Saturday, July 3, 2010

Reuters probes idea of nuking BP oil well

By Reuters
Friday, July 2nd, 2010

MOSCOW/WASHINGTON (Reuters) - His face wracked by age and his voice rasping after decades of chain-smoking coarse tobacco, the former long-time Russian Minister of nuclear energy and veteran Soviet physicist Viktor Mikhailov knows just how to fix BP's oil leak in the Gulf of Mexico.

"A nuclear explosion over the leak," he says nonchalantly puffing a cigarette as he sits in a conference room at the Institute of Strategic Stability, where he is a director. "I don't know what BP is waiting for, they are wasting their time. Only about 10 kilotons of nuclear explosion capacity and the problem is solved."

A nuclear fix to the leaking well has been touted online and in the occasional newspaper op-ed for weeks now. Washington has repeatedly dismissed the idea and BP execs say they are not considering an explosion -- nuclear or otherwise. But as a series of efforts to plug the 60,000 barrels of oil a day gushing from the sea floor have failed, talk of an extreme solution refuses to die.

For some, blasting the problem seems the most logical answer in the world. Mikhailov has had a distinguished career in the nuclear field, helping to close a Soviet Union program that used nuclear explosions to seal gas leaks. Ordinarily he's an opponent of nuclear blasts, but he says an underwater explosion in the Gulf of Mexico would not be harmful and could cost no more than $10 million. That compares with the $2.35 billion BP has paid out in cleanup and compensation costs so far. "This option is worth the money," he says.

And it's not just Soviet boffins. Milo Nordyke, one of the masterminds behind U.S. research into peaceful nuclear energy in the 1960s and '70s says a nuclear explosion is a logical last-resort solution for BP and the government. Matthew Simmons, a former energy adviser to U.S. President George W. Bush and the founder of energy investment-banking firm Simmons & Company International, is another calling for the nuclear option.

Even former U.S. President Bill Clinton has voiced support for the idea of an explosion to stem the flow of oil, albeit one using conventional materials rather than nukes. "Unless we send the Navy down deep to blow up the well and cover the leak with piles and piles and piles of rock and debris, which may become necessary ... unless we are going to do that, we are dependent on the technical expertise of these people from BP," Clinton told the Fortune/Time/CNN Global Forum in South Africa on June 29.

Clinton was picking up on an idea mooted by Christopher Brownfield in June. Brownfield is a one-time nuclear submarine officer, a veteran of the Iraq war (he volunteered in 2006) and now a nuclear policy researcher at Columbia University. He is also one of a number of scientists whose theories rely not on nuclear bombs -- he did toy with that thought for a while -- but on conventional explosives that would implode the well and, if not completely plug it with crushed rock, at least bring the flow of oil under control. "It's kind of like stepping on a garden hose to kink it," Brownfield says. "You may not cut off the flow entirely but it would greatly reduce the flow."


Using nuclear blasts for peaceful ends was a key plank of Cold War policy in both the United States and the Soviet Union. In the middle of last century, both countries were motivated by a desire to soften the image of the era's weapon of choice.

Washington had big plans to use peaceful nuclear explosions to build an additional Panama Canal, carve a path for an inter-state highway through mountains in the Mojave Desert and connect underwater aquifers in Arizona. But the experimental plans were dropped as authorities learned more about the ecological dangers of surface explosions.

The Soviet program, known as Nuclear Explosions for the National Economy, was launched in 1958. The project saw 124 nuclear explosions for such tasks as digging canals and reservoirs, creating underground storage caverns for natural gas and toxic waste, exploiting oil and gas deposits and sealing gas leaks. It was finally mothballed by Mikhail Gorbachev in 1989.

The Soviets first used a nuclear blast to seal a gas leak in 1966. Urtabulak, one of its prized gas-fields in Uzbekistan, had caught fire and raged for three years. Desperate to save the cherished reserves, Yefim Slavsky, then Minister of Light Industry, ordered nuclear engineers to use the most powerful weapon in their arsenal.

"The Minister said, 'Do it. Put it out. Explode it,'" recalls Albert Vasilyev, a young engineer and a rising star in the project who now teaches at the Lenin Technical Institute in Moscow.

Vasilyev remembers the technology behind the program with obvious pride. "The explosion takes place deep underground," he says. "We pinch the pipe, break it and the pipe collapses." According to Vasilyev, the blast at Urtabulak sealed the well shut leaving only an empty crater.


In all, the Soviets detonated five nuclear devices to seal off runaway gas wells -- succeeding three or four times, depending on who you talk to. "It worked quite well for them," says Nordyke, who authored a detailed account of Soviet explosions in a 2000 paper. "There is no reason to think it wouldn't be fine (for the United States)."

But not everything went smoothly. Vasilyev admits the program "had two misfires". The final blast in 1979 was conducted near the Ukrainian city of Kharkov. "The closest houses were just about 400 meters away," Vasilyev recalls. "So this was ordered to be the weakest of the explosions. Even the buildings and the street lamps survived." Unfortunately, the low capacity of the device failed to seal the well and the gas resurfaced.

Alexander Koldobsky, a fellow nuclear physicist from the Moscow Engineering and Physics Institute, insists the peaceful nuclear explosions were safe. The people who worked on the program "were brilliant professionals", he says. "They had a culture of safety, which did not accept the word 'maybe', but only accepted the words 'obligation' and 'instruction.' Any derivation from these in nuclear technologies is a crime."

Still, he concedes, "there were different scenarios of what happened after an explosion." At his first blast in a Turkmen gas field in 1972, "the stench was unbearable," he says. "And the wind was blowing toward a nearby town." He closes his narrow lips into a smile as if refusing to say more.

Koldobsky shrugs off any suggestion of fear or emotion when the bomb exploded. "I felt nothing. I was just doing my job."


Not everybody is so sanguine about the Soviet experience. Speaking on condition of anonymity, an expert from Russia's largest oil exporter Rosneft, urges the United States to ignore calls for the atomic option. "That would bring Chernobyl to America," he says.

Vladimir Chuprov from Greenpeace's Moscow office is even more insistent that BP not heed the advice of the veteran Soviet physicists. Chuprov disputes the veterans' accounts of the peaceful explosions and says several of the gas leaks reappeared later. "What was praised as a success and a breakthrough by the Soviet Union is in essence a lie," he says. "I would recommend that the international community not listen to the Russians. Especially those of them that offer crazy ideas. Russians are keen on offering things, especially insane things."

Former Minister Mikhailov agrees that the USSR had to give up its program because of problems it presented. "I ended the program because I knew how worthless this all was," he says with a sigh. "Radioactive material was still seeping through cracks in the ground and spreading into the air. It wasn't worth it."

"Still," he says, momentarily hard to see through a cloud of smoke from his cigarettes, "I see no other solution for sealing leaks like the one in the Gulf of Mexico."

The problem, he goes on, is that "Americans just don't know enough about nuclear explosions to solve this problem ... But they should ask us -- we have institutes, we have professionals who can help them solve this. Otherwise BP are just torturing the people and themselves."


Nordyke too believes the nuclear option should be on the table. After seeing nine U.S. nuclear explosions and standing behind the control board of one, he estimates that a nuclear bomb would have roughly an 80 to 90 percent chance of successfully blocking the oil. According to his estimates, it would have to be an explosion of around 30 kilotons, equivalent to roughly two Hiroshima bombs or three times as big as Mikhailov's estimate. The explosion would also need to remain at least 3 to 4 miles away from other offshore wells in the area.

The bomb, says Nordyke, would be dropped in a secondary well approximately 60-70 feet away from the leaking shaft. There it would create a large cavity filled with gas. The gas would melt the surrounding rock, crush it and press it into the leaking well to close it shut.

Although the BP well is thousands of feet deeper than those closed in the Soviet Union, Nordyke says the extra depth shouldn't make a difference. He also says that so far below the ground, not much difference exists in onshore or underwater explosions -- even though the latter have never been tried.

Nordyke says fears that radiation could escape after the explosion are unfounded. The hole would be about 8 inches in diameter and, despite the shockwave, the radiation should remain captured. Even in the case of radiation escape, he says, its dispersed effect would be less than that of floating oil patches.


But don't expect an explosion under the Gulf of Mexico any time soon. Even a conventional blast could backfire and cause more problems. There is a chance any blast could fracture the seabed and cause an underground blowout, according to Andy Radford, petroleum engineer and American Petroleum Institute senior policy adviser on offshore issues. The U.S. Department of Energy has no plans to use explosives "due to the obvious risks involved," according to a DOE spokeswoman.

There's also the question of time. Preparations for a nuclear explosion could take up to half-a-year; BP has said it will have a relief well in place to stop the leak by August. "I think it has to be considered as only the last resort," Nordyke says. But "they ought to be thinking about it."

Would he be willing to work on such an operation? "I'd be happy to help," he says.

Feds force colleges to police student file-sharing

New rules bring online piracy fight to US campuses--Colleges become reluctant allies in fighting online music, movie piracy under new rules
By Raw Story
Friday, July 2nd, 2010

Starting this month, colleges and universities that don't do enough to combat the illegal swapping of "Avatar" or Lady Gaga over their computer networks put themselves at risk of losing federal funding.

A provision of the Higher Education Opportunity Act of 2008 is making schools a reluctant ally in the entertainment industry's campaign to stamp out unauthorized distribution of copyrighted music, movies and TV shows.

Colleges and universities must put in place plans "to effectively combat the unauthorized distribution of copyrighted material by users of the institution's network" without hampering legitimate educational and research use, according to regulations that went into effect Thursday.

That means goodbye to peer-to-peer file-sharing on a few campuses — with exceptions for gamers or open-source software junkies — gentle warnings on others and extensive education programs everywhere else.

Despite initial angst about invading students' privacy and doing the entertainment industry's dirty work, college and university officials are largely satisfied with regulations that call for steps many of them put in place years ago.

But whether the investment of time and money will make a dent in digital piracy is uncertain.

"If the university is going to prohibit underage drinking, I think it ought to prohibit anything on the Internet that's illegal, too," said Alicia Richardson, an Illinois State University junior who applauds her school's restrictive policies on file-sharing. "I'm not going to mess with it. I know the consequences."

Among other things, schools must educate their campus communities on the issue and offer legal alternatives to downloading "to the extent practicable."

Colleges and universities that don't comply risk losing their eligibility for federal student aid.

Many colleges worried they would be asked to monitor or block content. But the provision says schools can get a great deal of flexibility, as long as they use at least one "technology-based deterrent."

Their options include taking steps to limit how much bandwidth can be consumed by peer-to-peer networking, monitoring traffic, using a commercial product to reduce or block illegal file sharing or "vigorously" responding to copyright infringement notices from copyright holders.

Almost all campuses already manage bandwidth or vigorously process infringement, or "takedown," notices, said Steven Worona, director of policy and networking programs for Educause, a higher education tech advocacy group.

While the recording industry has backed off its strategy of suing illegal file-sharers, it still sends infringement notices to colleges — a shot across the bow that urges users to delete and disable computer access to unauthorized music to avoid legal action.

"The problem campuses have is that commercial network providers are not doing anything to limit the amount of infringement on their networks or educate their customers about copyright law," Worona said. "Every fall, a new cadre of students arrives on campuses who have been engaging in infringing activity since the third grade."

Since October 2008, the Recording Industry Association of America said it has sent 1.8 million infringement notices to commercial internet service providers — and 269,609 to colleges and universities.

RIAA, which represents the major music labels, stressed that the numbers don't necessarily reflect piracy trends, but rather the group's ability to detect it.

College officials argue notices are a flawed measure of illegal activity because it's up to copyright holders whether to send them and that false positives are possible.

RIAA president Cary Sherman said the group can't say whether campus programs are putting a dent in piracy. But he said the threat of a gradually tougher response to repeat violations is working, pointing to the University of California, Los Angeles, as one example.

"We think we're beginning to get to a scale now where it actually can make a difference," he said.

UCLA has developed a system that notifies users by e-mail when the school receives a copyright infringement notice, setting into motion a process that includes a "quarantine" on the computer's Internet access and the student's attendance at an educational workshop. Repeat offenders typically face one-semester suspensions.

Since the workshops started, repeat offenders have virtually disappeared, said Kenn Heller, assistant dean of students. Earlier this year, UCLA also struck a partnership with Clicker Media Inc. to make both university-produced videos and network TV shows, music videos and movies available through its undergraduate student Internet portal.

The Motion Picture Association of America, which also pressed for the legislation, is encouraged by what campuses are doing but it's too early to tell whether it will curb piracy, spokeswoman Elizabeth Kaltman said.

Few campuses have gone as far as Illinois State, which raised eyebrows by seeking and accepting entertainment industry money to underwrite a now-abandoned research project on digital piracy.

The university also blocked all peer-to-peer activity in residence halls and on wireless access points, said Mark Walbert, Illinois State's chief technology officer. Students who use the technology for legal means — like tapping open-source software Linux or downloading World of Warcraft game updates — can get exceptions.

For students seeking legal download options, the school developed BirdTrax, a Web page with links to the free movie and music streaming websites such as Hulu and Pandora.

In 2007, the University of Michigan took a different approach, launching a campus initiative called "BAYU," which stands for "Be Aware You're Uploading." At little cost, the school developed a software program that automatically notifies users of university networks when they are uploading, or sharing files from their computer with users elsewhere.

The university does not look at what is being shared, and notices go out regardless of whether the activity is legal or illegal, said Jack Bernard, a university lawyer who devised the program, which Michigan offers free to other schools.

As a result, the number of copyright infringement notices the university receives has slowed to a trickle, he said.

"We think scare tactics and most technological means don't realize the ends we want because technological means never seem to keep up with people's ability to thwart them," Bernard said.

New technologies have made it more difficult to assess how much enforcement has affected piracy, said Joe Fleischer, chief marketing officer for tracking firm BigChampagne Media Measurement.

File-hosting services such as RapidShare store infringing content on distant servers, meaning uploaders' identities are difficult to track. Websites that share links to those files are searchable through Google.

"It's a much more complicated battle than it was five years ago because so many new modes of infringement are emerging," Fleischer said.

New NASA images from space show oil invading Louisiana wetlands

Deepwater Horizon
Xeni Jardin | Friday, Jul 2, 2010

Images released today from NASA: "Multiple cameras on JPL's MISR instrument on NASA's Terra spacecraft were used to create two unique views of oil moving into Louisiana's coastal wetlands." More details about what we're seeing here:
The left-hand image contains data from MISR's vertical-viewing camera. It is shown in near-true color, except that data from the instrument's near-infrared band, where vegetation appears bright, have been blended with the instrument's green band to enhance the appearance of vegetation. 
The Mississippi River delta is located below the image center. The slick is seen approaching the delta from the lower right, and filaments of oil are also apparent farther to the north (towards the top). The oil is made visible by sun reflecting off the sea surface at the same angle from which the instrument is viewing it, a phenomenon known as sunglint. Oil makes the surface look brighter under these viewing conditions than it would if no oil were present. However, other factors can also cause enhanced glint, such as reduced surface wind speed. To separate glint patterns due to oil from these other factors, additional information from MISR's cameras is used in the right-hand image.

The Anti-Counterfeiting Trade Agreement (ACTA)


It looks like the Anti-Counterfeiting Trade Agreement (ACTA) will become law before long. This is a little unusual, because Congress will not pass or approve it. It's also unusual because its primary impact has nothing to do with counterfeiting and little to do with trade. Instead, ACTA will regulate the internet.

Even worse than putting the government in charge, ACTA in its current form will give organizations such as the recording industry (RIAA) and movie industry (MPAA) the indirect authority to shut down web sites and ban individuals from the internet.

Coincidentally, the RIAA and MPAA were involved in the development, drafting, and negotiations of ACTA. The U.S. Congress was not informed of the details of the negotiations, even when they asked for the information. Last year the White House said it would "damage the national security" if they released information on ACTA.

In addition, coincidentally, the RIAA and MPAA pay millions of dollars to U.S. politicians in campaign contributions. Also, coincidentally, these five attorneys have all represented the RIAA in the past decade:
Thomas Perrilli was appointed U.S. Associate Attorney General by Obama.

David Ogden was appointed Deputy Attorney General by Obama (he resigned last December).

Brian Hauck was appointed as counsel to the Associate Attorney General. Hauck's position is to serve as Perrelli's lawyer.

Ginger Anders was appointed as Assistant to Solicitor General Elena Kagan, who has been nominated for the Supreme Court.

Ian Gershengorn was appointed Deputy Assistant Attorney of the Civil Division of the Department of Justice.
These five also come from the same law firm, Jenner and Block. In fairness, most seem to be exceptional lawyers, and, more importantly, Ginger Anders is an excellent violin player.

Finally, a draft of the agreement has been made public, not by the U.S. Government, but by the European Union. The European Parliament voted 633 to 13 to demand the release of ACTA's text, while the U.S. Congress collected campaign contributions from the RIAA and MPAA and refused to make it public.

It seems odd for industry groups to be involved in passing what amounts to a major law affecting the majority of the people in the U.S., without even informing Congress of the content. As a "trade agreement," ACTA can and probably will become law by executive order, without Congressional approval.


Job market not growing fast enough for big rebound

By Jeannine Aversa and Christopher S. Rugaber, AP Economics Writers | July 2, 2010

WASHINGTON --A second straight month of lackluster hiring by American businesses is sapping strength from the economic rebound.

The govt. jobless rate fell to 9.5 percent (the real rate rose to 19.1%) in June, still far too high to signal a healthy economy. It came in slightly lower than the month before only because more than a half-million people gave up looking for work and were no longer counted as unemployed.

The private sector added just 83,000 jobs for the month. Looked at from that angle or almost any other, from a teetering housing market to falling factory orders, the recovery is limping along as it enters the year's second half. And that is when the benefits of most of the government's stimulus spending will begin to wear off.

The fate of the economy will hinge on whether it can stand on its own. President Barack Obama acknowledged the slow pace of the recovery and used the new jobs figures to argue for more stimulus spending and extended unemployment benefits.

"We're not headed there fast enough for a lot of Americans," the president said. "We're not headed there fast enough for me, either."

Overall, the nation's total payroll actually shrank last month by 125,000, the first decline in six months, the Labor Department said Friday. The loss reflected the end of 225,000 temporary jobs helping the U.S. Census Bureau complete its 10-year head count.

The 83,000 jobs added by the private sector was a better performance than in May, when private job creation nearly stalled. But it fell far short of what the economy needs -- at least 200,000 jobs a month -- to bring down the unemployment rate.

Nobody, from Obama to Federal Reserve Chairman Ben Bernanke to private economists, expects that anytime soon. And the government has mostly exhausted its realistic options for nudging the economy along faster.

Benchmark interest rates, which at low levels can encourage borrowing to spur economic growth, are already near zero. Republicans in Congress object to additional stimulus spending.

Unemployment is expected to stay above 9 percent through the midterm elections in November. And the Fed predicts joblessness could still be as high as 7.5 percent two years from now. Normal is considered closer to 6 percent, and economists say it will probably take until the middle of this decade to achieve that.

The jobless rate did come down in June from 9.7 percent the month before. But that was mainly because 652,000 people abandoned their job searches.

Even among Americans with secure jobs, confidence is fading. One gauge of consumer confidence fell in June to about 53, down nearly 10 points in a single month. And it's well below the reading of 90 typically seen in a healthy economy.

Add to that jitters over Europe's debts, an edgy stock market and cautious consumer spending, and the result is an economy essentially moving sideways. It's no surprise that businesses are reviewing their orders and seeing no reason to add to payrolls.

Few big companies say they plan to step up hiring in the second half of the year. Most auto, airline and railroad companies, for example, say they expect little or no job growth, blaming weak demand.

One that does plan to hire, Chrysler Group LLC, expects to add engineers and other workers as it updates its aging line of cars and trucks. The company has announced 1,000 factory jobs in Detroit to meet demand for the new Jeep Grand Cherokee SUV.

But other companies, like American Airlines, have no plans to significantly boost hiring this year. And major railroads, which have furloughed thousands since the recession, say they have no plans to add employees in the coming months.

In June, manufacturers, the leisure and hospitality industries, temporary staffing agencies, and education and health services providers all added jobs. Retailers, construction firms and financial service providers cut payrolls. So did state and local governments, which are wrestling with budget shortfalls.

On Wall Street, stocks sagged yet again on the news. The Dow Jones industrial average finished down 46 points, its seventh consecutive losing session. The Dow lost more than 10 percent of its value in the second quarter.

Trying to put a positive outlook on the report, Obama said it showed that "we are headed in the right direction." At the same time, he acknowledged there is a "great deal of work to do to repair the economy and get the American people back to work."

His options are limited. Senate Republicans concerned about record budget deficits this week blocked his efforts to extend unemployment benefits for millions of out-of-work Americans.

"The two things that are growing fastest in this Democrat economy are the size of the federal government and the crushing burden of the national debt," said Senate Republican leader Mitch McConnell of Kentucky, who led opposition to the extension.

All told, 14.6 million people were unemployed in June. An additional 11.2 million have given up their job searches or are working part-time but would prefer full-time work. That adds up to nearly 26 million Americans, and an "underemployment" rate of 16.5 percent.

Among the 225,000 census workers who lost their temporary jobs in June are people who had been unemployed before and now are again. One of them is Michael Stein, who worked for the census in Phoenix on and off since April 2009, after losing his job with an architectural firm.

It all ended for good two weeks ago.

Jobless again, Stein, 49, at least feels better off with the census experience on his resume.

"I was told the State of Arizona is hiring again," he said. "Because of the people I met at the census, there's a possibility if they could find the right position, they'll put in a good word for me."

Eric Model, co-owner of Seal & Co., a shop in Summit, N.J., that sells accessories and toys, said he has not replaced the two back-office workers he let go two years ago. Not including a summer hire, Model has four employees, plus himself.

"It would be nice to get some support," Model said. "But I don't want to go out on a limb and hire somebody, anticipating things will improve. I would rather run with low expenses."

Those Americans who still have jobs drew smaller paychecks last month. Average hourly wages fell 2 cents to $22.53. Workers' hours were cut, too. Those factors could dampen consumer spending in the months ahead and further weaken the recovery.

It all threatens to perpetuate a vicious cycle for the economy.

"It is a Catch-22 situation," said Sung Won Sohn, professor at California State University, Channel Islands. "Businesses are reluctant to hire for fear of a 'double-dip' recession. Without jobs, people are watchful of their spending, a danger to the recovery."

Democrats push for new Internet sales taxes

The halcyon days of tax-free Internet shopping will, if Rep. Bill Delahunt gets his way, soon be coming to an abrupt end.

Delahunt, a Massachusetts Democrat, introduced a bill on Thursday that would rewrite the ground rules for Internet and mail order sales by eliminating the option for many Americans to shop over the Internet without paying state sales taxes.

At the moment, Americans who shop over the Internet from out-of-state vendors usually aren't required to pay sales taxes. Californians buying books from or cameras from Manhattan's B&H Photo, for example, won't be required to cough up the sales taxes that they would if shopping at a local mall.

This is hardly a new debate: pro-tax officials and state governments have been pressing Congress to require taxes to be collected for a decade or so. They argue that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick-and-mortar retailers do.

But with states scrambling for new sources of revenue during what may be a double-dip recession, pro-tax lobbyists are hoping that they'll have better luck this year. The National Conference of State Legislatures applauded Delahunt's legislation, saying he should be commended for allowing states to collect as much as $23 billion in new taxes.

So did the Retail Industry Leaders Association, whose tax committee members include Wal-Mart, Home Depot, Costco, AutoZone, Target, and IKEA.

On the other side are groups that advocate for lower taxes and retailers including and eBay. In astatement on Friday, Tod Cohen, eBay's vice president for government relations said: "At a time when unemployment rates are high and small businesses across the country are closing shop, we are confident that Congress will protect small Internet retailers and the consumers they serve from another Internet tax scheme."

Co-sponsors of Delahunt's bill, the "Main Street Fairness Act," include Reps. Michael Capuano, John Conyers, Stephanie Herseth Sandlin, and Peter Welch, all Democrats. No Republican has signed on as a co-sponsor.

The final version of Delahunt's legislation had not yet been made public on Friday, and his office did not immediately respond to queries from CNET. But it's expected to be similar to other versions he's introduced before.

Earlier versions were drafted in response to a U.S. Supreme Court decision saying that, in general, out-of-state retailers can't be required to collect sales taxes unless Congress changes the law. The justices noted in a 1992 case called Quill v. North Dakota: "Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes."

One exception to that rule is a legal concept called "nexus," which means a company can be forced to collect sales taxes if it has a sufficient business presence. If Amazon had an office in California, it already would be collecting sales tax for Golden State residents. (Another exception is the sale of cigarettes, which is covered by the Jenkins Act.)

In response to complexity concerns, the pro-tax forces have offered a proposal that they hope Congress can be persuaded to adopt. The concept is called the Streamlined Sales Tax Agreement, invented in 2002 by state tax officials hoping to straighten out some of sales tax laws' most notorious convolutions.

Since then, some 24 states have signed on, either wholly or partially, to the agreement, meaning they agree to simplify their tax codes and make them uniform. If enough states participate, proponents believe it will be easier to convince Congress to make sales collection mandatory for out-of-state retailers.

"Despite a decade of trying to reduce the unreasonable burdens cited by the Supreme Court, the actual simplification achieved by the Streamlined Sales Tax Project is not nearly sufficient to convince Congress that it should abandon its role in protecting interstate commerce," Steve DelBianco, executive director of the NetChoice coalition, said in e-mail on Friday. Coalition members include AOL, eBay, Expedia, and Yahoo.
There is one caveat under existing law: online purchases from sites like Amazon and eBay only seem to arrive tax-free. Legally, however, purchasers are required to pay their own state's sales tax rate--the concept is called a "use tax"--and then voluntarily report the amount owed at tax time. But, state tax collectors say, few do.

State tax collectors haven't exactly been idle while waiting for Congress. They've been trying to force Amazon to turn over purchase records in North Carolina, attempting to force retailers to become tax-tattlers in California and Tennessee, and putting the squeeze on affiliate programs in Colorado.

Earlier this week, the Direct Marketing Association sued Colorado, saying its law requiring out-of-state retailers to turn over purchase history information is unconstitutional.

The Impoverishment of America's Middle Class

Lying and Spying: The Economy is Sinking. The Coming Depression
Confidence is Down Along With the Market.

by Danny Schechter | July 2, 2010

The FBI arrests 1200 Americans for mortgage fraud in the largest crackdown of its kind in history. There is no media focus on the companies that securitized and insured their toxic loans. This white-collar crime sweep is, at best, a one-day story with most of the reports carried by local outlets.

Clearly the FBI did not get the media punch it had hoped for. The issue of financial industry fraud did not even register on the media’s Richter scale.

Two weeks later, the FBI tried again, this time with an ill-timed, years in the making bust of 11 alleged Russian spies accused, so it seems, of impersonating Americans with no sign that they carried out successful espionage missions.

The story grew legs, in several senses, after it was discovered that one of the “spies” posted sexy pictures of herself on Facebook and other sites.

Ooo la-la: Predictably, she has now become the story; No one knows what to think about the FBI’s motives in pumping up this cold war like drama. Their big spy-catch was questioned in both the US and Russia. Now watch for payback in the form of arrests of Americans in Moscow.

Meanwhile, the financial “reform” bill may go down after the lobbyists persuaded, cajoled and paid off legislators to water it down, and defang it. If it passes, the Wall Street lobby is already working to insure any proposed regulations are as weak as can be.

Did you know that firms such as Citigroup and Goldman Sachs could exploit loopholes until 2022 before withdrawing from "illiquid" funds such as private equity? The long gestation period is an example of the degree of compromise inserted into the package following months of lobbying on Capitol Hill by powerful banks, according to Bloomberg News.

This is a scandal that has yet to be fully disclosed as Amped Status reported,

“A devastating report in the NY Times documents how Tim Geithner's New York Fed worked tirelessly to make sure that AIG was forced to pay banks such as Goldman Sachs 100 percent on dubious contracts that might otherwise have been slashed or subjected to lawsuits. Geithner, of course, was promoted for his efforts to run the rest of the nation's economy. The article is full of revelations that would be mind-numbing if we weren't so used to reading about how taxpayers have been fleeced in the meltdown.”

At the same time, the economy is heading for a dive. Reports the Washington Post:

“The recession has directly hit more than half of the nation’s working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.

The economic shock has jolted many Americans into a new, more austere reality, which is likely to have lasting consequences for an economy fueled mostly by consumer spending. More than six in 10 Americans say they have cut down on borrowing and spending, the survey found.

The reason: Nearly half of the survey’s respondents say they are in worse financial shape as a result of the downturn, which destroyed 20 percent of Americans’ wealth.”

And who is going to fix it? The NY Times doubts that the private sector can or will:

“In cutting spending to rein in deficits, governments are effectively betting that the private sector can make up for lost stimulus spending — and the markets are skeptical.”

It’s worse than that. The markets have been turbulent and volatile. Explains the AP, “Investors have been so burned by the financial crisis of 2008-09 that they fear any hint of a slowdown means the economy will start tanking again.” The quarter, which ended June 30th, was at the lowest level in a year.

Paul Farrell offers this analysis on Marketwatch, “tragically for future generations of Americans the guidance system of capitalism’s Invisible Hand has been replaced by the guiding hand of Wall Street: With no public conscience, no soul, no ethics, no moral values, nothing other than the addict’s obsession to get as rich as possible, fast as possible.”

At the same time, the focus by governments on “austerity” in the name of containing deficits will bring enormous pain to working people but is unlikely to generate jobs or economic stability. Economist Paul Krugman—and others—fears the onset of a depression.

Some like Mish’s Global Economic Trends analysis say it is already here, writing, “ By the way, a depression is not coming, we are clearly in one, a deflationary one at that. Once again, those chanting hyperinflation all missed the boat by light-years.

Various safety nets like food stamps, unemployment insurance, and of course people no longer paying their mortgage and living in their houses for free all mask over the depression.”

But, whether its here or coming, the once unthinkable idea of a depression is being taken seriously as the Columbia Journalism Review observes, “What with Washington still unable to get its act together on a new round of stimulus spending, warnings about the consequences of inaction are taking on a much more serious tone, and the word “depression” is starting to creep into the coverage.”

And what about international cooperation and regulation some hoped would emerge in this age of globalization? No one at the G20 even wanted to talk about that. The German Parliament killed a tough measure to ban naked short selling. The G 20 would not consider called for a global regime of needed regulations.

“It’s the responsibility of government to make the world financial system less dangerous. Judging from the G20 summit this weekend, we are making no progress at all in that direction,” writes Economist Simon Johnson on Baseline Scenario. 

No wonder consumer confidence is said to be “dipping.”

“Americans, worried about jobs and the sluggish economic recovery, had another relapse in confidence, causing a widely watched barometer to tumble in June, reported AP.

The Conference Board, a private research group based in New York, said Tuesday that its Consumer Confidence Index dropped almost 10 points to 52.9, down from the revised 62.7 in May. Economists surveyed by Thomson Reuters had been expecting the reading to dip slightly to 62.8.”

So where are we? Nowhere at all! The next jobs report is already said to be bad. The Republicans blame Democrats and vice versa. Wall Street has shifted the blame from them. Why aren’t people in the streets?

No wonder it’s more fun to read about sexy Russian spies or even Sarah Palin spying on Russia from her front porch,

Obama Gets Advice from Bush on Oil Spill [Cartoon]

by Timothy B. Hurst on July 2, 2010

BP still Blocking Media Access-Anderson Cooper


BP deliberately sinks oil with Corexit as cover up

Whistle blower to testify on oil spill worst fear
June 30, 2010 by Maryann Tobin

Testimony before a Senate investigative panel this week is expected to reveal what many have suspected about BP all along; they don’t care about the environment, the animals that are dying, and the lives that are being destroyed by the Deepwater Horizon oil spill.

In a shocking interview with CNN’s Anderson Cooper on June 29th, Allegiance Capitol Corporation V.P. Fred McCallister said that BP is deliberately sinking oil with the toxic chemical disbursant Corexit, to hide the size of the oil spill. By sinking the oil before it can be collected, BP won’t have to pay fines on it.

McCallister said, “Everybody in Europe, where the standard practice is to raise the oil and collect it, is scratching their heads, and quite honestly laughing at what’s happening in the Gulf.” He added, “Everyone is looking at us and wondering why we’re allowing this to happen.”

McCallister is set to appear before a Senate investigative panel on Thursday and testify that BP’s only interests regarding the Deepwater Horizon spill is protectimg their own financial interests. His statements explained why BP has been refusing offers of help from additional foreign skimmers.

BP’s fear is that independent skimmers would be able to count the number of gallons collected, and thus provide the US government with data to assess spill rate financial penalties against BP, according to McCallister.

“BP is in control of this situation and they are doing what’s in the best interests of BP and their shareholders,” McCallister said.

It's Not That You're Wrong. You're Just Evil.

by Daily Kos | Fri Jul 02, 2010
I think right now every oil company in the world says, I don’t want to pay $100 million a day to cut corners on drilling a well. And that’s where I believe the market system works. Nobody’s got more to lose in this deal than BP.  -- Haley Barbour, Governor of Mississippi
Others have already pointed out the fallacies and political stupidity inherent in this particular bit of insanity from the estimable governor of the great state of Mississippi.  Hearing it on the radio yesterday, it was difficult to decide whether to laugh or cringe.
But the problem isn't that Mr. Barbour is wrong about the nature of markets and responsible actors, or that he is politically obtuse.  The problem is that his statement perfectly fits the definition of moral evil, and exemplifies everything that is wrong with conservative economic philosophy.
    Let us, for a moment, take Mr. Barbour at his word.  Let us assume, contrary to our experience after Exxon-ValdezIxtoc and every financial crisis created by market bubbles and excessive leverage for hundreds of years since they started selling tulips in the Netherlands, that after an egregious negative event, market forces will self-correct, and companies worried about their bottom lines will ensure that such an event never happens again.
Let us grant, for the sake of argument, the preposterous notion that BP and their shareholders are the greatest victims of this disaster, even as an environmental and economic catastrophe of national and quite possibly global proportions continues to worsen each day.
Now what?  Even if Mr. Barbour's assumptions were correct, what does that leave us with?
It leaves us with moral evil.  In fact, it is the worst sort of moral evil a politician can exercise.
Bribery, kickbacks, extortion, backstabbing, deceit, personal moral failings and corruption of all kinds are generally what we consider to be the chief evils associated with politicians.  They're what give politicians and politics itself a bad name.  But these flaws, while severe, are rarely fatal.  Moreover, they tend to exist at every stratum of society.
The true danger in politics is when people in power elevate ideological purity over their basic humanity, empathy, and common sense.  This danger is as present on the Left as it is on the Right.  From Stalin to Hitler, from Pol Pot to Pinochet, from the Crusades to the terrorist attacks on 9/11, by far the greatest evils perpetrated by persons in power are done out of rigid and passionate commitment to ideology.  The brutal human consequences of that ideology are ignored or justified as subservient to the perceived greater good of whatever Utopian ideal happens to be in vogue.
In Haley Barbour's case, and in the case of the entire modern Republican Party, the lives and livelihoods of millions are merely unfortunate collateral damage on the way to the free market Utopia envisioned by Ayn Rand and Milton Friedman.
If the entire world's economy must collapse to teach a few financial institutions about the dangers of leverage, then so be it.
If an entire Gulf must be suffocated in putrid oil to teach a few oil companies a lesson about rig safety, then so be it.
If the infrastructure of entire countries must continue in disrepair for years and entire wars must be lost while we work out the kinks of hiring private contractors for the job of nation building, then so be it.
If millions of Americans must suffer and die so that a few private health insurance institutions may continue to shell out dividends to their shareholders as God and Adam Smith intended, then so be it.
And so on.  We must suffer these inconveniences, after all, or how will we ever reach the Utopia of total freedom and perfect market balance?
This is moral evil of the most perilous kind.  It is an inhuman pathology that creeps up only occasionally in great civilizations--but when it does, it can be more devastating than the sum of hundreds of years of petty graft and political corruption.
Sadly, it is this Utopian pathology which has overtaken the modern GOP.  It is not only disturbingly wrong, politically naive and factually misguided.  It is incredibly dangerous.

40 Million Doses of H1N1 Vaccine To Be Destroyed

Thursday, July 01, 2010

About a quarter of the swine flu vaccine produced for the U.S. public has expired — meaning that a whopping 40 million doses worth about $260 million is being written off as trash.
“It’s a lot, by historical standards,” said Jerry Weir, who oversees vaccine research and review for the U.S. Food and Drug Administration.

The outdated vaccine, some of which expired Wednesday, will be incinerated. The amount, more than twice the usual leftovers, likely sets a record. And that’s not even all of it.
About 30 million more doses will expire later and may go unused, according to one government estimate. If all that vaccine expires, more than 43 percent of the supply for the U.S. public will have gone to waste.

Federal officials defended the huge purchase as a necessary risk in the face of a never-before-seen virus. Many health experts had feared the new flu could be the deadly global epidemic they had long warned about, but it ended up killing fewer people than seasonal flu.

“Although there were many doses of vaccine that went unused, it was much more appropriate to have been prepared for the worst case scenario than to have had too few doses,” said Bill Hall, spokesman for U.S. Department of Health and Human Services.Most leading health experts generally agree with that.

Millions of doses of flu vaccine generally go unused every year and are marked for burning, but in recent years the leftovers amounted to closer to 10 percent of the supply, rather than the 25 percent expiring now. Government flu experts couldn't recall throwing away anything close to 40 million doses before.

The new H1N1 swine flu emerged in April last year, hitting children and young adults particularly hard. It was difficult to predict how deadly it might be or how easily it might spread. Federal health officials pushed five vaccine manufacturers to produce a vaccine as quickly as possible. What's more, they wanted a lot of it — many experts thought most people would need two doses for it to work.

The government placed three orders last year for a combined total of nearly 200 million doses — an unprecedented amount and almost double the amount of vaccine produced in recent years for seasonal flu.

About 162 million doses were meant for the general public. Another 36 million included doses for the military and other countries.

But demand never took off, for several reasons:
—Tests of the vaccine soon showed only one dose was enough to protect most people.

—Much of the vaccine was not ready until late 2009, after the largest wave of swine flu illnesses passed.

—Swine flu turned out not to be as deadly as was first feared. About 12,000 deaths have been attributed to it

— or roughly a third of the estimated annual deaths from seasonal flu.
So while people were waiting hours for swine flu vaccinations in some cities in October and November, by January local health departments were trying gimmicks to get anyone at all to come in for a shot.

Government officials have known for months that they were looking at a huge surplus. According to an Associated Press calculation based on federal purchasing information, the dollar value of the 40 million expired doses is about $261 million. The government didn't release an official figure, but Hall said the AP estimate was approximately correct.

In Europe, where nations also found themselves with millions of unused doses, some commentators have attacked the World Health Organization, which declared swine flu a global epidemic, or pandemic.

The critics have questioned the motivation of some WHO advisers who had links to the pharmaceutical industry.

Some critics have simply lamented that a lot of anxiety was raised and money wasted, not just during the swine flu scare but also in government responses to bird flu and SARS, a respiratory virus that swept parts of Asia in 2003.

"Each time the so-called experts told us that millions of people would be killed worldwide by the respective viruses. We have learned that the experts were utterly wrong," said Dr. Ulrich Keil, a professor at Germany's prestigious University of Muenster and a WHO adviser.

"This behavior is irresponsible because the angst campaigns ... confuse the priority setting in public health," he said. The death toll from influenza epidemics is much smaller than the number killed annually by chronic illnesses like heart disease, cancer, stroke and diabetes, he added, in an e-mail.

Unused flu vaccine is a common problem. The June 30 expiration date is set by the FDA and has less to do with the vaccine's shelf life than the desire to tweak the recipe each year to protect against the three flu strains expected to cause the most illness.

"It's not necessarily because it's degraded or not potent," said Dr. Mark Mulligan, an Emory University vaccine researcher.

In the past year, about 114 million doses of seasonal flu vaccine were distributed. The government thinks most of that was used — demand was unusually high because of fears about swine flu.

In the flu vaccination campaign for this coming fall, swine flu vaccine is being combined with two seasonal strains in single doses. Manufacturers have told the government they expect to make about 170 million doses.

An influential government advisory panel this year recommended that virtually all Americans get flu shots each year. Still, that doesn't mean it will all get used.

"No doubt there will be unused doses. This happens every time," said Dr. John Treanor, an immunology specialist at the University of Rochester Medical Center.

10 Corporate Outrages

July 2, 2010 by Michael Leon ·

You might have heard this: BP is so well connected in Washington that even after being cited for 760 different safety and environmental violations, the company still got environmental waivers for the Deepwater Horizon rig that’s now destroying the Gulf.1
But BP’s not alone in using its DC influence. Check out the list below of other companies’ outrages.
1. Exxon Mobil made billions in profits, and yet paid not one dime in federal income taxes in 2009.2
2. The 2005 energy bill had a little known provision, commonly called the Halliburton Loophole, which exempted natural gas drilling from the Clean Water Act. The result? Water so contaminated that you can light it on fire.3
3. Massey Energy was cited more than 2400 times for safety violations in its mines, but chose not to fix potentially lethal problems because low penalties meant it was cheaper to simply keep paying the fines. This spring, 29 miners were killed in an underground explosion at a Massey mine in West Virginia.4
4. Michael Taylor was the FDA official who approved the use of Monsanto‘s Bovine Growth Hormone in dairy cows (even though it’s banned in most countries and linked to cancer). After approving it, he left the FDA—to work for Monsanto. Until last year, when he moved back to the government—as President Obama’s “Food Safety Czar.” No joke.5
5. Internal Toyota documents outline how the company was successful in limiting regulators actions in the recalls last year—saving hundreds of millions while the death toll continued to climb.6
6. GE and its lobbyists—including 33 former government employees—have successfully lobbied Congress to override Defense Department requests to cancel a GE contract to work on a new engine for the Joint Strike Fighter jet. GE will need $2.9 billion to finish the project.7 
7. Top executives at 9 top banks including Citibank, Bank of America, Goldman Sachs, and Morgan Stanley paid themselves over $20 billion in bonuses just weeks after taxpayers bailed them out to the tune of $700 billion.8
8. During the waning days of the Bush administration, officials responded to a long-term lobbying campain by pre-empting product liability lawsuits for dozens of whole industries. They bypassed Congress entirely and rewrote rules ranging from seatbelt manufacturing regulations to prescription drug safety.9
9. Sunscreen manufacturers including Johnson & Johnson and Schering-Plough, in the interest of profits, are opposing an FDA proposal requiring full reporting on sunscreen labels. The New York Times just confirmed that current SPF ratings don’t even measure sun rays that cause cancer.10
10. BP—a company with a record of 760 drilling safety and environmental violations—was granted safety waivers in order to operate the deepwater drilling rig that ultimately created the worst environmental disaster in US history.1

1. “BP’s latest plan succeeding, but may make spill worse,” Newsweek, June 2, 2010.
2. “GE, Exxon Paid No U.S. Income Taxes in 2009,” ABC News, April 6, 2010
3. “Why is Dick Cheney Silent on the Oil Spill?,” Newsweek, June 10, 2010
4. “Other Massey Mines Showed A Pattern Of Violations,” NPR, April 13, 2010
5. “Monsanto’s man Taylor returns to FDA in food-czar role,” Grist, July 8, 2009
6. “Toyota tried to cut costs on recalls,” Los Angeles Times, February 22, 2010
7. “GE vice chairman openly challenges Gates over F-35 fighter jet engine,” The Hill, June 17, 2010
8. “Bankers Reaped Lavish Bonuses During Bailouts,” The New York Times, July 30, 2009
9. “Bush Rule Changes Curtail Rights of States, Consumers,” Wall Street Journal, October 15, 2008
10. “UVA Reform: It’s Not PDQ,” The New York Times, June 23, 2010

Comparing This Recession to Previous Ones: Job Changes


Source: Bureau of Labor Statistics. Chart by Amanda Cox. Horizontal axis shows months.
Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession.
Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized
with National Bureau of Economic Research’s official business cycle dates.

The economy lost 125,000 jobs in June, driven primarily by the elimination of 225,000 temporary Census positions. In just the private sector, payrolls increased by 83,000, a modest gain over employment in May.

The chart above shows job changes in this recession compared with recent ones, with the black line representing the current downturn. The line has ticked upward since last year, but still has a long way to go before the job market fully recovers to its pre-recession level. Since the downturn began in December 2007, the economy has shed, on net, about 5.4 percent of its nonfarm payroll jobs. And that doesn’t even account for the fact that the working-age population has continued to grow, meaning that if the economy were healthy we should have more jobs today than we had before the recession.

The unemployment rate (measured by a different government survey, and based on how many people are without jobs but are looking for work) edged downward to 9.5 percent in June, from 9.7 percent in May.

In recession battle, Germany and China are winners

By Harold Meyerson | Thursday, July 1, 2010

The Great Recession rolls on, but it's not too early to single out the major powers that have come through the wreckage in the best shape. They are the ones the other major nations implore for help -- to bail out weaker economies, to diminish their dominance of the world's production and start consuming more themselves. There are just two such nations: China and Germany.

Global unemployment might remain stratospheric, but in China, long-suppressed wages are finally increasing for millions of industrial workers. China's stimulus -- effectively the world's largest -- has funded bullet trains, airports and wind turbines. In Germany, unemployment has been running a point or two below ours, and exports remain high. Thanks to its favorable trade balance, Germany's finances are the strongest in Europe, which is why German monetary guarantees have been key to the future of both Greece and the euro.

Germany and China don't have a lot in common. Germany has a mature economy and is a stultifyingly stable democracy. China has a rising economy and remains disturbingly authoritarian. What sets them apart from the world's other major powers, purely and simply, is manufacturing. Their predominantly industrial economies meet their own needs and those of other nations, and have made them flourish while others flounder.

This used to be true of United States, too. In 1960, manufacturing accounted for a quarter of our gross domestic product and employed 26 percent of the labor force. Today, manufacturing has shriveled to 11 percent of GDP and employs a kindred percentage of the workforce.

For the past three decades, with few exceptions, America's CEOs, financiers, establishment economists and editorialists assured us that the transition from a manufacturing to a post-industrial economy was both inevitable and positive: American workers would move to more productive jobs, and the nation's financial security would only grow. But after rising steadily during the quarter-century following World War II, wages have stagnated since the manufacturing sector began to contract.

Increasingly, it's our most productive jobs that are being offshored. Until 2001, the United States exported more advanced technology than it imported, but since then, as Clyde Prestowitz reports in "The Betrayal of American Prosperity," his persuasive new book on the need for an American industrial policy, we've been running annual high-tech deficits that reached $61 billion in 2008. Worse yet, as we lose manufacturing, which employed 63 percent of our scientists and engineers in 2007, we lose many of our most valuable professionals. Last year, reported Business Week, the number of employed scientists and engineers fell 6.3 percent while overall employment fell 4.1 percent.

Most Americans, I suspect, believe we're losing manufacturing because we can't compete against cheap Chinese labor. But Germany has remained a manufacturing giant notwithstanding the rise of East Asia, making high-end products with a workforce that is more unionized and better paid than ours. German exports came to $1.1 trillion in 2009 -- roughly $125 billion more than we exported, though there are just 82 million Germans to our 310 million Americans. Germany's yearly trade balance went from a deficit of $6 billion in 1998 to a surplus of $267 billion in 2008 -- the same year the United States ran a trade deficit of $569 billion. Over those same 10 years, Germany's annual growth rate per capita exceeded ours.

Germany has increased its edge in world-class manufacturing even as we have squandered ours because its model of capitalism is superior to our own. For one thing, its financial sector serves the larger economy, not just itself. The typical German company has a long-term relationship with a single bank -- and for the smaller manufacturers that are the backbone of the German economy, those relationships are likely with one of Germany's 431 savings banks, each of them a local institution with a municipally appointed board, that shun capital markets and invest their depositors' savings in upgrading local enterprises. By American banking standards, the savings banks are incredibly dull. But they didn't lose money in the financial panic of 2008 and have financed an industrial sector that makes ours look anemic by comparison.

So even as Germany and China have been busily building, and selling us, high-speed trains, photovoltaic cells and lithium-ion batteries, we've spent the past decade, at the direction of our CEOs and bankers, shuttering 50,000 factories and springing credit-default swaps on an unsuspecting world. That's not to say our CEOs and bankers are conscious agents of foreign powers. But given what they've done to America, they might as well have been.

Decline in Labor Force Leads to Drop in Unemployment

The June drop in hours suggests that hiring will slow further.

The Labor Department reported that 652,000 people left the labor force in June, causing the unemployment rate to edge down to 9.5 percent, even as the number of employed reportedly dropped by 301,000. The establishment survey showed a gain of 100,000 jobs, excluding the 225,000 Census workers who lost their jobs in June. The establishment survey also showed declines in both the length of the average workweek and the average hourly wage, providing further concerns about labor market weakness going forward.

The employment-to-population (EPOP) ratio fell to 58.5 percent, reversing gains from the prior three months; although this is still 0.3 percentage points above the low hit in December. This decline was concentrated among men who saw their EPOP fall by 0.3 percentage points, as their unemployment rate edged up from 9.8 to 9.9 percent. The EPOP for women was unchanged, with their unemployment rate falling from 8.1 percent to 7.8 percent.

Black men were hit especially hard as their EPOP fell from 58.5 to 57.3 percent. The EPOP for black teens fell by 1.8 percentage points to 14.4 percent, just above the all-time lows hit in November and December.

College grads seemed to do well last month with their EPOP rising by 0.2 percentage points and their unemployment rate falling by 0.3 percentage points to 4.4 percent, the lowest level since April of last year. Workers without high school degrees had a 0.9 percentage-point drop in their unemployment rate to 14.1 percent, but this is associated with a drop in the EPOP in recent months. By age, older workers continue to be outliers, with employment for those over age 55 rising by 20,000, even as it fell by 321,000 for everyone else.

Other data in the household survey are also consistent with a weakening labor market, notably a decline to 6.2 percent in the percentage of the unemployed who have voluntarily quit their jobs. The median and average duration of unemployment spells both increased to new records, 25.5 weeks and 35.2 weeks, respectively; although there was a modest decline in the share of long-term unemployed. The number of discouraged workers was more than 50 percent higher than the June 2009 figure, with the number for men being more than 70 percent higher.

There is little basis for a hope of an improvement based on the establishment data. The 100,000 private sector jobs bring the average rate of job creation to just 119,000 over the last three months. With state and local governments shedding jobs at the rate of 13,000 a month over the same period, the rate of job creation over this period is roughly equal to the growth in the labor force. And there are no obvious candidates for improved growth any time soon.

The manufacturing sector added just 9,000 jobs in June, after adding 70,000 over the prior two months. With the workweek shortening by 0.5 hours, there is little reason to expect robust hiring. Construction lost another 22,000 jobs, mostly in the non-residential sector. This decline is likely to continue, although possibly at a slower pace.

The retail sector lost 6,600 jobs, its second consecutive decline. Finance shed 15,000 jobs, 6,500 of the losses were in real estate following the end of the homebuyers tax credit. Health care employment increased by just 9,300 in June, following weak growth in May. The sector had been adding close to 20,000 jobs a month. Employment services also showed modest growth of 35,800 after growing at twice that rate last fall. And restaurants shed jobs for the second consecutive month.

The index of aggregate weekly hours fell by 0.2 percent after a big jump in May. The May number may have been overstated, but clearly there is not much positive momentum here. And wages grew at just a 1.0 percent annual rate over the last quarter.

With state and local governments cutting back to deal with deficits, house prices falling again, and wages not keeping pace with inflation, there is little hope for a robust growth any time soon. It is likely that the unemployment rate will rise in the second half of the year.

The Reason For High Unemployment

Get Really Informed.  
by Daily Kos | Fri Jul 02, 2010

It's profitable for CEOs and shareholders.  Evidence below the line.  We are not getting the truth (ok, no surprise) from the news.

Here's an example:  Caterpillar, who laid off more than 20,000:
2006  Caterpillar CEO -  Pay:  $4.28
2009  Caterpillar CEO Forbes Column Headings Caterpillar 2009 JW Owens Compensation
Remember J & J?  Weldon went from $8 in 2006 to $17 million in 2009 (see below):
We have to ask the right questions.  Like:

  • What incentives do corporations have to hire more American workers?
  • How many American jobs could have been saved, if so much money wasn't skimmed from revenues to pay huge salaries at the top and shareholder dividends?

The charts and facts below are empirical evidence that both increased from 2006-2009 as the US Economy tanked and millions lost their jobs.  It's a blatant highjacking or, as Buffet described it, the biggest transfer of wealth in the history of America.

This helps explain how 1% of Americans ended up, in 2010, with most of the wealth of our country.

The media isn't digging deeply enough, in my opinion.

The following two links are for Fortune 500 CEO pay for 2006 and 2009, and includes both shares paid and total shares owned, as part of their compensation.

This is provided not so much to poo poo the CEOs, but to show that they actually made huge gains in both their pay and share holdings in from 2006-2009.  Shares that pay annual dividends, most of which are rolled into more shares or not.  What?  Really?  How can that be?

That is the question that needs to be addressed.  How can that be.  The third link is a diary I wrote that got little attention.  It connects empirical evidence that companies greatly improved their cash-on-hand and used it to pay higher dividends to shareholders BECAUSE they reduced their employees.

While perusing the two Forbes reports, presented alphabetically by corporation name, pick a corp and check the income/shareholdings of it's CEO to see how hugely many improved their net worth during the WORST RECESSION since the 1930s.

Maybe you can find the company that laid you or your friends and family off.
Here's a couple of examples:  Caterpillar and Johnson & Johnson from the Forbes 2006 and 2009 CEO Compensation listings:
2006  Caterpillar CEO Forbes Column Headings 2006 JW Owens, Caterpillar Comp
2009  Caterpillar CEO Forbes Column Headings Caterpillar 2009 JW Owens Compensation
Analysis, Caterpillar CEO gains (all figures are in millions):
Mr. Owens Pay increased from $4.28 Million Dollars, to $6.02 Million in 2009.  He could have been a new CEO on or about 2006 because there is no 5-year pay average listed.  However, in 2009 Mr. Owens 5-year earnings are $43.18 million.   However, only four years max have passed between 2006 and 2009.  We have his income for 2006 and 2009, respectively $4.28 and $6.02 which total $10.30.  Let's subtract $10.30 from $43.18 = $32.88.  And then divide $32.88 by two to determine Mr. Owens average pay for years 2007 and 2008, which equals $16.44 million each year.

Mr. Owens is just one of perhaps many who were highly paid at Caterpillar.  Mr. Owens is one of those 1% of Americans who have become very, very rich while the US economy spiraled into the worst recession since the Great Depressed.

Isn't it a reasonable question to ask:  

How many of Caterpillars 20,000+ lay offs could have been avoided if such huge compensation packages were used to maintain the American workforce instead of hugely enriching the few at the top of this corporation. 
Another Layoff Shock: Caterpillar (CAT) To Cut 20,000
Posted: January 26, 2009 at 7:42 am
CAT admitted that it could not even call the depth of the recession. The company said "Global economic conditions and key commodity prices have continued to decline significantly. Financial markets remain under stress, and our expectations for 2009 have deteriorated. Uncertainty around the depth and duration of this recession makes it very difficult to forecast sales and revenues."
And Caterpillars share values.  Not so bad considering the plight of millions of Americans:
Caterpillar Share Values 06-10
WARNING:  This might make your blood boil.  Caterpillar seems to speak two languages.  One is "Sad, Bad Prospects, You're Fired" and the other "Proud to Announce Higher Dividends for our Shareholders Because, in the words of Mr. Owens
Caterpillar Inc. (CAT, Free Analysis) of Peoria, Illinois is to raise their quarterly cash dividends to $0.44 per share of common stock, a total increase of $0.02, or 5%. The Board of Directors for Caterpillar voted on June 9th, 2010, and the dividends will be payable August 20th, 2010, to stockholders of record at the close of business, July 20th, 2010. “During the global economic turmoil of 2009, Caterpillar maintained its dividend rate, while also strengthening the company’s balance sheet and improving cash flow.
Now we are pleased to reward stockholders with dividend growth, which underscores Caterpillar’s global reach and the strength of our business model,” said Caterpillar Chairman and Chief Executive Officer Jim Owens. “With this increase, Caterpillar has paid higher dividends to its stockholders for 17 years in a row.” 
Caterpillar has paid a cash dividend every year since the company was created in 1925, and its cash dividend has nearly tripled since 1998. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company saw sales and revenues of $32.396 billion in 2009.
20,000 people lost their jobs, and Caterpillar's CEO and Board of Directors are pleased to pay a higher dividend to it's shareholders?  If this doesn't raise a few eyebrows here, in Congress, and the media what will?
2006 J & J CEO Forbes Column Headings J & J WC Weldon 2006
2009 J & J CEO Forbes Column Headings J & J CW Weldon 2009
Ok, I'm too depressed about this BLATANT FLEECING OF AMERICANS to do the analysis for Mr. Weldon.  Remember, he's the CEO that bought the $8.45 million empty lots while laying off 8,100 workers.
But here's J & J's story regarding layoffs and dividend increases:

Johnson & Johnson
J & J's dividend increase:
J&J last week boosted its dividend payout by 10.2% and the stock currently yields 3.32%.
Really?  10.2%?  That's awesome for the shareholders.
Johnson & Johnson cuts 900 jobs
Health-care giant Johnson & Johnson has eliminated about 900 positions from its U.S. pharmaceuticals unit, becoming the latest drug maker to slash costs amid generic competition and pricing pressures.
The job cuts represented about 6% of the U.S. work force.
HEALTH CARE November 3, 2009, 2:08PM EST text size: TT 
Johnson & Johnson to Overhaul Pharma, Cut 7,000 Jobs
The huge health-care conglomerate has been hit hard by the recession, but it also needs to become more efficient.
And remember these charts that indicate a relationship to corporations huge increase in cash-on-hand and long-term unemployment
Corporate cash-on-hand has risen to its highest increased levels since 1952, from 2007-Present at the same time long-term unemployment has done the same and the CURVE IS ALMOST IDENTICAL.  
Is this contributing to long-term unemployment?  Krugman thinks so.*  The charts seem to indicate it does:
Long-Term Unemployed Chart

Look at the cash-on-hand chart in the upper left for a comparison.

Follow the Money

WHEN WILL CONGRESS CALL A PARTY FOUL?  These rolling in dough companies owe the American people some loyalty.  We made them what they are.  Our sweat, on-the-job injuries, our work ethic, and our dependability for 70 YEARS!!!!!!.



If haven't had to move on because your blood pressure has become dangerously elevated or you feel your pootie and/or woozle are at risk, here's empirical evidence for Target, Kellogs, and Johnson and Johnson:
Fortune 500 earnings soared this year, despite a feeble recovery, as companies cut costs fast and deeply. From Goldman Sachs to Google, here are the biggest winners
Record profits, highest increase in cash-on-hand since the 1950s and 60s.  And the worst unemployment/recession since the Great Depression.
Something doesn't quite add up if the curtain is pulled back.
But, hey, you decide.  

Below is an overview of two economic factors.  The dramatic, even historic, rise in cash-on-hand percentage/quantity holdings by major corporations and the dramatic rise in unemployment.  The two charts above seem to indicate a relationship.

In fact, US unemployment seems to boost the cash-on-hand health of the very corporations who have laid off American workers.

If this is true, why would we expect to see the millions of unemployed ever restored to the jobs and salaries they once earned and enjoyed.

Even more unsettling is this question:  If most corporate boards and officers benefit from profitability that seems to be bolstered by not hiring and paying living wages to American workers, and if the GOP is more corporate friendly, who are these wealthiest of the wealthy going to back in November.  Democrats or Republicans?

I think we are doomed.  So, what can we do about it.  I don't know, I am asking you.
What can we do about this apparent Wall Street driven travesty?

Rather than pontificate, let's listen to the words of the experts:
The Federal Reserve reported Thursday that nonfinancial companies had socked away $1.84 trillion in cash and other liquid assets as of the end of March, up 26% from a year earlier and the largest-ever increase in records going back to 1952. Cash made up about 7% of all company assets, including factories and financial investments, the highest level since 1963. 
"Stockholders don't want them to keep sitting on cash at a zero return," said Paul Kasriel, an economist at Northern Trust. "They're going to use it," either to increase hiring and investment or to make payouts to shareholders in the form of dividends or share buybacks, he said. 
Earlier this week, retailer Target Corp. raised its quarterly dividend to 25 cents a share from 17 cents, saying that the company's cash holdings were "well above the amount needed for optimal reinvestment in our core business."
To demonstrate how layoffs can be good for share values:
Target Corp., the popular discount retailer, is one of the latest chains to announce major layoffs..... 
Soon after the company released its press statement, Target shares closed up 19 cents at $33.34 per share on the New York Stock Exchange today.
The gist of the above-cited WSJ article seems to indicate that the cash-on-hand will be used to better the companies standing via higher dividends paid to shareholders and/or acquisition, not necessarily to employ or better pay employees.
Earnings for companies in S&P 500 surged 176% in the fourth quarter of 2009 and probably rose another 44% in the first quarter of this year, according to Bloomberg data. And that rise in earnings has been accompanied by a rise in cash holdings. 
A recent analysis by Standard & Poor’s Financial Services LLC found that companies in the Standard & Poor’s 500 Index have some $831.2 billion on hand - 36.3% more than they had in December 2007 when the recession officially began. 
Now investors are pressuring many of these corporate cash-hoarders to do something with the money they have on hand. Some of it will go towards the purchase of new equipment, the hiring of more staff, share repurchase programs, and acquiring rivals.But it’s also a safe bet that a large portion of that newfound wealth will be paid back directly to investors through dividends. 
“Dividends show what companies are really saying, how they feel about the economy and their prospects,” Tom Wirther, senior investment officer at Chemung Canal Trust Co., told Bloomberg. 
Over the past week alone, a record 22 companies announced they would reward investors with higher dividend payouts.
A thorough reading of this DailyMarkets report will expose the companies flush with cash and paying higher dividends to its shareholders.  Below you will find the layoff history for two of these companies, Kellogg and Johnson & Johnson.

Kelloggs dividend increase:
Consumer staple Kellogg Company (K: 52.68 
0.34%) - founded in 1906 - has paid dividends since 1986. On April 23, the company increased its payout by 8% to $0.405 per share. Kellogg currently yields about 2.72%.
ibid. DailyMarket
The Kellogg history of layoffs beginning in 1996 to the present, in my opinion, is representative of how corporations seized the opportunities enabled by NAFTA:  Layoff American workers, eliminate benefits, lower wages, and/or offshore mfg.  Below is a link where you can review Kellogg's dismantling of American jobs.
Kellogg layoffs in Omaha
Kellogg said it eliminated the jobs of some production workers at its cereal plant in Omaha, expanding layoffs that began earlier this month...
The Battle Creek, Mich.-based company declined to disclose the number of workers who lost their jobs. But most of them were eligible for retirement, said Kellogg spokeswoman Kris Charles.
Posted: November 19, 2009 
Kellogg plant in Cary begins layoffs
For an insight of how jobs have been lost to American Kellogg workers, read Kelloggs layoff history beginning in 1996.  I think we can thank NAFTA SHAFTA for this:
Johnson & Johnson
J&J's dividend increase:
J&J last week boosted its dividend payout by 10.2% and the stock currently yields 3.32%.
Johnson & Johnson cuts 900 jobs 
Health-care giant Johnson & Johnson has eliminated about 900 positions from its U.S. pharmaceuticals unit, becoming the latest drug maker to slash costs amid generic competition and pricing pressures.
The job cuts represented about 6% of the U.S. work force.
HEALTH CARE November 3, 2009, 2:08PM EST text size: TT 
Johnson & Johnson to Overhaul Pharma, Cut 7,000 Jobs
The huge health-care conglomerate has been hit hard by the recession, but it also needs to become more efficient.
As an aggregious aside:
J&J CEO Weldon Bought $8.45M Waterfront Lot as He Planned 8,100 Layoffs
By Jim Edwards | Nov 3, 2009
Of course, I can go on and on demonstrating this seemingly related trend for the companies boasting higher dividends paid to shareholders this year and their massive layoffs since 2007.

Most telling and easy to see is a journey through a wonderful service provided by Forbes magazine.

Also helpful, although a bit cumbersome, is this site begun in November, 2008:
Is it possible that the gains on Wall Street and higher dividends paid reflect the benefits the massive layoffs had for the corporations?

And, if so, how does this bode for well-paying re-employment?

Where is the plan from either the Democrats or the Republicans to create something/anything to fully employ those about to lose their unemployment benefits, especially in areas of the country where there are NO JOBS.

Make the Dems and especially the Republicans address this egregious trend that may stall re-employment of Americans forever.  
If we don't make Congress address the ability of corporate officers to be able to increase their wealth and pay increased dividends to shareholders at the same time they are laying off workers by the millions, we are missing the key issue to explain long-term unemployment, IMHO.

Will we be seeing trucks piled with families and possessions harkening back to the days of The Grapes of Wrath?

Hasn't history proven time and again that mass unemployment/poverty creates
  • unnecessary societal chaos?  
  • increased crime?  
  • suicides?  
  • spousal/child abuse?  
  • addictions?  theft?  
  • the tax burden of increased incarcerations?
  • and dogged posting of diaries that are extremely irritating, like this one?
If you want, you can go to this link to view the month by month, year by year layoff histories of the Fortune 500 companies.