Recession on The Huffington Post

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.

Small-Business Bankruptcies Rise 81% In California

2009-12-22T11:19:39Z

As credit lines have shrunk and consumers have cut back on spending, thousands of small businesses have closed their doors over the last year. The plight of struggling firms has been aggravated by the reluctance of banks to lend money, said Brian Headd, an economist at the Small Business Administration's office of advocacy.

"While bankruptcies are up, overall, small-business closures are up even more," Headd said.

California has been particularly hard hit. The latest data show small-business bankruptcies up 81% in the state for the 12 months ended Sept. 30, compared with the previous year.

Continued Decline For Los Angeles Crime According To Latest FBI Stats

2009-12-22T10:53:23Z

It could be a blessing or a curse for new Los Angeles police Chief Charlie Beck: Rates for major crimes in Los Angeles continued to dip in 2009. With continuing joblessness, a city struggling to find money to hire officers, and a looming release of 40,000 state prisoners, the only direction for crime might be up.

Robyn Griggs Lawrence: Americans Love Microwaves -- But are they Safe?

2009-12-22T10:25:34Z

With the economy still in recession, more American families are eating at home rather than eating out, but most aren't making hearty, traditional meals on the stovetop or in the oven. They're nuking.

A new report from market research company NPD found that more Americans are microwaving their meals instead of making them on the stovetop. Stovetop cooking has been on the decline and microwave use has been rising since the mid-1980s. This study, the "24th Annual Report on Eating Patterns in America," microwave use is at an all-time high. In 1985, 52 percent of meals were prepared on the stove top. Today that number has dropped to 33 percent, while the number of main meals cooked in the microwave has risen to almost 23 percent.

Microwaves are fast and can save energy, but they may not the safest option for cooking food. Studies have shown that daily exposure to microwave emissions shouldn't exceed more than 1 milliwatt per minute, but average microwave use exceeds this. Microwave cooking may also change food's nutritional quality.

This isn't to say any of us is going to get rid of our convenient microwaves. It might not hurt to use them a little less often -- more for popcorn, less for full meals -- if you're concerned about microwave emissions, though.

Besides, there's something really lovely about stirring a pot of soup on the stovetop.

US Crime Rate Falling, Despite Recession

2009-12-21T17:49:49Z

WASHINGTON – High unemployment. More folks on food stamps. Fewer owning their homes. Yet for all the signs of recession, something is missing: More crime.

Experts are scratching their heads over why crime has ebbed so far during this recession, making it different from other economic downturns of the past half-century. Early guesses include jobless folks at home keeping closer watch for thieves, or the American population just getting older_ and older people commit fewer crimes.

Jane Wales: Information-Expectation Mismatch: Philanthropy's Story Continues to go Untold

2009-12-21T17:04:01Z

In a reminder that philanthropy's story goes untold, a recent survey of civically engaged Americans reports that only 19 percent had heard or seen anything in the news about philanthropy's response to the economic downturn.

Reflecting previous surveys from the foundation-funded Philanthropy Awareness Initiative (PAI), very few respondents could cite an example of how a foundation had benefited the community or an issue about which these citizens care. Yet PAI reports in High Expectations, High Opportunity that these engaged Americans, who represent the 12 percent of the adult population who are active in their communities as civic or business leaders, are looking to foundations to find solutions to society's problems. Specifically, they think foundations should voluntarily shift funding priorities to ease the pain of this economic recession. Given the fact that many foundations are already taking such steps, there is an information gap that needs to be filled, according to the PAI report. PAI notes that nearly 90 percent think foundations should be more open with the public about their activities, mistakes and lessons learned.

Points taken... I think.

Although they acknowledge the significance of PAI's findings, it is deep within the culture of most private foundations to shun the spotlight and instead direct attention to the issues that concern them or the grantees they support.

Among the topics on the agenda of the Aspen Philanthropy Group is the question of whether foundations can be truly effective in advancing the public good while falling silent on the strategies that guide and the unique role that foundations play.

As this and previous PAI surveys demonstrate, it is a conversation that is overdue.

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

Deepak Chopra: Is This a Spiritual Crossroads?

2009-12-21T10:44:16Z

A front-page poll in the New York Times confronts an issue no one likes to talk about: the pain of losing a job. Fifty percent of the unemployed have borrowed money from friends or relatives. Around the same number have experienced depression or anxiety. Four in ten are struggling enough that they have noticed behavioral changes in their children.
Normally, a recession as bad as this one wouldn't be coupled with a jobless recovery. The last time the unemployment rate hit ten percent, during the early Reagan years of 1981-82, the country returned to normal by having workers go back to familiar jobs. That isn't going to happen this time. The recovery involves a crisis of identity for millions of people.
Here are the critical factors:

-- Manufacturing jobs have collapsed, leaving Michigan, for example, with the highest unemployment in the nation, at 15%. Some of these jobs can be retooled; others will return with the recovery of the big three automakers. But even before the bubble burst, manufacturing was fleeing to China.

-- As companies rehire, they are more likely to rehire in China and South Asia than at home.

-- Older workers who have never lost their jobs before are among the last to get a new job and the first to be jobless for more than a year.

-- Minority unemployment is around twice the national average, and the young are being hardest hit. Their chance at a good first job -- or even a college education -- has been severely curtailed.

-- All the bad conditions mentioned above will last at least another two years, if we believe the optimists, or up to a decade if we believe the pessimists.

In short, no ordinary bubble collapsed. America was already going through a crisis of identity, spending wildly, incurring foreign debt, living off second mortgages and paper profits as house prices soared, trusting that the rich had a social conscience, passively ignoring corruption in politics, and being diverted by pointless social issues as reactionary politicians and religionists fanned the flames.

I can only see this as a spiritual crisis that was long in the making.

Crises bring uncertainty. They weaken social bonds and increase class antagonism. Fear lurks just beneath the surface. The most basic questions -- Who am I? Where is my life headed? -- beg for answers.

The future will form itself around how this uncertainty is resolved. The reactionary pull is still strong. There is a huge faction that is blinded to anything but free markets, military superiority, church values, and consumerism. The right wants a return to an America that hasn't really prospered according to their creed for twenty years, unless you call two frustrating wars and massive debt to China a way to prosper. The left is more appealing, because it includes the vast majority of progressives. Also, the left is wedded to utopian visions, and utopia is more digestible than neoconservative fantasies.

But neither side will bring us into a new spiritual reality. That can happen only one person at a time, with hopeful but uncertain steps. A recent survey of economic response to bad times revealed that no one really knows what causes an economy to grow. Over seventy factors were studied, including lower taxes, job programs, and bailout subsidies. Sometimes they work, sometimes they don't. There's an invisible factor that makes one society rise and another fall.
Ultimately, it takes a vision that conquers uncertainty and keeps fear at bay. At this moment, every American is seeking such a vision. It's a challenging time for the pocketbook but even more challenging for the soul. Needless to say, my hope is that America revives on a spiritual basis. A return to the status quo won't work, and it's not going to happen anyway. "May you live in interesting times" is said to be a Chinese curse. I doubt it. Change only occurs in interesting times. Far worse is another supposed Chinese curse: May you live the life you are already living.

Published in the San Francisco Chronicle

For more information go to deepakchopra.com

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.

Demand For Temporary Workers Grows -- Does It Mean Employers Will Start Hiring Soon?

2009-12-21T08:34:23Z

The hiring of temporary workers has surged, suggesting that the nation's employers might soon take the next step, bringing on permanent workers, if they can just convince themselves that the upturn in the economy will be sustained.

Philip N. Cohen: Is the Recession Really Saving Marriages?

2009-12-19T14:50:00Z

The National Marriage Project, under the editorship of the sociologist W. Bradford Wilcox, has released a report titled The State of Our Unions, 2009: Money and Marriage. It has a lot of useful information on marriage and families, with some editorial bending in the pro-marriage-and-family direction.

My beef here is with the chapter titled "The Great Recession's Silver Lining?" In it, Wilcox writes:

Judging by divorce trends, many couples appear to be developing a new appreciation for the economic and social support that marriage can provide in tough times. Thus, one piece of good news emerging from the last two years is that marital stability is up.

That line was quoted by Ross Douthat at the New York Times, which is a shame, because there is no evidence about anyone's appreciation for marriage in the chapter. Instead, the evidence for this assertion is presented in a graph that shows three data points in the divorce-rate trend:

The figure shows a decline in the divorce rate from 2007 to 2008. In the press release he calls that drop "the first annual dip since 2005." (The rate shown here is divorces in a given year per 1,000 married women in the population that year.) Couple things:

1. There is no data point for 2006, so for all we know the divorce rate actually rose higher than it was in 2007, and started falling before the recession, which officially began in December 2007.

2. Despite the dramatic turnaround apparent in this graph, it's really not enough to go on to draw the kind of conclusion he draws.

The second point is more important, because there really is a lot of research that shows job loss increases the odds of divorce. So why should this recession be different? It's possible it is, but there's no evidence - in this report or elsewhere that I've seen - of such a change.

In fairness, Wilcox wrote a column in the Wall Street Journal that musters some anecdotal evidence for his theory. But nothing to get him this far: "For most married Americans, the Great Recession seems to be solidifying, not eroding, the marital bond." Even if the divorce did drop a little in one year - that doesn't say anything about "most married Americans."

That three-point graph is especially unfortunate because it leads to interpretations like this: "The divorce rate ... had previously been on an upward path, rising from 16.4 divorces per 1,000 married women in 2005 to 17.5 in 2007." That seriously misstates the real trend in divorce rates, which have actually been falling since 1981. And there is nothing in the trend to suggest that recessions teach couples a "new appreciation for the economic and social support that marriage can provide in tough times." In the appendix, Wilcox presents that longer trend, which makes his previous figure seem much less dramatic.

(The graph seems a little off to me - notice how 10.6 is closer to the line for 10 than 14.9 is to the line for 15 - but I'll work from his numbers below anyway.)

I think the story of a turnaround in divorce rates has traction because, like crime, divorce is one of those things many people assume is always getting worse (I see this in student papers frequently). So any decline in divorce rates looks like an important change.

What is recession's effect?

I previously speculated that, because this recession was costing so many men their jobs, more men were likely to be become primary caregivers, and do more housework. The downside - I speculated - was that "maybe men getting 'stuck' with childcare doesn't bode well for marriages." To support that speculation, I showed a graph of divorce rates that had little upward spikes during some recent recessions. The graph was not the real evidence for the argument - which was here:

We already know that economic hard times contribute to marital instability and divorce. Studyafter study after study have found that losing a job increases the likelihood of divorce, with some evidence that husbands' losses matter more.

Here is a new graph I made, with the "crude divorce rate" (divorces per 1,000 people in the population) in blue, superimposed over Wilcox's calculations in red. (His takes more work, which is probably why he doesn't have it for every year. But they track quite well, with some pulling apart some after 1980, which has to do with changes in the population composition that probably aren't important.) I also put the recessions on there, roughly, by hand with purple bars.

Source: Divorce rates from 2010 Statistical Abstract and various prior years; business cycles from 2010 Statistical Abstract.

Two things here:

1. Over the longer run, there is no obvious relationship between recessions and the divorce rate. There are big social forces at work here (like the rise of the legal practice of no-fault divorce, the increase in women's education and employment, the growing tendency of men and women of similar education levels to marry, later age at marriage, more cohabitation and unmarried childbearing, etc.). But on the surface - which is where the Wilcox conclusion is drawn - there is not much to go on.

2. The crude divorce rate I got from the Statistical Abstracts shows a little peak in 2006 - not 2007 - followed by two consecutive years of decline, beginning before the recession. So rather than talk about the reason for the decline in the last year - which really just fits in with the falling divorce rates since 1981 - the anomaly is 2006. I have no explanation for that, but in the long run it probably doesn't matter much.

I doubt the final word will end up as simple as, "Couples too broke to bicker," as heartwarming as that is. There may be something to the speculation that falling home prices are stalling some divorce plans, but that is not quite the same as developing a newfound appreciation for the benefits of marriage.

I'm sticking with this: in hard times, families are a big part of how people make it through, but hard times are also hard for a lot of marriages. If it's true that the husband's job loss especially increases stress on a marriage - as previous research suggests - we may yet see that emerge for the current crisis. If not, maybe something has changed.

Cross posted from the Family Inequality blog.

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...

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

Mark Horvath: 'Tis the Season to Get Dirty and Help Fight Homelessness

2009-12-17T12:53:06Z

Almost 12 months ago Danny Brown had an idea. The idea was simple: for 12 months, pick one charity each month and raise $12,000 (or more) for that charity. And thus, the 12for12k Challenge was born. I believe 12for12K Challenge is one of 2009's most brilliant ideas.

But this month, instead of just giving money, Danny is asking that we all join together to do something a little different, a little risky, a little dirty. What that means is this month we are going to take real, tangible action to support our local homeless services. That's right, the organizations in your town that are helping people get off the streets by providing health services, housing and jobs!

I am not a numbers person because the numbers are always off. It is nearly impossible to have an accurate point-in-time count of the homeless population. Plus, many people living in hotels or 'couch surfing' are never counted. What I can tell you is that hundreds of thousands of people slept outside last night and even more slept inside our shelter systems. Very large percentages are families with small children.

For many, something as simple as a pair of clean socks or a hot cup of coffee to keep warm is all they want this holiday season. Of course, they need so much more. Which is why we are asking you to join the 12for12k Community in supporting the people who are fighting homelessness in your home town.

The 12 Days of Christmas Homeless Push is rather simple. We've come up with a starter list themed around the 12 Days of Christmas, only this is the 12for12k version. Please feel free to come up with your own list. And I encourage homeless service organizations to publish their own lists either on the 12for12k blog, 12for12k Community, or on their Web sites.

It's up to you which ones you choose, although obviously choosing all 12 will make the biggest impact. And whatever you decide to do, record it. Photographs, videos, blogs, social networks -- your choice. Sharing can only make more people aware and encourage more help -- and that's always a good thing. 12for12k will share your stories on our community, so please consider joining if you haven't already.

So... on with the 12 suggestions.

Day 1. Contact your local homeless shelter(s) and ask what they need. Make a list and work from there.

Day 2. Gather 10 friends each (family, friends, colleagues) in preparation for Helping Day.

Day 3. Challenge these friends to a bake-off. Cook a bunch of homemade goodness -- soup, stews, cookies, etc -- ready for Helping Day.

Day 4. Clean out your closet (especially your husband's, 12for12k wives!), and pack up all the old clothes that you find. Coats, socks, underwear, shoes, jeans -- anything and everything.

Day 5. Go through your linen closet and think of what blankets, sleeping bags, duvets, etc, that you no longer need.

Day 6. Check your pantry - do you really need all these tins of soup or canned stew? Collect and store.

Day 7. Invite a homeless person for coffee. Go to a Starbucks or McDonald's, buy a combo, sit and talk. Get to know the person behind the story.

Day 8. Go grocery shopping. Find 2-for-1 deals and buy what you can afford. Save the second item for Helping Day.

Day 9. Kids are homeless too. Collect all your children's unwanted toys and them box up. This includes books as well

Day 10. Go to your local fast food/coffee house and buy a bunch of gift cards ready for handing out.

Day 11. This one's an easy one -- share with your networks what's happening and get them involved.

Day 12. This is Helping Day. Go to a shelter, take everything you and your friends/family have collected, and help. One hour; six hours; all day -- it doesn't matter. Help serve food, give out packages, talk to people, befriend someone. Simply put: be human to another human being.

For you party animals, maybe holding a 12for12k Holiday Party to support a homeless shelter is more your style. By all means make it happen! See what people did in Lowell, Massachusetts.

Be creative, have fun, and let's really get dirty this holiday season to help our friends and neighbors who don't have a home. If you have any questions or are having trouble finding a homeless services organization ask the 12for12k Community or holler at me on Twitter.

Here are a few resources that may help:

United Way's 2-1-1 Information and Referral Search

Homeless Shelter Directory

Rescue Mission Directory

What to Buy If You Are Homeless

35 Ways to Help the Homeless

photo of courtesy of MLFNOW

Elizabeth Warren: Feminomics: Women and Bankruptcy

2009-12-17T11:39:57Z

From an economic standpoint, will 2010 be the year of the woman? As part of the Roosevelt Institute's ongoing 'Feminomics' series, running on the New Deal 2.0 blog, I was asked to reflect on women's changing roles in the economy. Here's my take on the pernicious effects of bankruptcy on women -- especially those in the middle class.

Why is bankruptcy an issue of equal justice and fairness to women?

Bankruptcy exposes the economic vulnerability and insecurity of middle class women. The women in bankruptcy, like the men who file for bankruptcy, are a fairly representative cross-section of the American middle class. Their education levels are slightly higher than the population generally, with women in bankruptcy more likely to have attended college than their counterparts. Most are employed when they file. They work in a representative cross-section of industries and occupations. More than half are homeowners. By the most overt criteria, the women who file for bankruptcy are, as a group, solidly middle-class. But at the time they file for bankruptcy, their incomes tend to hover only slightly above the poverty level, and they are deeply mired in debt. The women who file for bankruptcy played by all the rules, but they are still in economic freefall.

How has the financial crisis impacted women experiencing debt and insolvency?

Based on projected figures, more than a million women will find their way to the bankruptcy courts this year -- more women than will graduate from college, receive a diagnosis of cancer, or file for divorce. The numbers are staggering.

How do current bankruptcy laws place special burdens on women?

For many women, the on-time payments of domestic support obligations are essential to economic survival. Until 2005, the bankruptcy of those who owed the obligations actually helped women because the bankruptcy wiped out credit card debts and other obligations, while leaving domestic support obligations intact. This gave women a clear field to collect from their ex-husbands. But the credit card companies got the laws changed in 2005, making it harder for these men to declare bankruptcy and harder to discharge credit card debt. That puts women trying to collect domestic support obligations and credit card companies in direct competition for the ex-husband's resources. Credit card companies can hire lawyers and develop extensive debt collect departments, something that is really tough for women. When the credit industry controls the bankruptcy rules, women lose.

Twenty-nine women's groups -- a diverse collection that included the Y.W.C.A., Hadassah, American Association of University Women, Church Women United, the NOW Legal Defense Fund and the Feminist Majority-publicly opposed the bankruptcy legislation.

What groups of women are especially at risk?

Women with children are particularly vulnerable, both because of the economic challenges faced by single-parent households and because bankruptcy now gives credit card companies greater capacity to compete with women in collecting past-due debts.

How can women protect themselves from bankruptcy?

Most women file for bankruptcy in the aftermath of a serious medical problem, a job loss or a family break up. It is hard to protect against those. But women can help themselves if they keep their fixed expenses (rent, car payment, student loans) to half of their incomes, and if they put aside some savings. My daughter and I wrote a book with more detailed advice, called All Your Worth, that some women have found helpful.

What legal reforms are necessary moving forward to ease the burden on women?

Anything that eases the burden on hard-working, middle class American families will provide great help to women. One thing the financial crisis taught us, though, is the extent to which the broken consumer credit market has fueled the insecurity of the middle class. Today, lenders operate in what is really a Wild West environment. They face little regulation, and they can get away with almost anything that pushes up profits. In the years leading up to the crisis, the broken market affected women disproportionately. Women were 32 percent more likely than men to have received subprime loans and 41 percent more likely than men to have received higher-cost subprime loans, regardless of income.

There are a number of causes of the rising insecurity of the middle class, but one of the biggest problems right now is that the largely unregulated consumer credit industry has preyed on customers by burying tricks and traps in the fine print and concealing true costs. This is why I believe it is so important for Congress to act on the President's proposal to create a new Consumer Financial Protection Agency. We need to make the market competitive again and to get rid of the tricks and traps. This will empower families to make good choices and will increase their economic security.

This post originally appeared on New Deal 2.0.<

Read more: Women's Issues, Women and Economics, Middle Class Woman, Recession, Bankrupty, Business News

Tom Gregory: Corrected: TIME 's Person of the Year

2009-12-17T04:02:33Z

Read more: Lloyd Blankfein, Time, Goldman Sachs, Subprime Mortgages, Person of the Year 2009, Subprime Mortgage Crisis, Person of the Year, Goldman, Ben Bernanke, Time's Person of the Year, 2009, Recession, Comedy News

Fed Interest Rates Held Flat, To Remain Ultra Low For An "Extended Period"

2009-12-16T16:16:24Z
WASHINGTON — The Federal Reserve pledged Wednesday to hold interest rates at a record low to drive down double-digit unemployment and sustain the economic recovery.

The Fed noted that the economy is growing, however slowly. And turning more upbeat, it pointed to a slowing pace of layoffs.
Read more: Federal Reserve, Fed Funds Rate, Fed Interest Rate, Ben Bernanke, Recession, Economic Recovery, Business News

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.
Read more: Economists, The Dollar Crisis, Authors, Economic Crisis, The Corruption of Capital, Financial Crisis, Recession, Books, Stimulus, China, Economy, Author Predictions, Richard Duncan, Books News

New Home Construction Rose 8.9 Percent In November

2009-12-16T09:48:46Z
WASHINGTON — Construction of new homes, helped by better weather, rebounded in November following a setback in the previous month.

The gain is a hopeful sign that the housing recovery is continuing, a development viewed as critical to lifting the overall economy out of recession.
Read more: Home Construction, Housing Slump, Housing Market, Housing Crisis, Recession, Housing Bubble, New Home Construction, Business News

Robert Scheer: Wall Street's Fat Cats Are Still In Charge

2009-12-16T01:58:55Z
Most Americans now know that Wall Street bankers are so greedy as to never be trusted, and I suppose it is a sign of progress that our president now seems to grasp the obvious. How depressing, though, that a man who was elected as a consequence of one of the boldest grass-roots populist campaigns in this nation's history should now feel obligated to offer the disclaimer that "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street."

But whatever his intentions, Barack Obama has in fact accomplished just that, to the immense anger of the public that elected him. Thus, it is understandable that, in his "60 Minutes" interview last Sunday, Obama lashed out at the ingrate bankers whose greed he had served but who have failed to seriously increase lending or forestall foreclosures and instead shamelessly pocketed the cash the government threw their way:

"They're still puzzled why is it that people are mad at the banks. Well, let's see," he said. "You guys are drawing down $10 [million], $20 million bonuses after America went through the worst economic year that it's gone through in--in decades, and you guys caused the problem. And we've got 10 percent unemployment."

But what did the president expect from those guys after he and his Republican predecessor were so quick to reward them so handsomely for their failures? In a reversal of the guiding principles of the meritocracy that informed Obama's own success story, the president promoted, rather than flunked, the people who got it all wrong.

One of those was Larry Summers, who as Bill Clinton's treasury secretary pushed through the radical deregulation that enabled disastrous Wall Street greed. But although Summers pocketed a cool $15 million from Wall Street in 2008 as he was advising Obama the candidate, he seems at last to have gained some awareness that the rules of the game he helped write now need to be changed. Speaking of the very bankers who once so handsomely paid him for his services, Summers, now Obama's top economic adviser, told CNN: "Here is what I think they don't get. ... It was their irresponsible risk-taking in many cases that brought the economy to collapse."

Summers is upset that the banking bandits he once so slavishly adored are now opposing even the tepid legislative reforms that the administration supports. The banking lobby is in full-frontal assault mode on efforts of Senate Democrats, led by Chris Dodd, to establish a single bank regulator who might actually bring the industry to heel.

The largest of the banks--the very ones that led the charge into the financial abyss--are fiercely lobbying against the very sensible and all-too-limited proposals that would increase their capital requirements and empower the government to prevent them from growing to unmanageable proportions once again. They are even more incensed about attempts to regulate the rewards that bankers reap from risking the capital of their depositors and the taxpayers who ultimately foot the bill.

However, Obama's stern rhetoric apparently did not move the top banking honchos who failed to show up for this week's White House meeting with the president. The heads of Goldman Sachs and Morgan Stanley waited until the morning of the Monday meeting to catch a plane and then claimed that fog prevented their journey.

Citigroup Chief Executive Vikram S. Pandit couldn't make the meeting with the president who had saved his corporation from bankruptcy because he was too busy lining up new private financing to allow Citigroup to escape the bonus confines and other limits stipulated by the government bailout program.

No bank bears greater responsibility for the economic debacle that has caused such worldwide suffering than Citigroup, whose immense growth was made possible by legislation that Summers and his then-mentor, Clinton Treasury Secretary Robert Rubin, successfully promoted in the late 1990s. Rubin was rewarded for his efforts with a top job at Citigroup, which was formed from one of the largest mergers in history and which paid him $120 million before its fortunes plummeted. The bank is by no means out of the swamp of its own creation, as it still holds a huge portfolio of toxic assets, is still sustained by substantial public assistance and was trading Tuesday at less than $4 a share--a tiny fraction of its value before Rubin led it astray.

It was Rubin, as an Obama adviser, who pushed for Pandit's selection as head of Citigroup. Perhaps Obama could enlist Rubin's aid in getting Pandit to accept the president's invitations to the White House. But of course there is no expectation of getting Rubin and Pandit to pay back the bankrupted homeowners they swindled.
Read more: Robert Scheer, Vikram Pandit, Robert Rubin, Larry Summers, Bailout, Wall Street Bonuses, Wall Street, Recession, Citigroup, Business News

McCain, Cantwell Team Up To Renew Glass-Steagal Act, Depression-Era Banking Law

2009-12-15T20:00:33Z
Senators John McCain and Maria Cantwell are joining forces to reinstate the Depression-era Glass-Steagal Act of 1933, which separated commercial banking from Wall Street investment banking. According to Newsweek, the two plan to announce the bipartisan McCain-Cantwell bill on Wednesday morning.

The Glass-Steagall law was repealed in 1999, allowing for commercial and investment banking to combine. Bloomberg notes that its repeal has sparked debate as to whether it "helped spawn reckless lending practices and financial speculation that led to the meltdown of credit markets last year and the $700 billion U.S. bailout of troubled banks."

So far, the idea hasn't gotten any attention from the Obama administration, which does not attribute the current crisis to the law's repeal, and dismisses the idea that reinstating it would have any impact on the financial sector. Furthermore, Newsweek's Michael Hirsh points out that renewing Glass-Steagal may be "almost akin to unscrambling an egg"-- in other words, impossible:

By the time it was formally repealed in 1999, commercial banks like Citigroup had been moving gradually into investment banking for nearly two decades. Glass-Steagall had come under continual pressure as traditional commercial banks sought to follow their old clients into the capital markets, issuing stocks and bonds instead of borrowing the old way.

McCain and Cantwell do, however, have some support. Majority Leader Steny Hoyer, for one, voted to repeal Glass-Steagall, and told reporters in Washington that "maybe that was a mistake."

The measure was first co-sponsored by five House Democrats last week, all of whom also voted to repeal the bill in 1999.
Read more: John McCain, Stock Market Crash, Wall Street, Commercial Banks, Tim Geithner, Maria Cantwell, Banks, Glass-Steagall Act, Arthur Levitt Jr., Securities and Exchange Commission, Paul Volcker, Recession, Great Depression, Politics News

Holly Hamann: The Benefits of Starting a Business During a Recession: One Colorado Story

2009-12-15T17:56:52Z
About nine months ago, my business partner and I both quit our full-time jobs in Boulder to start a Web 2.0 company that builds social features for blogs. We had no funding, no office, a few customers, and operated the company from our savings. We both have families to support, mortgages to pay and college educations to save for. What person in their right mind would quit their job during the worst economy since the Great Depression?

Starting a company in the middle of a recession certainly has its challenges. Funding is hard to come by and investors are gun-shy. It's tougher to get loans and skilled employees who have jobs are less likely to leave for riskier ventures. Consumers have less money to spend on products and are very selective about what they do spend money on. While all those things might be true, with tough times comes great opportunity. There are pools of extremely talented people who are looking for work and willing to take below-market salaries to join a great team. Employees are more flexible about relocating, work hours, and job sharing. Commercial property rates are lower and the cost of travel is down. The challenging economy also means fewer companies will start new ventures, which results in fewer competitors.

From a product perspective, a tight economy and skeptical investment climate forces you to be ruthless in your product development. You don't have the luxury of going in ten different directions and chasing features that are cool but way outside your core vision (we call those "bright shiny objects"). If you spend one day on something that doesn't further the goal of solving your customers problems, you have wasted precious time. Competitors with more money and resources will eat your lunch if your take our eye off the ball for a minute. And we wouldn't have it any other way. We are conditioned to think fast, test often, be brutal with priorities and involve feedback from real customers every step of the way.

We still don't have a fat budget, fancy office or corporate salary. What we do have is a customer base of over 20,000 customers that grows every day. We launch features in weeks, not months. We're able to advance swiftly in a market where others have retreated with a wait-it-out mentality. We are making significant progress and have overcome hurdles with customers, investors, and competitors. We're even driving revenue sooner than we thought we would.

Being forced to play by recession-era rules is good for our business. Our gutsy move is paying off and we're months ahead of where we would be if we'd played it safe and waited. Sometimes what looks like a challenge is really fate handing you a lottery ticket and inviting you to play a bigger game.
Read more: Web 2.0, Boulder Colorado, Economic Recession, Colorado, Startups, Denver News

Brookings Institute: Mountain States Hit Hardest By Recession

2009-12-15T14:31:39Z
The economic crisis last year hit the nation's six mountain states, including Colorado, harder than any other block of states, according to a report Monday from the Brookings Institution.

"In many mountain region locations, the sheer abruptness of the shift from hyper-growth early in the decade to a severe contraction in the last year has spawned a sense of almost existential whiplash," the report found.

The newly minted MountainMonitor, a joint effort between Brookings' Metropolitan Policy Program and the University of Nevada Las Vegas, looked at economic conditions in Arizona, Colorado, Idaho, Nevada, New Mexico and Utah.
Read more: Recession, Rocky Mountains, Mountain States, Rocky Mountain Recession, Denver News