Wednesday, March 30, 2011

USA CEO Confidence Hits Record High: Survey


U.S. chief executives' view of the economy brightened in the first quarter, with 92 percent expecting sales to rise over the next six months and more than half looking to add jobs, according to a survey.

The Business Roundtable's quarterly CEO Economic Outlook index surged to 113—the highest in the nearly 10 years the group has been doing the poll.

The Roundtable, whose member companies collectively generate close to $6 trillion in annual revenue, conducted the survey between Feb. 28 and March 18.

"Our CEOs see momentum in the economy over the next six months, with increased demand fueling greater investment and job creation," said Ivan Seidenberg, CEO of Verizon Communications, who serves as the group's chairman.

Fifty-two percent of the 142 CEOs who responded to the survey said they planned to add jobs in the United States over the next six months, compared with 11 percent who planned to cut headcount. Sixty-two percent said they planned to boost capital spending.

Monday, March 28, 2011

Peter Morici: The Gathering Storm: USA Economy Remains Too Vulnerable

The economy picked up in the first quarter. After adding 175,000 jobs in February, economists expect the Labor Department will report on Friday that the economy added 188,000 jobs in March. However, events in Japan, Libya and the wider Middle East, and the European sovereign debt crisis threaten to reverse these gains and thrust the economy into a second recession.

Longer term, job gains in the range of 200,000 a month are not enough to push unemployment down to acceptable levels. Dysfunctional energy, trade and tax policies are holding back U.S. growth, adding to unemployment and lowering wages.

Private Sector Jobs

Core private sector jobs have the potential to set off a virtuous cycle of hiring, consumer spending and more hiring, but after such a deep recession, 170,000 jobs per month is simply not enough.

Until February, the private sector was creating few permanent jobs. Most jobs were either in health care and social services, which enjoy heavy government subsidies, or temporary business services. Excluding those activities, the “core” private sector gained 170,000 jobs in February; whereas during the prior 13 months, the average gain was only 45,000.

The economy must add 13 million private sector jobs over the next three years—360,000 each month—to bring unemployment down to 6 percent. Core private sector jobs must increase at least 300,000 a month to accomplish that goal.

Growth at three percent will only keep unemployment steady, because the working age population increases one percent a year, and productivity advances about two percent. Growth in the range of 4 to 5 percent is needed to get unemployment down to 6 percent over the next several years.

Prior to the turmoil in the Middle East, economists were forecasting 3.5 percent growth for 2011, but the surge in oil prices and gasoline at $3.60 per gallon will likely shave half a point—perhaps more—from this less than rosy outlook. Similarly, should the nuclear crisis keep Japanese manufacturing shut down for more than a month, U.S. GDP could be slashed as much as another one half a point—to something in the range of 2.5 percent.

Also, the festering European sovereign debt crisis and new weakness in the housing market threaten to further dampen exports and domestic consumption, and slow growth further.

Wrap all those together and a perfect storm may be brewing.

Growth below 2.5 percent would result in waves of new layoffs, a further tumble in housing prices, retreat in the equities market, and rising interest rates as the federal deficit soared. That combination would kill the recovery and send the economy into a second recession from which it might not recover for many years.

Structural Impediments to Growth

The U.S. economy and the durability of American prosperity are too vulnerable, because temporary tax cuts, stimulus spending and large federal deficits do not address structural problems holding back GDP growth and jobs creation—the huge trade deficit, dysfunctional energy and tax policies, and rising health care costs are the culprits.

At 3.3 percent of GDP, the $500 billion trade deficit is a tax on domestic demand that erases the benefits of tax cuts. Consequently, the U.S. economy is expanding at about 3 percent a year instead of the 5 percent pace that is possible after emerging from a deep recession and with such high unemployment.

Oil and trade with China account for nearly the entire U.S. trade deficit.

The Administration is banking on electric cars and alternative technologies, such as wind and solar, to replace imported oil but those won’t pull down gasoline consumption enough to significantly reduce the oil import bill for a least a decade. Failure to produce more domestic oil and gas, by sending dollars abroad that do not sufficiently return to purchase U.S. exports, is a jobs killer.

China maintains an undervalued currency by spending 10 percent of GDP to purchase dollars—this reduces domestic Chinese consumption and subsidizes Chinese exports by about 35 percent. Failure act to offset Chinese currency subsidies, for example by taxing dollar yuan conversions, is the single most significant flaw in Administration policy to create an adequate numbers of jobs.

More broadly, major trading partners in Europe and Asia rely on value added taxes to finance government and health care, whereas Americans pay higher corporate taxes and directly for health care.

Under WTO rules, VATs are rebateable on exports from Europe and Asia and are applied on imports from the United States into those markets, creating huge pricing disadvantages—American products are essentially taxed twice. A neutral change in U.S. tax policy toward a VAT—swapping a VAT for reductions in corporate and personal income taxes—would help remove a major competitive disadvantage on U.S. exporting and import-competing industries.

Without fixing energy policies, addressing Chinese currency subsidies, modifying the tax structure, and truly reforming health care, high unemployment will be a permanent feature on the U.S. economy and real wages will decline. Neither the Obama Administration nor Republican leadership in the Congress appears inclined to do what needs to be done.

Finally, the 2010 health care law is pushing up health care costs, rather than reducing those as promised, making insurance unaffordable for many small and medium sized businesses. Although manufacturing has enjoyed a stronger recovery than the rest of the economy, it has been significantly focused on activities that use very little labor illustrating the burden that health care imposes on U.S. employers.

Thursday, March 24, 2011

Elephant Collars Allow GPS tracking in Kenyan Anti-Poaching Effort

Elephant GPS Tracking Collar


Eight elephants have been fitted with GPS collars to help the Kenyan Wildlife Service map their traditional migration corridors in the Tsavo East National Park.

The monitoring project will also help rangers combat poaching and instances of human-elephant conflict. Stuart McDill reports.




Elephant collars allow GPS tracking in Kenyan anti-poaching effort | Video | Reuters.com

Pastor Loses Job After Doubting Hell's Existence (Video) "Love Wins?"

When Chad Holtz lost his old belief in hell, he also lost his job.
The pastor of a rural United Methodist church in North Carolina wrote a note on his Facebook page supporting a new book by Rob Bell, a prominent young evangelical pastor and critic of the traditional view of hell as a place of eternal torment for billions of damned souls.
Two days later, Holtz was told complaints from church members prompted his dismissal from Marrow's Chapel in Henderson.
"I think justice comes and judgment will happen, but I don't think that means an eternity of torment," Holtz said. "But I can understand why people in my church aren't ready to leave that behind. It's something I'm still grappling with myself."
The debate over Bell's new book "Love Wins" has quickly spread across the evangelical precincts of the Internet, in part because of an eye-catching promotional video posted on YouTube.

N.C. Pastor Fired for Not Believing in Hell Pastor Chad Holtz ministered to a congregation in Oxford, North Carolina until he stated that he no longer believed in hell in a blog post to the church website. Holtz told his story to the AP.

Bell, the pastor of the 10,000-member Mars Hill Bible Church in Grand Rapids, Mich., lays out the premise of his book while the video cuts away to an artist's hand mixing oil paints and pastels and applying them to a blank canvas.
He describes going to a Christian art show where one of the pieces featured a quote by Mohandas Gandhi.  Someone attached a note saying: "Reality check: He's in hell."
"Gandhi's in hell? He is? And someone knows this for sure?" Bell asks in the video.
In the book, Bell criticizes the belief that a select number of Christians will spend eternity in the bliss of heaven while everyone else is tormented forever in hell.
"This is misguided and toxic and ultimately subverts the contagious spread of Jesus' message of love, peace, forgiveness and joy that our world desperately needs to hear," he writes in the book.
For many traditional Christians, though, Bell's new book sounds a lot like the old theological position of universalism — a heresy for many churches, teaching that everyone, regardless of religious belief, will ultimately be saved by God. And that, they argue, dangerously misleads people about the reality of the Christian faith.
"I just felt like on every page he's trying to say 'It's OK,'" said Southern Baptist Seminary President Albert Mohler at a forum last week on Bell's book held at the Louisville institution. "And there's a sense in which we desperately want to say that. But the question becomes, on what basis can we say that?"
Ancient Debate 

About the only thing everyone agrees on is that this is not a new debate in Christianity. It stretches to antiquity, when Christianity was a persecuted sect in the Roman Empire, and the third century theologian Origen developed a theory that contemporary critics charged would mean that everyone, even the devil himself, would ultimately be saved. Church leaders eventually condemned ideas they attributed to Origen, but he has had a lasting influence across the Roman Catholic, Orthodox and Protestant traditions
Those traditions often disagree, even internally, on what awaits souls after death. The Catholic Church, which has a formal process for identifying souls in heaven through canonization, pointedly refrains from saying that anyone is without a doubt in hell. Protestants reject the concept of purgatory, in which sins can be atoned for after death, but disagree on other questions. The lack of consensus is enabled partly by ambiguities in the Bible.
Evangelical opposition to Bell is exemplified in a succinct tweet from prominent evangelical pastor John Piper: "Farewell, Rob Bell.
Page Brooks, a professor at the New Orleans Baptist Theological Seminary, thinks Bell errs in a conception of a loving God that leaves out the divine attributes of justice and holiness.
"It's love, but it's a just love," Brooks said. "God is love, but you have to understand you're a sinner and the only way to get around that is through Christ's sacrifice on the cross.
Making his new belief public is both liberating and a little frightening for Holtz, even though his doubts about traditional doctrines on damnation began long before he heard about Rob Bell's book
A married Navy veteran with five children, Holtz spent years trying to reconcile his belief that Jesus Christ's death on the cross redeemed the entire world with the idea that millions of people — including millions who had never even heard of Jesus — were suffering forever in hell.
"We do these somersaults to justify the monster god we believe in," he said. "But confronting my own sinfulness, that's when things started to topple for me. Am I really going to be saved just because I believe something, when all these good people in the world aren't?
Gray Southern, United Methodist district superintendent for the part of North Carolina that includes Henderson, declined to discuss Holtz's departure in detail, but said there was more to it than the online post about Rob Bell's book
"That's between the church and him," Southern said.
Church members had also been unhappy with Internet posts about subjects like gay marriage and the mix of religion and patriotism, Holtz said, and the hell post was probably the last straw. Holtz and his family plan to move back to Tennessee, where he'll start a job and maybe plant a church.
"So long as we believe there's a dividing point in eternity, we're going to think in terms of us and them," he said. "But when you believe God has saved everyone, the point is, you're saved. Live like it.
Bell argues that hell has assumed an outsize importance in Christian teaching, considering the word itself only appears in the New Testament about 12 times, by his count.
"For a 1st-century Jewish rabbi, where you go when you die wasn't the most pressing question," Bell told The Associated Press. "The question was how can you enter into the shalom and peace of God right now, this day."
Bell denies he's a universalist, and his exact beliefs on what happens to people after death are hard to pin down, but he argues that such speculation distracts people from an urgent point. In his telling, hell is something freely chosen that already exists on earth, in everything from war to abusive relationships.
The near-relish with which some Christians stress the torments of hell, Bell argues, keep many believers needlessly afraid of a loving God, and repel potential Christians who might otherwise be curious about the faith's teachings.
"The heart of the Christian story is that God is love," he said. "But when you hear the word 'Christian,' you don't necessarily think 'Oh, sure, those are the people who don't stop talking about God's love.' Some other things would come to mind."

Pastor loses job after doubting hell's existence - US news - Life - msnbc.com

Atlantic Oil Spill Threatens Endangered Penguins


Thousands of endangered penguins have been coated with oil after a cargo ship ran aground and broke up on a remote British South Atlantic territory, officials and conservationists said Tuesday.
The shipwreck also threatens the lobster fishery that provides a livelihood to one of the world's most isolated communities.

US Finances Rank Near Worst in the World: Study (Video) *Burgeoning debt problem*

The US ranks near the bottom of developed global economies in terms of financial stability and will stay there unless it addresses its burgeoning debt problems, a new study has found.

In the Sovereign Fiscal Responsibility Index, the Comeback America Initiative ranked 34 countries according to their ability to meet their financial challenges, and the US finished 28th, said David Walker, head of the organization and former US comptroller general.

While the news is bad, there is a bright side.

"We think it is important for the American people to understand where the United States is as compared to other countries with regard to fiscal responsibility and sustainability," Walker said in a CNBC interview. "Americans are used to rankings and they're used to ranking very high, but frankly in this area we rank very low."

As the US languishes near the bottom, these countries make up the top five: Australia, New Zealand, Estonia, Sweden, China and Luxembourg.

"Here's the good news: Some of the top countries had their own fiscal challenges, made reforms and now rank highly," Walker said. "If we adopt the recommendations of the National Fiscal Responsibility and Reform Commission or ones that have similar bottom-line impact, we move from 28 to 8."

But he said policymakers in Washington can learn much from countries like New Zealand, which faced a currency crisis and made the necessary reforms to get back to prosperity.

Walker acknowledged that some of the countries that rank ahead of the US do not have the same type of challenges.

Walker predicted the US will have a debt crisis "within the next two to three years" and implored Washington lawmakers to "wake up."

"First, they're arguing over the bar tab on the Titanic," Walker said. "We need to cut spending.

Frankly we need to cut spending more than what has been talked about but over a longer period of time. But what's imperative is that we need to attach some conditions to increasing the debt ceiling limit that will bring back tough budget controls..."


G.E.’s Strategies Let It Avoid Taxes Altogether *$14.2B profit, no tax, $3.2B refund*

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. Even as the government faces a mounting budget deficit, the talk in Washington is about lower rates. President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue. He has designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.

“He understands what it takes for America to compete in the global economy,” Mr. Obama said of Mr. Immelt, on his appointment in January, after touring a G.E. factory in upstate New York that makes turbines and generators for sale around the world.

A review of company filings and Congressional records shows that one of the most striking advantages of General Electric is its ability to lobby for, win and take advantage of tax breaks.

Over the last decade, G.E. has spent tens of millions of dollars to push for changes in tax law, from more generous depreciation schedules on jet engines to “green energy” credits for its wind turbines. But the most lucrative of these measures allows G.E. to operate a vast leasing and lending business abroad with profits that face little foreign taxes and no American taxes as long as the money remains overseas.
Company officials say that these measures are necessary for G.E. to compete against global rivals and that they are acting as responsible citizens. “G.E. is committed to acting with integrity in relation to our tax obligations,” said Anne Eisele, a spokeswoman. “We are committed to complying with tax rules and paying all legally obliged taxes. At the same time, we have a responsibility to our shareholders to legally minimize our costs.”

The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company’s executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.

But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States.

G.E.’s Strategies Let It Avoid Taxes Altogether - NYTimes.com