Moonhowlings

Over the weekend, former national security advisor Zbigniew Brzezinski spoke the following when he accepted the Jury du Prix Tocqueville Prize in France:

The foregoing observation is especially relevant to our understanding of the challenge facing contemporary America.  Though a democracy, it is becoming a country of socially ominous extremes between the few super rich and the increasingly many who are deprived.  In America today the top 1% of the richest families own around 35% of the entire nation’s wealth, while the bottom 90% own around 25%.   It should be a source of perhaps even greater concern that the majority of all currently serving Congressmen and Senators, and similarly most of the top officials in the executive branch, fall in the category of the very rich, the so-called top 1%.

At the same time, though still a unique super-power, America finds it difficult to cope with the consequences of the increasingly accelerating global changes that are spinning out of control, both on the socio-economic and on the geopolitical levels. Socio-economically, the world is becoming a single playing-field in which 3 dynamic realities increasingly prevail:  globalization, “internetization”, and deregulation. 

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Huffingtonpost.com:

 [T]he former speaker suggested that benefits were being abused by people who were more interested in living off the government dime than in finding actual work.

“It is fundamentally wrong to give people money for 99 weeks for doing nothing,” he said.

Most studies of unemployment insurance have showed that lethargy is not a side effect of providing help to the unemployed. The money that is being distributed simply doesn’t cover the salary lost from not having a job.

The Newster sticks his foot in his mouth again.  Since when do the jobless get accused of being lazy.  On the one hand there is much weeping, wailing and gnashing of teeth over joblessness and unemployment.  Then there is the Newster who suggests that people are abusing being unemployed.  Help me understand this. 

From the Washington Post:

Republicans scuttle negotiations with Obama

A picture is worth a thousand words.  Cantor might want to jump ‘ship’ and go back to being a normal Republican. 

The VRS had a great year.  It had an 18.5% return as of June 30 for last year.  It has nearly returned to its all-time high water mark in 2007, before the crash of 2008.  The trust fund now has approximately $55 Billion dollars.  However, the VRS  board of directors warn that its still not big enough to keep promises made to teachers and local and state workers. 

After the crash, the fund dipped to $38.9 billion dollars in March 2009.  According to Roanoke.com:

But with more government workers and teachers retiring, the investment gains don’t erase the need for lawmakers to increase contribution rates, pension administrators told the Joint Legislative Audit and Review Commission. Pension obligations represent just one of the pressures facing Gov. Bob McDonnell and lawmakers who must shape a new two-year budget next year.

“The fund is aging and will increasingly face the prospect of negative cash flows in years ahead as benefit payments exceed payments from payroll contributions,” said Diana Cantor, the chairwoman of Virginia’s retirement board.

The retirement system has nearly 340,000 active members, including state and local workers, teachers, judges and law enforcement officers. It pays out benefits to more than 156,000 retirees, a number that is increasing. Cantor noted that 5,368 teachers retired in July 2010, a 48 percent increase over the number reported the previous year.

“Recent investment gains notwithstanding, we continue to believe that contribution rates will have to rise to meet our pension obligations over the long term,” she said.

The retirement board will recommend new contribution rates after meeting with an actuary this fall. The state has underfunded the plan, routinely paying rates less than those recommended by the Virginia Retirement System’s governing board over the past two decades.

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USAToday.com

WASHINGTON — Social Security made $6.5 billion in overpayments to people not entitled to receive them in 2009, including $4 billion under a supplemental income program for the very poor, a government investigator said Tuesday.

In all, about 10 % of the payments made under the agency’s Supplemental Security Incomeprogram were improper, said Patrick P. O’Carroll Jr., the Social Security inspector general.

Error rates were much smaller for retirement, survivor and disability benefits, which make up the overwhelming majority of Social Security payments, O’Carroll told a congressional panel.

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From msnbc.com:

The jabs Erin Parker has heard about her job have stunned her. Oh you pathetic teachers, read the online comments and placards of counterdemonstrators. You are glorified baby sitters who leave work at 3 p.m. You deserve minimum wage.

“You feel punched in the stomach,” said Ms. Parker, a high school science teacher in Madison, Wis., where public employees’ two-week occupation of the State Capitol has stalled but not deterred the governor’s plan to try to strip them of bargaining rights.

Ms. Parker, a second-year teacher making $36,000, fears that under the proposed legislation class sizes would rise and higher contributions to her benefits would knock her out of the middle class.

“I love teaching, but I have $26,000 of student debt,” she said. “I’m 30 years old, and I can’t save up enough for a down payment” for a house. Nor does she own a car. She is making plans to move to Colorado, where she could afford to keep teaching by living with her parents.

Around the country, many teachers see demands to cut their income, benefits and say in how schools are run through collective bargaining as attacks not just on their livelihoods, but on their value to society.

Even in a country that is of two minds about teachers — Americans glowingly recall the ones who changed their lives, but think the job with its summers off is cushy — education experts say teachers have rarely been the targets of such scorn from politicians and voters.

This woman really isn’t making a great deal of money.  She has college debts that must be paid off.  The NO Child Left Behind Act sets unrealistic expectations for every teacher in this nation.  Specifically, the act says that by 2014 each school will have 100% pass rate.  In other words, every child in America will have passed all of his/her state objectives.  Sure, sure, by the time 2014 rolls around, someone in the Department of Education or Congress will have come up with some lamely concocted caveat to ease the pains of not being able to do the impossible, but that is still the albatross that hangs around each teacher’s neck as they enter the building each morning to go to work.  That is the axe  that hangs over their head during the work day. 

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Sam Stone aka "B. Virdot"

This month’s Smithsonian Magazine features the story of B. Virdot’s mysterious letter in the Canton, Ohio newspaper during the Great Depression. 

The next steps are unclear for the deficit commission’s drastic debt reduction plan. Many people have simply said what has been proposed in the draft is unacceptable on many levels.

Perhaps a plan this draconian is a place to start discussion. Right now it seems that senior citizens and federal works are heavily targeted and that the wealthy will be impacted the least.

Ten Flash Points in the Fiscal Commission Chairmen’s Proposal

I don’t doubt for one second that there are people out there gold bricking, but to make sweeping generalizations? I know of several people who just haven’t been able to get a job. Perhaps there are better people to attack than the jobless.

Much of the unemployment situation depends on location. Those of us living in Northern Virginia are fortunate. We haven’t been hit as hard as other localities.

Was Beck lacking sensitivity? Is it fair to attack people for being unemployed after 99 weeks?

Interesting way to look at the debt, especially since debt rose under Saint Ronnie and decline under Bad-boy Bill. It seems to me if we cut the war business, the debt might not be such an issue.

It is difficult to balance 2 wars and pull out of an almost depression. Too bad Obama is getting all the blame. People that are placing all the blame on him really aren’t intellectually honest with themselves or with others.

According to the New York Times, factory jobs are returning but the skill level of those in the jobs pool do not match the skill level needed by those seeking employees for factories.  Often pools of workers simply do not produce a match because American workers are unable to perform the skills needed to do the job.

BEDFORD, Ohio — Factory owners have been adding jobs slowly but steadily since the beginning of the year, giving a lift to the fragile economic recovery. And because they laid off so many workers — more than two million since the end of 2007 — manufacturers now have a vast pool of people to choose from.

Yet some of these employers complain that they cannot fill their openings.

Plenty of people are applying for the jobs. The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.

Economists expect that Friday’s government employment report will show that manufacturers continued adding jobs last month, although the overall picture is likely to be bleak. With the government dismissing Census workers, more jobs might have been cut than added in June.

And concerns are growing that the recovery could be teetering, with some fresh signs of softer demand this week. A central index of consumer confidence dropped sharply in June, while auto sales declined from the previous month.

Pending home sales plunged by 30 percent in May from April as tax credits for home buyers expired. Fretting that global growth is slowing, investors have driven stock indexes in the United States down to their levels of last October, for losses as great as 8 percent for 2010.

As unlikely as it would seem against this backdrop, manufacturers who want to expand find that hiring is not always easy. During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.

Now they are looking to hire people who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math proficiency than was previously required of the typical assembly line worker.

Makers of innovative products like advanced medical devices and wind turbines are among those growing quickly and looking to hire, and they too need higher skills.

“That’s where you’re seeing the pain point,” said Baiju R. Shah, chief executive of BioEnterprise, a nonprofit group in Cleveland trying to turn the region into a center for medical innovation. “The people that are out of work just don’t match the types of jobs that are here, open and growing.”

The increasing emphasis on more advanced skills raises policy questions about how to help low-skilled job seekers who are being turned away at the factory door and increasingly becoming the long-term unemployed. This week, the Senate reconsidered but declined to extend unemployment benefits, after earlier extensions raised the maximum to 99 weeks.

So, who do we blame?  Bush?  Obama?  the schools?  the employers?    Seriously, what can be done to retrain?  Can factories get tax credits for training these new employees to fit their needs?  Corporate giants like IBM have always done a great deal towards training their own people.  Do we just pull in workers from overseas while Americans, millions of them, go unemployed?  How about partnerships with local schools to re-educate workers for current  jobs.  Obviously what was needed 20 years ago is not needed today. 

Reading this article reminded me of warning that were issued some 20 years ago.  We were told that workers needed to be retrofitted to do different math, different computer skills and those not making the transition would lose their jobs to overseas.  Have the chickens perhaps come hope to roost at the wrong time?  Perhaps our stimulus packages should contain much more directed at retrofitting and retraining the American worker.  The wages in discussed in this article were fairly low level wages.  No one is getting rich here.  What do we do?

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Northrop Grumman is headed to Virginia. It is the 61st largest company in the United States and it is a huge defense contractor.

According to the Washington Post:

RICHMOND — At a news conference last week at Northrop Grumman’s Rosslyn offices, where a panoramic view of Washington loomed outside a floor-to-ceiling wall of glass, Virginia Gov. Robert F. McDonnell ticked off the reasons he thinks the giant defense contractor chose to locate its new corporate headquarters in the commonwealth.

He cited the state’s low corporate tax rate, its business-friendly regulations and right-to-work laws that prohibit requiring employees to join unions.

One factor the Republican didn’t mention: The massive flow of federal spending that provides the core of Northrop’s business and has made it the nation’s 61st-largest company.

McDonnell has been a leading voice in railing against rising federal spending. But lost amid the calls for Washington to freeze or reduce spending is this twist: Although most economists agree that mounting federal debt could be dangerous to the national economy, Virginia has thrived on Washington’s decade-long spending spree, according to analyses done by professors at Virginia colleges.

Ten cents of every federal procurement dollar spent anywhere on Earth is spent in Virginia. More than 15,000 Virginia companies hold federal contracts, a number that has almost tripled since 2001. Total federal spending — from salaries to outsourced contracts — has more than doubled, to $118 billion, since 2000, as homeland security and defense spending skyrocketed in response to the 2001 terrorist attacks and the wars in Iraq and Afghanistan. By 2008, it accounted for about 30 percent of Virginia’s entire economy.

Federal dollars have filtered through the rest of the economy, too, helping to build the high-tech Dulles corridor and funding new homes and cars for federal workers and contractors and meals at local restaurants. The billions have helped fuel the economic boom cycles of the past decade and have cushioned the blow of the recent recession, particularly in Northern Virginia, where the unemployment rate has stayed stubbornly below 6 percent, less than the state and national rates.

“We have a rich uncle, I like to remind people — Uncle Sam,” said Stephen Fuller, director of the Center for Regional Analysis at George Mason University.

Maybe Cuccinelli shouldn’t be trying so hard to piss off the feds. It sounds like Virginia is riding the old gravy train. To have less than 6% unemployment in this economy is enviable. To be getting 10 cents of every federal procurement dollar spent anywhere on earth is quite an accomplishment.

Much as McDonnell probably won’t like sharing the limelight, much of Virginia’s pro-business reputation was developed and nurtured by people like Mark Warner. Under the Kaine administration, Virginia was voted the number one state to do business in. McDonnell is savvy and should continue the tradition of attracting and maintaining businesses and a robust economy. He just needs to rein in his attorney general since much of that business originates with federal contracting.

The Seal of Loudoun County

Loudoun County is #1 jurisdiction in wealth.  Prince William takes a paltry 14th place in national wealth, according to Forbes Magazine.   The rankings were done on the median household income from the 2008.  The following local counties are as follows:

Here are the  local jurisdictions in the top 25:

1.  Loudoun County

2. Fairfax County
3. Howard County
6. Fairfax City
9. Arlington County
10. Montgomery County
12. Stafford County
13. Calvert County
14. Prince William County
16. Goochland County, Va.
21. Charles County
23. Alexandria City

Dr. Stephen Fuller, economist at GMU, informed WTOP that one reason so many local counties made the top 25 list because unemployment in this area is low.

We’re getting richer and probably this reflects the fact we were less damaged during the recession. Our unemployment is only 6.2 percent, which is high for us, but it’s way down compared to the nation.”

Fuller says most of the local counties are also fueled by duel incomes

The Forbes Magazine link shows all 25 of the richest counties/jurisdictions. Some of them are surprising. Virginia and Maryland certainly came out with the most winners.

Congratulations to all the winners.  Does everyone feel like they are just rolling in dough?

There is all sorts of scuttlebutt over getting rid of Ben Bernanke.  Two Democratic senators, Barbara Boxer and Russ Feingold both started stirring up things on Friday about not re-confirming the current Federal Reserve Chairman.  Before that, there were other democrats including Senate Leader Harry Reid who expressed doubts.  There are already Republicans who place the financial woes on the country onto Bernanke, saying he should have known before hand. 

While the Democrats and Republicans play political reindeer games, some of those who have forgotten more than most people know about all things financial seem horrified at the prospect of not having Bernanke at the helm.  Warren Buffett, the financial mogul, is one such person.  He has said if Bernanke is not reconfirmed he will immediately begin to sell off stock and put his money elsewhere. Wall Street dropped 4% last week over this fighting as well as Obama’s firmly administered bank spanking.

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Before everyone starts leaping and jumping for joy, it is a good idea to put everything in perspective.  Since March 2009, stocks have made a remarkable recovery.    The bottom had also fallen out of the stock market, so much recovery was needed. 

Several people have said they have broken even to where they were before the crash.  I offer up scenerios.  Those people either weren’t invested heavily in equities or they fed their accounts a lot this past year.  For those who have static accounts, the recovery doesn’t come near to breaking even. 

According to USA Today:

Once it was clear a collapse wasn’t going to happen, the Standard & Poor’s 500 index roared back 64.8% from its early March low. For the full year, the index rose 23.5%, or 211.85 points, it’s best showing since 2003.

 The Dow Jones industrial average rose 1,651.66, or 18.8% for the year. From its March 9 close, the Dow jumped 59.3%. Powered by the recovery in high-tech stocks, the Nasdaq ended 2009 with a gain of 696.12, or 43.9%. Tthe Nasdaq has surged 78.9% from its March low.

 

Up until March of last year, many people were fearful of opening their statements.  If one lost 40% in the crash, and many of us did, it will take a lot more than 40% increase to bring you back even.  That’s the math of percentages.  I have a 401k that increased by 33.6% but I am not even close to being back to the fall 2007 high water mark.  Not even close.

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