash as losses mount. In its latest report, Palm posted an operating income loss of $117 million, compared to $102 million for the same period a year ago. Even Palm's CEO and chairman was moved to publicly admit, "Recent performances have been very disappointing, but the potential for Palm remains." Whenever a company uses the "P" word, beware because it usually comes with crappy results.
HP has tried to put a brave face on its decision. Their bigwigs have talked about leveraging their corporate relationships to sell Palm units. That would be great if the decision makers for purchasing wireless units were the same people who bought printers and computers. Unfortunately, they often are not. And even if they were, how will HP dislodge the big wireless carriers who already have extensive inroads and sales into large corporate clients? That begs another question: are Curly, Larry and Moe running the sales and marketing departments at HP?
HP has enjoyed a somewhat checkered past when it comes to acquisitions. Think EDS and Compaq. Past stumbles even led to the sacking of its CEO, Carly Fiorina, in 2005. Before the ink dries on the Palm acquisition, the current CEO might be well advised to start digging into what kind of a severance package HP offers.
The deal underscores what happens when a firm with a large cash horde panics. As the money pile climbed to nearly $14 billion, questions must have arisen about what to do with the stash. The M&A folks were dispatched. The result was a mad grab for an asset that appears cheap only because it has lost so much value. However, even a cursory examination of Palm and the smart phone market should have set off alarm bells.
For instance, Palm has a tiny almost insignificant slice of the booming smart phone market. Palm, which recently introduced its slick Palm Pixi Plus, has a 4 percent smart phone market share, ranked by operating system. Even worse, it is losing share to the Goliaths, Apple and Google, who are relatively newcomers to wireless. Apple's share is 24 percent, while Google's Android comes in at 19 percent. Research in Motion (RIMM), with its Blackberry, occupies first place with a 44 percent market share. As the dwarf of the smart phone litter, how can Palm even hope to compete without massive research and development spending? Did HP sign up for that?
As distressing as those numbers are for Palm, there are even more depressing figures if you own HP stock. By one estimate, Apple's installed base is about 85 million, compared to Palm's puny 2.5 million. While the numbers of smart phone users are growing double digits, Palm is falling further behind. During the most recent quarter, Palm's shipments rose, but its sell-through dipped 29 percent from the previous quarter. Does Palm sound like the right platform to capture this growth market? It makes you wonder if the M&A Department at HP is staffed by Dumb and Dumber.
One reason for the dismal numbers is that Palm was late to the smart phone party, a sad commentary when you consider the revolutionary Pilot and Treo products of years past. Although Palm is trying hard to catch up, the firm is chasing deep-pocketed tech giants, like Apple, RIM, Nokia and Goggle. It is a race they are destined to lose. While every smart phone maker can boast some gee whizz features, the future is all about the applications that run on the unit. Here is where Palm has ceded too much ground, having only opened its app catalog in June of last year. If you are an app developer, does Palm even show up on your radar screen?
But that's not even the worst news. Palm's financials are bleeding red ink, burning through cash as losses mount. In its latest report, Palm posted an operating income loss of $117 million, compared to $102 million for the same period a year ago. Even Palm's CEO and chairman was moved to publicly admit, "Recent performances have been very disappointing, but the potential for Palm remains." Whenever a company uses the "P" word, beware because it usually comes with crappy results.
HP has tried to put a brave face on its decision. Their bigwigs have talked about leveraging their corporate relationships to sell Palm units. That would be great if the decision makers for purchasing wireless units were the same people who bought printers and computers. Unfortunately, they often are not. And even if they were, how will HP dislodge the big wireless carriers who already have extensive inroads and sales into large corporate clients? That begs another question: are Curly, Larry and Moe running the sales and marketing departments at HP?
HP has enjoyed a somewhat checkered past when it comes to acquisitions. Think EDS and Compaq. Past stumbles even led to the sacking of its CEO, Carly Fiorina, in 2005. Before the ink dries on the Palm acquisition, the current CEO might be well advised to start digging into what kind of a severance package HP offers.
What's Wrong With America: Not So Special Interests
If you want to know why many Americans are fed up with politics, exhibit A is the Wind Farm battle off the coast of Massachusetts. A perfectly good idea for alternative clean energy took nine years to clear federal government hurdles, despite widespread support. And the fight is not over. Special interest groups are vowing to continue to wage war in an effort to scuttle the project.
What's at stake is a $1 billion plan to build 130 wind turbines that would supply three-fourths of the power for Cape Cod, Martha's Vineyard and Nantucket Island. The 440-foot tall turbines would stand five miles off Cape Cod. When the project was announced, environmentalists lined up on both sides of the issue in a classic political tug-of-war between competing interests. Everyone refused to budge. Somehow the greater good got lost in all the rancor, as so often does in today's political arena.
The line-up of special interests seemed almost never ending. The American Bird Conservancy said the huge turbines posed a threat to birds. The Alliance to Protect Nantucket Sound didn't like the prospect of ugly windmills stuck in the middle of their ocean playground. Area American Indian Tribes said the project would disturb ancient burial sites on the ocean floor.
Allied against these interests were groups such as Greenpeace, which called the project a solution to global warming. The Interior Department backed the project, citing the "green energy" potential. The wind industry chimed in with claims of the project's potential for lowering dependence on oil.
Throw into this stew of politics state and federal elected officials and you have a prescription for a costly stalemate. The many voices on both sides of this issue drowned out the public will. Most people in Massachusetts think wind farms are a good idea. That is a microcosm for what's wrong in America today.
Often tiny slivers of special interests can obscure the public good. Armed with lawyers, practically anyone can bring a public project to a grinding halt. No one ever questions whether the special interests really represent anyone. Most have thin but highly vocal and motivated support. Their membership lists, if anyone bothered to ask, probably represent less than 1 percent of the public. Yet they can thwart the will of the majority.
Every group, no matter how small, has a right to have its voice heard and its opinion considered. However, the country is allowing small minorities to use the courts and due process to rule as if they represented the majority. In a free society, some will argue that it is the price the country must pay.
But it doesn't have to be that way.
Whenever a group files a lawsuit, for example, it should be required to provide its membership list to certify it is not a special interest organization in name only. In addition, the organization must verify what percentage of the public at large its membership represents. Special interest groups that represent five percent or less of the public should not have the same standing as those that represent say, 30 percent.
I know there are some smart lawyers who will argue otherwise. But if the country doesn't do something soon, special interests will put a strangle hold on progress of any kind, while forcing the majority to live with the consequences of its own narrow self interests. That is not democracy, where the majority rules. It's anarchy of the minority.
What's at stake is a $1 billion plan to build 130 wind turbines that would supply three-fourths of the power for Cape Cod, Martha's Vineyard and Nantucket Island. The 440-foot tall turbines would stand five miles off Cape Cod. When the project was announced, environmentalists lined up on both sides of the issue in a classic political tug-of-war between competing interests. Everyone refused to budge. Somehow the greater good got lost in all the rancor, as so often does in today's political arena.
The line-up of special interests seemed almost never ending. The American Bird Conservancy said the huge turbines posed a threat to birds. The Alliance to Protect Nantucket Sound didn't like the prospect of ugly windmills stuck in the middle of their ocean playground. Area American Indian Tribes said the project would disturb ancient burial sites on the ocean floor.
Allied against these interests were groups such as Greenpeace, which called the project a solution to global warming. The Interior Department backed the project, citing the "green energy" potential. The wind industry chimed in with claims of the project's potential for lowering dependence on oil.
Throw into this stew of politics state and federal elected officials and you have a prescription for a costly stalemate. The many voices on both sides of this issue drowned out the public will. Most people in Massachusetts think wind farms are a good idea. That is a microcosm for what's wrong in America today.
Often tiny slivers of special interests can obscure the public good. Armed with lawyers, practically anyone can bring a public project to a grinding halt. No one ever questions whether the special interests really represent anyone. Most have thin but highly vocal and motivated support. Their membership lists, if anyone bothered to ask, probably represent less than 1 percent of the public. Yet they can thwart the will of the majority.
Every group, no matter how small, has a right to have its voice heard and its opinion considered. However, the country is allowing small minorities to use the courts and due process to rule as if they represented the majority. In a free society, some will argue that it is the price the country must pay.
But it doesn't have to be that way.
Whenever a group files a lawsuit, for example, it should be required to provide its membership list to certify it is not a special interest organization in name only. In addition, the organization must verify what percentage of the public at large its membership represents. Special interest groups that represent five percent or less of the public should not have the same standing as those that represent say, 30 percent.
I know there are some smart lawyers who will argue otherwise. But if the country doesn't do something soon, special interests will put a strangle hold on progress of any kind, while forcing the majority to live with the consequences of its own narrow self interests. That is not democracy, where the majority rules. It's anarchy of the minority.
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