Saturday, April 5, 2008

US jobless figures: The specter of a new depression

US jobless figures: The specter of a new depression

By David Walsh

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Friday’s Labor Department report, revealing that US payrolls were cut by 80,000 jobs in March and that 232,000 jobs have been lost in the past three months, can only mean new levels of social misery and raises the specter of a severe economic slump, perhaps the deepest since the Great Depression of the 1930s.

The March decline in jobs is the largest in five years. The number of private sector jobs has dropped by 300,000 since November 2007.

Millions of Americans face the prospect of a sharp decline in living standards and conditions of life. Because of their commitment to the profit system, no section of the US political establishment—neither the Bush administration and the McCain campaign nor the Clinton and Obama camps—is capable of proposing any measures that will materially assist those seeing their jobs, homes nor social benefits disappear or devastated by the present developments.

The figures contained in the Bureau of Labor Statistics (BLS) survey are bleak. The number of those officially counted as jobless rose by 434,000 in March to 7.8 million. The unemployment rate rose from 4.8 to 5.1 percent (the highest since the aftermath of Hurricane Katrina in September 2005). In the past 12 months, 1.1 million people have been added to the jobless rolls and the official jobless rate has climbed by 0.7 percent.

The number of people unemployed because they lost jobs climbed to 4.2 million; that figure has grown by almost one million in a year.

The debacle in the housing, credit and financial sectors is leading to “a broad-based decline,” in the words of Moody’s economist Mark Zandi. March’s figures on jobs, said Zandi, indicated that the problem “wasn’t just housing and Wall Street. The problems in the housing market have now affected the rest of the economy.” (Los Angeles Times)

Construction continued to be hard hit, with a loss of 51,000 jobs in March. Construction employment is down 394,000 since its peak in September 2006. Most of the decrease in March, 42,000 jobs, took place among specialty trade contractors. Both residential and commercial construction employment declined. David Wyss of Standard and Poor’s told the Associated Press that the construction figures were “doubly troubling” because March is “the first good month you get on construction because seasonal factors aren’t as large as they are in January.”

Manufacturing jobs fell by 48,000 in March (the largest drop since October 2006) and 310,000 have been lost in the past 12 months. The biggest job losses have taken place in durable goods, where wages and benefits tend to be higher.

Construction-related industries, such as wood products (5,000 jobs), nonmetallic mineral products (5,000 jobs) and furniture and related products (also 5,000 jobs) all suffered. Plastics and rubber products and textile mills also lost jobs, according to the BLS.

Jobs in employment services fell by 42,000 in March and have decreased by 210,000 since August 2006. Twelve thousand jobs in retail trade were lost, including 9,000 in building material and garden supply stores.

The March employment figures were worse than analysts had predicted. Moreover, the unemployment numbers for January and February were revised upward, adding another 67,000 jobs lost. John Silvia, chief economist for Wachovia, told CNNMoney.com, “The revisions are the real surprise in the report. If we had known it was anything like that, there would not have been any debate going on about whether we were in a recession. It’s pretty stark.”

Other analysts chimed in with gloomy comments. “Another terrible report,” said Joseph Shapiro of MFR, Inc., an economic forecasting firm in New York. “Private payrolls now down for four consecutive months. Consumer spending outlook is grim, with wage and salary income growth fading fast and other headwinds as strong as ever... This economic slump is going to be a long, grinding one, and a ‘v-shaped’ recovery appears quite unlikely.”

Ian Shepherdson of High Frequency Economics noted that the overall numbers were “significantly worse than expected ... Trends are awful; unemployment will keep rising, squeezing spending.”

The Economic Policy Institute pointed out that for “the fifth month in a row, fewer than half of industries have added jobs, demonstrating the pervasive nature of job loss.”

The government’s jobless rate notoriously underestimates the actual number of people out of work. The BLS reports that the “total unemployed” rate, a somewhat more realistic gauge of the actual job situation, which includes those working part-time involuntarily and those who have given up looking for employment, stood at 9.1 percent in March 2008 (seasonally adjusted), some 13.9 million people, up from 8.0 a year earlier, an increase of 13.75 percent over 12 months.

At the same time, increases in workers’ wages are falling behind inflation. Over the course of the year, wages grew 3.6 percent, less than the inflation rate of approximately 4 percent. Furthermore, since weekly hours also slowed during the past 12 months, weekly earnings are only up 3.3 percent, markedly behind the rate of inflation.

For certain staple items, prices have risen far faster than 4 percent. Flour, milk and eggs were up 24 percent for the year ending in February, according to the Consumer Price Index. By March 30, American Automobile Association figures indicate, gasoline had risen to an average of $3.287 a gallon for regular unleaded, more than 61 cents (or 23 percent) above the price a year ago.

Associated Press economics writer Jeannine Aversa commented, “With lofty energy and food prices, workers may feel like their paychecks are shrinking.” This is, in fact, a mass experience, at the same time as Wall Street operators and corporate CEOs continue to rake in vast fortunes. These geniuses, who have proclaimed the wonders of the market for the past quarter-century, preside over the present disaster threatening wide layers of the population.

The process feeds on itself. Economic uncertainty and the loss of jobs lead to decreased purchases, which contribute to further layoffs. US auto sales fell sharply in the first three months of 2008, as domestic and foreign car companies combined to post one of the worst first quarters in years. US auto sales as a whole dropped 12 percent over the same quarter a year ago; General Motors sales were down 19 percent; Ford, 14 percent; Toyota, 10 percent and Honda, 3.2 percent.

The BLS reported Friday that auto jobs fell by 24,000 in March, in part because of the ongoing strike at American Axle in Detroit and western New York state; the average monthly decline in auto was 6,000 jobs per month in the year ending in February.

The day before the bureau issued its report, an influential member of the Federal Reserve, Janet Yellen of San Francisco, told an audience that the US economy has “slowed to a crawl” and said no improvement was likely until 2009 at the earliest.

Addressing a conference in Florida in mid-March, Harvard economist Martin Feldstein, a member of the National Bureau of Economic Research, which dates business cycles in the US, remarked: “I believe the US economy is now in recession. Could this become the worst recession we have seen in the postwar period? I think the answer is yes. I would emphasize the word ‘could.’”

The assault on the working population goes beyond the growth in joblessness and inflation, as serious as they are. This “perfect storm” of an economic crisis means that the value of the only asset many people possess, their home, is dropping even as the job market shrinks and prices rise. Standard & Poor’s recently indicated that US home prices might decline as much as 20 percent by the end of 2008 from their peak in 2006.

The result is a flood of mortgage foreclosures, which rose to an all-time high at the end of 2007, the Mortgage Bankers Association revealed in a March 6 report. RealtyTrac reported at the end of March that 225,000 properties were in some stage of foreclosure, an increase of nearly 60 percent from the same period one year earlier.

The social consequences are appalling.

The increased number of empty houses for sale (now, in percentage terms, as high as at any time since 1956, when records were first kept) has led to an epidemic of break-ins aimed at stripping homes of pipes made of copper and other valuable metals. Reuters reported April 1, “In areas hit hardest by foreclosures, such as the Slavic Village neighborhood of Cleveland, Ohio, copper and other metals used in plumbing, heating systems and telephone lines are now more valuable than some homes.” A Cleveland city councilor, Tony Brancatelli, explained, “We’re seeing houses sold for $100 that are distressed houses that should not be recycled.”

Meanwhile the wars in Iraq and Afghanistan grind on, resulting in the deaths of countless Iraqis and Afghans, the killing and maiming of thousands of Americans and the draining of the US treasury to the eventual tune of trillions of dollars.

The lame-duck Bush administration barely goes through the motions in the face of alarming economic news. The Wall Street Journal noted acerbically Friday that, apart from tracking economic data and advising Treasury Secretary Henry Paulson, “Treasury officials seem to have two clear missions: agree with Federal Reserve Chairman Ben Bernanke and don’t utter the word ‘recession.’”

A White House spokesperson indicated the administration was “not happy” with the jobs report and promised that the economy would pick up later in the year.

George W. Bush spent Friday evening with the president of Croatia, Stjepan Mesic, in Zagreb. Oblivious to popular suffering either in America or the Balkans, during the course of his toast to Mesic, Bush idiotically declared: “We believe there’s a Creator that has given every man, woman and child on the face of the Earth the great gift of freedom. We believe markets are capable of unleashing the entrepreneurial spirit of our peoples. We understand that freedom requires sacrifice.”

Even as this “entrepreneurial spirit” was wreaking havoc in the US and global economy, the various major party rivals for Bush’s office made clear they intend to do nothing to alleviate the economic distress of the broad mass of the population.

Presumptive Republican Party candidate for president, John McCain, promised more of the same “free market” policies that have led to the present calamity, declaring, “it is essential to reduce the burdens on businesses and workers by lowering taxes, streamlining regulation, tackling health care costs, opening markets to American goods and helping those workers in need.”

The Democrats sought to gain political advantage from the bad economic news, without offering any concrete plan for remedying the situation. New York Senator Hillary Clinton praised the $30 billion Bear Stearns bailout and urged “equally aggressive action to help American families struggling in our bearish economy.”

She again endorsed proposals being drafted by Democrats Congressman Barney Frank of Massachusetts and Senator Christopher Dodd of Connecticut, aimed at averting an even deeper financial crisis and propping up the banks by ending the decline in home prices. The Frank-Dodd plan—which will not be enacted, in any event, due to Republican opposition—would aid only a fraction of the millions of families facing foreclosure.

Illinois Senator Barack Obama also criticized the Bush administration without offering a serious alternative. Both Clinton and Obama always have to make certain that they do not offend powerful financial and banking interests, on whose endorsements and funding they depend.

Obama said, “Instead of doing nothing for out-of-work Americans, we need a second stimulus that extends unemployment insurance and helps communities that have been hit hard by this recession. Instead of tolerating decades of rising inequality, we need to grow the middle class by investing in millions of new Green Jobs and rebuilding our crumbling infrastructure.” These vague promises, which will never be carried out, will not help anyone.

The leading Democrats are insulated from the day-to-day reality and sentiments of broad masses of people in the US and could not respond even if they were aware of them. They speak for one wing of the oligarchy that rules the country.

Meanwhile a radicalization is under way that will blow apart the two-party system and the entire political set-up in America. A poll whose results were published in the New York Times Friday provides a glimpse into the actual state of popular opinion. The newspaper reported that Americans “are more dissatisfied with the country’s direction than at any time since the New York Times/CBS News poll began asking about the subject in the early 1990s.”

The survey found that 81 percent of respondents believed “things have pretty seriously gotten off on the wrong track,” an increase from 69 percent a year ago and 35 percent in early 2002. Only 21 percent of those surveyed said the overall economy was in good shape, and 78 percent felt that the US was in worse condition than 5 years ago. Only 28 percent approved of Bush’s performance.

The decline of the position of American capitalism in the world, its decisive loss of global hegemony, has the most profound implications. For wide layers of the population it means, in the first place, a series of severe shocks. In the end, this process must have revolutionary political consequences.

Wall Street brokerages borrowing $38.1 billion a day from Federal Reserve

Wall Street brokerages borrowing $38.1 billion a day from Federal Reserve

By JEANNINE AVERSA

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WASHINGTON -- Big Wall Street investment companies are stepping up their borrowing a bit from the Federal Reserve’s unprecedented emergency lending program.

The Federal Reserve reports Thursday that those firms averaged $38.1 billion in daily borrowing over the past week from the new lending program. That compared with $32.9 billion in the previous week and $13.4 billion in the first week the lending facility opened.

The program, which began on March 17, is part of the Fed’s effort to aid the financial system.

The Fed, for the first time, agreed to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, will continue for at least six months. It was the broadest use of the Fed’s lending authority since the 1930s.

Fed Chairman Ben Bernanke and his colleagues opened the facility as it raced to deal with the sudden crash of the venerable Wall Street firm Bear Stearns, which was on the brink of bankruptcy. Fearful that other investment firms could be in jeopardy given the intense fear that gripped the markets at that time, the Fed moved to give investment firms a place to go for overnight cash loans.

The lending facility is seen as similar to the Fed’s “discount window” for commercial banks, where the Fed acts as a lender of last resort. Commercial banks and investment companies pay 2.5 percent in interest for overnight loans from the Fed.

Banks also stepped up their borrowing from the Fed’s discount window. Banks averaged $7 billion in daily borrowing for the week ending April 2. That compared with $550 million the previous week.

Fed's interest rate games could destroy the dollar

Fed's interest rate games could destroy the dollar

Tim O'Brien

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Federal Reserve Chairman Ben Bernanke has reduced the key federal funds rate six times in as many months -- reducing the cost for major borrowers significantly. This combines with providing $270 million in funding, plus $30 billion in additional guarantees, for JP Morgan Chase to buy Bear Stearns Cos.

"Helicopter Ben" is living up to the nickname he earned after he remarked in a 2002 speech that he would stave off a recession even if he had to drop money from helicopters to do it.

The results of these policies have been destructive. The dollar is collapsing not only against foreign currencies -- we're now at par with the Canadian dollar and rocketing toward a 2-1 deficit against the Euro -- but also against commodities. Gold was passing the $1,000-an-ounce landmark, silver $20. Even industrial metals like copper and zinc are fetching record prices.

Now, a spike in a particular commodity -- say, for instance, $100-per-barrel oil -- can be attributed to a shortage. But when they all move dramatically and simultaneously, it's the purchasing power of our money that has gone down.

In fact, the increasing cost of even the base metals recently prompted Edmund Moy, director of the United States Mint, to propose further debasing the copper and nickel-plated, zinc slugs we call coins by substituting color-coated steel.

"Never before in our nation's history has the government spent more money to mint and issue a coin than the coin's legal tender value," he claimed in testimony at a recent hearing before the House Financial Services Committee's panel on monetary policy. But the U.S. mint continues to issue 1-ounce Gold Eagle coins currently worth about 18 times their $50 legal tender value.

The beginning of the end for money "as sound as a dollar" was the creation of the Federal Reserve less than a century ago. The final blow came during the Nixon administration when our money's last tie to anything of intrinsic worth was severed with the decree that even Silver Certificate currency would no long be redeemable in specie.

Why would Bernanke, Moy, et al., want to degrade our money? Who benefits?

The answer is: those who are at the head of the line. Creating an additional $270 million in U.S. currency to give JP Morgan Chase provided that company the means to acquire Bear Stearns. Then the owners of Bear Stearns spend the money on something else, albeit at slightly reduced purchasing-power value.

The effects will continue to ripple outward, gradually diminishing. The amount of goods and services that can be bought with that $270 million must inevitably decline until the nominal value of the currency reaches equilibrium with the actual wealth available in the economy to purchase.

And who will pay? You will -- in the future when you go to draw out the money you put into your 401(k) in today's dollars. Your investment won't be worth as much as it should.

What is amazing is that the public has acquiesced in this money-debasing. It ought to be self-evident that it is impossible to create wealth by making entries in a computer.

One Nevada businessman may have found a way to bring the system crashing down -- he has begun paying employees in those $50 Gold Eagle coins, making their annual salaries well below the threshold for even having to file tax returns. So far, the IRS is helpless to stop it.

The Forbidden Financial Topic: U.S. National Debt

The Forbidden Financial Topic: U.S. National Debt

by Mike Adams

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(NaturalNews) As we wind our way towards an election between the numerous professional liars who have been put forward as candidates for U.S. President, it seems to be a great time to remind us all about the financial issue being routinely ignored by virtually everyone (except Ron Paul, of course, who was never really embraced by the "please lie to me" mainstream public). To what financial issue am I referring? The national debt, of course.

Americans don't want to hear about the national debt. It's like a family living paycheck to paycheck, maxed out on their credit cards, trying to pretend the collection notices are all being lost in the mail. They don't want to admit they have no ability to actually pay off the debt they've incurred by pursuing a flamboyoant lifestyle, blowing wads of cash on high-priced wines, luxury vehicles, and an occassional line of coke -- they desperately want to imagine they can keep living on money that appears from nowhere, regardless of how much they owe to everybody else and the fact that their incomes don't even come close to matching their expenditures.

See the related Counterthink Cartoon on this topic at: http://www.naturalnews.com/022931.html

Too bad every household in America doesn't have its own Federal Reserve, huh? If it did, we could all just print money to pay off our debt, save our skins, and ignore the fundamentals of economics. But even in Washington today (and New York), the Federal Reserve is too busy bailing out greedy, criminally-operated banks to turn much attention to the much larger issue of the United States' national debt. Apparently, saving the banks is more important than anything else, and the Fed is now committed to destroying the U.S. dollar through runaway hyperinflation in order to prevent a few rich bankers from facing the consequences of their outrageous sub-prime lending sprees.

America runs its finances like a crack addict

But let's get back to the national debt for a moment. The United States government is broke. The only reason it's been able to operate for this long is because other nations and foreign central banks have been foolish enough to keep lending the U.S. government more money. It's like giving cash to a crack addict and hoping he will somehow seek out a drug rehab center on his own.

This is the person who never gets a job, never makes an honest living, but yet somehow manages to hit up everybody else for cash. You know how it works: "I need to buy a car to get a job," they say. And then when you pony up the cash for their car, they get drunk and wreck the car, and they never try very hard to get a job in the first place. They keep spending and spending, tossing money down the drain on blows of crack, meth, heroin or booze. They promise to go into rehab someday, if you'll only help them through "the next month" with a little more cash. This is the life of a drug addict. (Do you know one? Everybody does, it seems...)

America is that drug addict. It borrows cash from the central banks around the world, blowing it all on Medicare prescription benefits signed into law by Bush (money for drugs, see?). It spends trillions on military campaigns that accomplish nothing positive, yet enrage the global community and recruit lifelong enemies of this nation. Notice how the price of oil has more than tripled since the war with Iraq started? It's so bad now that truck drivers are going on strike over the price of diesel.

America spends money not merely like a drunken sailor, but like a crack-addicted sailor with a wheelbarrel piled high with one-hundred dollar bills, locked in a room full of Gov. Spitzer's favorite hookers and a suitcase spilling over with blow.

Don't dare explain the national debt to anyone

But try to explain the simple workings of finance, debt and economics to the uninformed, and you'll be accused of being a doomsayer, a pessimist, or -- the worst insult in today's fear-based society -- unpatriotic! How dare you point out the economic truths that will soon bring this country's federal government to its knees! Such blatant truths shall not be tolerated... especially not in a country whose entire financial system is based on a cascade of fictional financial instruments propped up by nothing more than wishful thinking and Enron-style accounting fraud.

Let me translate all this for you in serious terms: The United States is already broke. The Federal Reserve is destroying the currency. The U.S. dollar will soon be virtually worthless. There is no saving the dollar, and there's no saving the savings of any U.S. citizen foolish enough to be holding dollars when the music stops. The Federal Reserve has already decided to do anything in its power to save the rich bankers; even if it means destroying the value of all the dollars held by hard-working Americans. The day will come, folks, when your savings accounts will all be "recalibrated" and you'll be given ten cents on the dollar while the Fed slinks away with 90% of your savings, using it to bail out overpaid bank owners.

And the federal government? Under a long string of presidential crooks -- Democratic and Republican alike -- it has decided to pursue a dangerous experiment called, "What happens if we never pay our debtors while running up more debt?" That experiment, not surprisingly, will end in the financial demise of this nation. (But there's good news: A new, better system may emerge from the dust of the greenback... keep reading...)

You can't defy the laws of gravity... nor economics

These aren't careless predictions, by the way. These are simple observations the follow the fundamentals. Why are the nations of the world fleeing the U.S. Treasury debt auctions? Why are dollars increasingly worthless everywhere except in the United States itself? The answer is because the Fed is hyperinflating the currency to save the banks, even while the government is snorting yet more crack and spending unprecedented levels of increasingly-worthless dollars on drugs and war (or, as they call it, "medication and defense").

Hence the bumper sticker: Annoy everyone. Explain the national debt. People don't want to hear this. They'd rather imagine none of these problems exist; that debt doesn't matter; that unlimited dollars can be created out of nothing with zero impact on peoples' savings; that the U.S. government is wise enough to avert financial disaster. These are the hopes of the deluded. These are precisely the ramblings of Enron's accountants before the crash, or dot-com stock pushers before that crash. They're the slobbering blatherings of all the people who said housing prices will never fall, and therefore everyone will get rich off the never-ending housing price booms!

Important lessons learned the hard way

I've spend many years pointing out the idiocies of the deluded. I publicly predicted the dot-com crash and began warning people to get out of the market in 1998 - 2001. (This is a matter of public record, not some wishful hindsight.) I also publicly predicted the collapse of the housing market right here on this website, beginning nearly two years ago. And now, those predictions that once seemed "radical" are the Wall Street Journal's front page news. What am I predicting now? Like I said, it's not a prediction, it's just an observation.

It's like observing gravity. If you toss something into the air, you can be confident it's going to come falling back to the ground. You don't have to "predict" gravity; it's a law of the universe. It works by itself, like clockwork, regardless of what you want it do to (I'm ignoring near-light speed travel, relativity, quantum physics, and all that fun stuff for the purposes of this metaphor, by the way, for those readers who are physicists). Likewise, when you see a nation throw its dollars into the air, spending its way to oblivion, ignoring its debt and ramping up its spending to even higher levels, it doesn't take much of a prediction to know that it's all going to fall back to the ground in a grand economic collapse.

So I'm not even calling the coming collapse of the U.S. government a "prediction." It's just common sense. It's as obvious as gravity. If you don't believe me, do the math. There is no mathematical solution to the current financial crisis facing not merely the banks and the currency, but the federal government itself. The only unknown factor is WHEN things will happen. Can the Fed help the economy limp along in a state of near-collapse for another year? Perhaps. Five years? Maybe. Ten years? I doubt it.

Now for the good news: The good news is that the U.S. federal government will eventually go bankrupt. Yes, that's the good news! Because after the financial chaos passes (which will not be fun, believe me), we have a chance to create a new society, a new currency and a new, honest system of government that actually represents the People for a change. The current cabal of corruption and criminal behavior that sits in Washington and pretends to protect the interests of the voters is about to find itself on the receiving end of an angry mob. The 200+ year experiment called The United States of America is in its final chapter. But out of its failure, we can learn important lessons. We can learn things that will help us create a better future society. Lessons like:

• Never let a private company (the Federal Reserve) control the money supply.

• Never let "representative" legislators vote in your place. Insist on a DIRECT Democracy in the next society. (We don't need Senators and Congresspeople, folks. The whole concept is long since outdated, and most Senators and Congresspeople are crooks.)

• Never let a government abandon the gold standard for its currency. If you do, that government will inevitably hyperinflate the currency and leave the people broke.

• Never let corporations run the government. If you do, your government will become a branch of the corporations, and the regulators (like the FDA, USDA, etc.) will become agents of corporate-sponsored terrorism that abandon all ethics and destroy the health and safety of the People.

• Never allow the centralization of power in one branch of government. For example, do not allow the creation of Executive Orders we've seen signed by the President.

• Never allow one man (the President) to commit acts of war. Didn't we learn this after Vietnam?

• Never allow people from industry to take jobs in the government where they become biased, pro-corporate pushers of everything from pharmaceuticals to beef.

• Never allow politicians to censor scientists.

• Never allow the population to be dumbed-down through sub-standard public schools that only raise a generation of obedient workers, not skeptical thinkers.

• Never allow the media to control the population through advertiser-supported propaganda and violent programming.

• Never allow politicians to destroy citizens' rights. When they attempt to do so, march on your capitol (in a non-violent way, of course). Arrest the politicians. Prosecute them for crimes against the People.

• Never allow corporate lobbyists to have access to lawmakers. If you do, you'll end up with a corrupt government that only protects corporations, not the People.

• Never allow your government to operate in secret, with secret prisons, secret wiretapping laws and secret war "evidence" that is never made public. Secrecy breeds corruption. Honest societies do not need to conduct their judicial processes in secret.

• Never allow corporations to play God with the food supply by genetically modifying the crops.

• Never allow corporations to be granted intellectual property ownership over seeds, genes, animals and medicines. If you do, you will one day wake up impoverished, "homeless on the continent your fathers conquered," to quote Jefferson.

• Never allow banks to operate on a fractional reserve system of loans and money creation that's just begging for a series of cascading failures.

... I could go on, but you get the point. We have learned some very tough lessons over the last 200+ years, and once this present government collapses, it is crucial that we apply those lessons in creating a new system that abandons tyranny and embraces genuine freedom. We will have this opportunity soon. Many Americans will lose their life savings on the journey towards this new opportunity, but if we maintain our collective vision of a brighter future society, I believe we can create something much better out of the ashes of this failed experiment called the United States of America.

Please note: In no way do I support violence of any kind in creating a new society in the aftermath of this current one. I only support collaboration, openness, freedom and great respect for all living creatures as well as our sacred planet Earth. I believe the passing of this failed government is a blessing, not a curse, and I believe the collapse of the U.S. dollar will ultimately help awaken many to the tough but rewarding decisions that will face us all in the very near future. We must consciously decide to take back our freedoms, our rights and our futures from a system of corporate and government control that has destroyed our planet, exploited our people, and stolen our savings. But if can make the rights decisions based on creating a more promising future for our children, then the rewards will be unimaginable.

We the People hold the power to create a new society based on the freedoms and promises once held sacred in this land. Be ready to play your role, a constructive role, in the aftermath of this current society. And do not be surprised when gravity kicks in and this entire fictional government charade comes crashing down along with the fractional reserve banking system, the criminal Federal Reserve, the war-mongering politicians and the endless, endless debt. There is no way out now other than collapse and rebirth.

I can't say when it will come, or exactly how it will play out. I only urge us all to remain positive, informed and constructive. The coming chaos will be painful in the short term, but out of the ashes of a failed society, we can work together to rebuilt a new one based on real freedom, honest money, sensible medicine and limited government.

Bushwacked -- the Sequel: Jobs Down, Unemployment Up

Bushwacked -- the Sequel: Jobs Down, Unemployment Up

By Daniel DiRito

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By all accounts, George W. Bush was determined to win reelection and thus avoid a repeat of his father’s embarrassing defeat. Unfortunately, they say the sins of the father shall be visited upon the son. If true, the declining economy at the close of this Bush administration may well be a revisiting of his father’s misfortune. While George W. Bush may have charted a different course than his father, he appears to be arriving at the same destination.

While the promise of the senior Bush to enact no new taxes is thought to have been a key component of his downfall; the cutting of taxes by his son was touted as the ultimate economic elixir. Given the economic status at the end of both Bush administrations, it seems to have been a difference without a distinction.

It’s likely that the slow slog towards recession has now become a snowball racing rapidly down a slippery slope; headed for an unknown destination. Despite the repeated assurances from the Bush administration that a sound economy underlies the current downturn, the ride to the bottom may be a long one and it may end with a thunderous thud. When it’s all said and done, the consequences of this Bush administration may mirror the misfortunes that befell the GOP in the wake of the prior Bush administration.

From Reuters:
WASHINGTON (Reuters) — Employers cut payrolls for a third month in a row in March and the unemployment rate jumped to a 2-1/2 year high, more evidence that a housing downturn and credit crisis may have pushed the economy into a recession.
The Labor Department on Friday reported that March non-farm payrolls fell 80,000, biggest decline in five years.
It also said the March unemployment rate jumped to 5.1% from 4.8%, highest since a matching rate in September 2005.

Adding to the bleak picture, the department revised the first two months of the year’s job losses to a total of 152,000 from a previous estimate of 85,000.

The March job report was more bleak than expected. Economists had forecast a decline of 60,000 in non-farm payrolls and a rise in the unemployment rate to 5%.
“There doesn’t appear to be any silver lining. It shows that we’re right in the middle of a recession that will probably take a while,” said Carl Lantz, U.S. interest rate strategist at Credit Suisse in New York.
“Our expectation is that it will be a longer recession than the last two and we’re just in the beginning,” Lantz added.

It has taken George W. Bush two terms to reach an endpoint that will undoubtedly be seen as very similar to that of his father’s presidency. Both men watched as the economy tanked…unaware of the plight of the working class. The first Bush didn’t know the price of milk - the second seemed oblivious to the rising cost of gas. During their presidencies, both men invaded Iraq - the first Bush having the good sense to limit the scope of the incursion - the second determined to one-up daddy regardless of the cost.

In 1988, when Anne Richards spoke her oft quoted words about the senior Bush, “Poor George. He can’t help it. He was born with a silver foot in his mouth”; little did we know how prescient her observation would be with regards to the second Bush. In recalling the expression, “The acorn doesn’t fall far from the tree”, one could also argue that the electorate bears responsibility for succumbing to another well known idiom…the one that posits, “Fool me once, shame on you; fool me twice, shame on me”.

Sadly, a new poll provides a grim assessment of the degree to which voters may be experiencing buyers remorse. Unfortunately, what’s done is done…and we’re left to hope that the damage can be undone.

From The New York Times:
Americans are more dissatisfied with the country’s direction than at any time since the New York Times/CBS News poll began asking about the subject in the early 1990s, according to the latest poll.
In the poll, 81 percent of respondents said they believed “things have pretty seriously gotten off on the wrong track,” up from 69 percent a year ago and 35 percent in early 2002.
Although the public mood has been darkening since the early days of the war in Iraq, it has taken a new turn for the worse in the last few months, as the economy has seemed to slip into recession. There is now nearly a national consensus that the country faces significant problems.
A majority of nearly every demographic and political group — Democrats and Republicans, men and women, residents of cities and rural areas, college graduates and those who finished only high school — say the United States is headed in the wrong direction. Seventy-eight percent of respondents said the country was worse off than five years ago; just 4 percent said it was better off.

In the end, there is also an abundance of irony to be found in the two Bush presidencies. The former president Bush spoke of mobilizing 1,000 points of light…the latter nearly succeeded in turning off all of the lights. When the senior Bush called Americans to service, it was impossible to know that his son would enlist 1,000’s of young Americans in the prosecution of an ill-advised war.

When the current president pledged to unite us, we should have realized that the ability to unite emanates from the capacity and the willingness to hear, understand, and appreciate the views of others. When he pledged compassionate conservatism, we missed the numerous indications that compassion would only flow to those who adopted his brand of conservatism. Hence, compassion modified by conservatism is more likely an ideology of intransigence than an expression of empathy.

As we await the passage of the second Bush administration, it should be abundantly clear to voters that we can ill-afford a third Bushwhacking. Hopefully voters won’t be fooled by the cleverness of the GOP to choose another Bush as their candidate. Lest there be any confusion, I’m not talking about an eventual Jeb Bush candidacy…I’m talking about none other than John “W” McCain.

Gas prices rise to new record

Gas prices rise to new record

Fuel now above $3.30 a gallon; crude costs also rising

NEW YORK - Retail gas prices surged to a new record above $3.30 a gallon Friday and appear poised to rise further in coming weeks as gasoline supplies tighten.

Oil prices, meanwhile, supported the gas price rally by jumping more than $2 a barrel after a dismal employment report sent the dollar lower.

At the pump, gas prices rose 1.4 cents overnight to a national average of $3.303 a gallon, according to AAA and the Oil Price Information Service. That’s the latest in a series of records, and about 60 cents higher than a year ago.

While oil’s surge above $100 over the last month has boosted gas prices so far this year, analysts now expect gas prices to continue rising regardless of what direction crude takes. The Energy Department expects prices to peak near $3.50 a gallon later in the spring, but many analysts predict the spike could approach $4.

That’s because gasoline supplies are falling, in part because producers are cutting back on output of the fuel due to the high cost of crude — the more expensive crude is, the more refiners have to pay and the lower their profits are. They’re also in the process of switching over from producing winter grades of gasoline to the less polluting but more expensive grade of fuel they’re required to sell in the summer.

"That cuts back on some of the supply and helps to pump up the price," said Mike Pina, a spokesman for AAA.

The margin between the price refiners pay for crude and receive for selling the products they make from it is around $11 to $12 a barrel right now, according to the Oil Price Information Service. However, that margin has occasionally slipped into negative territory in recent weeks and is well below margins of $37 a barrel refiners earned last spring.

On Thursday, ConocoPhillips said high crude prices were significantly hurting its refining margins. Last week, Valero Energy Corp. cut output at its Corpus Christi, Texas, refinery due to high supplies and falling demand. Analysts believe many other refiners are adopting similar tactics.

Friday’s price spike is a sign those cutbacks may be working, giving everyone in the supply chain, from refiners to retailers, the ability to raise prices to try to boost margins. Many gas retailers say they make more on the sale of coffee and sundries in their convenience stores than from selling gasoline.

Of course, that’s not good news for consumers also paying higher food prices and watching their home values slide. Food prices are high due in part to diesel prices, which held steady overnight at a national average of $4.023 a gallon, near recent records.

High oil prices are also hurting airlines. Aloha Airlines shut down and ATA Airlines filed for bankruptcy protection in recent weeks, citing high fuel prices as a cause of their failures.

In futures trading, meanwhile, oil futures rose Friday after the Labor Department said employers cut payrolls by 80,000 jobs last month, much more than analysts had expected. The unemployment rate rose to 5.1 percent. That news sent the dollar lower and pushed light, sweet crude for May delivery up $2.40 to settle at $106.23 a barrel on the New York Mercantile Exchange. Gasoline futures for May delivery rose 3.24 cents to settle at $2.7567 a gallon.

Gasoline futures were also boosted Friday by a fire that shut down part of a Los Angeles refinery.

Much of crude’s price moves in recent months have been tied to the dollar. Many investors view crude, gold and other hard commodities as hedges against a falling dollar and rising prices. Also, crude becomes less expensive for overseas investors when the dollar is falling.

In other Nymex trading Friday, May heating oil futures rose 6.93 cents to settle at $2.9921 a gallon, while May natural gas futures fell 9.5 cents to settle at $9.322 per 1,000 cubic feet.

In London, May Brent crude futures rose $2.38 to settle at $104.90 a barrel on the ICE Futures exchange.

Economy Loses 83,000 Jobs, Unemployment Jumps to 5.1 Percent

Economy Loses 83,000 Jobs, Unemployment Jumps to 5.1 Percent

By Dean Baker

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The private sector is shedding jobs at the rate of almost 100,000 per month.

The establishment survey showed the economy losing 80,000 jobs in March, the third consecutive month of job loss. The private sector lost 98,000 jobs, the fourth consecutive decline in private sector employment. Overall, the private sector has lost 296,000 jobs over the last three months, a decline of 97,000 per month. Not surprisingly, the weakness in the labor market is also affecting wage growth. Wages grew at just a 2.5 percent annual rate over the last quarter, well below the rate of inflation and down sharply from the 3.6 percent growth rate over the last year. The household survey showed a 0.3 percentage point jump in the unemployment rate to 5.1 percent, while the employment population ratio (EPOP) fell to 62.6 percent, the lowest rate since March of 2005.

The job loss in the establishment survey was widely spread across sectors, although construction and manufacturing continue to be hardest hit, shedding 51,000 and 48,000 jobs, respectively. Both residential and non-residential construction are now reducing payrolls, as overbuilding in the non-residential sector is leading developers to cut back in this sector, also. Construction employment is down by 182,000 since November and by 356,000 (4.6 percent) over the last year.

Manufacturing employment is down by 151,000 since November and by 310,000 (2.2 percent) over the last year. The auto sector has been especially hard hit, losing 47,500 jobs since November and 95,000 (9.3 percent) over the last year, although this loss is somewhat inflated by a parts strike last month. The apparel and textile sectors also continue to be big losers, shedding 19,700 jobs since November and 45,700 jobs (8.2 percent) over the last year.

The retail sector lost 12,400 jobs in March and has lost 100,000 since November. Employment in the temporary help sector, which is often an indicator of future job growth, fell 21,600 in March and is down by 55,200 since January. The health care and restaurant industries are the only parts of the private sector with strong job growth, adding 22,800 jobs and 23,400, respectively.

The job growth in the restaurant sector may be an illusion. Over the last four months, the Labor Department has shown a gain of 58,100 jobs. However, the imputation for new firms not captured by the survey has been even larger at 85,000. The Labor Department is imputing jobs in this sector at close to the same rate as it did last year when the economy was growing much more rapidly, which means it is likely overstating job growth.

The data in the household survey reinforce the bleak picture. Nearly every demographic group showed a decline in employment rates and a rise in unemployment rates. Black teens were among the hardest hit groups with their EPOP falling to 19.7 percent, the lowest level since it hit the same number in June of 2003, which in turn was the lowest level since March of 1984.

The unemployment rate for workers without high school degrees jumped 0.9 percentage points to 8.2 percent, the highest rate since October of 2004. The unemployment rate for workers with high school degrees rose by 0.4 pp to 5.1 percent, while the EPOP dropped by 0.6 pp to 59.1 percent. This is the lowest EPOP for workers with high school degrees since the Labor Department changed the coding in the survey in 1992.

The measures of unemployment duration all fell in March, which is consistent with many more workers becoming unemployed for the first time. The number of workers involuntarily working part-time continued its upward path and is now 591,000 above its year ago level. The percentage of unemployment attributable to people voluntarily quitting their jobs, a measure of confidence in the labor market, fell to 10.1 percent, the lowest level since March of 2004.

This report removes any doubt the economy is in a recession, with the private sector now shedding jobs at a rate that may exceed 100,000 per month. With real wages declining, and the plunge in house prices destroying home equity at more than a $2.5 trillion annual rate, it is likely the rate of job loss will accelerate in the months ahead.


Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.

Record Home Foreclosures across America

Record Home Foreclosures across America

Banking Act of 1999 has opened a Pandora’s Box

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The desire of commercial banks to gut the Glass-Steagall Act(GS) of 1933 so they could get back into the lucrative investment banking business has resulted in today’s subprime mortgage mess, the dean of the Massachusetts School of Law(MSL), a former Justice Department anti-trust lawyer, says.

"When federal agencies began making inroads on Glass-Steagall in the 1980’s and 1990’s, so that banks were allowed by the agencies to do things that Glass-Steagall forbade, I was amazed," says MSL Dean Lawrence Velvel, of Andover. He noted GS "had deliberately separated commercial banking from investment banking because Congress felt in the 1930’s that the combination of both types of banking in a single institution was one of the reasons for the Great Depression."

During that era, "when both types of banking were combined in one institution and a bank’s stock business and stock investments went down, the whole bank went down because of huge losses and capital impairments," Velvel explained. And it was to avoid any repeat of the nation’s financial collapse GS was enacted.

Once the GS safeguards were removed by enactment of the Gramm-Leach-Bliley Act of 1999 (GLBA), Velvel says, "Horrible loans were made, horrible securities were packaged and sold from these loans, and when one side of the bank got into problems, they quickly spread to the other side. As a result, huge banking companies such as Citicorp and Merrill Lynch are in big trouble."
"If delinquencies in the fourth quarter of 2007 for subprime adjustable-rate mortgages hit an all-time record 5.29%, it’s because the visionary protections in the New Deal legislation(GS) have been abandoned," Velvel says. Banks are holding billions in mortgage-related instruments for which there is no market.

In a related article published in MSL’s opinion journal "Long Term View," law Professor Holly Vietzke writes GLBA has more closely connected "the banking industry to the U.S. stock market, ensuring that any significant dive on Wall Street will have disastrous effects on the nation’s financial system."

Some analysts link GLBA to the Enron scandal and other corporate crises, writes Vietzke: "Enron’s financial backers Citigroup, Inc. (which earned millions of dollars in fees as one of Enron’s biggest backers) and J.P. Morgan Chase are accused of committing securities fraud in connection with the formation and use of Enron Corporation’s special purpose partnerships."
"It appeared that, with the cooperation of Citigroup and J.P. Morgan Chase, Enron intended to inflate profits and income over debt, and it tried to fool investors by hiding debt from the analysts," Vietzke continues. The Wall Street Journal, she noted, reported Citigroup and Chase made more than $200 million in fees for transactions that helped Enron among other energy companies, "boost cash flow and hide debt."

Vietzke asserted this kind of activity is one of the reasons why Congress passed GS in the first place. "The GLBA is, as Enron shows, fermenting stock market manipulations that allow corporate executive to cash in" while their bank loans are outstanding.
GLBA triggered a wave of mergers, including Citigroup with major insurer Travelers and the American-based bank holding company Citicorp, a $70 billion combination. "After the merger, Citigroup’s business included insurance, lending, banking, investing and asset management," Vietzke pointed out.

If Citigroup expected to reap a profit upwards of $700 million from the deal, Vietzke said, stockholders "saw no such gain." Before the merger, Citicorp stock was up to $182 and Travelers was $73. After the merger, however, Citicorp dropped to $84 and Travelers to $37.

Other financial institutions that combined: Chase Manhattan joined with J.P. Morgan in a $35 billion merger to form J.P. Morgan Chase; First Union Corp. acquired Wachovia Corp; insurance giant MetLife bought New Jersey-based Grand Bank; Washington Mutual took over Homeside Lending; First Merchants bought Lafayette Bancorp; FleetBoston Financial purchased Summit Bancorp, and, in Ohio, National Bancshares Corp acquired Peoples Financial.

These, and similar mergers, have not always yielded positive results. Vietzke writes: "In addition to causing higher fees, a decline in personal service, privacy issues for consumers, and a decrease in value for stockholders, these unions have suffered internally as well."
Geoffrey Boisi, the engineer of the J.P. Morgan Chase deal, resigned just two years after the merger as did Allan Wheat (Credit Suisse First Boston) and John Mack (Morgan Stanley) before him.

In a poll of 50 executives, Professor Robert Bruner of the University of Virginia found only 37% of them believed the mergers actually created value for buyers.

Until the GLBA, Vietzke writes, "banks had regularly circumvented the restrictions of the Glass-Steagall Act by sharing office space with securities firms, creating the illusion to consumers that the bank insured securities transactions."
"The securities firm would benefit from the bank’s steady flow of customers, and the bank would receive a portion of the firm’s commission. The customer often never knew it was conducting business with separate entities. The GLBA effectively made this practice legal," Vietzke said.

Minnesota “DNA Warehouse” Bill Pending

Minnesota “DNA Warehouse” Bill Pending

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The Minnesota Department of Health wants to own the DNA of every citizen, starting at birth, for

the purpose of doing genetic research on individual citizens without consent. (SF 3138/H.F 3438)

Already, the DNA of 780,000 children is illegally owned and controlled by Minnesota government in a State DNA warehouse. Already, the genetic information of more than 41,000 children has been used for genetic research inside and outside of the Minnesota Department of Health...without parent knowledge or consent…or legal authority.

The Minnesota Department of Health began saving newborn blood and DNA in July 1997 by executive decision—without legislative authority. They later began sharing it with researchers.

In March 2007, an administrative law judge ruled that, in compliance with the state genetic privacy law, explicit informed parent consent was required prior to saving the DNA or sharing it with researchers. The Health Department said no.

Instead, state Health Department officials are now asking Minnesota legislators to exempt the DNA warehousing and research activities from the Minnesota Genetic Privacy Law (M.S.13.386). If the Department’s DNA warehouse & research bill becomes law, State officials will be empowered to continue keeping the DNA of infants (eventually voting adults) without consent.

On Tuesday, March 11, 2008, Senator Warren Limmer (R-Maple Grove) attempted to add informed parent consent requirements to the Department’s Senate bill, but the Senate Judiciary Committee voted against consent rights, essentially voting against citizen DNA property rights.

"Yes, the Governor is in support of this bill," testified Mark McCann from the Minnesota Department of Health, in response to Sen. Limmer's inquiry. Mr. McCann opposed Sen. Limmer's amendment to the bill. The author, Sen. Ann Lynch, says the DNA warehouse extends beyond the needs of the infant to the broader health care reform issues of “prevention and cost containment.”

The Senate bill is scheduled to soon go to the floor of the Senate for a vote. Every Senator will be required to vote on the bill. Thus far, there are no consent requirements for DNA warehousing or genetic research in the bill.



CONTACT INFO:
SENATE BILL: S.F. 3138 (Author: Sen. Ann Lynch (D-Rochester))

Governor Tim Pawlenty: 651-296-3391 (1-800-657-3717); tim.pawlenty@state.mn.us

Your Senator: 651-296-0504 (toll free 1-888-234-1112); www.senate.leg.state.mn.us/


HOUSE BILL:

The House bill (HF 3438) is authored by Rep. Paul Thissen (D-Mpls). Next hearing Thursday,

March 13, 2008 before the HHS Comm. at 2:15 p.m., Room 200 State Office Building. To

testify email the HHS Committee Administrator: jen.mcnertney@house.mn

To Contact HHS Committee Members: House Info: 651-296-2146 or

http://www.house.leg.state.mn.us/comm/committeemembers.asp?comm=11000

Ahmadinejad: Nations to establish independent new world order

Ahmadinejad: Nations to establish independent new world order

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Stressing that era for the US Government to consider itself the owner of the entire world is over, Iran’s President Mahmoud Ahmadinejad said here, "Resorting to countless capabilities, world nations would establish an independent new world order, if hegemonic powers would keep on exerting pressure over them." President Ahmadinejad made the comment in an interview with Japan’s Kyodo news agency, adding, "Today is beginning of an era for the domineering of the world nations who will soon impose their will, like many governments that are fed up with the status quo of the unjust international relations and willing to alter them, and this is an event that would definitely take place."

OPPRESSIVE POWERS HAVE BECOME ISOLATED
The President of the Islamic Republic of Iran pointed out that the oppressive powers of the world had assumed they could isolate the Iranian nation, but the reverse has happened today, since Iran enjoys excellent and friendly ties with most world nations based on mutual respect.

President Ahmadinejad further reiterated, "On the contrary, the US government is suffering from having achieved the worst international status today. They had assumed if they would sit at the UN Security Council and decide over a matter it would be done for sure, while they had better realize if such decisions remain unheeded it means that they need to harmonize with world nations."

He added, "It is to their own benefit to do so, since otherwise they would be fully isolated in the long run."
Ahmadinejad added, "Today no nation, including the Japanese nation, likes the politicians of the oppressive powers, such as the US president, and I can assure you that even the Americans do not like their own president."

IRI HAS APPROPRIATE SOLUTIONS FOR CURRENT WORLD PROBLEMS
President Ahmadinejad said that Iran is a big power standing by the side of the world nations today, stressing, "The Islamic Republic of Iran has appropriate solutions based on justice and respecting the nobility of human beings and nations for the current world problems."

He announced Tehran’s readiness for sharing viewpoints aimed at solving acute world problems, stressing, "Global security and economy, discrimination, occupation, massacre of world nations and broad violation of human rights in Western countries are important issues that can be put to discussion."

NEGOTIATION OVER NUCLEAR ISSUE MEANINGLESS
The IRI President pointed out that keeping in mind that the International Atomic Energy Agency’s (IAEA) last report on Iran proved that the entire ambiguities on Iran’s nuclear program have been resolved, negotiation over the matter is absolutely meaningless today.

He added, "We are interested in holding dialogues over issues of mutual interest, within certain frameworks and at effective level so that results could be achieved of the invested time, energy and money, and of course we have good proposals for holding such dialogue, too." Ahmadinejad referred to the point that the Islamic Republic of Iran has mastered the nuclear technology for peaceful purposes today, adding, "In order to hold a new round of talks, the level of negotiations, their framework, and their subject needs to be defined in advance, in accordance with the new conditions."

La-Z-Boy, Whirlpool Moving Hundreds Of Jobs To Mexico

La-Z-Boy, Whirlpool Moving Hundreds Of Jobs To Mexico

Workers at Dayton, Cleveland Facilities Get Notices

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La-Z-Boy and Whirlpool are moving jobs to new plants in Mexico, bringing job losses to hundreds of workers in Dayton and Cleveland.

La-Z-Boy employees in Dayton were told today that the cutting and sewing operation is being moved to Mexico.

Kathy Liebmann, La-Z-Boy spokesperson, said the Dayton facility has over 2,000 employees, but she did not have a breakdown on those in cutting and sewing. A La-Z-Boy employee said it was around 750.

Ms. Liebmann said La-Z-Boy is closing a plant at Tremonton, Utah, but will keep its other plants open, including the one at Dayton. She said the 400 production jobs at the Utah plant will be spread over the other five plants.

She said workers in cutting and sewing will have an opportunity to train for available production jobs.

Ms. Liebmann said the Mexico plant is slated to open in January.

Meanwhile, some 350 Whirlpool employees are losing their jobs at the former Maytag facility in Cleveland.

Those jobs are also going to Mexico as well as to Oklahoma.

Ms. Liebmann said the transition will take place over the next 18-24 months.

La-Z-Boy makes recliners and other furniture.

Kurt L. Darrow, La-Z-Boy’s president and chief executive officer, said, "Speed to market for custom orders is a tenet of our brand promise to the consumer and the strength of our U.S. facilities enables us to deliver on that promise. With its proximity to the U.S. and the lower cost structure inherent in a Mexican-based operation, we made the decision to transition our domestic cutting and sewing operations while streamlining the assembly aspect of production in the United States.

"Our new Mexican facility will be able to rapidly supply our domestic plants with cut-and-sewn fabrics and leather for custom orders and will complement the existing cut-and sew program from China, which supplies our U.S. manufacturing operations with kits for our high-volume SKUs.

"Once we made the decision to transition the domestic cut-and-sew
operations to Mexico, we analyzed our remaining total capacity. With the floor space created by consolidating six cut-and-sew operations into one in Mexico, and with our manufacturing facilities dedicated solely to production, we determined we could service our existing and future demand with one less facility. Importantly, our remaining facilities will be able to increase their capacity utilization as a result of this change. Therefore, we made the difficult decision to close our Tremonton, Utah, facility.

"We are confident this reallocation of resources, combined with the many changes we have made to our production processes, will continue to strengthen our operations. We regret the impact these moves will have on the families and lives of those employees affected and greatly appreciate the contribution of each employee and thank them for their years of dedicated service."

Mr. Darrow added, "With the normal attrition rate at our production facilities and the time with which we plan to transition our cutting and sewing operations, employees working in that capacity will have the opportunity to learn new skills and be considered for other positions within their facilities as they become available, particularly as we shift production from Utah."

Following the closure of its Utah facility, La-Z-Boy’s upholstery segment will have a total of 5.5 million square feet of upholstery manufacturing space in North America, including 4.8 million in the United States and 700,000 square feet in Mexico and will employ approximately 8,000 people in those facilities.

Mr. Darrow said, "With the breadth and size of our operation, we will
ensure that our dealers and their customers will continue to receive excellent service with ontime deliveries as we transition production between facilities. Additionally, our manufacturing footprint will allow us to flex our capacity as we execute on our strategic growth plan."

The Utah facility, which is approximately 675,000 square feet, will be idled after operations cease and will be marketed for sale. As a result of these actions, La-Z-Boy will take a pre-tax restructuring charge in the range of $17 - $20 million, or $0.20 to $0.24 per share. This charge will be principally for severance and other benefit costs and will also include training costs to begin production in the other facilities, the write-down of certain fixed assets and other associated costs.

As the plant is closed and the cut-and-sew operations are transferred, these charges will be incurred as follows: $2.0 - $2.5 million in the fourth quarter of fiscal 2008; $9 million-$10 million in fiscal 2009; and the balance in 2010.

Once these moves are completed, the company expects to realize in excess of $25 million in annual cost savings, with the full benefit beginning in fiscal 2011.

Countries rush to restrict trade in basic foods

Countries rush to restrict trade in basic foods

Governments across the developing world are scrambling to boost farm imports and restrict exports in an attempt to forestall rising food prices and social unrest.

Saudi Arabia cut import taxes across a range of food products on Tuesday, slashing its wheat tariff from 25 per cent to zero and reducing tariffs on poultry, dairy produce and vegetable oils.

On Monday, India scrapped tariffs on edible oil and maize and banned exports of all rice except the high-value basmati variety, while Vietnam, the world's third biggest rice exporter, said it would cut rice exports by 11 per cent this year.

Was Killing Iraqi Children Worth It?

Was Killing Iraqi Children Worth It?

By Jacob G. Hornberger

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A snapshot of the opening scene in the U.S. invasion of Iraq provides an excellent insight into the immorality and horror of the entire operation, from start to whenever it finally finishes.

According to an article in yesterday's New York Times, at the outset of the invasion the U.S. military dropped bombs on a palatial compound in which Saddam Hussein was hiding. The article states:

"But instead of killing the Iraqi dictator, they had killed Mr. Kharbit's older brother, Malik al-Kharbit - the very man who had led the family's negotiations with the C.I.A. to topple Mr. Hussein. The bombings also killed 21 other people, including children, and the fury it aroused has been widely believed to have helped kick-start the insurgency in western Iraq."

Now, that episode has at least two important lessons.

First, prior to the invasion the popular mantra among U.S. officials and many private Americans was the need to "get Saddam." But as we often pointed out here at The Future of Freedom Foundation, it was never going to be just a question of "getting Saddam." Instead, it was going to be a question of how many Iraqi people, including children, U.S. forces would have to kill before they "got Saddam."

The article doesn't state whether the U.S. military had actual knowledge that there were innocent people, including children, in the compound that it bombed. But it is a virtual certainty that they did have such knowledge. After all, if their intelligence was sufficiently good to know that Saddam was hiding in the compound, it had to be sufficiently good to know that there were other people living in the compound, including children.

Thus, when the U.S. military dropped those bombs, it had to be with the full knowledge that they would be killing innocent people in the process, including the children. And even if they didn't "know" that there were innocent people in the compound at the time they dropped the bombs, they knew that there were dropping the bombs in reckless disregard of whether there were innocent people there or not.

The fact is that U.S. officials didn't care whether there were innocents, including children, in that compound. Those children and their parents were obviously considered a small price to pay if Saddam Hussein had been killed at the outset of the war.

Of course, this attitude would match the attitude taken by U.S. officials throughout the period of the brutal sanctions that were enforced from 1991 to 2003. As tens of thousands of Iraqi children were dying year after year from the sanctions, the U.S. attitude was that those deaths were a small price to pay for ridding Iraq of Saddam Hussein. That's why UN Ambassador Madeleine Albright, upon being asked whether the deaths of half-a-million Iraqi from the sanctions were worth it, she replied that yes - they were "worth it." She was expressing the sentiment of the U.S. government, a sentiment that manifested itself again in the bombing of the compound in which those Iraqi children and their families were killed.

Second, the killing of those children and their families is just one example of how U.S. foreign policy has engendered anger and hatred for the United States, which produces the threat of terrorist retaliation, which brings about the "war on terrorism," which results in more interventions, more massive military spending, and ever-increasing loss of liberty at home.

Let me repeat what the Times article said: "The bombings also killed 21 other people, including children, and the fury it aroused has been widely believed to have helped kick-start the insurgency in western Iraq."

Now, ask yourself: Why has the U.S. government been occupying Iraq for the past 5 years? Didn't they already "get" Saddam? Hasn't he already been executed?

The answer is that U.S. officials, having "gotten" Saddam must now "get" the "bad guys" in Iraq. And who are the "bad guys?" They're the Iraqis who are angry over the killing of Iraqis, including women and children, who had to be killed in the process of "getting Saddam."

As they continue to bomb all these "bad guys," they continue to kill more innocents, including more Iraqi children and their families, which then incites more fury, which then causes more "bad guys" to join the insurgency. Those additional "bad guys" are then used as the excuse to continue the occupation of Iraq, an occupation that for obvious reasons will go on indefinitely.

To state what I consider self-evident moral truths, it was morally wrong and a grave violation of God's laws to:

(1) attack a country whose government and citizenry had never attacked the United States;

(2) kill Iraqis, including children and their families, in order to achieve regime change in Iraq; and

(3) kill Iraqis, including children and their families, in order to spread "democracy" to Iraq.

One can only wonder whether the American people, in crises of conscience, will ever confront such issues.

Jacob Hornberger is founder and president of The Future of Freedom Foundation. Send him email

US Senate leaders agree on pro-industry housing bill

US Senate leaders agree on pro-industry housing bill

By Joe Kay
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The US Senate is debating a housing bill agreed to by the Democratic and Republican party leaderships that includes tens of billions in tax breaks for corporations, with paltry tokens for distressed homeowners.

On Wednesday, Democrat Christopher Dodd and Republican Richard Shelby, the chairman and ranking member of the Senate Banking Committee, announced the agreement. It is currently being debated on the Senate floor. After a bill is passed, likely sometime next week, it will go to the House of Representatives for debate and approval before reaching the White House.

On Thursday, the Senate rejected an amendment that would have allowed judges to alter mortgage terms for individuals in bankruptcy court. On Friday, it added an additional tax break for corporations, on top of what was already included in the Dodd-Shelby agreement.

In pushing the bill, the Democratic Party leadership is attempting to make a pretense of aiding the millions of Americans who have lost their homes or may shortly lose them in foreclosure. The Bush administration has already moved to bail out investment bank Bear Stearns and Wall Street in general. This past week the Treasury Department announced plans that would have the effect of loosening regulation on banks while making it easier for the Federal Reserve to intervene to save banks in crisis.

“We helped Wall Street... But now is our opportunity to take care of people on Main Street,” said Senate Majority Leader Harry Reid. Dodd echoed the remarks, saying the Senate bill was directed at “millions of people on Main Street who wondered whether or not the Congress is paying attention to their concerns, what’s happened to their hopes, to their economic well being.” The Act is itself misnamed the “Foreclosure Prevention Act of 2008.”

An article in the Associated Press on Thursday noted, however, that the bill “showers money-losing businesses with $25 billion in tax relief in the next few years but offers just $3 billion to homeowners, according to estimates released Thursday by Congress’ Joint Tax Committee.” The Associated Press commented that the Congress study “lends credence to accusations that the measure helps businesses like home builders while doing little to help millions of families threatened with foreclosure.”

The major tax break will allow those companies hit by the housing slump, including home builders and banks, to credit losses against taxes paid in the previous four years, essentially giving them a major tax rebate. On Friday, the Senate voted 76-2 to include another tax provision that would benefit other companies not directly impacted by the housing slump.

The Senate by a vote of 58-36 defeated an amendment that included the major provision touted by Democrats to help homeowners—giving judges greater ability to alter mortgage terms. Eleven Democrats joined Republicans in defeating the measure after heavy lobbying from the banking industry. The Mortgage Bankers Association issued a statement praising the move.

The principal measure included in the bill that would apply directly to those who have had their homes foreclosed is a paltry $100 million for foreclosure counseling. Even this is half of what Democrats had initially proposed.

Other measures of the bill are aimed at slowing the decline in home prices without providing any serious relief to those who have had their homes foreclosed. One measure would give a $7,000 tax credit over two years to individuals who purchase a home in or near foreclosure. Another measure would provide $10 billion in tax-free revenue bonds that could be used to finance lower-interest mortgages to allow borrowers to refinance.

Even the tax credit is a paltry sum. The Washington Post reported, “In the Washington area, where the median price of a home is $420,000, the tax break is ‘peanuts,’ said Jim Whitehead, a real estate agent at Lord & Sanders in Woodbridge.”

Another measure pushed by Democrats would expand the ability of the Federal Housing Administration (FHA) to insure higher-valued mortgages. Some $4 billion would be given to local communities to refurbish foreclosed homes in order to prevent further declines in property values of the surrounding neighborhoods.

The bill does not include a provision supported by Dodd to allow the FHA to use $10 billion to insure $400 billion in mortgages if banks agree to write down the principal and allow the mortgages to be refinanced on less severe terms. This measure is also aimed at putting the breaks on the fall of housing prices, which has hit Wall Street hard. It is entirely voluntary and many homeowners would not qualify.

The collapse of the housing market has been devastating for millions of people. An estimated 8,000 families are forced into foreclosure every day.

Hundreds of billions in cheap loans have been offered to commercial and investment banks, backed up ultimately by the federal government. The Democratic Party, including both of the presidential candidates, has supported these moves. However, no section of the political establishment is interested in coming to the aid of ordinary people caught up in the crisis.