Posts from the ‘Economy’ Category

Ayn Rand First Interview 1959 (Full)


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America’s Deceptive 2012 Fiscal Cliff (Part 2)



America’s Deceptive 2012 Fiscal Cliff (Part 2) (via Market Shadows)

  Source: pintura.aut.org via Bonegrrl on Pinterest   Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II – The Financial War Against the Economy at Large Courtesy of Michael Hudson Originally published at Naked Capitalism (part 1 is here) By Michael Hudson, a research professor…

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Obama To Extent Tax Cut For 98% Americans And 97% Small Business



Extending Middle Class Tax Cuts for 98% of Americans and 97% of Small Businesses (via The White House)

President Barack delivers a statement on the need for Congress to act to extend tax cuts for middle class families, in the East Room of the White House, July 9, 2012. (Official White House Photo by Pete Souza) Today the President called on Congress to extend the middle class tax cuts for the 98 percent…

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Top Documentary Films – Watch Free Documentaries


Top Documentary Films – Watch Free Documentaries.

Ethos, a powerful new documentary hosted by Woody Harrelson, is an investigation into the flaws in our systems, and the mechanisms that work against democracy, our environment and the the common good.

With a stunning depth of research and breadth of analysis, this film delves deep into the inter-connected worlds of Politics, Multi-National Corporations and the Media.

Most of us have wondered at some point how we have arrived at a situation where democracy is touted as having created an equal society when all we see is injustice and corruption.

Politicians openly deceive the public with the support of major corporations and the mainstream media. Wars are waged, the environment is destroyed and inequality is on the rise.

But what is the source of these institutional mechanisms which – when we scratch the surface – are so clearly anti-democratic, so contradictory to the values we hold in common and yet so firmly embedded that they seem beyond discussion?

Ethos opens a Pandora’s box that has it’s roots in the cross-roads where capitalism-meets-democracy, implicates every power-elite puts profit before people and finally offers a solution whereby you – the viewer – can regain control using the one thing they do care about – your cash.

Watch the full documentary now

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Obama hits China on trade and Romney on China | The Ticket – Yahoo! News


Obama hits China on trade and Romney on China | The Ticket – Yahoo! News.

Campaigning Monday in the pivotal battleground of Ohio, President Barack Obama hit China over allegedly underhanded competition that hurts American workers, and knocked Mitt Romney as being for unfair trade practices before he was against them.
Equality Armando Olmos

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“We don’t need folks who during election time suddenly are worrying about trade practices, but before the election are taking advantage of unfair trading practices,” Obama told a crowd of some 4,500 cheering supporters in Cincinnati.

The Republican presidential nominee has recently redoubled his attacks on the president over China as both men court blue-collar workers who blame Beijing’s rise for the decline of American manufacturing. It’s a sentiment with overwhelming support in Congress, where many accuse the rising economic power of keeping its currency artificially low against the dollar—a move that helps keep its exports cheaper relative to American competition.

The former Massachusetts governor has promised that, if elected, he will formally designate China a currency manipulator, a step that could trigger retaliatory sanctions—and, many experts warn, precipitate a trade war.

Obama, who has sometimes struggled to reach white working-class voters, accused Romney of benefiting personally from seeing American manufacturing jobs flow to China. The president charged that, as head of the private equity firm Bain Capital, his rival invested in firms that moved jobs to Asia.

“He made money investing in companies that uprooted from here and went to China,” Obama said. “Now, Ohio, you can’t stand up to China when all you’ve done is sent them our jobs.”

The Romney campaign vigorously disputed that allegation, with spokesman Ryan Williams accusing the president of “recycling false and debunked attacks.”

“He can’t tell the people of Ohio about his record of fewer jobs, more debt, and lower incomes,” Williams said in a statement. “And even members of his own party have loudly condemned his inaction toward China.”

(The Republican National Committee also blasted out a series of quotes from Democrats, including Ohio Sen. Sherrod Brown, which had criticized the Obama administration for not designating China a currency manipulator. Obama aides say the yuan is artificially cheap, but that the issue is best addressed either at the World Trade Organization or through bilateral negotiations—even though such talks have yielded little progress. Legislation meant to escalate the pressure on Beijing has stalled in the Republican-held House of Representatives in the face of opposition from potent sectors of big business.)

Obama’s trip came as the U.S. Trade Representative Ron Kirk announced new steps to challenge China’s allegedly improper subsidies to its auto and auto-parts sectors.

The Obama administration is also escalating another trade enforcement action, begun in July, against what it says are unfair anti-dumping and countervailing duties on some $3.3 billion in U.S. automobile exports to China.

“You can talk a good game, but I like to walk the walk, not just talk the talk,” Obama said.

Romney’s tough rhetoric on China reflects how a challenger can use foreign policy issues to his or her advantage: Candidate Obama did the same thing on China in 2008, pushing then-President George W. Bush to boycott the Beijing Olympics. In 2000, candidate Bush hit the Clinton administration’s record on China and described the rising Asian power as a strategic competitor. And in 1992, candidate Bill Clinton accused then-President George H.W. Bush of accommodating the “butchers of Beijing.”

Each time, the candidate turned president muted his more strident criticisms and worked to bring Beijing into international institutions and get its cooperation on a range of thorny issues, like nuclear programs in North Korea and Iran. Advisers to Romney insist that he would keep his pledge.
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U.S. Republican presidential nominee and former Massachusetts Governor Mitt Romney pauses as speaks to reporters in Los Angeles, California

U.S. Republican presidential nominee …

Republican presidential candidate and former Massachusetts Gov. Mitt Romney addresses the U.S. Hispanic Chamber of Commerce in Los Angeles, Monday, Sept. 17, 2012. (AP Photo/David McNew)

Republican presidential candidate and …

Presidential Hopeful Mitt Romney Speaks To Hispanic Business Owners

Presidential Hopeful Mitt Romney Speaks …

U.S. Republican presidential nominee and former Massachusetts Governor Mitt Romney addresses the U.S. Hispanic Chamber of Commerce in Los Angeles, California

U.S. Republican presidential nominee …

Republicans Accidentally Vote To End Welfare-To-Work Requirements | Addicting Info


Republicans Accidentally Vote To End Welfare-To-Work Requirements | Addicting Info.

The Workforce Investment Improvement Act, a bill spearheaded by Republican Representatives Virginia Foxx (R-NC), Joseph J. Heck, (R-NV), and Buck McKeon (R-CA), would allow states to group state and federal employment/training programs, such as TANF (Temporary Assistance for Needy Families), into a single fund. However, this has an apparently unforeseen side effect–it would take away federally mandated requirements for the programs.

That is the result found, at least, by the nonpartisan Congressional Research Service. The CRS is sometimes known as “Congress’ think tank” because of their nonpartisan policy and legal analysis services.

The funny thing here is that it is generally the conservatives in the government that are screaming about leftists all wanting a free lunch. By trying to accomplish their government-consolidation aims, they have, in effect, done exactly what they try to accuse President Barack Obama of. Talking Points Memo points out the irony:

“I don’t think the TANF work requirements were what they had in mind when they were working on the Foxx bill,” says Elizabeth Lower-Basch of the Center for Law and Social Policy. “But it is sort of a collateral consequence.”

According to a brief written by CLASP, for the House Education and Workforce Committee hearing on the bill in June, the bill also “eliminates many of the requirements and mandates that governed the now consolidated streams.” The committee cleared the bill anyway.

That, of course, is exactly what Republicans are falsely claiming the Obama administration’s state waivers would do. In reality, those waivers are only on offer to states that can demonstrate that they have or will increase the number of people transitioning from welfare to work by at least 20 percent.

They go on to point out that, “The GOP’s legislation has no such safeguards. According to the Congressional Research Service analysis of the bill published this month, ‘[I]f TANF funds were consolidated into the [Workforce Investment Fund], TANF program requirements (e.g., work requirements) may no longer apply to that portion of funding because the TANF funding would not exist (i.e., it would be part of the WIF and thus subject to WIF program requirements).’”

A humorous situation indeed.

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Earnings Outlook in U.S. Dims as Global Economy Slows – NYTimes.com


Earnings Outlook in U.S. Dims as Global Economy Slows – NYTimes.com.

The boom in American corporate profits, which has far outpaced the gains in the broader economy since the end of the last recession, is faltering.
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A Burberry store in Manhattan. The company has issued a warning about earnings.
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A FedEx truck being unloaded in New York.
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Giants like FedEx and Intel, two bellwethers of the global economy, are warning of lower quarterly profits because of weakness in worldwide demand. Overseas companies are feeling the pinch, too. Burberry, the British luxury retailer which had seemed immune to a slowdown, is offering a similar warning.

Even smaller, family-owned companies like Eastman Machine in Buffalo, which makes cutting equipment for the textile industry, are wary. “We feel like we are walking on a tightrope,” said Robert Stevenson, Eastman Machine’s chief executive.

In all, Wall Street expects quarterly profits at the typical large American company to decline for the first time since 2009.

The causes of the expected decline are many. In addition to the anemic economy in the United States, much of Europe has fallen into recession while growth in China, once white-hot, has slowed. There is also the looming prospect of automatic tax increases and spending cuts in Washington, which has caused companies to sit on the sidelines.

After reducing spending and eliminating jobs during the recession, American companies reaped huge gains by keeping expenses down and putting off aggressively hiring new workers as growth slowly returned. Strong profits have also propelled the stock market higher, reassuring investors whose other assets, like real estate, have declined in value over the same period.

But while the Standard & Poor’s 500-stock index on Friday reached its highest close since 2007 — after the Federal Reserve’s announcement of its latest stimulus effort — the cycle of steady earnings increases appears to have run its course.

“A lot of the profit gain you had in the last few years was a bounce from the recession and a result of very aggressive cost-cutting,” said Ethan Harris, chief United States economist at Bank of America Merrill Lynch. “Those factors are going to be very hard to replicate.”

The expected decline in profits has yet to set off big layoffs. But it is another factor that is inhibiting hiring and keeping unemployment above the politically important level of 8 percent, executives and economists say.

Last week, the Federal Reserve announced its boldest effort yet to kick-start growth and confront persistently high unemployment. The next day, the government reported that industrial production in August fell 1.2 percent, the biggest monthly contraction since March 2009.

While executives welcomed the Fed’s announcement, many express concern over just how much impact it will have.

Just over half of managers at North American companies now expect production levels to increase in the next 12 months, down from 64 percent in the second quarter, according to a survey by CEB, a member-based advisory firm. In the same survey, the percentage of executives who expect to hire more workers fell to 34 percent from 41 percent last quarter.

“We’re sort of like in this limbo environment,” said Gregory T. Swienton, chief executive of Ryder System, the truck rental and transportation company. “I’d love to be able to say we’re hiring, but there is no natural big growth that would require hiring.”

The slowdown overseas is beginning to cut into profits at both large and small companies, many of which had benefited in the last few years from heightened demand abroad even as growth in the United States slowed.

At Eastman Machine in Buffalo, orders from China and Europe are below last year’s levels, said Mr. Stevenson, the chief executive. Business has held up better domestically, and Mr. Stevenson says he is optimistic about the future of his family-owned company over the long haul.

Wall Street analysts expect earnings for the typical company in the S.& P. 500 to decline 2.2 percent in the third quarter from the same period a year ago, according to Thomson Reuters, the first such drop since the third quarter of 2009. Earnings are expected slide 3 percent from the second quarter of 2012.

What is more, 88 companies have already said that results will come in below expectations; 21 that have signaled a positive outlook, said Greg Harrison, corporate earnings research analyst at Thomson Reuters.

“That’s much more pessimistic than normal,” said Mr. Harrison, who added that the third quarter of 2001 was the last time that earnings guidance leaned so heavily to the downside.

To be sure, pockets of optimism remain. In addition to the stock market rally this month, corporate earnings are still expected to finish 2012 up 6.1 percent from 2011, largely because gains in the first half of the year will offset any decline in the third quarter. And earnings results in the fourth quarter could benefit from a slowdown late last year, making make year-over-year comparisons look better.

Looking ahead, if corporate profits enter a sustained decline, big companies are likely to face increased pressure to cut jobs, since there is much less room left to cut costs elsewhere.

After rising steadily in the wake of the recession, profit margins for S.& P. 500 companies peaked at 8.9 percent in late 2011, said David Kostin, chief United States equity strategist at Goldman Sachs. Margins are expected to fall to 8.7 percent in 2012.

Indeed, margins are eroding at some companies as revenue dips. Intel said this month that it estimated revenue for the third quarter would total $13.2 billion, plus or minus $300 million. That is off from an earlier forecast of $13.8 billion to $14.8 billion, and 7 percent below revenue a year ago. Profit margins are estimated at 62 percent, down from 63.4 percent a year ago.

Wall Street estimates that Intel will earn about $2.58 billion in the third quarter, a 26 percent drop from the same quarter a year ago. The company, which makes semiconductors, has been hurt as computer makers cut chip inventories in Asia, while demand for personal computers has been soft worldwide.

At FedEx, which warned of lower-than-expected results on Sept. 4, profits in the current quarter are projected to decline by 2 to 6 percent. When the company reports earnings Tuesday, analysts will watch closely for weakness in shipments in China and the United States, two major markets that have been softer than originally forecast.

While profit margins have plateaued in corporate America, productivity gains in the overall economy have ebbed as well. After rising at an annual rate of 2.9 percent in 2009, and a 3.1 percent pace in 2010, productivity inched up 0.7 percent in 2011, according to the Bureau of Labor Statistics.

“There’s only so much you can cut,” said Chad Moutray, chief economist at the National Association of Manufacturers.
A version of this article appeared in print on September 17, 2012, on page A1 of the New York edition with the headline: U.S. Earnings Are Beginning To Feel a Pinch.

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