Economy on The Huffington Post

Mahinda Rajapaksa: We Look Back with Sadness, But We Look Forward with Hope

2009-12-24T10:41:26Z

This time of year is a period for reflection for many people around the world. For the people of Sri Lanka it brings back acutely painful memories, but also for the first time in many years, a genuine sense of hope.

On December 26, 2004, one of the worst natural disasters in modern times befell our country and we required aid and other support from the world on an unprecedented scale.

The tsunami that struck the length of Sri Lanka's eastern coast and enshrouded the island had a devastating effect. In a matter of moments, over 40,000 people had lost their lives and a further 20,000 were injured. More than half a million people were displaced with in excess of 100,000 homes destroyed.

Those who survived or who came to assist in the aftermath, from across Sri Lanka and from abroad, will never forget the horror the ocean wrought on the island that day.

Thankfully those events are in the past. And for the people especially in the north, east and south that survived and gradually rebuilt their lives with the assistance of the international community, NGOs and Sri Lanka's own Reconstruction and Development Agency (RADA), it can finally be said that the future holds great promise. For, our people are now living without the threat of terrorism for the first time in over a quarter of a century.

This closing of a chapter will bring improvements in quality of life beyond many Sri Lankans' living memories.

For a country that has managed average economic growth of over 6% since 2005, despite our difficulties, it is clear that our promise is significant, something that is beginning to be recognized internationally.

In October 2007, in the midst of the sub-prime crisis, Sri Lanka floated its debut U.S. $500 million sovereign bond which was three times over-subscribed. And in October of this year the Government issued a second $500 million sovereign bond that received the highest oversold subscription of the year, over 13 times over-subscribed, while both Fitch and S&P have revised their ratings from 'negative' to 'stable'.

Analysts are now excitedly talking about Sri Lanka as the next Singapore and comprehensive plans are being put in place to make this vision a reality.

We are increasingly seeing large investment funds flood money into the country, not as an act of generosity, but because they see the potential that is being unlocked in Sri Lanka.

Over the whole of Sri Lanka, massive infrastructure projects are taking place, from the construction of one of the largest deep water ports in the Indian Ocean, at Hambontota in the south, to the establishment of the Trincomalee Investment and Tourist Zone in the east. Formerly at the heart of our troubled areas, Trincomalee, with its natural harbour and scenic beauty, is now emerging as a potentially major commercial and industrial hub in the South Asian region and a tourism destination in its own right.

Moreover Sri Lanka's people have talent. Our potential as an outsourcing destination is already being recognized and the success of our expatriate doctors and engineers, lawyers and accountants, confirms just what extraordinary capabilities our people posses.

We also have a thriving garment industry that not only provides the West with value goods, but also enshrines the highest of labor conditions and environmental standards.

We have vast untapped potential in our fertile agricultural lands, particularly in the north and east -- previously setback through terror for three decades and now active once again.

And there's tourism. Overseas visitors have always flocked to Sri Lanka, but never in the numbers that we could have achieved without the threat of terrorism. With terrorism now at an end, we have set an annual target of 2.5 million visitors by 2016. We encourage people from around the world to come and experience the unrivaled Sri Lankan spirit of hospitality.

So, five years on from the terrible events of 2004, now is truly an exciting time for our country. We are creating a land of opportunity for all Sri Lankans and no-one will be left behind. Aid is no longer the priority for us. We offer investment opportunities, an island of beauty and tranquility to be enjoyed, not pitied.

Sri Lanka is ready to make its mark. Our troubles are behind us and we look forward to welcoming the world. As scientist and writer Arthur C. Clarke said of his adopted home, this is the best place in the world from which to view the universe.

Dan Dorfman: Deck the Halls With Boughs of Economic Folly

2009-12-23T13:27:38Z

When push comes to shove, pistols with blanks are useless.

The same can be said about the ballooning ranks of economic dreamers -- those self-professed financial experts who keep pounding the table and tell us that we're out of the woods. One of their arguments -- which cannot be dismissed -- is the rebounding stock market, a frequent harbinger of a peppier economy. Currently, though, the dreamers could be setting us up for a nightmare.

One member of the club is New York City mayor Michael Bloomberg, who recently hopped aboard the bandwagon of economic dreamers (some describe them as economic buffoons), which includes such notables as Ben Bernanke, Alan Greenspan and Timothy Geithner.

Bloomberg, a billionaire businessman turned politician, an effective mayor and supposedly a pretty savvy guy, declared pretty affirmatively on TV the other day that the economy has stopped getting worse. That may be so in the more affluent city restaurants Bloomberg frequents or in the land of Oz, but certainly not nationally in the U.S.

Clearly, you don't become a billionaire by being economically gullible. But some market pros argue the current undeniable facts of economic life suggest Bloomberg is not looking at the economy with a full deck. For example, as well reported, disturbingly on the rise -- in some cases sharply so -- are the number of welfare recipients, the use of food stamps, job losses, foreclosures, mortgage delinquencies and extended unemployment claims.

Any way you look at it, such bleak signs are not ingredients of an economy that has stopped getting worse.

Likewise, within blocks of where Bloomberg lives on the Upper East Side, empty stores and restaurants and vacant commercial space hungry for tenants abound. So, too, does a slew of holiday bargains at unusually lofty 50% to 80% discounts throughout New York City's top shopping streets.

On top of this, third-quarter GDP growth, originally reported at 3.5%, and then revised downward to 2.8%, was just knocked down again to 2.2%.

In contrast to Bloomberg's economic buoyancy, Donald Trump recently took a more sobering view of the economy, telling CNN'S Larry King "there's something wrong." Trump also took note of friends and tenants who he says are squeaky clean financially, have impeccable credit, but who can not get a loan. Likewise, Trump pointed to some of his CEO friends who tell him they're doing terribly, but whose stocks are going through the roof and they don't understand why.

JC Spender, professor of economics at the open University Business School in Milton Keynes, U.K., opts for what he thinks are the more rational views of Trump. He notes that the real estate mogul is wired into economic events, while Bloomberg's focal point is dealing with reality of being a politician rather than a successful businessman, and is therefore taking on a more optimistic tone when talking to the public.

Anyone who thinks the U.S. is headed back to normality in terms of economic growth and employment is simply not looking at the facts, Spender says. There is no indication, he observes, that there is any path between where we are now and where we have to be to get the economy to where it should be. The chief dilemma, as he sees it, is "what the hell the banks are doing with our money" -- notably, they're lending to each other for a fee and to Wall Street for the best of the deals, but not to Main Street.

Without bank lending, he says, the economy and the stock market should stagger along the downside in 2010. "I think we've turned the clock back 100 years," he tells me. "How," he asks, "are people supposed to find work when banks won't lend?"

West Coast liquidity tracker Charles Biderman, the skipper of TrimTabs Investment Research, who was overly negative and missed much of the 68% rally from the March lows, is convinced 2010 will be a bummer both for the economy and stock prices.

For starters, he notes declining wages and salaries, as well as falling take-home pay (currently down 11%-12% year over year) and lack of purchasing power, will plague the economy going forward. Further, he points out, there's nothing to drive final demand, job growth and a more robust housing market, and no job growth means no income growth.

Further, at some point, he says, the government will have to stop throwing money at the economy (such as the purchase of mortgage-backed securities) and the stock market and interest rates will rise. Biderman believes that somehow government money has leaked into the market, spurring the stock and bond rally.

But the market. he says, can not keep going up on better than expected results. You need revenue growth and without job growth that can't happen. TrimTabs' online job postings index has shown no appreciable increase over the past five months, meaning those who have lost their jobs are finding it difficult to find a new one.

As such, Biderman thinks the rally is on borrowed time, and he sees a significant market decline in 2010. "In the 1930s. we saw sharp rallies followed by sharp declines and we should see more of the same now," he says.

His favorite investment, designed to guard against higher inflation, are TIPS (treasury inflation-protected securities), which are currently yielding 3%.

Jeffrey Saut, the chief investment strategist of Raymond James, also offers some concerns, noting "things could become more difficult." Some of the headwinds: Loss of some of the stimulus money, the likelihood of higher taxes, government intrusion into corporate America, more difficult earnings comparisons, a probable pickup in inflation, which should raise interest rate fears, and election jitters.

Another of Saut's key concerns: The 68% rally from the March lows has stripped away some of the margin of safety.

Institutional investment adviser Bill Rhodes of Boston-based Rhodes Analytics, Also hoists cautionary flags. "We're still relying on liquidity provided by the government, which is keeping interest rates low. but that's never a good thing," he says, "because it's indicative of stress in the financial system."

As Rhodes sees it, it's time to consider taking money off the table by reducing exposure in the market's weakest sectors -- financials, energy and consumer staples.

It's worth noting noting that weakness in the financials is synonymous with declining stock prices.

The bottom line: Beware of halls decked with boughs of economic and market folly.

What do you think? E-mail me at Dandordan@aol.com

Daniel Heimpel: Invest In Child Care, Invest In The Future

2009-12-23T11:14:27Z

Budgets from Sacramento to Washington D.C. are driven by the concept of Return on Investment. Return is overwhelmingly expected in the same fiscal year that resources are invested.

While prevalent, this methodology is entirely counter-intuitive. Apply this to a human. If one had to show ROI in the same year as they spent the money, no one would ever go to college - no one would invest in their future.

But shortsighted budgeting has befallen most public entitlements, including foster care. This despite years of research in the field of child welfare that has consistently shown that investing in children is met with positive returns. Because of this research, fiscal arguments against front-loading foster care have become irrefutable and irrelevant.

With the passage of the Fostering Connections and Increasing Adoptions Act of 2008, congress resoundingly showed intent to invest in children and start the paradigm shift. Extension of care to 21, mandates on educational stability and resources devoted to making sure foster kids had permanent loving connections all speak to a body of legislators with not only their constituents' hearts, but also the taxpayers money in mind. One need not throw up statistics or cost projections to underscore the moral and fiscal burden of a society that fails these young people, and the benefits of a society that does. Just think to your own childhood and the investments put into your success; where would you be without them?

Despite the resounding, bi-partisan statement that Fostering Connection's passage was, the dark force of so-called "fiscal responsibility" had already crept in. The Congressional Budget Office scores the cost of all legislation. Lawmakers are always constrained by cost and were intent on keeping the score for Fostering Connections budget neutral or better. While pragmatic, lawmakers had been forced by this insidious shortsightedness to bargain away an enormous piece to the puzzle.

Along with extension of care to 21, Fostering Connections provides matching federal funds to states that provide foster care payments for family members who take in kin, commonly referred to as subsidized or kinship guardianship.

To keep the CBO score low a clause was written into the law, which suggests that only subsidized guardianship agreements reached "prospective" of the passage of the law in October of 2008 would be eligible for federal funding. In December of 2008, the Health and Human Services' Administration for Children and Families (ACF) issued guidance, which excluded federal funds for the tens -- if not hundreds -- of thousands of foster youth already in existing subsidized guardianship programs in 27 states including California.

In California alone, an estimated 10,000 children already in kin care would be ineligible, costing the state $60 million in annual federal funds. For California, which just hacked its way through a $20 billion deficit by slashing $100 million to the child welfare system, every penny counts. Without the Federal kin care dollars, California's bid to extend care to 21 -- the shining provision of Fostering Connections -- is all but dead.

In September, California Assembly Speaker Karen Bass submitted Assembly Bill 12, which would use matching federal funds to pay for keeping kids in care past 18. With one sixth of the nation's 500,000 foster children living in California, the passage of the bill, which has been sidelined due to the state's budget crisis, could pave the way for sweeping implementation of Fostering Connections across the nation.

With so much at stake over the ACF guidance, Sacramento is threatening Washington with a deft maneuver: moving thousands of kids back into foster care to make them eligible for the federal IVE funds and then moving them back into subsidized guardianship.

It appears that California's scheme may work, which could unleash copycat tactics across the 26 other states and the District of Columbia with tens of thousands of kids. If this happens the federal government will have to end up paying anyway. The most practical thing would do would be for ACF to rescind its guidance and allow all those states to access federal funding.

Understanding this, a growing number of the lawmakers who passed Fostering Connections have begun pressuring ACF.

If ACF does relent it will cost more money today. But if AB12 passes in California and that serves as the catalyst for the implementation of Fostering Connections across the nation we will surely save money tomorrow. Then the real victory will be even greater than helping tens of thousands of children in need.

The real victory will be a clear illustration that the only way to budget responsibly is to do what we all do intuitively, invest in the future - even if that is more than a year off. The shift in consciousness has to begin somewhere, and that place is in a country that has the foresight to parent its collective children as any individual parent would their own.

Our Recession Vs. The Dark Ages: Historian Compares Two Miserable Economic Periods

2009-12-23T09:27:52Z

The more complex an economy is, the more fragile it is, and the more cataclysmic its disintegration can be. Our economy is, of course, in a different league of complexity to that of Roman Britain. Our pottery and metal goods are likely to have been made, not many miles away, but on the other side of the globe, while our main medium of exchange is electronic, and sometimes based on smoke and mirrors. If our economy ever truly collapses, the consequences will make fifth-century Britain seem like a picnic.

David Bach: "Start Over, Finish Rich", David Bach's 10 Steps For Getting Out Of Debt

2009-12-23T07:30:00Z

Get Yourself Out of Credit Card Debt and Start Over

If you are one of the estimated 50 million Americans who are drowning in credit card debt, know that while it may not be easy you can get out of debt.

Figure Out How You Got in Credit Card Debt in the First Place
Ask yourself how you got there. Be honest. Did you buy things you wanted or things you needed? Recognize that whatever got you into credit card debt is going to keep you there if you don't change how you spend money. If you are drowning in credit card debt, STOP USING YOUR CREDIT CARDS.

Use the DOLP® (Dead On Last Payment) Debt-Reduction System
If you can afford to make the minimum payments on your cards, use Bach's DOLP system to prioritize your debts and their payments. The DOLP system works by identifying the card you can pay off quickly and then having you pay it off first. Fill out a DOLP worksheet (free at Finishrich.com/dolp), writing out the name of each account you have, the outstanding balance you owe, the minimum monthly payment, and the payment due date. Then give each account its own DOLP number, which you calculate by dividing the outstanding balance by the minimum monthly payment. Assign a DOLP ranking for each account, with the account with the lowest DOLP number ranked # 1. Enter the payment due dates for all your credit accounts in a calendar system with it set to remind you of each due date in advance so you won't make any late payments. Then start paying down the debt the DOLP way by making the minimum monthly payment on every account except for the one with the # 1 DOLP ranking. For that card, make as big a payment as you can afford--ideally, at least double the minimum. Once a card has been paid off entirely, retire it (but don't close the account) and start paying down the card with the # 2 DOLP ranking. Repeat until you have paid off the full balance due on every card.

Get Your Credit Card Interest Rate Lowered
First, know the rate you are paying on each of your cards (listed as the "annual percentage rate" or "APR" at the bottom of your most recent credit card statement). Second, find out how your interest rates compare to the national average by visiting a website like Bank Rate, Low Cards, or Card Trak. Make sure you are being charged a fair rate for your category - super-prime (for the most creditworthy); prime (for average borrowers); sub-prime (for below-average borrowers); promotional (for new customers); and punitive (for those who've broken the rules by missing payments or exceeding their credit limits). You'll know what category you fall in by checking your credit score. Use this information when you call the credit card company to request a lower rate.

If You Can't Afford to Make the Minimum Payments
Take advantage of Help With My Credit, a resource for struggling consumers created by a group of major card issuers, including Bank of America, Citi, Discover Card, and the Visa and Mastercard networks. Ask the credit companies about their "debt-management plans." You can get your interest rate slashed (sometimes eliminated entirely) in return for signing on to a guaranteed repayment program in which payments are automatically debited from your checking account monthly.

If card companies can't help you, contact the National Foundation for Credit Counseling. Beware, however, of "debt-settlement companies" that offer to negotiate a settlement on your behalf with your creditors, often promising they can "wipe out your debt or cut it in half." Many of them simply steal your money.

What to Do If Your Credit Card Debt Has Already Been "Charged Off"
If you've gotten really behind on your credit card payments, the credit card company may write off the debt as a loss and sell it to a collection agency. If this has happened to you, get copies of your credit reports and check if the debt shows up as having been "charged off." If it does, the damage is basically done and the charge off will stay on your credit report for up to ten years (depending on your state) bringing down your credit score.

Time Barred Debts--Read this Before You Settle
If you are being harassed by a creditor, find out the statute of limitations on time-barred debts. Go to FTC.gov and search for "time-barred debts." You may find that your debt has already cleared the date when you can be sued by a creditor. If you settled now, you may re-start the time this negative mark appears on your credit record! Do not settle anything until you know your rights.

Once you start to reduce your debt, here's what to do next:

From "Start Over, Finish Rich: 10 Steps to Get You Back on Track in 2010"

REBUILD YOUR EMERGENCY SAVINGS

My Grandma Rose Bach used to tell me, "David, when the going gets tough, the tough have cash." In this, as in so many other things, she knew what she was talking about. Cash is king. Cash is security. Cash is protection. This is a lesson too many of us have learned the hard way in the recent downturn. It's one thing to have your credit cards maxed out and your home-equity line closed down by the bank. But then add in losing your job and your income--and, well, it can get pretty darn bleak.

The fact is that without a cash cushion, we are only one job loss or one emergency medical expense away from disaster. This is why we all need a rainy day fund--a cushion of emergency money that can keep us afloat when times are tough. Unfortunately, in recent years, Americans have been really terrible a bout saving for a rainy day.

The good news is that there are signs millions of us have woken up to the need to increase our savings since the recession hit. After hovering around zero from 2005 through early 2008, the U.S. savings rate climbed past 5% in the spring of 2009. As the Los Angeles Times put it, "Given the economy's crash, many people clearly have gotten religion about saving money." And so should you--right now, this minute. Trust me, 2010 is the year to beef up your emergency money.

"WHERE DO I FIND THE MONEY?"

The biggest obstacle to setting up an emergency fund isn't convincing yourself that you should but convincing yourself that you can. I can't tell you how many students and clients of mine over the years have said to me something like this: "Come on, David, let's get real. I can barely make ends meet as it is. How can you possibly expect me to scrape together several thousand dollars and just leave it sitting in a bank account somewhere?"

My answer is that it's not as impossible as you think. To begin with, there's the Latte Factor: you could easily be wasting 5 to 10 dollars a day--maybe a lot more--on unnecessary expenditures. This money would do you a lot more good in a rainy-day fund. Indeed, your first priority with any money you save by fixing your Latte Factor should be funding an emergency account.

Now, by themselves your Latte Factor savings may not be enough to build a big financial cushion very quickly. Especially if you're starting from zero, you're going to have to dig a bit deeper in order to get an emergency account fully funded anytime soon. This could mean temporarily giving up something that may be important to you but isn't actually essential--like premium cable or eating out or taking cabs instead of the bus. It may not be pleasant going without something you're used to, but, hey, this is a priority. And, anyway, the sacrifice won't go on forever. As soon as the balance in your rainy-day fund is where you need it to be, you can go back to watching HBO.

Again, I know what the objections to this approach are going to be. "But, David," people say to me, "even if I could reduce my spending on paper, I just don't have the willpower to actually do this in real life, day in and day out. It sounds like going on a diet--and we all know how those end up." My answer to this is that there is a way to put aside money for your rainy-day account that doesn't involve willpower or discipline or stick-to-it-iveness. What you do is make it automatic--that is, you arrange to have a portion of your pay automatically deducted from your paycheck and deposited in an account you've set up just for this purpose. (You could put your rainy-day money in the same account you use to pay your bills, but I don't think that's a good idea. When you keep your spending money and your emergency money in the same place, it's too easy to dip into the rainy-day fund for monthly expenses--and before you know it, your emergency fund will be gone.)

The great thing about automating your rainy day fund is that once you've set up your automatic saving system, you no longer have to think about it. And if you don't have to think about it, there's no chance you'll forget to do it--or, worse, change your mind and deliberately not do it.

Excerpted from START OVER, FINISH RICH: 10 Steps to Get You Back on Track in 2010 by David Bach © 2009 by David Bach. Reprinted by permission of Broadway Books.

Eric Lotke: The 2010 Elections: Bring 'em on!

2009-12-23T06:51:43Z

I'm looking forward to the 2010 elections. We need them.

Many dread how badly the election is shaping up. Commentators predict double digit Democratic losses in the House and further retreat from the sixty vote threshold in the Senate. We fear a progressive era strangled in its infancy.

But there's a sunny side too. The election can bring the fight out of us. We can turn complaints about how bad things are into complaints about how we got here and how long it will take us to dig out. Like in 2008, the elections in 2010 give us an opportunity to point out the failures of long conservative reign and dare conservatives to try to take us backward.

• Don't like the deficit? Three times as much of it came from the wars in Iraq and Afghanistan (unpaid for) and the Bush tax cuts (without offsets) as from the Obama's Recovery Act.

Source: Center on Budget and Policy Priorities

• Don't like the job situation? We lost 11,000 jobs in November. That's bad. But we lost 533,000 jobs in November of last year, the crowning achievement of Bush's presidency. It will take a long time to turn this around. But at least we're turning.

Source: AFL-CIO

• Frustrated about health care reform? Me too. But don't forget how bad it was. Health care spending rose from 13.8 percent of GDP when Bush took office to 16.6 percent last year -- even as the number of uninsured grew by a million people every year. So we spent more every year but got less for it. In personal terms, the cost of a family premium more than doubled, from $5,791 in 1999 to $12,680 in 2008.

Source: Kaiser Family Foundation

A few years ago, guaranteed, affordable health care for all was an impossible dream. Now it's just a few votes away. Let's thank the progressive forces that got us this far rather than assailing them for compromise. Save the attacks for the forces that compelled the compromise.

Other changes haven't even begun to take effect. We're beginning efforts to regulate financial markets so Wall Street serves the real economy, not the other way around. We're taking baby steps towards energy independence, and even starting to make sure that the components of our new energy economy are made in America -- so we don't replace a dependence on foreign oil with a dependence on foreign manufacturing. We're starting to reign in private contractors who took over public functions but left the public interest behind, especially in Afghanistan and Iraq.

We want those things to happen. All that and more. But we won't get there if we start circling the firing squad over who's to blame over health care reform. We know who's to blame. Obstructionist senators, obsolete 60 vote filibuster rules, and giant corporations who buy their influence. Our deep hole comes compliments of conservative ideologues who valued private interest over the common good.

The President doesn't talk about that much. In a non-election year, the leader of our great democracy chose to govern not to campaign. Senators who wanted change tried in good faith to work with Senators who preferred failure to reform. They treated gridlock like bad weather, a chance misfortune, not a deliberate strategy by the opposition party.

An election year can be different. We can bring the fight back -- for the ideas and ideals that will put the government on the side of working people and heal our broken economy. The people want these changes. An election is a chance to fight. Bring it on.

Lita Smith-Mines: What Recession? Full Spend Ahead!

2009-12-22T18:05:51Z

For 30 long minutes, I sat within earshot of a woman who simultaneously catalogued her materialistic desires and her economic despondency to her hairdresser. Unable to escape, and admittedly engrossed by her fiscal highs and woes, I discreetly focused on my knitting and heard a tale I knew all too well. The seemingly insatiable holiday shopper to my right was the same kind of yuletide consumer that made appointments in my real-estate law office each January for another tradition: the annual pay off my holiday bills by refinancing consultation.

As the ability to charge-now, refinance-later vanished when most homeowners' equity evaporated, I hoped the chronic consumer had also become extinct. But judging by what I overheard, any celebration of the persistent purchaser's passing was premature. Though she said over and over again that "times were tough in the pocketbook this year", my fellow salonista proclaimed that she had eliminated the "pain in the ass" problem of applying mascara daily. She solved this derriere distress by having fake lash extensions permanently affixed to her lids (though I gathered that "permanent" was a misnomer, as her false lashes stay attached for about 10 weeks).

When her curious colorist asked Ms. Tough Pocketbook the cost of the counterfeits, we both learned the price tag was about $500! Ms. TP then elaborated on the care and feeding of 10 week lashes: when she wakes up each morning, her falsies are tangled, requiring them to be combed through (a motion not unlike running a mascara wand through lashes, I mused).

Moving on, we heard that her teenage daughter was also a pain in her posterior, pestering her for an upgraded cell phone and MP3, not knowing Mom had already charged these gifts on her "almost maxxed out emergency VISA."

TP wanted a "Pandora bracelet with lots of charms" as a holiday gift from "Jack", a boyfriend or husband, though Jack was depressed lately because his commissions were "way, way down." [Being mostly uninformed about jewelry, I later searched on-line and found such bracelets start at about $40, with charms upwards of $35 apiece. If TP desired even a basic model, and defined "lots" as maybe six charms, that's still $250 plus tax to be shelled out by a dispirited man with dwindling earnings.]

Moving on, TP griped about making her "third trip to the dry cleaners this week" after she left the salon. But before she left to bear the chore of the dry cleaner, TP advised her stylist that she was going to pick up "some more" of the decorative and scented candles sold in the front of the salon as she "loved seeing and smelling them everywhere in the house."

There was some chatter about jeans and boots that needed to be acquired for holiday parties, and one final declaration before she travelled beyond my prying ears: TP revealed that she was going to try a new restaurant for dinner that night because she "doesn't cook on weekends--period."

I couldn't ask any pertinent questions of TP, so I acknowledge my snoopy snapshot can't capture the contents of her wallet, the size of her bank accounts, or the scale of her pay stubs. But if "times were tough" as she asserted once every five minutes, I'm thinking that she could halt the financial assault on her pocketbook by re-wearing her 2008 party clothes, declaring an embargo on avoidable credit card charges, asking for a $25 scarf from down-on-his-luck Jack, picking up a bottle of Woolite, and ordering in a few cartons of Chinese take-out.

Chicago Unemployment Rate Drops Slightly Month-Over-Month

2009-12-22T15:40:19Z

Unemployment in metropolitan Chicago edged down to 10.3% in November but remained close to a 26-year high.

Rep. Edolphus Towns: Congress Is Committed to Creating Jobs on Main Street

2009-12-22T15:26:25Z

Across the nation, in our communities and neighborhoods, we are experiencing the effects of the economic downturn. Jobs have vanished at rates not seen since the Great Depression, and many know someone who lost their job as a result of the recession.

The Democratic Congress has been focused on turning around our economy, and acted on our commitment by enacting several measures that have already created or saved more than a million jobs this year. We moved quickly at the beginning of 2009 to pass the American Recovery and Reinvestment Act, or "Recovery Act," which has helped keep cops on the beat and teachers in classrooms, while making critical investments in green technology and our nation's infrastructure.

The Recovery Act has also helped ease the recession's burden by extending unemployment benefits and increasing COBRA assistance to millions of people without health insurance.

To help turn our economy around, I worked with the Obama administration to ensure that Recovery Act funds benefit economically distressed areas. I also helped bring Department of Transportation officials to my home district in Brooklyn, NY, to help small business owners and government contractors understand how to access Recovery Act funds and meet the reporting requirements.

Another important part of speeding up our recovery is the Jobs for Main Street Act, which redirects repaid funds from the Troubled Asset Relief Program (TARP) that helped to stabilize our financial sector, and passed the House last week. During a recent interview on CNBC, I made it clear that I believed Congress needed to use repaid bailout funds to create a jobs program that helps those Americans hardest hit by the recession.

The bill invests $48 billion in infrastructure spending to rebuild roads and bridges, modernize public buildings and mass transit and clean our water and air. Moreover, the legislation includes $27 billion to save or create 250,000 education jobs over the next two years, and helps retain law enforcement officers and firefighters. The bill also directs $500 million to create 250,000 summer jobs for low-income kids and includes $750 million for job training programs at community colleges, a third of which is targeted at low-income trainees.

H.R. 2847 also includes several key initiatives to help America's small businesses. The bill expands the federal guarantee for banks that lend to small businesses, and eliminates fees on Small Business Administration (SBA) loans. We all know that small businesses are the engines of job growth in our economy, but a lack of available credit has prevented small businesses from creating jobs. By making small business loans more accessible and affordable, we can spur the creation of thousands of jobs on main street that will continue to fuel our economic recovery.

In addition to supporting job creation legislation, I have been working on other job creation-related initiatives. I worked with my colleagues in the Congressional Black Caucus (CBC) recently to ensure that the "Jobs for Main Street Act" does not raise taxes on hard working Americans or place a greater burden on our children. The CBC also urged President Obama to make decreasing unemployment and increasing job creation the nation's number one priority.

As the holiday season approaches, I am reminded of all the families struggling to put food on the table and to make ends meet. We still have a way to go until job opportunities are abundant, but my colleagues in Congress and I remain committed to boosting our economy and create jobs, especially in the communities hardest hit by the recession.

Lesley Stern: My Annual Holiday Letter

2009-12-22T14:05:37Z

Dear Friends, Family and Whom it may concern:

Is it almost 2010 already?

2009 has been a busy year at my house. And there's no better time than the holidays to reflect and reconnect with loved ones.

Where to start on the extraordinary year I've had?

It started with a flurry of activity. After months of campaigning and donating 40% of my annual income ($50.00) to elect transformational candidate Barack Obama, I was able to kick back and enjoy the fruits of my labor. The lavish star-studded inauguration ceremony and celebrations were fabulous! Through a happy quirk of fate, my cable wasn't disconnected until the next day.

My career has been more challenging than ever. In addition to conceiving genius work that's won praise and accolades from my mother and father, my salary has reached a level previously unseen since I was half my age. I feel like a girl again!

2009 has also been a year of some of the most satisfying naps ever!

Being civic minded, I put in record time following the news this year. In fact, I won the Anderson Cooper 360 challenge several weeks in a row this past fall.

Other honors include finishing the TV Guide crossword puzzle 42 out of 52 weeks and getting my Costco card stamped enough times to get a free brick of Tillamook cheddar cheese. Even this past week I was surprised by a "best customer" award from the pot delivery guy.

I've also made great strides on the financial front. I discovered how to get the laundry machines in the basement to work without quarters! That ought to save me several dollars a week.

Perhaps best of all, in 2009 I found Mr. Right. It was love at first sight when our eyes met at the shelter. He's sitting on my lap right now. Thank goodness he gets along with my other cats, Denzel, George, Barack, Brad and Ashton. Next year, we plan to adopt several kittens and begin negotiations for a reality show.

At this very moment a light powdering of dust is forming on the windowpane. I can hear the faint crackling of paint peeling and I'm overwhelmed with a sense of joy, contentment and unity with God (or whatever) and all of mankind. Of course, that could just be the cough medicine.

Have a happy, healthy holiday season and a prosperous new year.

Love,
Lesley

Have you ever wondered what it's like being broke in France? Learn more.

Jim Wallis: AIG: We Shall Know the Truth

2009-12-21T17:05:26Z

"You shall know the truth, and the truth shall set you free." Those are the words of Jesus, and they couldn't be more relevant that they are today on Wall Street. Some very large financial giants triggered a massive economic crisis that has caused suffering for millions of people, and we still don't know exactly what happened. It's time to learn the truth behind the irresponsible, risky and selfish behaviors that plunged our nation and so many families into this painful mess. Today, I joined one effort to do that; and I invite you to join with me. Here's the story.

One of the giants whose practices led to the 2008 financial crisis was AIG -- the American Insurance Group. When it was on the verge of collapse, the federal government intervened with a bailout that ultimately totaled $180 billion. Now, as several major banks are re-paying bailout funds in order to get free from strict government regulation, AIG is beginning to discuss a similar action.

Yesterday, three of the leading corporate investigators -- Eliot Spitzer, former attorney general and governor of New York; Frank Partnoy, professor of law at the University of San Diego; and William Black, professor of economics and law at the University of Missouri-Kansas City -- wrote in the New York Times:

A.I.G. was at the center of the web of bad business judgments, opaque financial derivatives, failed economics and questionable political relationships that set off the economic cataclysm of the past two years.

They urge that before any deals are made to end government (read: taxpayer) control of the company, we should demand answers to questions such as: Who knew what, and when? Who benefited, and by exactly how much?

And, they conclude that:

The three of us, as experienced investigators and prosecutors of financial fraud, cannot answer these questions now. But we know where the answers are. They are in the trove of e-mail messages still backed up on A.I.G. servers, as well as in the key internal accounting documents and financial models generated by A.I.G. during the past decade. Before releasing its regulatory clutches, the government should insist that the company immediately make these materials public.

Since AIG is now 80% owned by U. S. taxpayers, it is more than appropriate that we know the truth here. A citizens group has created a website urging people to sign An Open Letter to the Trustees and US Congress, asking that all of these documents be released to investigators. I've signed it, and urge you to do so. With the economy still struggling to recover from the crisis AIG helped to create, with tens of millions of people unemployed and home foreclosures growing, we deserve to know how and by whose decisions this happened in order to hold them accountable. This is what democracy requires; this is what morality requires, this is what religion requires -- to tell the truth.

Jim Wallis is the author of Rediscovering Values: On Wall Street, Main Street, and Your Street--A Moral Compass for the New Economy, Editor-in-Chief of Sojourners and blogs at www.godspolitics.com.

Click here to get e-mail updates from Jim Wallis

Ben Arnon: Do American Taxpayers Receive Dividends on Repaid TARP Funds?

2009-12-21T16:45:36Z

In no way do I profess to be an expert on the topic of TARP and government bailouts. For that matter, I don't think many people in the entire country, even leading economists and political scientists, can make that claim. I offer this post merely as an observation about a question I recently had.

I diligently followed the TARP debate and happenings early on. However, at this point there have been so many versions, revisions, and debates about the TARP program that I have lost track.

I do know that recently banks have begun repaying TARP funds to the federal government. My limited understanding of the TARP program is that the funds used to purchase troubled assets from the banks is money borrowed from the American taxpayers. I believe there is a recoupment clause written into the TARP program legislation.

How exactly does TARP recoupment work? Does it only get repaid to taxpayers once all TARP funds have been repaid to the federal government? A claim on Wikipedia states that TARP funds will be repaid after 5 years.

I often hear people - particularly Republicans - talk angrily about how much money the government is spending on the bailout programs. However, I rarely hear people describe these spending programs as loans made to banks by the American taxpayers. Viewed through this lens, the question people should be debating is what interest rate they will see on their return once TARP funds are repaid by the banks, and when exactly they will receive their dividends. As for who pays the interest on the TARP bailout loans, it should be the banks.

It is clear from observing the healthcare debate that the federal government is currently catching a lot of heat about perceived overspending -- not just from Republicans but also from independents and conservative Democrats. Why doesn't the government re-structure the TARP recoupment clause so that American taxpayers receive repayments sooner than 5+ years down the road? This would help more people understand the difference between spending and loaning.

USAA insurance company has an interesting model that seems like it would make sense for the repayment of TARP monies to taxpayers. Every year, if USAA's total capital exceeds its current and projected requirements, the Board of Directors authorizes a Subscriber's Account distribution. This year, USAA returned $490 million in distributions and dividends to its membership. Why not use this model for TARP recoupment so that all monies repaid in 2009 are repaid to American taxpayers in the form of dividend checks in 2010? And onward for 2011, 2012, etc. until all TARP funds have been repaid to the American taxpayers with interest paid by the banks.

Please share your thoughts about this topic by writing a comment to this blog post below.

Prune Perromat: Among Other Obstacles on the Road To Recovery: A New Consumer Behavior

2009-12-21T14:30:52Z

An inspired economic commentator told me recently that spending was like some cocaine for the American economy: it helped the country to get going and get excited.

Now, since the start of this recession, Americans drastically curtailed their overall spending. Among other shocking figures, during the third semester 2008, only a year ago, spending in non-durable goods (mostly clothing and food) fell 6.4 percent, its largest decline since 1950. Last February, a Bloomberg index on Consumer Spending and Attitude*, which intends to analyze consumers' spending mood, fell to a memorable low of 1.6, down from 61.9 in December 2007 (although it already went back up to 30.2 last month).

For the last 24 months, America's drug, its linchpin, its growth engine, has been seriously faulting. The massive loss of jobs and the tight or nonexistent bank credit entailed a steep decline of the economic activity and contributed to building peak unemployment figures.

"Everybody is hurt these days, everybody," says Abdul Beydoun, a general store manager in Chelsea, on 7th avenue. Beydoun says that since he opened his store in the 1980s, he has never seen such a thing. "When the food business is down, everybody is down." Is the economy about to pick up? He doesn't think so: "On a given day, I have 10 people coming in asking for work instead of buying food."

"People are devastated, people are angry, they can't afford to spend money like they used to," says Inku Ephrem, the owner of Julian and Sara, Inc., a trendy and renowned boutique for children in Soho, NY.

"But hopefully we're coming out of this for now," she says. "It's been a huge struggle, and you hear it from a lot of people, but you know, I am just hoping that it's going to get better, and so is everybody else."

Although Fed Chairman Ben Bernanke along with many commentators announced a couple of months ago that the recession was over, the National Federation of Independent Business announced in November a new drop in its optimism index. Indeed, like Ephrem, many retailers are hoping to see before long the end of the recession in their shops.

For Prof. Mark Cohen, retail expert at the Columbia Business School, the perceived delay in the "spending recovery" is logical. Better days will come, he says, but not yet, not in this holiday season, for too many issues are on the way.

The very high level of unemployment is the first major obstacle on the road to recovery. Although it went down from 10.2 percent in October to 10.0 percent in November, U.S. employers are still cutting jobs and about 7.2 million people were let go since the end of 2007. Moreover, Cohen adds that unemployment effects are additionally worsened by "underemployment", which affects people who still have jobs but are earning far less than before.

Also, the lingering fear and uncertainty on the part of consumers who worry about their income is not helping.

But in a consumption-driven country for which consumer spending (from households and non-profits) account for about 70 percent of its GDP, the shopper shouldn't merely rely on new low-tax policies from Washington to boost small and larger businesses, some economists say. It is his/her job to take the lead in the recovery process by increasing his/her spending.

"It's not gonna help if we hold on to our money," says Kelly Merle, a mother of three who was shopping on 5th avenue. "We need to spend to keep jobs going."

"Right now there are a lot of people struggling so it's helpful if we buy American, if we buy products," adds her husband.

But Prof. Cohen objects that getting people back into the stores may not be as easy as expected as a new spending paradigm has taken place during this recession: the change of the consumer's behavior. Less capricious wants, more essential needs, the consumer, confronted to a double year of hardship, has deeply and durably evolved, and "when the recession is over, the shopper will not merely return and behave as he/she has in the past." What will happen in the future of American consumption and retailers will depend to a great extent on this new factor, he adds.

"There is much less that I need," admits Karen Finckenor, 40, who introduces herself as both a jewelry vendor and a shopper. Only selling half of what she used to sell before the downturn, she is now induced to behave differently as a shopper. "I think that the economy will pick up next year and that things will look very different. But I also think that people will eventually start gravitating to things that are less material, even in this country where we shop so much, and want so much and want for nothing all the time, and have everything that we want in the minute. I think eventually - or hopefully - it pushes people towards a simpler lifestyle. Less stuff."

In the street, the people I met and interviewed seem to agree. They won't shop as before, they are pickier, more cautious. Some are not only more selective but are also getting more inventive in their spending. Diane Kramer, 48, lost her job just a year ago. "A day after the election." She decided not to give up to her new low-income situation and to find new ways to please her family for Christmas. Unable to get her daughter a pricey present this year, she took her in a one-day trip to New York City, and visited with her such glamorous places as Rockefeller Center and its Christmas tree, Macy's, Central Park, and 5th avenue. "And we went ice-skating," she adds proudly.

As for the recovery in itself, it might not be there yet, and this holiday season's figures might not be as high as expected, but for CNNMoney retail expert Parija B. Kavilanz, the situation is far from desperate.

"We still have a couple of days to go until Christmas and until the end of the year. But all indicators are pointing out that overall it's going to be a better season, simply because last year was so bad."

In a word, it should get better as it can't get any worse. But retailers, beware and prepare, your average consumer is not the same anymore.

*10 questions covering attitudes about the local economy now and in the future, personal finances now and in the future, comfort with making major purchases and other household purchases, confidence in jobsecurity and in the ability to save and invest for retirement or education and job loss experience for self, friends and family in the near future

Joseph Stiglitz: 'Significant' Chance The Economy Will Contract In 2010

2009-12-21T09:01:07Z

(AP) -- Nobel Prize-winning economist Joseph Stiglitz warned there's a "significant" chance the U.S. economy will contract in the second half of next year, and urged the government to prepare a second stimulus package to spur job creation.

"The likelihood of this slowdown is very, very high," Stiglitz told reporters in Singapore. "There is a significant chance that the number will be in the negative range."

Stiglitz, a professor at Columbia University, called on Washington to make more funds available to state governments who face a drop in tax revenue.

The U.S. economy, the world's largest, must grow at least 3 percent to create enough jobs for new entrants into the labor force, he said.

The unemployment rate fell to 10 percent in November from 10.2 percent in October.

"If you don't prepare now, and the economy turns out to be as weak as I think it's likely to be, then you'll be in a very difficult position," he said.

The economy grew at a 2.8 percent rate in July through September, after a record four straight quarters of contraction.

2000s Most Dismal Stock Market Decade In History: "WSJ"

2009-12-20T23:58:19Z

The U.S. stock market is wrapping up what is likely to be its worst decade ever.

In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.

Hale "Bonddad" Stewart: 2009 Economic Year in Review: How Did We Get Here?

2009-12-19T14:11:49Z

Because we are approaching the end of the year, it is appropriate to take a look back at the economy for the last year to see how we're doing. This will be a two part series. The first is, "How Did We Get Here?" It will be a retrospective of the economic numbers for the collapse. The second part will be a "Where We Are Now" piece which will show, well, where the economy is now relative to where we were about a year ago. So, let's get started.

The fall of 2008 was marked by panic. After the fall of Lehman Brothers, there was widespread talk of a "deflationary spiral," which is:

... a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price.[7] Since reductions in general price level are called deflation, a deflationary spiral is when reductions in price lead to a vicious circle, where a problem exacerbates its own cause. The Great Depression was regarded by some as a deflationary spiral. Whether deflationary spirals can actually occur is controversial.

Here is a chart of the year over year percentage change in US inflation for the last five years:

Note the "cliff diving" that occurs in mid-2008: prices literally fell off a cliff. This situation is one of the most serious that can occur in an economy; it says that people have literally stopped buying things en masse. Here is a chart of real personal consumption expenditures (PCEs) for the last five years that shows the drop:

This was the first drop in over 10 years indicating that something fundamental had changed in the US economy. Because PCEs comprise 70% of the US economy, this drop was extremely concerning. However, PCEs weren't the only thing dropping. Real exports were dropping:

As was total domestic investment:

At this point, it's important to remember the GDP equation: personal consumption expenditures plus investment plus net exports (or exports - imports) plus government spending = GDP. In other words by the end of 2008 every major element of GDP was dropping hard and fast.

In other words, by the end of 2008 -- early 2009, it was obvious the economy was at the beginning of an economic death spiral. This is exactly the same situation the country faced in 1929-1933 -- which was originally mishandled horribly.

So, that's how we started the year. In the next article we'll take a look at the economic numbers for the year to see how the economy is faring.

Geithner: TARP Repayments Don't Hurt Bank Lending Ability

2009-12-19T04:41:39Z

Treasury Secretary Timothy Geithner said U.S. banks aren't hurting their ability to lend as they repay the Troubled Asset Relief Program and back away from government assistance.

"By replacing the Treasury investments with private capital, banks have stronger capital positions, and will be in a better position to expand lending...

Taylor Marsh: No Thrill Up Dylan Ratigan's Leg

2009-12-19T01:14:35Z

That was just painful to watch.

That Rep. Wasserman-Schultz, a progressive dynamo who is among the very best we've got, ducked the obvious implications to the insurance stocks soaring by saying she's not a stock analyst, reveals a tragic circumstance that has Democratic leaders pushing the current health care bill at the cost of their own credibility. Dylan Ratigan's simple demand that she answer the question, which she couldn't, sending her off the show ungracefully. When David Axelrod, appearing during Morning Joe, met up with Ed Schultz, it was equally embarrassing. The whole Democratic spectacle right now turning into a tremendous tragedy.

Watching Democrats parade on cable, it's like invasion of the Democratic principle snatchers. The administration's mishandling of health care sending good people out to parrot talking points that you can see they don't even believe. So, here's some advice: Don't trust a word coming out of their mouths right now. Look to Arianna Huffington, Ed Schultz, Keith Olbermann, and especially, Dr. Howard Dean.

As for Dylan Ratigan, he's the new hero of economic rage, and the foreshadowing of things to come for Democrats, if they don't listen to Keith, Ed, Howard and Arianna. Ratigan, who has unseated Chris Matthews in the arena of "hardball," gets what's happening right now with health care, but also manages to feel my pain and my political rage. Meanwhile, Matthews is too busy propping up establishment characters like Sen. Mary Landrieu, whose health care vote was bought amidst the Let's Make a Deal atmosphere on Capitol Hill, which is more shameful than usual right now, the newest reporting revealing that the White House may have pressured the FDA to help BigPharma. With Matthews offering David Axelrod a softball practice zone, where he can dance all over the Hardball host as Matthews takes pot shots at new media for having done the job Mr. Matthews is evidently too lazy to do anymore.

Progressives from across the spectrum, including Obama for America, have successfully sent the Obama White House into full damage control, because we're not willing to have just any win if it means rewarding insurance companies while we pay for the prize.

The argument begins with something very simple, at least for me.

How can any politician, let alone a Democrat, defend the practice of forcing the American people to buy a product from an industry that enjoys a monopoly, with individual choice obliterated by a political party who has always professed to have the people's back?

As we've seen this week, they can't. It's been a Dexter-size political bloodbath for anyone who has tried.

As for Paul Krugman, he's simply lost his mind.

Talking to my economic friends who haven't, they ask what happens when a right-wing president comes in and goes on a budget cutting spree stripping out the subsidies built in to help cover mandate demands? How will Democrats explain that one?

But instead of Pres. Obama going after Sen. Lieberman and conservative Democrats holding up real reform, Pres. Obama openly threatened a Democratic leader for standing up for Democratic ideals:

Obama himself has taken notice.

"Don't think we're not keeping score, brother," Obama told DeFazio during a closed-door meeting of the House Democratic Caucus, according to members afterward.

But poking a stick at those in power is what DeFazio does.

What's unfolded this week has ignited my inner libertarian, which I didn't even know existed, with voices of You Can't Make Me Buy Anything raging in my head. Irrational, I know, but I've simply had it, though it's not over.

On Sunday, we will next see Obama's Karl Rove, Mr. David Axelrod, defend health care on "Meet the Press," with Howard Dean, Joe Scarborough, Markos Moulitsas and Ed Gillespie sitting down to join this little chat. There will be no doubt that Mr. Axelrod will be talking about his own family's struggles, a very personal story he's been telling all this week. However, after watching Axelrod work during the primaries, any effort to engender empathy on his part plays like a spider to the fly drama in my head.

On ABC News this past week, Obama was in rare form, doing a Bush impersonation I never thought I'd see from him, using every scare tactic he could think of to warn people of the dire, I say DIRE!, consequences if we don't pass health care reform before Santa Claus comes to town.

If the current health care bill isn't passed "the federal government will go bankrupt," warned Pres. Obama.

Bwah-ha-ha! ...and also absolute rubbish. As Lawrence O'Donnell said on Morning Joe, to paraphrase, no chief executive should ever threaten this about the U.S. It's leadership malpractice.

"This will be the single most important piece of domestic legislation that's passed since Social Security," he continued.

Single most important to the insurance companies that is, who stand to make buckets of cash on the backs of Americans forced to buy health insurance from private companies, without any competition that holds down costs.

"Potentially, they're going to drop your coverage, because they just can't afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year," Pres. Obama threatened.

Potentially drop your coverage. After sitting back all year long this is what we finally get from Barack Obama. Scare tactics that Dick Cheney would love.

I've been uninsured many times in my life and it was for a reason. As a self-employed person I couldn't afford it. I see this plan to force people to buy insurance, looking at those un-insured times in my life and thinking about paying a penalty, and I just want to scream at the top of my lungs.

This is a free country last time I looked.

Democrats have absolutely no right and no moral authority to tell me or anyone else they must buy anything, least of all inside a rigged market that sends me further into debt or maybe worse.

My inner libertarian is on fire, and I'm a die hard liberal. If that isn't a warning sign for the White House nothing is.

Taylor Marsh, with podcasts available on iTunes.

Eli Davidson: Four Letter Words That Could Change Your Life

2009-12-18T10:54:00Z

Recently, there was an outbreak of Potty Mouth in our office. @*#^**#! Computer one- down. Ugh! Computer two- down. Double Ugh! Computer three-down. *#@**#!!!! I hate to admit it but, the air of our normally serene office was peppered with some pretty ripe phrases. Those expletives slapped me in the face as they hung in the air. If you are reading this, you are on the cutting edge. You know about the powerful impact language has on the results you create. Trust me there's nothing like hearing yourself talk like a sailor to bring that message home. It got me thinking.

Maybe, there is real power in four letter words.

The N Word
What sector is hiring the most new employees in the US right now? Technology? Manufacturing? Financial Services? Nope. National Public Radio recently reported that collection agencies have the highest growth in new hires. How could that be? Consumer debt is at an all time. Why? People have confused two four letter words: Want and need.

If you are peering into the overstocked warehouse called your closet, a wee bit of reeducation on that distinction might be a good idea. "You mean I don't need a new pair of blue boots?" Sure, you want them. They just aren't in the need category. You need an umbrella, groceries, and to getting your teeth cleaned. Begin spending your money more consciously on what you need and you will discover that you have more money for the things you really want (owning home, enjoying a vacation, starting your own business).

Loral Langemeier introduced me to the concept of Financial Freedom Day. That would be the day that you no longer need to work. Imagine that! If you give yourself the luxury of imagining your opulent prosperity and you may make different choices. Boy, that has more juice for me than saving for retirement. What day do you want to have financial independence and the cash flow to be living from as you choose? It might be something to consider the next time that a trip to the local department store temps you. Do you feel you should buy someone a gift?

"Do I need this?" is a great question to ask yourself. Write the question on a Post It and attach it to your wallet. Spending less money on your immediate gratification want can assist you in building up the cash to have more of what you really want.

The H Word
Those Americans that have jobs are working harder and longer hour than ever before. Studies have shown that now Americans have surpassed the Japanese for most hours worked. Maybe, this is a little something you have noticed in your own life. If you are looking for a job, you could probably benefit from some help.

Help isn't admission of defeat, but actually it is an invitation to contribute. Often, you will discover the person that you asked for help feels tremendously grateful about the experience. Scientists have discovered that there is a phenomenon called "Helper's High" the boost that people feel when they are helping others. Both the person asking for help and the person delivering that help are sharing a valuable gift with one another.

Inviting others input (which is a great way to ask for help at work) is incredibly productive. Two noggins are in fact smarter than one. Recently, I was giving a speech at a large insurance carrier. An audience member raised her hand with a mammoth problem. She had no solution in sight. Once I opened up the floor for a brainstorming session, she got a flood of input from other members of the audience. Within minutes of asking for help, she had superb solutions and next step actions to a problem that seemed impossible when she tried to tackle it alone.

Ask someone in your life for help- with the dishes, on a detail of a project.
Ask to help someone in your life- pick up groceries for an elderly neighbor, baby sit for a friend and see how terrific you feel.

The P Word
I saved the word with the worst reputation for last. No the P word doesn't have anything to do with the regions below your belt. The United Nations.... Study found that at the current rate of growth, depression would surpass the common cold as the most prevalent disease on the planet by ----. One reason I see that people are suffering from a lack of play. Give yourself some time each week with an activity that tickles your heart, and watch your stress levels plummet. The focus of my work is assisting people to get out of their own way and allowing their dreams to have their say. One of the most effective tools that I use with my clients is inviting them to p-l-a-y. Play has gotten such a bad rap that sometimes; I have to spend a good bit of time convincing. The glee factor will make it worth it.

Make an appointment to give yourself 15 minutes of play 3 days this week. Isn't it time you got to have recess?

You will probably need to treat it like a meeting or it won't happen.
Dance, sing, conduct, kick leaves (often something that you enjoyed as a child can be very potent).

Jim Wallis: The Parable of the Unmerciful Bankers

2009-12-17T15:52:37Z

This week, I joined a press conference with People Improving Communities through Organizing and the Center for Responsible Lending on the steps of the United States Treasury. The first three speakers were not the usual Washington talking heads. Instead, they were American homeowners who were losing their homes to foreclosure--a terrible thing that now happens to another American family every 13 seconds (6,600 per day). And a rapidly increasing number of them are now due, not to subprime mortgages, but to the loss of employment. That's what had happened to those who told their stories on Monday in Washington D.C. across from the White House and just down the street from the huge Bank of America and PNC Bank buildings.

Mercy Martinez began to cry as she spoke. She had saved for years and put $100,000 down to buy her first condo. Choking back tears, she recalled her meeting with the Countrywide Financial mortgage broker. "I had enough money for a traditional, 30-year fixed rate loan; but the loan servicer unethically tricked me into an adjustable rate loan that could put me in foreclosure at any moment." Now she waits for the "time bomb" of her loan to explode, and when it does she will join the millions of Americans facing foreclosure. Mercy is not alone: in 2006, 61 percent of subprime borrowers were forced into mortgages more expensive and riskier than what they qualified for.

Meanwhile, inside the White House, the heads of the nation's biggest banks and financial institutions were meeting with the president. They were told that since the American people had bailed them out, they now needed to do something for the American people by beginning to lend again and to agree to loan modification plans enabling homeowners not to lose everything. But so far, those admonitions are falling on deaf ears. Indeed, I learned this week that the bonuses and extra compensation paid to the executives at the big banks are on track to exceed the 2007 level of $162 billion (even after some banks, like Goldman Sachs, have switched compensation packages away from cash and into stock bonuses). At the same time, the Center for Responsible Lending estimates that the bonus pool of just one of these big banks would have been enough money to prevent or significantly delay foreclosure for all 2.3 million people who lost their homes last year. And what about loan modifications to help homeowners stay in their homes? To date, Bank of America has agreed to fewer than 100 permanent home loan modifications. Amazing.

At the press conference, I pointed out the fundamental moral contradiction of this situation: Those whose behavior is most responsible for causing this economic crisis are being saved from failure and suffering by the American taxpayers, while those least responsible for causing this recession are now losing both jobs and homes--with no bailouts for them on the horizon. My friend Rev. Derrick Harkins made a point about "grace." He suggested that in order to try to save the economy from a feared massive meltdown, some real grace was extended to the big banks; but they now seem unwilling to extend grace to anyone else. Does this sound like a gospel parable to you?

What it sounds like to me is a very bad morality play--one that I write about much more extensively in my new book Rediscovering Values: On Wall Street, Main Street, and Your Street--A Moral Compass for the New Economy. The book says we need a new national conversation about all this, a return to some basic values, and a moral recovery to accompany an economic recovery. We cannot go back to normal this time; we need a new normal. It's time to change the script of this play. That is the only way all this suffering and pain can be redeemed.

+Click here for a free download of the first chapter of Jim's new book, "Sunday School with Jon Stewart."

Jim Wallis is the author of The Great Awakening, Editor-in-Chief of Sojourners and blogs at www.godspolitics.com.

Click here to get e-mail updates from Jim Wallis

Bob Wells: Disillusionment And The 'Knowledge Economy'

2009-12-17T14:45:47Z

First came a phone call, early on a Monday. One of our friends -- I'll call him S -- had been missing for three days. Within hours, another phone call: the police had found him dead in his car, all signs pointing to suicide.

How he did it (fairly gruesomely) is not material here. The point I'll focus on here was that he was a highly gifted marketing copywriter. He'd been recently laid off by a big telecom company, a place where for several years he'd been well paid, but where the mood had darkened lately as wave after wave of layoffs swept through the place. The office politics had grown increasingly cutthroat, he said. But you didn't dare try to be above it all because you had to stay in the fray and fight to protect your job.

Now, S had other issues -- for one, he was gay and recently unlucky in love. And, besides, is it ever terribly easy to fathom what ultimately drives a person to suicide? He had legions of friends and admirers, a loving family. A video at his memorial service showed him in a myriad of happy venues, surrounded by loved ones, always with a huge and winning smile.

For me, S's death has become an example of (or at least a metaphor for) the pained existence of the growing number of people I know and hear about who could be classed professionally as Knowledge Workers. Remember that term? We Americans were all going to become Knowledge Workers -- manipulators of information -- while lowly tasks like manufacturing went offshore. We, with our ability to massage words and symbols, thus adding to their value, would be at the pyramid's peak of human productivity.

Yet here they are -- well, here we are. A veteran book editor lives in poverty near Mendocino because she's competing against editors in Asia who will work for tiny sums. A Boulder woman in her 50s who ran a highly successful advertising agency asks, "Will I ever work again?" A business reporter I'd managed at the Boulder Daily Camera, who had researched and written stories for me so beautiful I almost cried, now scratches around for substitute teaching jobs. A Boulder videographer who's made award-winning documentaries makes the rounds of design firms looking for any small video shoots. Highly educated and formerly successful Knowledge Workers all, and all struggling today.

What went wrong?

We know how computers ripped through companies, obsoleting armies of secretaries and bookkeepers, then middle managers. Add to the mix a nasty recession, and the layoffs then spread into "upper" managers. For many of my friends, there's also the age factor: growing legions of twenty-somethings who may not be good writers, but who assure you they can "write for search engines."

I think it's been Google and the Internet that are really wiping out the reporters, editors and videographers. Let me explain why.

During a recent podcast discussion of Rupert Murdoch's attempts to persuade Google to pay him in order to index content from his publications, someone pointed out that Google's not likely to give in. The reason is that, while the content in Murdoch's properties may be good, there's almost always another provider who's content kind of gets the job done. If the Wall Street Journal story's not available, Reuters, Bloomberg and the AP are waiting in the wings.

For today's information-seeker, the perception is one of an essentially limitless supply of good (or certainly adequate) and free content. If the content's not readily available from a publication, podcast or on-demand video, a quick Google search will probably yield content that's at least perceived as coming direct from the source, "unmediated" by publishers and their ilk. What's changed is what economists call liquidity -- the way in which search engines and intelligent aggregators can match up the best of that content with the wants and needs of individual information consumers.

This perception of limitless quantities of free content is enhanced by the role of the aggregators, which display the latest indexed and/or "crowdsourced" stories, pictures, audios and videos. Services like Alltop and Feedly aggregate across broad topic ranges. Others focus in on narrower topics or points of view, one of my favorites being the left-leaning political aggregator commondreams.org. Sites like Huffington Post and Daily Beast mix in original content with their powerful aggregating abilities. Bloggers and podcasters pore over all this info-flow, often adding very useful (and entertaining) opinion and analysis. All in all, our cup of content runneth over.

In such a media environment, the scarce commodity becomes not content but the consumer's time. We breeze through these content-rich sites -- so little time, so much to do! We tell ourselves "gee, that's an important story," but we have scarcely time to scan all the "important" headlines. Web development firms and their clients all eventually settle on the overriding importance of clean design and verbal brevity. Their mantra: "People don't read long text."

When "information liquidity" makes it easy for people to find the best of all that Internet content, demand for those who would create even more content declines. I have a feeling this has much to do with why my Knowledge Worker friends are having such a hard time.

An ultimate irony. My friend learned how to commit suicide -- guess where? After he'd died, they found the instructions (recipes for a witch's brew of toxic chemicals) on his computer. From the Internet. Some information, it seems, is all too readily available.

Rohit Chopra: Should We All Stop Paying Our Mortgages?

2009-12-16T14:59:49Z

Tens of thousands of American families may remember Christmas of 2009 as the last time they'll spend a holiday in a home they own. Millions of properties have gone into foreclosure since the economic crisis began, and 2010 might not look much prettier.

Congress and the media have paid a lot of attention to those who have lost their homes. Less talked about are the millions of people who keep making their payments every month, even though they really can't afford to. Today, most homeowners are losing big on their investment. Shouldn't more people stop paying their mortgages?

I spoke with several homeowners around the country who haven't skipped any mortgage payments - but are seriously struggling. All of them shared common challenges, but they all have more options than they thought existed.

Deep underwater. These struggling homeowners have mortgage payoff balances that are much higher than the value of their home. Selling their home is simply not an option, since they would have to come up with the difference in cash to settle up with their lender.

Deep in debt. Even though they can't really afford their mortgage payments, many are spending down their savings and relying on credit cards to buy food and other necessities. One homeowner is regularly taking cash advances on credit cards to pay the mortgage.

Part of me really admires their efforts. They feel like they are doing everything possible to honor their commitments to their lenders and stay in their homes. But when they drain savings and accumulate enormous debt, that doesn't seem much better than foreclosure.

Foreclosure is sad, but for those who can easily find a new place to rent for much less, it can be financial liberation. If you are $100,000 underwater and go into foreclosure, your loss is essentially erased. In most cases, the lender can only take the house, not your future earnings. So, the only real financial consequence is that you'll have a tough time getting a loan for almost a decade.

But the truth is that there are much better options than staying in a home you can't afford or going to foreclosure. If you or someone you know is struggling with their mortgage, tell them to call their lender to discuss the options. Here are some of the best ones to consider:

Short sale and deed-in-lieu. If you don't want to stay in your home and can't afford to sell, these are worth thinking about. A short sale is when a lender agrees that you can sell the house for less than the mortgage balance. A deed-in-lieu is when you hand over the property voluntarily, saving the lender the high costs of going through the foreclosure process. You'll still take a hit to your credit score, but a decent real estate lawyer can often limit the impact by negotiating the terms of the agreement carefully.

Loan modification. If you want to keep your home, your best bet might be to modify the loan. The Obama economic rescue package included substantial help for struggling homeowners. The program will allow many homeowners to substantially reduce their monthly payments. Individual lenders also offer their own modification, repayment, and refinance options that are far better alternatives to staying and struggling or going into foreclosure.

Deed-for-lease. Many homeowners might be eligible to hand over their home in exchange for a lease. Instead of a mortgage payment, you'll make a rent payment, which will probably be substantially lower. Again, depending on the terms of the agreement, this might damage your credit, but you'll be able to stay in your home.

While we can all admire the efforts of those who keep paying bills on time, we should be worried about the deep financial hole that millions are digging. Foreclosure may seem like the only way out, there are better options that would allow millions of Americans to take back control of their lives and keep a roof over their head.

Got questions? Direct message me on Twitter (hitchop).

Taylor Marsh: It's Not Lieberman, It's Obama

2009-12-16T10:50:25Z

We've gone from the Teddy Kennedy health care bill to the Joe Lieberman bill.

The Senate is proving it's a failed institution if the Democratic majority can only support legislation that does nothing close to what its original intent. Senators are unwilling to stand up on principle rather than the holy writ of getting any win, no matter what it means. But the anger directed towards Joe Lieberman is off-base; where this failure lands is on the doorstep of Pres. Obama, an executive who can't bring himself to lead.

Pres. Obama is desperate for "a win" on health care (and everyone, especially Joe Lieberman, knows it), because he took for granted that it would be easy to get it done. Naive doesn't even come close to the President's miscalculation, but that's what happens when you stand too long looking into the reflecting pool.

A commenter who has frequented my blog, a Republican turned Obama Democrat, wrote this yesterday on my Facebook page:

Lieberman is disgusting. I'm furious with the entire Democratic party. To think I switched party for change, what a damn laugh. I agree with Howard Dean. vote down the bill in the Senate. Harry Reid is a creep and a sleaze. These guys all are just concerned with themselves, not the American people.

Pres. Obama doesn't care. It's a win or bust for him, with the health care train now careening towards an end of the year crash.

First Obama let the August recess come and go without a bill. Getting bested by Sarah Palin's "death panels" squeal came next. The finale of getting beat by Joe Lieberman having operatic overtones, given Joe's recent history with progressives in Connecticut. Mr. Obama doesn't care about the details as long as he can say he beat seven presidents who failed that came before him. He's betting history won't remember the minutia; it will simply be written that it was Barack Obama who got it done.

He never expected Dr. Howard Dean to throw a rhetorical grenade in the middle of his end of the year finale.

What it all illustrates is that the Democrats now in the majority don't have the moral purpose for this fight. They're not Republicans, who actually are willing to go down fighting, no matter how wrong they are on any given issue.

Talking about his grade the first year with Oprah, Pres. Obama said he'd give himself a B+. With a health care "win," in his eyes, he goes up to A-. If you're judging through the lense of ego gratification, I'd say he's right.

Late yesterday NBC's Kelly O'Donnell reported that abortion is still a sticking point, with Sen. Nelson wanting his own Lieberman prize, but Jonathan Cohn says not so fast.

One interesting question is how Republicans Olympia Snowe and, maybe, Susan Collins fit into this picture. She was unhappy with the Medicare buy-in plan, saying she opposed the idea in principle and didn't appreciate the rush to concoct a compromise. But that effort is now over. The bill that remains looks remarkably like the one that passed the Finance Committee. As you may recall, Snowe voted for that bill.

The great advantage of recruiting Snowe is that she supports abortion rights. Remember, she joined the majority of Democrats in voting against Nelson's amendment that would have introduced language prohibiting the coverage of abortion services within the new insurance exchanges. (Collins did, too.) That would actually produce a bill more liberal than the House alternative, at least on this one issue, with the differences to be settled in conference.

This as Pres. Obama says, "We simply cannot allow differences over individual elements from meeting our responsibility to solve a longstanding and urgent problem for the American people." To women, even some Republicans, reproductive rights aren't simply "individual elements." They are longstanding issues over which we have a charge to keep, even if Pres. Obama isn't interested.

Would this be happening with Hillary? Her unflinching passion and purpose for health care reform, seen through her first failure, would have given us a leader who'd put political capital down to get it done. No, she wouldn't have written the bill, learning from her mistake, but she would have laid out markers of what was expected and she would have fought tooth and nail to get it done right. She certainly wouldn't have accepted a bill that put more burden on the American middle class, while not coming close to covering enough people to make it matter, with costs not contained. And she wouldn't have stood by silently while the bill was crafted as a gift to bolster the insurance monopoly across this country. Oh, and Clinton would never have sold out women to a bunch of men willing to put our civil rights on the chopping block. She'd have worked with Republicans and conservative Dems to the end, but used reconciliation in a heartbeat to get a bill to the public that was actually good and actually meant health care reform. Whatever bill Obama ends up signing won't be either.

The problem isn't Joe Lieberman, who simply read the political wind to find no will from his adversaries for the fight. It's Barack Obama. It's easy to roll a politician whose only goal is a win, details be damned.

Taylor Marsh, with podcasts available on iTunes.

Stimulus Or No, Economic Crisis Will Continue Predicts Author Richard Duncan

2009-12-16T10:43:35Z

After predicting in his 2003 book "The Dollar Crisis" that the U.S. property bubble would trigger a global recession, Duncan's new book argues that governments will have to keep stimulating their economies because U.S. demand for cheap goods will not return to the halcyon days of the 2003 to 2007 boom.

Reno: To the Disappointed

2009-12-15T13:42:34Z

Tonight Organizing for America put out the call to 'deploy' our newly formed Rapid Response Teams to start doing massive phone banking beginning Tuesday the 15th December in anticipation of voting on Health Industry Reform bills or amendments in the Senate. I'm the leader of one of these RR teams. As such, I have to write up a description of what we're needing, post it, invite people, etc. But there has been so much disgruntlement, grumblings I've been hearing about Obama, that I just couldn't write some blurb without addressing the dissatisfaction. Of course, what I came up with is WAY too long for a phone bank posting.

Our first gigantic test is getting close. The Senate is moving toward a vote on health industry reform. And I keep hearing that people "are so disappointed in Obama."

If we're throwing Barack Obama out as a phony power-monger like all the rest, I just have one question:

Who is going to replace him? Huh?

Getting elected was a huge longshot, against all odds. But governing? Governing is ridiculous, essentially war without bullets. Our government was written to produce stalemates. Plus, so many of us who campaigned for him are MIA.

I don't understand: We dump the guy and then complain bitterly that it was he who abandoned us? It's the classic parent-child struggle. Ten years from now are we going to be telling our shrinkers that Obama didn't meet our needs and that's why our lives suck? I mean, he's younger than a lot of us complainers. We're the ones who are the deserters. And I'm not talking about us deserting Obama. It's ourselves that we're forsaking. Our lives will suck if we back out now, and we won't be affording no shrinkers.

There's complaints that "... [Obama]'s trying too hard to accommodate. That he is not being tough enough. He let all those finance sector crooks who got us into trouble back into office. Why can't he be tough? Cheney and Bush-Co didn't give a damn to compromise ..." And that's why we loathed them. Is that how you want Obama to be?

Besides having to remind us that Obama was not elected Emperor, he said all through the campaign that compromise was what he was going to have to engage in. Not for some abstract ideal of 'bipartisanship' (there should be more than two parties anyway, but first things first), but for practical reality. I.e., we have to get a bill passed!

It feels suicidal to withdraw support from the best possibility we've had in generations. The overwhelming tide was going against progressive values, was it not?

Yeah, in this health bill, we're not getting everything we want. Has any leader gotten anywhere near as close to transforming this disgraceful health system of ours? At least during the election, his party was behind him, but not the minute he took office, people. Think of going to work and battling day and night, (weekends, Yom Kippur, and Easter too, sometimes) with people who are sworn to not let you do your job! And those are the friendlies.

You know that there are legislators that openly pray for President Obama to fail. That was the side, you may recall, that was so perilously close to shutting down what little 'representative government' we had left. How much chance are we then going to have to realize our progressive ideals: reverse the inordinate upward wealth consolidation, build a world class public school system, construct a sustainable energy program?

You know me. Am I Polly of the Anna's? I know this guy, the President of the United States, this administration, is different.

This is not a life and death anecdote, it's a detail, but it says a lot to me about Barack Obama and his values. Let us never forget the fish stinks from the head, folks.

So. After the election, there was a meeting with the Democratic National Committee and the original OFA, Obama for America. Naturally, as the President of the United States, who had run as a member of Democratic Party, Barack was now the default head of the DNC. The DNC folks wanted to fold OFA into the DNC. Why wouldn't they? The Prez said no.

Now the middle part of this story is a buncha arcane details, many about $$, that I'm not really worried about. Let it suffice to say that the sitting president cannot really carry an independent campaign organization outside the (unfortunate) two party system, so it was eventually arranged that OFA, the O now standing for Organizing, would be a project of the DNC. That was in the Winter.

Now it's the Fall, and last week, in some 200 locations, OFA had national volunteer community organizer training sessions. I was sent the Keynote (PowerPoint in Microsoft) slide presentation a few days before so I could set up the tech at the location. The lead page and each of the 60 slides after had a big DNC logo with a diminutive Organizing for America sign under it. I guess I was not the only American involved who thought that stunk. We weren't working our tuchesses off for the D N friggin' C. And we said so.

The next day, the DNC logo was hard to see, and Organizing for America was who we were working for.

What this reaffirmed for me, and a lot of other folks, was the power-sharing, deeply respectful ethos of this org. Like my experience during the campaign.

I believe if I had been Obama during that campaign and felt the outpouring of joy and hope, I would have reason to depend on your forbearance and support. Active support.

You wouldn't be disappointed in Barack if you participated in the ongoing work. You're only disappointed if it is out of your hands. And it's not.