Wall Street and the business community have supported Republicans for years, but now many of them are stunned to see the utter contempt that many Tea Party Republicans have for the financial system. While some understand the point of using leverage in negotiations, the willingness to tempt fate with a potential default on the national debt is making many CEOs nervous. GOP representatives are now hearing an earful from those business interests that helped raise a ton of money for them, and now CEOs are getting involved. Their ideal solution is to get a big budget defiicit deal, but they have had to impress on many members the potential for economic catastrophe if we get to the brink of defaulting on the national debt.
There are very strong opinions on all side of the government shutdown and the debt debate, but the plain fact is that the GOP is engaging in political extortion, and the President is not willing to let them get away with it.
Many Republicans from the beginning saw this as a failed strategy, and now even more are becoming frustrated as John Boehner again doesn’t seem to have an out. It’s a mess, and hopefully at some point this will be resolved without a full-blown crisis.
The Obama administration is trying to revive talks about corporate tax reform that could see the top rate in the US drop from 35 percent to 28 percent. This time, in order to strike a deal with House Republicans, Obama is linking his corporate tax proposal to other proposals for investments that would trigger growth in middle class jobs, such as infrastructure investments.
This offers another test as to whether House Republicans are remotely interested in governing as opposed to reflexively opposing anything Obama stands for. Most House Republicans strongly favor corporate tax reform, and many of them also understand the importance of investments like infrastructure.
This proposal should also generate support among business lobbyists as well, though Obama’s insistence on some sort of minimum tax for foreign corporate earnings will still be a problem for many multinationals.
Something needs to happen, however, as the current system is riddled with loopholes.
In February, the nonpartisan Congressional Budget Office predicted that this year’s deficit would fall to $845 billion, down from nearly $1.1 trillion in 2012. Goldman Sachs recently predicted that the deficit would fall even further, to $775 billion, and return to sustainable levels within two years.
As a result, the national debt is rising far more slowly than in the frantic days after the 2008 economic crisis: The Treasury Department actually expects to repay a tiny sliver of the $16.8 trillion national debt by the end of June.
Much of the improvement stems from recent budget deals. Over the past two years, Congress has capped agency spending and created the sequester, which is trimming outlays on domestic programs and the military. Lawmakers also agreed to raise taxes on virtually every American this year, letting a temporary reduction in the payroll tax expire and tax rates rise for households earning more than $450,000 a year.
But other factors are at work, too. Defense spending has been declining rapidly with the end of the war in Iraq and the ongoing drawdown of forces in Afghanistan. A surprising — and apparently durable — slowdown in health-care costs has sharply reduced projected spending on Medicare and Medicaid. And the falling jobless rate and improving economy have helped push federal tax collections up 16 percent over last year, according to figures out Tuesday.
This will have interesting implications for budget talks, but also should start instilling some confidence with business leaders, which hopefully then fuels even more economic growth.
The fracking revolution is having a ripple effect throughout the U.S. economy. That applies to both the natural gas boom in states like Ohio and the oil gas boom in North Dakota. BusinessWeek notes the impact the oil boom is having on local banks.
In his office on the second floor of a glass-encased building on North Main Street in Watford City, N.D., Stephen Stenehjem rolls out a map of a proposed multimillion-dollar residential development and shakes his head in disbelief. “My dad would have been very pleased,” says Stenehjem, a third-generation banker and the chief executive officer of First International Bank & Trust. “For 25 years, our focus as a community bank was to help keep our small town alive. So it has been really fun to see this oil come back.”
Once a depressed town of 1,700 in what was America’s least-visited state, Watford City and its neighbors are at the center of North Dakota’s oil and gas boom. While about 470 banks across the U.S. have folded in the past five years, those serving America’s new fracking economy have seen explosive growth. Oilfield workers carrying paychecks, investors looking to build, and farmers enjoying mineral-rights payments are pouring money into banks. First International, with $1.3 billion in assets and 21 branches in North Dakota, Arizona, and Minnesota, hired 65 employees over the past year, including lenders, trust officers, and insurance agents, and plans to add 30 more this year. “It’s fun to be a banker in North Dakota,” Stenehjem says. “Even six or seven years ago, if there was a new pole barn going up in the county, I knew about it. Now I can’t keep track of everything.”
The implications for the U.S. economy are staggering. It’s great to hear good news and we’ll be following this story.
Walmart has a reputation of being one of the best run companies in the world, but that reputation may be in jeopardy. This article details how Walmart’s obsession with cost-cutting and reducing employee headcount is destroying the customer experience. The company literally doesn’t have enough employees to get products loaded onto the shelves. Product is sitting in storage at the stores while customers can’t find that product on the shelves.
Walmart may be the poster child of companies that have been obsessed with cost-cutting since the recession began. It’s a tough balance, but perhaps some executives will read this an realize that sufficient investment in employees is critical for success.
This is good news for those of us who believe that immigration reform can provide much-needed certainly for the US economy and provide a real boost.
Labor and business representatives have met for the last several months to find a way to create a legal system for bringing foreign workers into the country for low-wage jobs such as restaurant and home-care work. That would greatly reduce the incentive for illegal immigration, supporters argue.
Under the new proposal, companies that could not find U.S. workers would be allowed to hire foreign workers. Those workers would enter the country under a newly created program of immigrant worker visas. Companies would have to advertise jobs to Americans first.
The agreement calls for creating a federal expert bureau that would make recommendations on the number of foreign workers allowed into the country each year. The recommendations would be based on unemployment data and other information about labor market conditions in particular industries.
The agreement involves a trade-off. For the first time, the AFL-CIO agreed to support establishing a temporary guest-worker program for low-skilled labor.
The Chamber of Commerce agreed that the number of workers admitted under the new visa would expand and contract with the economy. In addition, the visa would not tie a worker to a particular employer, a step designed to protect workers from the threat that they could be deported if they had a dispute with their boss. Workers would also receive protections on wages and working conditions. At least some of the temporary workers would be allowed to eventually apply for green cards, which would give them lawful permanent residence.
The chamber also signed on to a long-standing labor demand that an independent entity – the new expert bureau – have the authority to study labor data and recommend curtailing work visas when unemployment is high. The bureau would have “political independence analogous to the Bureau of Labor Statistics,” said to a joint statement released Thursday by AFL-CIO President Richard Trumka and U.S. Chamber of Commerce head Thomas J. Donohue.
The bureau would make recommendations, but it would then be up to Congress to set visa numbers, as it does now.
This is something we don’t see much in Washington – real compromise. Perhaps the Republicans in Congress will now change their tune a bit if the Chamber gets behind reform.
With the fracking boom, we’re seeing an explosion of related industries as well. One issue relating to hydraulic fracking has to do with the massive amounts of water used in the process. The water gets contaminated, and then it has to be dealt with. This is even bigger than the problem of potential ground water contamination.
Start-ups, venture capitalists and large companies, including Veolia and Siemens, see riches in water cleanup and are developing and testing various technologies. They are also working in other areas besides shale gas, including Canada’s oil sands and the use of water to pressure oil out of wells.
One of these companies is Ecosphere Technologies of Stuart, Florida, which uses ozone as a disinfectant to clean water in a process called advanced oxidation. The treatment, which does not use chemicals, can both eliminate the chemicals typically used for bacteria control and scale inhibition during fracking and recycle 100 percent of the water, according to Charles Vinick, the company’s chief executive.
Ecosphere says it has cleaned more than two billion gallons of water and eliminated the need for more than 1.7 million gallons of chemicals at approximately 600 oil and natural gas wells in U.S. shale fields since 2008.
The developments are very encouraging, both from an economic point of view and an environmental point of view, and this should help the overall fracking business which has been an economic boom for the US.
This is big news, and frankly it’s nice to see a company like Apple put its excess billions to use here in the United States.
Apple CEO Tim Cook says the company will produce one of its existing lines of Mac computers in the United States next year.
Cook made the comments in part of an interview taped for NBC’s “Rock Center,” but aired Thursday morning on “Today” and posted on the network’s website.
In a separate interview with Bloomberg Businessweek, he said that the company will spend $100 million in 2013 to move production of the line to the U.S. from China.
“This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money,” Cook told Bloomberg.
Here’s more context about why so much manufacturing has been done in China.
Cook said in his interview with NBC that companies like Apple chose to produce their products in places like China, not because of the lower costs associated with it, but because the manufacturing skills required just aren’t present in the U.S. anymore.
He added that the consumer electronics world has never really had a big production presence in the U.S. As a result, it’s really more about starting production in the U.S. than bringing it back.
There has been a trend in bringing some manufacturing back from China to the US. But this is big as it relates to technology manufacturing from a tech giant like Apple. Of course Apple has had to deal with Foxconn problems, so that may be driving this, along with the huge PR push Apple will get. But this move could help spur a new tech manufacturing hub, that would be great for the US and for Apple as well.
Take a look at this chart. This alone should provide clear evidence that the Obama stimulus worked to stem job losses and stop a great depression. The jobs market has steadily improved since. It still has a way to go, but the trend line is absolutely clear.