Route to Recovery

A trip through the epicenters of the recession

from UK News:

Ignore the data, Royal Wedding and sunshine give Britain Plc a Q2 kickstart

May 5, 2011 14:49 UTC

A lot of the economic data in recent days has made for pretty grim reading, reinforcing expectations that interest rates will remain at record lows for some months yet.

But a string of bullish updates from British retailers and manufacturers suggest that the second quarter could have got off to a flying start, with fine weather, the Easter holiday and the Royal Wedding all improving the national mood.

Anybody who ignores such signals from within the real economy does so at their peril. In January the pound tumbled when it emerged that the British economy had suffered a shock contraction in the final three months of 2010. The market was caught off guard again a month later when revisions painted an even bleaker picture.

Those of us who had been following closely the steady stream of profit warnings from UK retailers, travel groups and builders were not quite so surprised, particularly as we churned out long lists of companies hit by December's big freeze and predicted a looming standstill in the construction industry.

The big question now is whether the glow left by a month of unusually sunny weather and two holidays in swift succession for Easter and the Royal Wedding will translate into a sustainable recovery, or at the very least be enough to dull some of the pain of government cutbacks and job losses.

Supermarket group Morrison is sounding very cautious this morning. In common with a growing pack of retailers it has reported stronger than expected sales thanks to a bumper April but has not raised its forecasts for 2011 as a whole, citing falling disposable incomes and economic uncertainty.

An industry survey on Tuesday showed shopkeepers are planning for a weak May after last month's pick up.

Those in the firing line of government cutbacks also show that for some at least, the worst has yet to come. Defence giant BAE Systems said this week that it still expects sales to be hit by lower UK military spending, hinting that more job cuts may be on the way.

April's mini-boom did, however, give fashion retailer Next the confidence to up its guidance for the first half even if analysts warned people not to assume there had been a sea-change in consumer morale.

There are also very early signs of something more than just a bit of fair-weather, party spending. Within the construction sector -- such a big drag on the economy at the end of last year -- shares in house builder Galliford Try are up over 9 percent today after it predicted significantly better than expected full-year results following a buoyant spring where it has been enjoying a substantial rise in home sales even if prices remain subdued. Property website Rightmove also reported this week that its average revenue per advertiser was growing strongly while upmarket property consultant Savills has flagged a strong performance from its UK residential business.

People don't buy new houses on the back of Royal Wedding good cheer, do they?

Meanwhile software firm Sage this week reported growth across all regions for the first time since 2007, citing a tentative recovery in spending by small- and medium-sized businesses while Logica, which helps manage companies' IT systems, beat sales growth forecasts thanks to precisely the sort of stronger private sector demand the government is pinning its hopes on.

Not everybody is having an easy time of it. DIY chain Focus is preparing to appoint administrators, putting almost 4,000 jobs at risk, while chocolatier Thorntons blamed warm weather for weak Easter trading.

Overall, though, the upbeat noises have been drowning out much of the bad news from a corporate perspective with engineering group Weir upping its profit guidance, Moneysupermarket.com saying it is trading well ahead of last year and pub group Wetherspoon describing sales as resilient. Shares in bus and train operator Go-Ahead jumped today on higher profit guidance

The economy is certainly not out of the woods yet, with many firms grappling with high raw material costs and individuals worried about their jobs, but perhaps markets should be bracing themselves for a positive surprise from second quarter GDP data after the nasty shock at the end of last year and consequently readying themselves for rate hike expectations to be brought forward again. Whether its an expression of confidence or just irrational, 'pomped up' exuberance, there's no getting away from the fact that the FTSE 100 is hovering around levels not seen in almost three years.

Next week brings another flurry of corporate earnings, by the end of which we should have an even clearer picture of how Britain Plc is really faring.

from MacroScope:

APEC’s robots stealing the show

Nov 12, 2010 10:16 UTC

robot

A guide at the "Japanese Experience" exhibition talks to Miim, the Karaoke pal robot, on the sidelines of the APEC meetings in Yokohama, Japan on Nov. 10. REUTERS/Yuriko Nakao

    Miim is one of the more popular delegates at the APEC meetings in Yokohama Japan. She sings. She dances. She tosses her shoulder length hair. She may not be able to spout an alphabet soup of APEC acronyms like the other Asia-Pacific delegates. But she's still pretty lively. For a robot.

    This week's meetings of the Asia-Pacific Economic Cooperation forum have been earnest and most comprehensive . Foreign and trade ministers issued a 20-page statement about all the things they talked about -- a giant free trade zone, protectionism, the Doha round, easing restrictions on businesses, simplifying customs procedures, promoting green industries, cooperating on health and security, you name it. They also have been, and pardon my French here, excruciatingly dull. So far, the meetings and their stupefying statements have been a testimonial to Japan's skill at stating the ambiguous. Call it the opaque meetings. Journalists from around the Pacific rim have been desperately trying to find news as the 21 APEC leaders gather for their annual pow-wow this weekend.

     The annual "silly shirts"  photo shoot, in which leaders don native attire for the class picture of their summit is usually good news fodder, but is going to be a  big let-down this year. The leaders are merely being asked to show up wearing "smart casual" for the photo shoot on Saturday night, before they head inside for a Kabuki show.

   Which brings us back to Miim, the karaoke robot. She, er it, is one of 130 exhibits on display at  "Japan Experience", a government-sponsored exhibition in  the Pacific Yokohama convention center where the APEC meetings are taking place. The exhibit also features "personal mobility vehicles",  a cyborg suit named HAL that enables the wearer to lift really heavy stuff and perform heroically in disaster relief, a talking delivery robot, cute robotic seal pets for use in pediatric therapy, and much other cool stuff . 

    "Welcome to APEC Japan 2010," the anatomically correct Miim says. "This exhibition shows Japan's strengths and attractions. Please see, feel and touch advanced technology and initiatives of Japan."JAPAN

 The sun sets on Nov. 11 over Yokohama, Japan, the host for this week's APEC meetings. REUTERS/Yuriko Nakao

    "Japan Experience" guide Taeko Hamamoto says the exhibition is meant to illustrate some of the key themes at this week's APEC meetings. "It shows the APEC growth strategy, including an emphasis on human security, innovations like green technology, and transportation. It also shows Japan's amazing cutting edge technology in these areas."  

    As befits this theme, the leaders will gather for their talks around a "digital pond" in which virtual koi fish swim, and virtual leaves fall around a virtual stand of bamboo. It is meant to make the leaders feel like they are in a retreat in the autumn woods, a press handout says.  In the anteroom of this retreat, the leaders will view a showcase of  traditional items as well as stuff representing modern, high-tech Japan. Borrowing a slogan used for Brtain's promotions, it'ss being called "Cool Japan".

Perhaps the atmosphere will calm the heated debate about currencies and global imbalances at this week's Group of 20 meetings in Seoul this week. So far in Tokyo it's been all cybernetics and no pyrotechnics.

    Maybe the next time Japan hosts an APEC summit two decades from now, Japan's leaders will be confident enough to  stage a class photo of leaders resplendent  in cyborg suits. And a future edition of Miim can act as karaoke translator at the press conferences. That certainly would liven things up.

from Jason Subler:

Expo diplomacy and the Greek rescue

May 1, 2010 12:19 UTC

My colleague Edmund Klamann offers this dispatch from the Shanghai World Expo:

Outdoors at the sprawling Shanghai World Expo site on opening day, ubiquitous loud-speakers warned the afternoon crowd of hundreds of thousands that the line to enter the German Pavilion was three hours long and they should visit other pavilions.

But inside the Greek Pavilion, where Deputy Prime Minister Theodoros Pangalos spoke to a small group of staff and dignitaries at an opening ceremony, the impatience was palpable as his country's larger European neighbours deliberate over rescue measures.

"We are big enough to face our own problems," he told a brief, informal news conference after the ceremony.

"We cannot face global speculation. This has to be faced by European policy, which is lacking."

The harsh remarks for his fellow Europeans contrasted sharply with the warm words reserved for his hosts in China.

Even in touting the pavilion, which Pangalos hoped would present Greece as an attractive place to visit, he praised Chinese tourists as "interested in culture -- they don't over drink and they don't go around naked, unlike other Europeans".

He said his own socialist PASOK party was close to China's Communist Party and he would be back in China again in a month for a conference among political parties.

"Both China and Greece have a mixed economy," he said.

He did not answer directly about whether this trip to China, which runs from Thursday to Sunday, included a plea to buy Greek bonds, although he said discussions with Vice Premier Li Keqiang included economic relations between the two countries.

With tongue in cheek, but clearly acknowledging China's clout, he also proposed a tourist exchange with China of 10 percent of each country's population -- which would translate into some 130 million Chinese visiting Greece and just over 1 million travelling in the other direction.

from Emily Flitter:

A spiral for Europe?

Apr 28, 2010 16:02 UTC

Quelling the European debt crisis will take more than just a bailout package for Greece, says one expert in financial contagion. Other countries with shaky fiscal profiles need to get their finances in order--and fast. 

 Lasse Pedersen, a professor of finance at New York University's Stern School of Business, has made a close study of liquidity spirals in financial markets, and he sees parallels between his work and the European crisis. 

"Here the spiral is that the more concerned people will be about whether Greece can pay back its debts the higher the interest rate they will demand, and the higher the interest rate they demand the harder it will be. For instance, if the interest rate payments increase two or three times or more, it can become difficult to meet these payments even with a sound economic policy,"  Pedersen said in an interview. 

The danger that the feedback between investor anxiety and higher rates could appear in other European countries is real and needs some proactive attention, he added. 

"I do think that the contagion risk is very real and perhaps the way to stop it is for the International Monetary Fund or the European Union to already now think about making a deal with other countries like Portugal that aren't in immediate trouble now." 

 The other countries where high debt-to-GDP ratios have already attracted concern also need to move more quickly with reforms, Pedersen said. 

 "These countries have to realize that the main party that has to save them is themselves--they have to have a responsible fiscal policy that means they can pay back whatever debt they have." 

If they don't act decisively to show they can repay their loans, no amount of outside aid will help, Pedersen added. 

"Bridge loans, if they are a bridge to nowhere, won't help."

America’s Route to Recovery: Part Three – The Mind Factory

Dec 30, 2009 19:52 UTC

For the Reuters multimedia project Route to Recovery, a team of journalists toured America to examine the impact of the recession and posted their reports on reuters.com. For the last installment in the series, reporter Nick Carey has written an extended overview of the challenges and opportunities facing the country.  The third part of this three-part report is below. Click here for part one.

The idea of the “knowledge economy” is a common thread in different parts of America.
Commercializing research and leveraging highly-qualified university students, plus helping create small businesses via incubators has become a major focus in many communities.

The University of Alabama at Birmingham, for instance, has an incubator called the Innovation Depot, which provides low-cost space and resources for small startup firms. The incubator is currently home to around 70 small companies.

UAB’s annual research budget of around $400 million is 80 percent focused on biomedical research, followed by engineering and the physical sciences.

Birmingham, like Youngstown, was once a steel town. The city’s population has dropped more than 30 percent to 230,000 from 340,000 in 1960 and it has focused too frequently on trying to lure back big industry, according to Richard Marchese, vice president of research at UAB.

“The city has done its fair share of chasing smokestacks,” he said. “Birmingham has undergone an important adjustment by realizing that it needs to transform itself from an industrial based economy into an economy driven by innovation.”

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Parts of the former iron plant Sloss are seen at the new Sloss Furnaces National Historic Landmark in Birmingham, Alabama November 14, 2009. Sloss became a museum after producing iron for nearly 90 years, which gave rise to Birmingham for almost a century.  REUTERS/Carlos Barria

Youngstown, like Birmingham, is betting part of its future on an incubator, the Youngstown Business Incubator, which has 28 business-to-business software firms in its portfolio with some 300 employees. The incubator occupies three renovated buildings in downtown Youngstown — which was mostly dead a few years ago — and will move into a fourth in 2010.

“We didn’t want to have a broad range of industries that we couldn’t serve properly,” said James Cossler, the incubator’s CEO. “We wanted to pick one sector and be a world class incubator… We picked software because it is in almost everything we use.”

One condition for startups to receive benefits and resources, including deferred and reduced rent and paid utilities for furnished offices, is they must share their expertise and resources with other member companies, even after they “graduate” and move out.

Craig Zamary owns Green Energy TV, which he describes as the “YouTube of the green movement.” It takes videos from around the world on innovations in alternative energy.

Zamary said that not long after Green Energy TV moved into the incubator in early 2008 he told a fellow business owner he was having trouble with code for his website. The next day the fellow business owner turned up with the code he needed.

“I was wondering what he was going to bill me for it, but he said ‘That’s not how we do things around here,’” Zamary recounted. “Some day if he needs something from me I’ll be able to repay the favor.”

Cossler said office space in Youngstown’s incubator costs $8 per square foot compared to $200 in Silicon Valley, while “programming talent” costs about 60 percent more in California. There are also several universities within an hour’s drive, including Youngstown State University a few blocks away.

Cossler said criticism of the incubator — that it will not return Youngstown to its former size — has been misguided.

“We’re not going back to where we were,” he said. “Nothing can take us back and we have had to embrace the fact that we are going to be a smaller city.”

“But it’s absolutely realistic to expect that within a few years we could have 2,000 to 3,000 people employed here,” at the incubator or around it, he added. “This could be very powerful and very transformational for Youngstown.”

Youngstown’s Plan 2010 was developed by Youngstown State University in conjunction with the city and reflects a common thread between this city and other parts of the country like Rhode Island, Birmingham, or Austin, Texas, in that all of them have developed a strategy requiring cooperation between the authorities, local businesses and a local university.

KOWTOWING TO THE CREATIVES

Unlike Youngstown, Birmingham or Rhode Island, Austin has had a business development strategy in place since the 1980s.

“We made a very clear and conscious decision that above all we were going to kowtow to the creative classes,” said Lee Cooke, a former mayor.

From food to music and entrepreneurial opportunities, Austin has focused on attracting creative people.

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People eat at Chuy’s Tex Mex restaurant in Austin, Texas, November 5, 2009.  REUTERS/Lucy Nicholson

“It’s very simple. Creativity begets creativity,” said local state senator Kirk Watson.

Austin’s strategy has paid off. The city’s population has tripled to around 750,000 in 2009 from 250,000 in 1970. According to the U.S Bureau of Labor Statistics, the city of Austin had the highest level of job creation in America from 2003 to 2008. Private sector jobs overtook public sector ones — it is the Texas state capital — in the mid-1990s.

Austin has become known as a city of entrepreneurs — Michael Dell founded computer maker Dell Inc while studying at the University of Texas in 1984 — and has grown as people have flocked here looking for jobs.

While the inflow has slowed during the recession, the city is still a magnet for people like Norbert Wangnick.

An entrepreneur who sold his niche recruitment firm in Germany at the peak of the market in 2007, Wangnick, 45, moved to Austin late in 2008. After a year off, he is looking to either invest in a company or start a new one.

“Austin has so much energy,” he said. “It’s a great place to be if you want to start a business.”

The city, which hosts the annual SXSW live music festival and considers itself a cultural oasis in Texas, is a strongly Democratic city in a Republican state. Former mayor Cooke, a Republican, said Austin’s political leanings are not in line with his own or the more conservative business establishment. But he added that this fact is irrelevant.

“The choices we have made concerning the economic future of this city transcend politics,” he said. “This is about everyone pulling together.”

Cooperating for the good of the community is something Cooke said is lacking at the national level in America.

“I’d like to get rid of all 535 politicians in Washington and get rid of all the politics of the last 75 years,” he said. “Washington is all about the politics of self-perpetuation, not doing what is right for the country.”

The cornerstone of Austin’s strategy is coordination among the city, businesses and its biggest asset — the University of Texas at Austin. With 50,000 students, it is one of the country’s largest universities and a research powerhouse — biomedical science, engineering, math, physical sciences. UT vice president for research Juan Sanchez estimates some 10 companies graduate from the university’s incubator every year.
Senator Watson said Austin’s fortunes have been a mixture of luck and the sense to capitalize on its “enterprise value.”

“We were lucky in that we weren’t like Detroit, we didn’t have an old industrial factory to protect,” he said. “In places like Detroit it’s understandable spending a lot of energy trying to save the old factory because it means jobs for local people. What we have here is UT.

“UT is our mind factory.”

Watson describes that “mind factory” in largely industrial terms, even referring to students as “natural resources.”

Watson and Gary Farmer, chairman of Opportunity Austin — a regional economic development strategy — recall visiting Samsung Electronics Co Ltd in South Korea in 2005 with UT’s Sanchez to persuade the world’s top maker of memory chips to choose Austin for a new semiconductor plant.

Watson and Farmer say a critical moment came when Sanchez informed Samsung executives that there were hundreds of Korean students at UT. In April 2006 Samsung said it would invest $3.5 billion in a plant here creating nearly 1,000 jobs.

“The authorities in Austin, the business community and the university have marched in step for a long time,” Sanchez said. “Much of this has been based on the recognition of UT’s potential.”

Sanchez said such recognition is growing in America.

“There is a growing understanding that intellectual capital is going to be at least as important as manufacturing and natural resources,” he said.

FIXING ‘K THROUGH 12′
Conversations with civic and business leaders around the country support that statement.

In Evansville, Indiana, while Mayor Jonathan Weinzapfel laments Whirlpool’s decision to move production abroad, the company’s decision to keep its research and development facility here is something he says the city can build on.

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A worker walks out of the Whirlpool plant at the end of his shift in Evansville, Indiana November 23, 2009.  REUTERS/Brian Snyder

In cooperation with colleges like the University of Southern Indiana, Weinzapfel argues Evansville may be able to attract other R&D operations. “You have to find what your strengths are,” he said. “And you have play to those strengths.”

Locals around Bentonville, Arkansas — home to America’s biggest private employer Wal-Mart Stores Inc — say it is no coincidence that while Arkansas has one of America’s worst education systems, this local area’s school system is among the better performers.

“Walmart has provided a lot of support for the local school system,” said Jonathan Watson, pastor at the Bella Vista Assembly of God in nearby Bella Vista. “This is no accident, as Walmart uses the schools as a feeder system for providing well-educated future employees for its headquarters.”

According to Andreas Schleicher, the Paris-based head of the indicators and analysis division of the Organization for Economic Cooperation and Development (OECD) — a group of 30 mostly high-income, democratic nations — the problem with primary and secondary education in the United States, known as K through 12, is that it has been in suspended animation.

“For decades America has mostly been treading water while the rest of the world has been working hard to get ahead,” he said.

In 2007, some 78 percent of U.S. high school students graduated, slightly below the OECD average of 82 percent.

OECD data from the 1960s shows that 80 percent of American children graduated from high school then, compared to just 37 percent in South Korea. Now some 97 percent of South Korean children complete high school.

“America has been falling behind,” Schleicher said. “By the age of 15 a quarter of American students have problems with math and science, which foreshadows the problem many have completing high school.”

He added that although America spends more on education than many countries, its school systems are far more uneven in quality, particularly in inner cities. The graduation rate in some inner cities in America in 2008 was 50 percent or below.

“We’ve known about problems with America’s education system for the past four decades, but we haven’t had to deal with them,” said Mesirow Financial’s Swonk. “We were able to just stick under-educated people in factories and not worry about dealing with the problem. That is no longer an option.”

Sheldon Steinbach, a senior counsel in the postsecondary education practice at Washington-based law firm Dow Lohnes, said the United States has plenty of top-quality colleges and universities, but the problem does not lie there.

“As the old saying goes, if you put garbage in you get garbage out,” he said. “America’s K through 12 system has been broken for a long time and I am not sure if can be fixed because there are too many different authorities, federal, state and above all local, involved.”

UT’s Sanchez said if more young people make it to higher education, the pieces are in place for long-term growth.

As he notes, according to the OECD America still leads the way in research and development (R&D) spending. In 2007, the latest year for which data are available, America accounted for around 41 percent of R&D spending in the OECD. Japan was next with 26 percent. China’s R&D spending was equivalent to around 11 percent of the OECD total.

“It was not so long ago that China spent nothing on R&D,” Sanchez said. “Now they are a major power.”
“America is still clearly the global leader by a long way,” he added. “But we can’t afford to rest on our laurels.”

Two of the problems with the U.S. college system, however, are that it is expensive and too little is done to prepare school children to apply. State colleges and universities charge on average close to $20,000 a year, while some private institutions charge $30,000 to $50,000, Steinbach said.

David Kyvig, a distinguished research professor in the history department at Northern Illinois University, whose specialties include the Great Depression, notes that President Franklin D. Roosevelt’s New Deal in the 1930s helped but did not solve the country’s economic ills. World War Two lifted the economy thanks to massive government spending, funded by higher taxes. The U.S. government deficit stood at $10 billion in 1939 but hit $100 billion in 1944.

“The myth today is that Americans will never accept higher taxes,” Kyvig said. “But the deficit during the war was funded by higher taxes and Americans were willing to pay more because they knew it had to be done.”

He said that a large chunk of government spending went on the GI Bill — passed in 1944, it provided returning World War Two veterans with a college or vocational education.

“The GI Bill was the backbone of a quarter of a century of American prosperity and helped create America’s middle class,” Kyvig said. “It was not cheap, it cost an awful lot of money. But it paid off.”

Former Austin mayor Cooke, a Republican, agrees something like the GI Bill could help now. “Americans will pay more in taxes if they know what they’re paying for,” he said.

In 2002 some 52 percent of high school graduates went on to tertiary education. That figure reached 62 percent in 2009 and is expected to hit 64 percent in 2010.

“We still have a long way to go,” said Opportunity Austin chairman Farmer, echoing state senator Watson’s analogy: “We need to develop a better pipeline for our mind factory.”

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A worker stands inside a freezing room at a shrimp possessing plant in Bayou La Batre, Alabama November 10, 2009. REUTERS/Carlos Barria

ATTRACTING THE BEST AND BRIGHTEST
The six-minute plus video that Mary Tribble prepared for the annual meeting of the Charlotte Chamber of Commerce is aimed at encouraging business to embrace another changing dynamic in the U.S. economy — immigration.

As technicians bustle about preparing for the meeting, Tribble plays the film, making a slightly nervous gesture that says “humor me, please.” A music video appears entitled ‘I see,’ featuring ordinary residents of Charlotte, many of them Asian, Hispanic or black.

“This is a major departure for the chamber,” said Tribble, owner of Tribble Creative Group, an event organizing firm. “The cast of this film does not reflect the composition of the audience that will see it.”

What she means is while those in the video are ethnically diverse, the audience will be almost entirely white.

“Charlotte has changed a lot over the past few decades and the people here need not just to be aware of that fact, they should embrace it,” she said. “If we embrace diversity, more people will come and keep our local economy growing.”

Charlotte saw its white, non-Hispanic population decline to 55.3 in 2008 percent from 70 percent in 1990. Its black population edged up to 28.7 percent from 26.3 percent during that period but its Asian population more than doubled to 3.9 percent and Hispanics soared to 10.2 percent from 1.3 percent.

It’s a similar story nationwide. In 1900 one in eight Americans was not white, by 2000 that number was one in four. Census Bureau projections put whites in the minority by 2050.

Immigration has become a hot button issue, especially when it comes to low-skilled Hispanic workers from south of the border. Critics complain these immigrants steal American jobs.

But many people warn against shutting the doors to newcomers, noting that a big part of America’s success has been its ability to attract the highly educated people who can contribute to future U.S. prosperity.

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A businessman walks in downtown Charlotte, North Carolina November 16, 2009. REUTERS/Carlos Barria

“The last generation of immigrants in has a tendency to want to close the door behind them,” said Swonk. “But if we descend further into populism we risk losing that ability.”

Since the al Qaeda attacks of Sept. 11, 2001, the visa process for foreign students has become tougher, and the system also makes it hard for many to stay after they graduate.

CTS’ Singh in Alabama describes himself as the “poster child” for what America has represented to the world.

Revealing a history he says he has preferred not to divulge over the years, Singh said he came to America in the mid-1980s as a college dropout from India. While flipping burgers for a living, a chance meeting with an academic who interrogated him about the courses he had taken in India led to an invitation to enroll in an MBA course at Georgia College & State University in Milledgeville, Georgia. After his MBA , he did consulting work for some large southern corporations.

“Here I was advising the CEOs of big companies two years after flipping burgers,” Singh said. “The point being that with an education anything is possible in America.”

He said on recent visits to India he has talked to young, well-educated Indians who feel less inclined to come to America because of visa difficulties, plus growing employment opportunities closer to home as the Indian economy grows.

“America’s two biggest strengths have been its ability to reinvent itself and its ability to attract the best and brightest from around the world,” Singh said. “The moment that stops being the case, it’s over.”

DETERMINATION
There is no doubt the world’s largest economy faces a multitude of challenges. But many are convinced they can be overcome. The feeling among many Americans is that the United States must embrace what needs to be done and move forward.

In Youngstown, Congressman Tim Ryan believes that thanks to its software incubator and other local businesses, “this area could lead the recovery.”

State representative Bob Hagan — who watched this city stagger and fade as the steel mills left — is also convinced that Youngstown, and America, will emerge stronger.

“We can make a better future for our children,” he said. “But it won’t be quick, it won’t be easy and at times it will be painful.

“We will get there. But we’re not there yet.”

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Resident ride their bikes along the coastal area in Gulfport, Mississippi November 9, 2009. REUTERS/Carlos Barria

COMMENT

I like the “mind factory” concept. It could help turn things around for many people in the USA, but only if the state and federal governments stay out of the way. Unfortunately, high taxes and onerous regulations will continue to stifle much creative thinking.

America’s Route to Recovery: Part Two – A New Revolution

Dec 29, 2009 22:28 UTC

For the Reuters multimedia project Route to Recovery, a team of journalists toured America to examine the impact of the recession and posted their reports on reuters.com. For the last installment in the series, reporter Nick Carey has written an extended overview of the challenges and opportunities facing the country.  The second part of this three-part report is below. Click here for part one.

Leslie Taito is executive director of Rhode Island Manufacturing Extension Services (RIMES), a nonprofit that provides consultation for small and medium-sized manufacturers in Rhode Island, a state of 1 million people.

Rhode Island was the home of America’s first mechanized cotton mill, but since Taito arrived 16 years ago, the number of manufacturers here has fallen to 1,945 from 2,800. Still, she believes that all of those that are left can be helped to survive and thrive — and the best way is to get smart and not try to compete with low-cost Chinese producers.

“Manufacturers have to specialize and find a niche where they develop high-end goods that are not sold just based on cost,” Taito said. “Sure, China can make it cheaper than we can,” she said, while weaving in and out of traffic en route through the heart of Providence. “But what they don’t have is the design or engineering capabilities that we do.”

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Maria Montero carries plastic products for quality control inspection at Blow Molded Plastics in Pawtucket, Rhode Island November 17, 2009.   REUTERS/Brian Snyder

One of the companies that RIMES has worked with in the past is Pawtucket-based Blow Molded Specialties, which makes products from hot plastic that is blown into molds where it sets. Its clients are predominantly in the healthcare sector.

President and majority owner Tom Boyd describes how the company’s largest customer switched production of a basic product to Mexico because it could be made there for 2 cents apiece instead of 8 cents in the United States.

That company had accounted for some 35 percent of business. “That was nearly the end of us,” Boyd said with a wry smile.

So instead of trying to compete on low-cost products, Boyd’s company specializes in high-end, complicated and intricate products, and even develops products for customers.

In the company’s meeting room, he shows off some of the firm’s products including one which looks almost like a plastic accordion and is about the same size, with evident pride.

This, he explains, is a plastic bellows his firm developed for a healthcare company, whose name he says he cannot divulge. It has a special function. Conventional practice in organ transplants has been to ship organs on ice. But Boyd says it has been found that a better way to ship organs is to keep them functioning, and the bellows he holds in his hands is part of a device to keep a set of lungs pumping while in transit.

Asked how much Blow Molded charges for a pump like this, Boyd shrugs his slight shoulders. “Maybe a few dollars each. And we only sold a few of them.”

But then he leans forward with right eyebrow and right forefinger raised. “Ah, but you see, the money’s not in the product,” he said, his grin widening. “The money’s in the engineering. We bill our customers for the development work we do.”

Communities around the country say they want to attract small firms like Blow Molded rather than focus on major corporations, for the simple reason that when a giant plant shuts down, it is almost impossible to replace the jobs lost.

The classic example is Wilmington, Ohio, where empty store fronts on Main Street are grim testimony to what happened when DHL axed nearly 10,000 jobs.

“When a big company like that goes, it leaves a very large hole to fill,” said Mayor David Raizk (pronounced “risk.”)

“I’d rather see 200 small companies with 50 employees each than one big one,” he said. “You can lose one, two or even 10 of those and find a way to replace them. Big companies are great when they’re in town, but when they leave they devastate communities.”

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A pelican flies near a fisherman in Pensacola, Florida November 11, 2009. REUTERS/Carlos Barria

One such small firm is Computer Technology Solutions Inc, the largest privately-held software firm in Alabama, which has added some 40 jobs this year and now employs 150 people. “If that’s what we can do in a recession, imagine how we can do when the economy improves,” said president Sanjay Singh.

CTS got its start in a business incubator run by the University of Alabama in Birmingham. Singh said that unlike big corporations — which tend to be bureaucratic, slow-moving and inclined to withhold responsibility from young employees — CTS gives its 20-something employees multimillion-dollar projects to run on their own.

“If you give young people responsibility, they deliver,” he said. “We don’t hang over our employees’ shoulders waiting for them to get things done, we just let them do it.”

GREEN ECONOMY A LONG HAUL
There are great expectations that alternative energy or the “green economy” will help move America forward.

According to Lisa Frantzis, managing director for energy at Navigant Consulting Inc, in 2009, 7,000 megawatts of wind power was installed in America with the creation of 70,000 jobs — 50,000 direct and indirect jobs, plus 20,000 service-related jobs. Solar power saw 300 megawatts installed with the creation of 60,000 jobs.

Jay Paidipati, a Navigant managing consultant who works with Frantzis, said because of the industry’s breadth and relative youth, it is hard to make forecasts. “I would feel comfortable saying that the number of green jobs will be in the millions,” he said. “Just how many millions, I don’t know.”

ROUTE-RECOVERY/

Mesquite Lake Cattle Manure Power Plant is seen in El Centro, California, November 3, 2009.  REUTERS/Lucy Nicholson

It will be years, however, before that potential is realized. One of the main problems is the mass of rules and regulations that make building plants a lengthy process.

Imperial County in southern California has hit on a novel way to get around red tape, using a provision of state law that allows local authorities to streamline the approval process for building a plant, as long as it is under 50 megawatts.

This loophole enables officials to handle the approval process in as little as a year, compared to several years at the state level.

“Getting anything done in California is hard,” said Imperial Valley Economic Development Corporation CEO Tim Kelley, at his office in El Centro some 100 miles (160 km) east of San Diego. “But it is less hard to get it done here.”

This area has 360 days of sun a year and has suitable geological conditions for geothermal power — there are 10 such plants already. Thirty others for solar, geothermal and wind facilities, are in the process of acquiring permits.

Red tape is not the only challenge.

Paul Rich is chief development officer at Deepwater Wind LLC, which aims to develop America’s first offshore wind farm, in Rhode Island. The farm, which would eventually provide 15 percent of Rhode Island’s electricity, should come in two phases. The first test phase with six to eight turbines could be installed off the coast by 2012. By around 2015 the wind farm would contain around 100 wind turbines.

Rich described the coast between Maine and Maryland as the “Saudi Arabia of wind,” predicting an “enormous, exponential leap in jobs, manufacturing and infrastructure.”

Part of the reason for the long lead time is the need for extensive tests of local wind conditions, he said.
“It won’t happen overnight,” Rich said. “We are trying to create a truly new industry here and it has to be done right.”

“A far bigger concern for us is finding a qualified workforce to run and maintain the wind farm when it becomes operational.”

In blighted states like Michigan, many former manufacturing workers are already training for green jobs, even though relatively few have been created.

Matthew Derra, 41, lost his job at struggling auto supplier American Axle & Manufacturing Holdings Inc in July 2008. Now he is taking an associate degree in renewable energy and wants to find a job maintaining wind turbines.

“There’s nothing out there in my old field of work,” he said. “And there will be thousands of people out there chasing every green job, but I have to try.”

“I can’t just sit home and watch television.”

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April Metts watches television at her apartment in Providence, Rhode Island November 18, 2009.  Metts was homeless for several years before getting into her subsidized apartment as part of the Housing First RI initiative.   REUTERS/Brian Snyder

Even in California, which has America’s most aggressive climate change regulations, just 159,000 of the state’s 18 million jobs are considered “green” as of the start of 2008, according to public policy group Next 10.

Still, there are encouraging signs that money is flowing into renewable energy even in a sluggish economy.

Bill Gibson, is a business broker and principal of Gibson & Associates Inc in Pensacola, Florida. Gibson finds buyers for companies that want to sell.

He noted that companies selling luxury items are having trouble finding buyers because gun-shy banks won’t lend for that kind of investment, but he has noticed a lot more interest in renewable or alternative energy firms.

“There are definitely going to be haves and have-nots,” Gibson said. “Green energy is part of the future.”

The green energy industry is also seen as an opportunity for manufacturing firms to retool.

“What concerns me is when I hear people talking about manufacturing in the past tense,” said Virg Bernero, mayor of Lansing. “If we want wind turbines, someone here should manufacture them.”

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The Vulcan statue is seen at Vulcan Park in  Birmingham, Alabama November 14, 2009. The Vulcan statue is a symbol of old times at the iron industry in Birmingham.  REUTERS/Carlos Barria

GEEKS AT THE TABLE
Laurie White, president of the Greater Providence Chamber of Commerce, keeps a board covered in bad news — headlines from The New York Times, The Washington Post, The Boston Globe and The Economist about how badly the economy of the state has been faring. Rhode Island’s unemployment rate was 12.7 percent in November, the second highest in the country after Michigan.

“Our problems have made not just national but international headlines,” White said. “That motivates me to find a new way forward.”

Rhode Island is pinning its hopes on a strategy dubbed “Strengthening Providence’s Knowledge Economy.” It has involved bringing together local and state government, the Chamber of Commerce, the Rhode Island Economic Development Corporation (RIEDC) and hundreds of small hi-tech software companies.

“The geeks have finally been offered a seat at the table,” said business consultant Jack Templin.

White said there was an easy explanation: “The geeks are just about the only ones creating jobs right now.”
Companies like Working Planet, which handles algorithmic online market research for its clients, are now at the table.

“Up until a few years ago the chamber was focused on major companies and its existing membership base,” said Working Planet Marketing Group Inc president and co-founder Soren Ryherd. “Over the past three years the chamber has done an about face and is now also about the smaller companies that are creating jobs.”

“We have also become more organized because we need to reach the local universities so we can find and retain top talent,” he added.

Mike Saul is the interim executive director of the RIEDC and has spent much of his career as a “turnaround guy” taking poorly performing companies and making them thrive. He wants to do the same here, in part because three of his four children, like many of the state’s offspring, live outside Rhode Island because there was no work here for them.

“In any turnaround that is going to work you have to ask where is the enterprise value that I can push forward,” he said. According to Saul, the state’s education system and its wind potential create much of its enterprise value.

“Rhode Island’s attempts at economic development have been episodic in the past, but this time everyone is on the same page,” Saul said. “A crisis makes things happen. It helps individuals reinvent themselves and will help this country reinvent itself.”

Part Three – The Mind Factory

ROUTETORECOVERY/

A U.S. flag decal is stuck to the window in a door to the Harrington Hall homeless shelter in Cranston, Rhode Island November 18, 2009.    REUTERS/Brian Snyder

A NEW REVOLUTION
Leslie Taito is executive director of Rhode Island Manufacturing Extension Services (RIMES), a nonprofit that provides consultation for small and medium-sized manufacturers in Rhode Island, a state of 1 million people.
Rhode Island was the home of America’s first mechanized cotton mill, but since Taito arrived 16 years ago, the number of manufacturers here has fallen to 1,945 from 2,800. Still, she believes that all of those that are left can be helped to survive and thrive — and the best way is to get smart and not try to compete with low-cost Chinese producers.
“Manufacturers have to specialize and find a niche where they develop high-end goods that are not sold just based on cost,” Taito said. “Sure, China can make it cheaper than we can,” she said, while weaving in and out of traffic en route through the heart of Providence. “But what they don’t have is the design or engineering capabilities that we do.”
One of the companies that RIMES has worked with in the past is Pawtucket-based Blow Molded Specialties, which makes products from hot plastic that is blown into molds where it sets. Its clients are predominantly in the healthcare sector.
President and majority owner Tom Boyd describes how the company’s largest customer switched production of a basic product to Mexico because it could be made there for 2 cents apiece instead of 8 cents in the United States.
That company had accounted for some 35 percent of business. “That was nearly the end of us,” Boyd said with a wry smile.
So instead of trying to compete on low-cost products, Boyd’s company specializes in high-end, complicated and intricate products, and even develops products for customers.
In the company’s meeting room, he shows off some of the firm’s products including one which looks almost like a plastic accordion and is about the same size, with evident pride.
This, he explains is a plastic bellows his firm developed for a healthcare company, whose name he says he cannot divulge. It has a special function. Conventional practice in organ transplants has been to ship organs on ice. But Boyd says it has been found that a better way to ship organs is to keep them functioning, and the bellows he holds in his hands is part of a device to keep a set of lungs pumping while in transit.
Asked how much Blow Molded charges for a pump like this, Boyd shrugs his slight shoulders. “Maybe a few dollars each. And we only sold a few of them.”
But then he leans forward with right eyebrow and right forefinger raised. “Ah, but you see, the money’s not in the product,” he said, his grin widening. “The money’s in the engineering. We bill our customers for the development work we do.”
Communities around the country say they want to attract small firms like Blow Molded rather than focus on major corporations, for the simple reason that when a giant plant shuts down, it is almost impossible to replace the jobs lost.
The classic example is Wilmington, Ohio, where empty store fronts on Main Street are grim testimony to what happened when DHL axed nearly 10,000 jobs.
“When a big company like that goes, it leaves a very large hole to fill,” said Mayor David Raizk (pronounced “risk.”)
“I’d rather see 200 small companies with 50 employees each than one big one,” he said. “You can lose one, two or even 10 of those and find a way to replace them. Big companies are great when they’re in town, but when they leave they devastate communities.”
One such small firm is Computer Technology Solutions Inc, the largest privately-held software firm in Alabama, which has added some 40 jobs this year and now employs 150 people. “If that’s what we can do in a recession, imagine how we can do when the economy improves,” said president Sanjay Singh.
CTS got its start in a business incubator run by the University of Alabama in Birmingham. Singh said that unlike big corporations — which tend to be bureaucratic, slow-moving and inclined to withhold responsibility from young employees — CTS gives its 20-something employees multimillion-dollar projects to run on their own.
“If you give young people responsibility, they deliver,” he said. “We don’t hang over our employees’ shoulders waiting for them to get things done, we just let them do it.”

GREEN ECONOMY A LONG HAUL
There are great expectations that alternative energy or the “green economy” will help move America forward.
According to Lisa Frantzis, managing director for energy at Navigant Consulting Inc, in 2009, 7,000 megawatts of wind power was installed in America with the creation of 70,000 jobs — 50,000 direct and indirect jobs, plus 20,000 service-related jobs. Solar power saw 300 megawatts installed with the creation of 60,000 jobs.
Jay Paidipati, a Navigant managing consultant who works with Frantzis, said because of the industry’s breadth and relative youth, it is hard to make forecasts. “I would feel comfortable saying that the number of green jobs will be in the millions,” he said. “Just how many millions, I don’t know.”
It will be years, however, before that potential is realized. One of the main problems is the mass of rules and regulations that make building plants a lengthy process.
Imperial County in southern California has hit on a novel way to get around red tape, using a provision of state law that allows local authorities to streamline the approval process for building a plant, as long as it is under 50 megawatts.
This loophole enables officials to handle the approval process in as little as a year, compared to several years at the state level.
“Getting anything done in California is hard,” said Imperial Valley Economic Development Corporation CEO Tim Kelley, at his office in El Centro some 100 miles (160 km) east of San Diego. “But it is less hard to get it done here.”
This area has 360 days of sun a year and has suitable geological conditions for geothermal power — there are 10 such plants already. Thirty others for solar, geothermal and wind facilities, are in the process of acquiring permits.
Red tape is not the only challenge.
Paul Rich is Chief Development Officer at Deepwater Wind LLC, which aims to develop America’s first offshore wind farm, in Rhode Island. The farm, which would eventually provide 15 percent of Rhode Island’s electricity, should come in two phases. The first test phase with six to eight turbines could be installed off the coast by 2012. By around 2015 the wind farm would contain around 100 wind turbines.
Rich described the coast between Maine and Maryland as the “Saudi Arabia of wind,” predicting an “enormous, exponential leap in jobs, manufacturing and infrastructure.”
Part of the reason for the long lead time is the need for extensive tests of local wind conditions, he said.
“It won’t happen overnight,” Rich said. “We are trying to create a truly new industry here and it has to be done right.”
“A far bigger concern for us is finding a qualified workforce to run and maintain the wind farm when it becomes operational.”
In blighted states like Michigan, many former manufacturing workers are already training for green jobs, even though relatively few have been created.
Matthew Derra, 41, lost his job at struggling auto supplier American Axle & Manufacturing Holdings Inc <AXL.N> in July 2008. Now he is taking an associate degree in renewable energy and wants to find a job maintaining wind turbines.
“There’s nothing out there in my old field of work,” he said. “And there will be thousands of people out there chasing every green job, but I have to try.”
“I can’t just sit home and watch television.”
Even in California, which has America’s most aggressive climate change regulations, just 159,000 of the state’s 18 million jobs are considered “green” as of the start of 2008, according to public policy group Next 10.
Still, there are encouraging signs that money is flowing into renewable energy even in a sluggish economy.
Bill Gibson, is a business broker and principal of Gibson & Associates Inc in Pensacola, Florida. Gibson finds buyers for companies that want to sell.
He noted that companies selling luxury items are having trouble finding buyers because gun-shy banks won’t lend for that kind of investment, but he has noticed a lot more interest in renewable or alternative energy firms.
“There are definitely going to be haves and have-nots,” Gibson said. “Green energy is part of the future.”
The green energy industry is also seen as an opportunity for manufacturing firms to retool.
“What concerns me is when I hear people talking about manufacturing in the past tense,” said Virg Bernero, mayor of Lansing. “If we want wind turbines, someone here should manufacture them.”

GEEKS AT THE TABLE
Laurie White, president of the Greater Providence Chamber of Commerce, keeps a board covered in bad news — headlines from The New York Times, The Washington Post, The Boston Globe and The Economist about how badly the economy of the state has been faring. Rhode Island’s unemployment rate was 12.7 percent in November, the second highest in the country after Michigan.
“Our problems have made not just national but international headlines,” White said. “That motivates me to find a new way forward.”
Rhode Island is pinning its hopes on a strategy dubbed “Strengthening Providence’s Knowledge Economy.” It has involved bringing together local and state government, the Chamber of Commerce, the Rhode Island Economic Development Corporation (RIEDC) and hundreds of small hi-tech software companies.
“The geeks have finally been offered a seat at the table,” said business consultant Jack Templin.
White said there was an easy explanation: “The geeks are just about the only ones creating jobs right now.”
Companies like Working Planet, which handles algorithmic online market research for its clients, are now at the table.
“Up until a few years ago the chamber was focused on major companies and its existing membership base,” said Working Planet Marketing Group Inc president and co-founder Soren Ryherd. “Over the past three years the chamber has done an about face and is now also about the smaller companies that are creating jobs.”
“We have also become more organized because we need to reach the local universities so we can find and retain top talent,” he added.
Mike Saul is the interim executive director of the RIEDC and has spent much of his career as a “turnaround guy” taking poorly performing companies and making them thrive. He wants to do the same here, in part because three of his four children, like many of the state’s offspring, live outside Rhode Island because there was no work here for them.
“In any turnaround that is going to work you have to ask where is the enterprise value that I can push forward,” he said. According to Saul, the state’s education system and its wind potential create much of its enterprise value.
“Rhode Island’s attempts at economic development have been episodic in the past, but this time everyone is on the same page,” Saul said. “A crisis makes things happen. It helps individuals reinvent themselves and will help this country reinvent itself.”

COMMENT

I read one comment saying that their 2 children on graduation will have $100K in education debts.
Here in Sweden we can study right thru university completely free of charge, and even get a very generous monthly allowance to help with books and food etc etc

Posted by George | Report as abusive

America’s Route to Recovery: Part One – Castles Built on Sand.

Dec 29, 2009 16:26 UTC

For the Reuters multimedia project Route to Recovery, a team of journalists toured America to examine the impact of the recession and posted their reports on reuters.com. For the last installment in the series, reporter Nick Carey has written an extended overview of the challenges and opportunities facing the country. The first part of this three-part report is below:

YOUNGSTOWN, Ohio – When Bob Hagan was a boy people hereabouts equated the coke dust they swept off their doorsteps each day with opportunity, for it came from the steel mills that built this city.

After graduating from high school more than 40 years ago, Hagan worked briefly at one of the local steel mills that dominated the local economy. In 1971, he became a locomotive engineer at railroad company CSX Corp, switching rail cars in every mill and yard in the area over the years.

The job afforded him a ground-level view of the slow-moving disaster that would tear out Youngstown’s heart over the next decade and a half — as it did many other towns in America’s Rust Belt.

“In my rides through this valley on the train, I used to watch the fires of prosperity burn,” said Hagan, 60, an Ohio state representative since 1986 who still works for the railroad when not in session. “And then, years later, I watched the lights go out.”

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Barbed wire protects a building still standing from Youngstown, Ohio’s industrial past November 22, 2009.   REUTERS/Brian Snyder

On September 19, 1977 — remembered locally as Black Monday — Sheet & Tube Company laid off more than 4,000 workers in a single day. In the following years, the steel industry all but died here.

In hindsight, the big mistake was trying to save it.

“We have spent the past 20 to 25 years looking in the rearview mirror,” said Jay Williams, the city’s 38-year-old, independent mayor. “Letting go of the past has been difficult for many people because the past was so good.”

ROUTETORECOVERY/

Ohio Gas Mart owner Paramijt Singh (C) is reflected in the rear view mirror of a car while talking to his employees in Youngstown, Ohio November 21, 2009.    REUTERS/Brian Snyder

Today, the city immortalized by Bruce Springsteen’s 1995 Rust-Belt anthem “Youngstown” is moving on. Among other things, it has created an incubator to attract the types of small businesses that are expected to drive future growth. Despite the thousands of vacant homes that serve as reminders of a traumatic past and turbulent present, some business and civic leaders think this heartland city has a chance to lead the U.S. into its next era of prosperity.

Getting to there from here, however, won’t be easy — for Youngstown, for Ohio, for the nation.

BURST BUBBLES
Youngstown is an extreme but by no means unique case in America. On a basic level, it represents some of the challenges facing the country today in the wake of the longest and deepest downturn since the 1930s.

After two economic expansions based not on sustainable growth but on asset bubbles — the dotcom boom of the 1990s then the far more damaging housing mania this decade — longstanding problems have been brought into sharper focus.

Even during the recent good times, the U.S. manufacturing sector, the muscle behind U.S. post-war economic might, was buffeted as corporations shipped low-cost production overseas.

“The easy, blue-collar shot to the middle class is gone,” said Mike Rollins, president of the Austin Chamber of Commerce. “It’s going to take a lot more work to get there now.”

In short, the world’s largest economy is at a crossroads.

With a smaller manufacturing sector and a consumer base less able to keep leveraging future earnings, where will sustainable, long-term prosperity come from? And more immediately, where will jobs come from?

This is a debate that is taking place at the local level around the country, from Youngstown to El Centro, California, and many places in between. But it is also a discussion that few see taking place at the national political level.

“Washington just doesn’t get it,” said Shane Savage, a real estate agent in Pensacola, Florida, smoking a cigarette outside the home of a client who needs to sell fast in a down market. “It’s going to take a long time to fix the mess that we’re in and our politicians don’t have a clue how bad it really is out here.”

REINVENTING A NATION
Local politicians and businesses acknowledge that the answers to America’s primary problems have been long known.

The country has to get smarter and send more people to college, making it more able to compete in the global high-tech “knowledge economy” of the future. And America needs to keep attracting the world’s best and brightest to help it prosper.

Manufacturers must also continue moving up the value chain, switching to niche production that cannot be easily transferred to China or Mexico. In the future, the sector will involve fewer but more-educated workers.

Now civic and business leaders are looking closely at another part of the economic equation. After seeing the impact that the departure of large corporations can have, there is a renewed focus on fostering small businesses instead.

The reasons are simple: They create more jobs and can be more easily replaced if they leave.

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A waitress waits for plates in the kitchen of a restaurant in Bayou La Batre, Alabama November 10, 2009. REUTERS/Carlos Barria

According to the U.S. Small Business Administration, companies with fewer than 500 employees accounted for 64 percent of new jobs from 1993 to the third quarter of 2008.

Small firms also tend to be more involved in their local communities than major corporations.

“We have forgotten in this country that there is so much more to capitalism than just the exchange of goods and services,” said Amy Kedron, who runs Buffalo First, which sells books of coupons promoting businesses in this city at the far northern end of New York State. “It’s also about community.”

“And local businesses are the best at building communities,” she added, “because their owners are in it to make a living, not a killing.”

The other, not unrelated new focus is the “green” economy. Wind farms, solar panels and geothermal power plants will require someone to manufacture them, plus a trained workforce to run and maintain them. And if the private sector and government agree on anything, it’s that this industry must and will become increasingly relevant.

So at a time when critics have been quick to dismiss the U.S. economy as a has-been, some see the makings of an eventual if not immediate resurgence.

“America’s greatest ability has always been its capacity to reinvent itself,” said Diane Swonk, chief economist at Chicago-based financial services firm Mesirow Financial. “We may be able to emerge stronger and better, to the possible anger and envy of some parts of the world.”

But getting there will take a lot of time, effort and money in a nation not renowned for patience and long-term planning.

“Neither our political system nor our capital markets are used to anything but a short-term view, and fixing K through 12 is a long-term proposition,” Swonk said. “Not addressing the issue is an option we don’t have. There is a difficult decade ahead of us.”

The first step toward inventing the future, as Youngstown has found, is acknowledging that the past is gone.

“The thing we’re starting to understand is that the prosperity of the steel mills was the past,” Hagan said. “So let’s accept it and let’s move on into something that makes it even better.”

CASTLES BUILT ON SAND
What sets America’s current downturn apart from most past recessions is that the Great Recession has been national in scope. “Other recent recessions have been regional in nature,” says Swonk. “But this time, there is nowhere to hide.”

Data from the U.S. National Association of Realtors shows the median home price rose every year from 1989 to 2006 before the slide began in 2007. According to real estate website Zillow.com, as of the third quarter of this year 21 percent of all American homeowners owed more than their homes are worth. That equates to 12.4 million single-family homes with mortgages in negative equity, Zillow.com said.

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Daniel and Robin Akerman inspect their new house after buying in short sale in Pensacola, Florida November 11, 2009.   REUTERS/Carlos Barria

Real estate gains have been a major source of wealth creation and class mobility, so the hangover from the recent binge is likely to prove more painful than usual.

“I keep telling people this is not a housing downturn,” said Al Muller, a partner at Pensacola, Florida-based Metro Market Trends Inc, which tracks real estate markets in Florida and Alabama. “We are in the middle of the bursting of the biggest real estate bubble in the history of this country.”

The wealth destruction in Florida, which along with California has been among the hardest hit by the property tailspin, has been staggering.

“In the years of easy credit we all thought that we had more money,” Muller said after flicking through a wad of papers that included the names and addresses of the 3,018 foreclosures for the first 10 months of 2009 in Escambia and Santa Rosa counties where Pensacola is located.

“The people in foreclosure could be your neighbors, your friends or you could go to church with them or work with them,” Muller said pointing to the papers with evident sadness.

“We all thought (in the boom) that we could live in a bigger house. But we never realized that we were not getting any wealthier… Now there’s simply less money everywhere.”

From its peak in 2005 to the second quarter of 2009, U.S. home equity fell 37 percent, or $4.7 trillion, according to the Federal Reserve. To put that into context, China’s economic output in 2008 totaled around $4.3 trillion.

By the second quarter of 2009, Americans’ total net worth had shrunk 17 percent or $10.7 trillion from its peak in 2007.

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Leaves gather in front of an empty and boarded-up house in Youngstown, Ohio November 21, 2009.    REUTERS/Brian Snyder

FEWER JOBS EVERYWHERE
As well as their money, many have lost jobs. Unemployment stood at 10 percent in November after hitting a recession high of 10.2 percent in October. More than 7 million Americans have become unemployed since the recession began in December 2007.

For areas like Wilmington, Ohio, the job losses involved a single major employer.

This town of 14,000 was home for two decades to express delivery company Airborne Express. In 2003, Airborne was bought by DHL, a unit of German post office operator Deutsche Post, which was looking to take on America’s homegrown package giants FedEx and UPS on their home turf.

After spending billions of dollars, DHL gave up and shut down its U.S. domestic operations in January of this year, with a cost of 9,500 jobs.

DHL was the biggest employer not just in Wilmington, but in the five surrounding counties. The shock waves are being felt in communities filled with people who were able to make a good living with relatively little education.

“I hate to say it, but you have to wonder whether in the long run it was a good thing having DHL and Airborne Express here,” said Katy Farber, president of the Chamber of Commerce in nearby Highland County.

Some 2,800 people out of a population of 42,000 in Highland County lost their jobs when DHL left. The county had Ohio’s highest unemployment rate in October — 15.9 percent. Unemployment in the area before DHL began ratcheting down operations in May 2008 had long been around 3 percent.

“For decades our children were able to make $50,000 to $60,000 a year throwing boxes without even a high school diploma,” Farber said. “We have to retrain our workforce because those jobs are gone.”

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People in a truck leave after shopping at Walmart in Rogers, Arkansas, November 8, 2009.  REUTERS/Lucy Nicholson

It’s a challenge to which Michigan, home of the automobile, has become accustomed.

“The hardest thing for many auto workers who’ve been doing the same job for 25 years or so to accept is that instantly, permanently, their standard of living has been ratcheted down 80 percent,” said Douglas Stites, chief executive of Capital Area Michigan Works, a career center in Lansing, Michigan. “You may have been making $25 an hour making widgets for years, but now your skill set means you’re worth $8 an hour.”

The center is a hive of activity, with people filing in to make job applications and sign up for retraining courses.

Stites recalls a group of Hmong men who turned up after being laid off at an auto supplier. Although they moved from Southeast Asia to America decades ago, their low-skilled jobs meant they never had to bother learning English.

“What do you tell people like that?” he said. “There is no way they’re ever going to be able to sustain the lifestyle they’ve become accustomed to.”

Accepting that many of the easy, high-paid jobs of the past are gone is the first step in a process that some communities have taken toward reinvention. Youngstown, for instance, spent many years looking for a way to revive the steel industry.

“We have had to embrace the fact that we are going to be different and there is no going back to where we were,” said Mayor Williams. “But being smaller can also be better.”

Part of Youngstown’s Plan 2010 strategy involves trying to revitalize neighborhoods that can be saved and — in a city with 4,500 vacant homes — letting go those that cannot.

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A man walks past a painted building in Youngstown, Ohio November 21, 2009.      REUTERS/Brian Snyder

“We are aiming to focus on the neighborhoods that can be saved,” said Phil Kidd, a community organizer at the nonprofit group Mahoning Valley Organizing Collaborative. “But we have to accept the fact that we are going to have to wind down some neighborhoods gracefully.”

From a peak of 28.3 percent in 1953, manufacturing’s share of U.S. Gross Domestic Product fell to 11.5 percent in 2008.

Much of that decline in the recent past has been due to production moving overseas to developing nations like China or across the U.S. southern border into Mexico.

This is a source of frustration and anger for workers like the 1,100 former employees at the Whirlpool refrigerator plant in Evansville, Indiana, which has said it will shut in 2010 as the company shifts production to Mexico.

“It was like a punch in the gut,” said Natalie Ford, 42, of the announcement in August. Ford worked at the plant for nearly 19 years, while her husband Jim, 47, counts 18 years there.

“After all we have done for Whirlpool, I feel like we’ve been betrayed,” she added, her eyes misting over.

Part Two – A New Revolution

COMMENT

as i’ve said elsewhere…its pretty simple: in america you have two choices, governance by corporations or governance by ‘government’.

now ask yourselves: do you want private corporations, answerable to no one (even the u.s. senate), making the laws and controlling everything? it would be no different from n. korea or burma or the middle ages in europe! you’d have a few rich individuals on top and the rest would be serfs. its already like that in small town u.s.a. out in the heart (or hinter) lands. hell, you might say the whole country is run by the few and the privileged, since they seem to be able play congress like a fiddle. you might say that all this talk is already too late!

now, i don’t know about you, but it seems pretty simple to me; that if you’re going to let the corporations get their snouts into everything from health care to education, you’d better have a public dole and free medical for when they throw everybody out of work during technological expansions and out-sourcings.

but, if you insist on ‘working’ for a living rather than taxing the corporations and the rich into providing you a ‘living’ for sucking up our natural resources and polluting up our land and air and water and minds; then you better have a government able to provide you with ‘make work’ when you’re out of corporate work.

government created ‘make work’ is the only overnite solution! you can’t pull out of nafta or the wto overnight! you can’t rebuild all of the rust factories overnight! and you certainly can’t staff up factories you can’t rebuild overnite, overnight!!

nope, folks! corps aren’t going to do anything that’s not in their self-interest, and the repubs are the party of the white corporate upper classes. (after all, the white upper classes have their own clubs–you can’t get into (unless you’re serving)–why shouldn’t they have their own political party?) so you can count the repubs out of a recovery that doesn’t have you standing in a soup line like the poor folks in haiti!

you want to live like haiti after the earthquake? just keep voting republican!

our only hope is to clean-up of the democratic party by kicking out the dlc and blue dogs and going hard left! if we had a real party fighting to nationalize the corporations and banks, then at least we’d have a party on the road to recovery.

otherwise, you’re just on ‘the road’! (see the film, you’ll know what i mean. you’ll also see your future…’we eat, therefore we hunt’)

Austin real estate investors are aggressive in recession

Dec 9, 2009 20:19 UTC

Following our Route to Recovery special report, we asked contributors from Associated Content to tell us their stories about the recession.

By Melissa Plondke

My husband and I are some of the fortunate in Austin, Texas. As a bookkeeper for small businesses and individuals, I know how hard the recession has hit the country. I’ve witnessed local businesses falter and fail. A wealthy client of mine had to liquidate his portfolio, and he only recently has ventured back into investing. A retail client struggled mightily as customers disappeared. Friends have been impacted by pay cuts and job losses.

But we were frugal before the recession. We lapped up conventional financial wisdom. We fully funded Roth IRAs and contributed generously to a 401(k). We carried no credit card debt or auto loans. We paid some extra monthly on our 15-year fixed-rate mortgage. I was just starting my business after leaving a hospitality career.

We were poised to be the opportunists of the recession — late 20s, plenty of cash and excellent credit. But, because we were so aggressive, this year was our most financially harrowing. We ended up in a precarious position with one home too many.

Since the recession began, we have acquired two properties — a single-family rental house and a new home. We purchased both houses at value prices with hefty down payments, yet financing each was a nightmare. The investment property came first, and we suffered from the sins of previous investors.

Although many new homebuyers have less than a 20 percent down payment, some banks would not consider our application without 35 percent down. Every element of our application was scrutinized, and the financing we took to closing was a 15-year note at 8.14 percent despite pristine credit.

While it is not the double-digit interest rates of the eighties, it exceeded our expectations for a mortgage. We refinanced two months later privately at 6.21 percent. By that time, investors were looking for anything more palatable than the wild roller coaster of the stock market.

This spring, we again found ourselves in the real estate market. We happened across an under-priced home in an excellent neighborhood, one we previously could not afford. We discovered we were not the only bargain-hunters in Austin; in the three days the home was on the market, at least a dozen others viewed the home. Our offer secured a contract on the house, and we raced to meet the owner’s four-week closing deadline. We used a mortgage broker to locate affordable financing that fit within our time constraints. This time around, we obtained a 4.75 percent 30-year mortgage. We later joined record numbers of Travis County homeowners protesting their property taxes with new market values.

Our net worth was tied up in the equity of the three houses, and home equity laws in Texas would only permit us access to those funds through the sale of our previous house. We discussed the sale with a real estate agent, but negotiated the sale to colleagues prior to listing the house. Instead of a commission, the agent addressed the necessary paperwork for a fee of $2,000.

We breathed a sigh of relief when the sale closed in August. With cash in hand, we are hunting for another opportunity. Our good habits prior to the recession are paying off as others struggle.

Click here for more Route to Recovery

COMMENT

I CAN CREATE 15 MILLION JOBS ALMOST OVER NIGHT in America..

If America Pulls out of NAFTA and WTO so many jobs will be created we can not fill all of them.

I will bet anyone one million dollars to a donut that I can create 15 Million JOBS if I was President. America would instantly kick into overdrive and you would see more Jobs created than Americans could fill almost over night.

The American people have been screwed for the last 80 years and they do not even have a clue of what is happening.

All the Democrat or the Republican Congress/people and Presidents for the last 80 years in Washington D.C. of both parties do not care about America or the American People.

Most of the American Politicians have been either been bought off by the wealthy Council on Foreign Relations (CFR PARTY) or they just sit on their hands and go along to get along.

The CFR Party was founded by JP MORGAN , Paul Warburg (Jew), John D. Rockefeller (Jew), three super wealthy CFR members back in 1921 with the specific goal to control the American people by buying control of all means of communication to control and generate public support to advance the CFR Party agenda.

With control of the people they could now buy off and elect American Politicians of both parties to carry out their CFR PARTY agenda which is called International Free Trade.

But how can any country survive when all of the Politicans advocate sending all of the best paying jobs off shore to China and watch millions and millions of deplaced workers walk the street, lose thier homes, families go hungry in the name of International Free Trade.

That is exactly why the American Government is shipping all the American Manufacturing Plants off shore to China as fast as they can in the last 16 years. You are watching the largest transfer of wealth is the history of the world (from America to China). The American Federal Government is serving up all of the America wealth to China on a silver Platter.

Please tell me how America and our way of life will survive if the politicans continue destoying America?

At some point American workers will be required to compete with the Chinese workers for Slave Labor $2/day jobs. Every American regardless how much money you have will be affected in one way or another because a lowering tide will automatically lower all boats.

I think we are in the about the 8th inning right now.

If you think I am wrong I have only two questions for you to think about.

Why would AMERICA the most Wealthiest, the most Advanced, the most Strongest Country in the entire World, want to enter into NAFTA and the WTO and want to try to compete with third world Countries where the Workers are forced to work for Slave labor wages at $2/day?

There can only be one out come. All of the American International Manufacturers will be forced to move all of our great Factories that won world war II and our Technology off shore to Communist CHINA. Please tell me how that is in the best interest of the American People?

The American People has no choice in the matter either the USA pulls out of NAFTA and the WTO or at some point our country will just sink into the Abyss. You absolutely cannot have a complete Economic Recovery without Creating Good High Paying Jobs. Flipping Hamburgers at McDonald’s and working as a store clerk at Wal-mart will not do the trick.

I heard today on the news that the President Obama is going to start sharing America’s top nuclear secretes with China?

A country that has no Manufacturing base is called a THIRD WORLD COUNTRY. That is exactly where America is headed.

Once all the high paying manufacturing jobs are sent off shore to China. Please tell me where the America government will collect tax revenues to support our way of Life?

The CFR PARTY Global International Trade policy will end up driving America into total Bankruptcy, that is exactly what is happening right now. When the America people finally figure this out what is really happening it will be too late to stop it.

You want me to tell you why I already know this is the long term Plan.

Why don’t President Obama create those 15 million JOBS right now as the USA desperately needs additional Jobs?

My answer is because President Obama is a card-carrying member of the CFR Party and they have a concerted plan to redistribute all the American People’s wealth to all of the Third World Countries.

It is called enslaving the American workers and the total destruction of America as we know it. If you beat the American Worker down far enough he will be ready to accept anything you offer to feed his family.

All of you people who have money in the Bank and well fix and you love this International Trade, just wait till you lose everything then tell me about how smart you was.

Back to my Question:

How I would create 15 million jobs almost over night?

There is one thing the America Government has total Control over and that is WHERE and WHO will produce all of the products the American people buy and use on a daily basis.

I would PULL OUT OF NAFTA and the WTO and close the doors to the American Consumer Market (the biggest consumer market in the world) and I would tell the entire world if they want sell their Products in America they must build their products in America. This is exactly what China does.

I know all of you American people have been told for 80 years that protectionist will hurt the USA even more because all other countries around the world will stop buying American made products and the USA will lose a lot more American JOBS than they ever gain.

That my friend is just not true.

How can anyone make that statement without at least evaluating the Export and Import numbers?

Normally that answer is true. But, the American International trade deficit has grown so super huge in the last 16 years (and still growing); that if America just stops exporting anything and just produces the items we use on a daily bases that we are now importing mainly from China, we can create 15 million additional new jobs almost instantly.

In fact I really do not care if the rest of the world buys even one penny of American made Products from America. If America just manufactures all of the products we use on a daily bases right here in America, we will create an additional 15 Million Jobs automatically.

Also, the USA yearly National Budget Deficit will automatically be lowered by $760 Billion because that Trade Deficit Money will not be transfer off shore to China like now. The Federal Government will get a huge boost in Tax Revenues from the 15 million American higher paying Jobs.

The American Government must understand they can not continue to allow sending all the high paying American JOBS off shore to Mexico, India, China and Japan and still have enough JOBS to support the American way of life.

YOU CAN NOT GIVE SOMETHING AWAY AND STILL HAVE IT. . . .

Right now all of them 15 Million Jobs I am talking about have all been moved off shore to China, Mexico and Japan, Germany, India. They are producing all of those goods and are shipping it back to America to supple our daily needs.

Then when this very same goods is imported back into the America, the American Government who is broke, must borrow money from China and Japan to buy the very products that should have been produce right here in America in the first place.

This is Equivalent to our Stupid American Government forcing the American workers to sit on his Hands and then tell China to produce all of the goods America consumes and then when the goods is imported back into America the Federal Government is broke and are forced to borrow money from China and Japan to purchase all of this goods we are using on a daily bases.

This has got to the most stupid damn bunch in Washington or they are just conspiring to bankrupt and destroy America?

If you think I am wrong. You can goggle it and check it out for yourself. Then go to “youtube.com” and do some key word searches and listen to some of the videos and do your own research on the web.

I CAN CREATE 15 MILLION JOBS ALMOST OVER NIGHT right here in America ! ! !

Here is my Job creation Computations:

America Imported in 2006 mainly from China, Mexico, Japan and India well over $760 Billion Dollars more than we exported in 2006.

The $760 billion dollar import number that I am quoting includes Oil Imports which is something that America cannot change over night therefore must be subtracted out of total import number. The total U.S. crude oil imported during 2006 amounted to: $309.4 billion dollars of crude oil in 2006.

So, $760 billion minus $309.4 billion = $450.6 billion dollars worth of Manufactured Goods that could have and should have been produced right here in America.

Based on conventional wisdom in job creation, if you take $450.6 billion dollars worth of imported goods / $30 billion to create one million jobs = 15.02 million jobs would be automatically created almost over night.

++++++++++++++++++++++++++++++++++++++++ +++++++++
Now because some of you people still do not get it I am going to recalculate the cost of the Trade Deficit in just Jobs.

So please do not tell me the stock CFR PARTY answer: “YEA, but look at all of the EXPORTS JOBS the USA will LOSE.”

The American people have been BRAIN WASHED by the CFR PARTY into believes in that GLOBALIZATION is in the best interest of USA. I think they are trying to destroy the USA because that will be the final outcome.
++++++++++++++++++++++++++++++++++++++++ +++++++++

Total USA Imports in 2006:
———————————-
$ 2,211.7 billion ——- (this is the total Import number including all Oil Imports in 2006)
$ 309.4 billion less — (minus the total amount spent on Imported Crude Oil in 2006)
————————————————–
$ 1,902.3 billion / 30 billion=63.41 million jobs from Import. ======================================== ==========

Total USA Exports in 2006:
———————————-
$ 1,451.7 Billion / 30 billion=48.39 million jobs from Export.

If USA Pulls out of NAFTA and WTO right now:

USA could possibly lose 48.39 million Jobs from EXPORTS.

However, I am sure many countries will still export many items from the USA because they will be forced too. That would create even more jobs gained than I have estimated.

USA would absolutely gain 63.41 million Jobs from IMPORTS.

So, 63.41 minus 48.39 = 15.02 million NET JOBS GAIN.

My calculation means an ABSOLUTE 15.02 million Jobs gained if the rest of the world did not buy one penny of USA EXPORTS.

But, instead the Washington Politicians with all their Infinite Wisdom elected to move all of that manufactured goods off shore to China. Even as America has up-ward of 17% unemployment rate and climbing.

Then to make things even worse the Federal Government must borrow money from China and Japan to purchase back these very products as they are being brought back into America.

I think we are witnessing the Federal Government in the process of transferring all the America Assets off shore to Communist China on a silver platter.

The CFR PARTY goal is to turn America into a Communistic “North America Union” state consisting of Mexico, USA and Canada. The CFR are in total control of the American Government and have been for well over 80 years.

Why would the American Government sit on their hands and watch as all the Manufacturing Base and all our high Technology are being shipped off shore to a Communistic Country like China?

Make no mistake about it China is still a Communistic Country.

We are handing all of the American Military Defenses and our entire manufacturing base over to China on a silver platter.

Please tell me; “What the HELL are we going to do if we get into a War with Russia and China”?

I guess we’ll just concede the War without firing a shot like Poland did to Hitler during World War II. It looks like we would have been better off too have lost World War II to Hitler, at least we would not be forced to work for $2/day slave labor.

They must be stopped or one day America will wakeup under total Control of China Government.

This is so sad because we had it all and our Federal Government just transfers everything we own off shore to China, Mexico and India.

Have you ever asked yourself?

Why is it “when we elect a President from a different party and he always looks and acts almost identical as the last President”?

It really makes no difference who you vote for President as you will still end up getting the same party and it is called the “CFR PARTY”.

If you think I am crazy go Google it on “youtube.com”. Then Google any name along with “member of CFR”. Then start reading, reading and reading.

The American people have absolutely nothing to say about it.

You will never take back your country with the Ballot Box. I personally think it will require an all out Civil War. At some point the American People will say ENOUGH is ENOUGH and that is when all hell is going to break lose.

The Presidential Elections have been predetermined by the CFR PARTY since 1921.

Why is it every Presidential Candidates of both the Democrat and Republican Parties are always all members of the Council on Foreign Relations (CFR) which is controlled by the most wealthiest Jews in the world?

The “CFR Party” has tons of money so they figured out in 1921, if you want the President of the USA to be a card-carrying member of the “CFR Party”. They simply BUY OFF all the Presidential Candidates of both the Democrat and Republican Parties before the election even starts. Then the “CFR Party” WINS EVERY ELECTION before anyone ever casts a single vote.

Where is Joseph McCarthy when you really need him?

All of these politicians should be tried for treason and every penny of their ill-gotten wealth from all of these lobbyists confiscated and returned back to the U.S. Treasury.

This has to be a Concerted Conspiracy because most of these politicians hold Major Educational Degrees from some of the best colleges in America.

I worked as Industrial Engineer working as an Expert in Industrial Relocation, Manufacturing Efficiency & Engineering, Industrial Economy Analysis, etc. for Rockwell International. Most of my adult life was spent studying the very things of which I am posting about. So, please trust me I know exactly what I am talking about because that was my job for 30 years.

Here is the Main Problem in America.

The American People keep thinking their Representatives in Washington are looking after your interest and will always solve problems and do whatever is best for America and the American People.

Wrong!!!

If you do not listen to me then you are part of the problem too. If you think I am wrong go Google it and check it out. Then go to youtube.com and do key word searches and listen to the videos. Start thinking for yourself and doing your own research.

This is about Presidents and congress of both Democrat and Republican Representatives in Washington who have turned the operation of running the Federal Government entirely over to the Council on Foreign Relations (CFR PARTY).

This is also why Israel always gets exactly whatever they want from America. America has been helping Israel in every way possible even to the point of using borrowed money to support them.

Here is some of the things that should be done to make America Great again.

Add an amendment to eliminate all forms of “affirmative action” in every school, college and all other organizations in America.

Add an amendment to eliminate the American Electoral College System.

Add an amendment that Federal Elected Offices must have a majority of the total vote to win Office.

Add an amendment for Term Limits on all Federal Congressional Offices.

Add an amendment to abolish the Federal Reserve System because the America Treasury should be printing all money under the direction of the American Congress.

Add an amendment to put America back on the Gold Standard.

Repeal the State Home Land Security Act.

Build a Concrete Wall 15 feet high and 3 feet wide on our Southern Border and topped off with razor wire.

Rescind the Anchor Baby Law back to its original inception.

Any Illegal Aliens caught on American Soil would be given a mandatory 20 year prison sentence. Then watch them all run south back home.

Bring home all America Soldiers all over the world and shut down all of the Foreign Military Bases. We are not going to be the policeman to the rest of the world.

Add an amendment to make Lobbyist Illegal with a Mandatory 20-year prison sentence.

Appoint Ron Paul as Secretary of Treasury and very close adviser.

Appoint Lou Dobbs as Secretary of State.

Then hold the 2008 elections all over again for every office in the Federal Government.

Is there no end to the ruthlessness of the most Super Wealthiest People in the World?

If the American people wants their great Country back. There is only ONE WAY to get it back and that is march on Washington and physically take it back.

Did you think for one minute that all of those Prima Donna in Washington will give up all of that Power and money easily?

The CFR PARTY members always win the Presidential and Key Congressional elections and because it is absolute impossible to vote the CFR PARTY out of office.

You see if you control all the money in the world then you can always buy anything you want, even the United States Government.

The CFR PARTY buys-off all the main Candidates of both parties, then the American people elect one of the two carry-carrying members of the CFR PARTY every time.

The CFR Party has totally controlled the American Federal Government for well over 80 years.

So, if you want to end up working for $2/day just like the Chinese slave labor, just keep votes for your favorite Republican and Democrat Candidate. They are all a bunch of damn greedy Crooks.

SO MOTE IT BE. . . . .

Do you truly want to help straighten out the United States Government now? Then, copy and post this article everyplace on the Internet you can post.

The American People have a right to know exactly who runs our Federal Government.

BY: Harry Dingey

Have a good day my friends.

Posted by Harry Dingey | Report as abusive

The recession’s effect on my non-profit job in Charlotte

Dec 9, 2009 20:13 UTC

Following our Route to Recovery special report, we asked contributors from Associated Content to tell us their stories about the recession.

By Cheryl Williams

It was October 2008. I was sitting in the lobby at a doctor’s office in Charlotte, N.C., waiting for a physical for my new job. The waiting room was filled and all eyes were on the TV. The stock market was plummeting and it was clear that the American financial system was in crisis mode. Strangers who normally would never be speaking to each other were engaged in deep conversation about the economy. I remember thinking how blessed I was to have finally found a job.

I now work as a house mother at Angel House Maternity Home, a group home for pregnant women in Charlotte. Before coming to Angel House, most of our clients were homeless or living in shelters. Because our agency is non-profit, we felt far-removed at the time from anything going on with Wall Street. It didn’t take long for me to see how wrong I was.

In July, my boss informed us during an emergency meeting that the situation was bleak; there was a chance all of the maternity homes in the area would lose funding. She said she was preparing us for the possibility we might not have a job in the near future. Until she received the final word on budget cuts, she had to close the maternity home in August. This was bleak news for employees and for the women who lived at Angel House. They now had to find a place to stay for a month until we learned our fate.

To compensate, we cut back and have been more mindful of any kind of waste. We utilized the food bank more. We spent more conservatively. Not only were we worried we might lose our jobs, we were concerned for the pregnant women who could be forced back to the streets.

A month without a paycheck damaged my finances. Some bills did not get paid and late fees accrued. My husband had to pay for everything with a paycheck that doesn’t cover it all. I only work part-time, but the loss of $750 that month hurt. We cut 20 percent from our grocery and gasoline bills.

At work, the worry continued. In September, The Charlotte Observer reported fears of “another year of shriveled budgets” for many non-profit agencies in the area.

But after four weeks of closed doors, we learned our maternity home only lost part of its funding. We had to take a pay cut, but we’re relieved nonetheless. We can keep our jobs and the women can keep their homes.

Life is looking up a bit. But we proceed with caution on shaky financial ground.

Click here for more Route to Recovery

Racetrack owners wait out the recession in Austin

Dec 9, 2009 20:07 UTC

Following our Route to Recovery special report, we asked contributors from Associated Content to tell us their stories about the recession.

By Dacia Rivers

Peaches. Strawberries. Bell Peppers.

I have memorized the USDA’s dirty dozen list. These are my luxury items, the ones on which I splurge for organic at the government’s recommendation to protect my family from pesticides.

We have a grocery budget of $100 per week. Keeping a budget is new for us. I used to plan meals around whatever I felt like eating. Fresh tuna. Duck breasts. Expensive cheeses. Now I plan our menus using the sales flier from local Austin, Texas, grocery stores. Duck and tuna never go on sale, so we’ve traded them for chicken thighs and frozen cod.

We used to go out to eat once or twice on the weekends, but now we eat all of our meals at home. For lunch we’d hit a favorite Thai or Persian restaurant, but over the past two years we’ve eaten far more hard-boiled eggs than I care to think about.

My husband and I have always been bound by our love of travel. In our nine years of marriage, we have journeyed extensively together, always looking for new experiences. Before we had to tighten our purse strings, we would take at least one vacation a year. Even in lean years, we’d jaunt down to Mexico or off to the West Coast for a week.

But now it’s been three years since either of us have had our feet anywhere but on Texas soil.

Five years ago, my husband left his high-stress job as a producer of political campaign ads to start his own business — a sports car racetrack, where anyone with a performance automobile could pay to drive like a Formula One star without worrying about traffic or tickets.

Two years ago, our first child was born, and I left my job to stay at home with her. The racetrack had just opened, and we knew that times would be tough for a while, but we were prepared. I had saved up enough to take care of our $1,000-per-month mortgage for six months. After that, we figured the racetrack would at least be able to cover our bills.

It didn’t exactly work that way. The economy slumped and people stopped spending money on things they didn’t need. Things like racetrack memberships.

We took out a home equity loan to consolidate our bills. We cut back on anything we didn’t need, canceling our accounts with Netflix and Sirius, and buying an antenna to watch TV so we could cancel the cable.

I looked for work, but it was hard to find. I scoured Craigslist for part-time jobs, but what I found wouldn’t even cover the cost of child care. I started selling off items around our house on eBay and searching for work-from-home jobs.

I finally found one nine months ago and have since spent every minute of my daughter’s naps working. I earn enough that we can now cover bills and groceries.

Business at the racetrack is holding steady. New members trickle in, but old members are leaving at a distressing rate. Most of them are feeling the economic pinch, especially those in construction.

We do what we can and remain hopeful. We talk about the trips we will take some day. We talk about the meals we’ll have that won’t involve boiled eggs.

But for now we wait.

Click here for more Route to Recovery

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