When you total up all exports of goods and all imports of goods, China now conducts more total trade in goods with the rest of the globe than the United States does. China’s emerging role as the dominant player in global trade is shaking things up all over the planet. The following is a brief excerpt from a recent Bloomberg article…
Obamacare will reduce U.S. employment - Commentary: Mandating health care will hurt workers - MarketWatch - Diana Furchtgott-Roth - March 15, 2013 - Members of the House Energy and Commerce Committee gathered on Wednesday at a hearing of the health subcommittee to discuss the effects of the Affordable Care Act on jobs. As a witness at the hearing, chaired by Pennsylvania Republican Joe Pitts, I testified that the new law will reduce employment in America, particularly for low-skill workers, because employers face a higher cost of labor.
Whenever possible, firms will substitute high-skill for low-skill labor, part-time for full-time workers, machinery for people, and refrain from hiring a 50th worker, which can make them liable for penalties. Most people know by now that when ACA, also called “Obamacare” by its critics, is fully implemented in 2014, Americans will be required to buy insurance or pay a tax. Firms with 50 or more employees will have to offer affordable health insurance to employees, or risk annual penalties of $2,000 or $3,000 per full-time worker. No penalties are owed on part-time workers, those working fewer than 30 hours a week. The basic health insurance plan required by the law is generous — and expensive — with no lifetime maximum benefit, no copayments for routine care, mandatory mental health and drug abuse coverage, and free contraceptives. These plans are more comprehensive than those provided now by many employers. Democratic members contended that ACA would not affect hiring...Budget deficit jumps in February by $204 billion - USA Today - Christopher S. Rugaber - March 13, 2013 - The federal budget deficit jumped in February from January, though it is still running well below last year's pace. Higher taxes and an improving economy are expected to hold the annual deficit below $1 trillion for the first time since President Obama took office. The Treasury Department said Wednesday that the deficit grew in February by $203.5 billion. That followed a small surplus of $2.9 billion in January. And February's gap was $28 billon smaller than the same month a year ago. Through the first five months of the budget year that began on Oct. 1, the deficit is $494 billion. That's nearly $87 billion lower than the budget gap for the same period a year ago. The Congressional Budget Office estimates the deficit will total $845 billion for the entire year. That would be down from $1.1 trillion in the 2012 budget year and the lowest since 2008.
How Your Retirement Package Compares to Members of Congress - CNBC - Paul O'Donnell - March 12, 2013 - While extending the payroll tax cut through the end of last year, members of Congress last fall took what many feel was a long overdue whack at the cost of their retirement plan. They bumped up the rate at which federal employees contribute to their pension plan, saving an estimated $15 billion over the next 11 years. They also made sure that none of the increase applied to themselves. Anyone in service before the law went into effect would pay into the pension plan at the old rate. For all the talk you hear from Capitol Hill about running government more like a business, Congress has a retirement plan that would make any Fortune 500 executive blush. Members can retire younger, having contributed fewer of their own dollars, than almost any worker in the country — even more than the generous terms other federal workers get.
At a time when traditional pensions are disappearing and many workers are struggling to save for retirement, the Federal Employees' Retirement System (FERS), an old-school defined benefit pension program, pays 215 former congressmen and women an average of $39,576, for an average of 16 years of service, according to a recent Congressional Research Service report. That's about what the average private-sector worker makes in retirement from all sources after a lifetime of work, according to the Employees Benefits Research Institute. The average income that worker gets from a pension is about $8,800 — if they have one. In 2010, fewer than 15 percent of private sector employees were enrolled in a defined-benefit pension.
With Positions to Fill, Employers Wait for Perfection - New York Times - CATHERINE RAMPELL - March 6, 2013 - American employers have a variety of job vacancies, piles of cash and countless well-qualified candidates. But despite a slowly improving economy, many companies remain reluctant to actually hire, stringing job applicants along for weeks or months before they make a decision... The number of job openings has increased to levels not seen since the height of the financial crisis, but vacancies are staying unfilled much longer than they used to — an average of 23 business days today compared to a low of 15 in mid-2009, according to a new measure of Labor Department data by the economists Steven J. Davis, Jason Faberman and John Haltiwanger.
As a result, employers are bringing in large numbers of candidates for interview after interview after interview. Data from Glassdoor.com, a site that collects information on hiring at different companies, shows that the average duration of the interview process at major companies like Starbucks, General Mills and Southwest Airlines has roughly doubled since 2010.
Barclays CEO Said to See 28% Staff Drop in Decade on Automation - Bloomberg - Howard Mustoe - March 7, 2013 - Barclays Plc (BARC) Chief Executive Officer Antony Jenkins told some of the lender’s shareholders that the company may shed almost a third of its workforce over the next decade as automation and online banking cut the need for staff, two people familiar with the conversations said. Jenkins, 51, discussing the long-term future of the bank in meetings with shareholders, said the London-based lender could foresee reducing staff levels by 28 percent to about 100,000 over a period of about 10 years, according to the people, who declined to be identified as the discussions were private.
Wall Street: $474 Million, Detroit: 0 - Zero Hedge - Tyler Durden March 17, 2013 - The more time passes, the more skeletons emerge from the closet. So what’s the punishment for an industry that has literally destroyed countless communities across the American landscape? Trillions in taxpayer bailouts and even more control over our government. They say “it would’ve been much worse without the bailouts.” Tell that to Detroit. From Bloomberg:
The only winners in the financial crisis that brought Detroit to the brink of state takeover are Wall Street bankers who reaped more than $474 million from a city too poor to keep street lights working.
The city started borrowing to plug budget holes in 2005 under former Mayor Kwame Kilpatrick, who was convicted this week on corruption charges. That year, it issued $1.4 billion in securities to fund pension payments. Last year, it added $129.5 million in debt, 9.3 percent of its general-fund budget, in part to repay loans taken to service other bonds.
“We have no lights, no buses, poor streets and now we’re paying millions of dollars a year on our debt,” said David Sole, a retired municipal worker and advocate for Moratorium Now Coalition, a Detroit group that fights foreclosures and evictions. “The banks said they need to be paid first. But there is no money.”
Jaw-Dropping Crimes of the Big Banks - Washington Blog - March 14, 2013
An economy of peak food stamp usage, peak Dow, and peak Debt: What does it say about our economy that at the same time the Dow Jones hits a peak, we have the highest percentage of Americans on food stamps? - mybudget360 - It is a dichotomy that speaks to the current state of our economy. Food stamp usage has peaked at the very same time that the Dow Jones Industrial Average is setting new highs. Of course, the Dow is setting new nominal highs but still has a way to go to catch up to the eroding effects of inflation. You have to really ask how is it possible that at a time where so much financial wealth is available that so many people, over 47 million people in our country, are relying on food assistance just to get by. Where is all the wealth going? The financial system has been propped up with trillions of dollars of bailouts and loan programs and has allowed the same kind of speculation that caused our serial bubbles to once again emerge. Many people are speculating in places like Las Vegas and Arizona and crowding out your typical family simply looking to buy a simple home or find a rental. The fact that we are facing a peak in food stamp usage and seeing a new high with the Dow is very telling in the sense that it shows that we are truly becoming a society with a smaller middle class. The actual number is 47,791,966 Americans that now receive food assistance. What the media does not convey is that the stock market is largely not a true indicator of health for the underlying economy. Few Americans own any significant amount of financial wealth. Most Americans rely on actual jobs to live and support their family. Many of these companies are increasingly earning higher profits by slashing wages, cutting benefits, and earning profits from their business abroad. What the press does not tell you is the standard of living for many Americans has moved backwards over the last few decades. Median household income is now back to levels last seen in the mid-1990s.
US Plans to Let Spy Agencies Scour Americans’ Finances - Newsmax MoneyNews - March 13, 2013 - The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters. The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial data banks, criminal records, and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates. Financial institutions that operate in the United States are required by law to file reports of “suspicious customer activity,” such as large money transfers or unusually structured bank accounts, to Treasury's Financial Crimes Enforcement Network (FinCEN).
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