Condo prices near a cliff - Apartment developers cheaply taking over failed conversion projects
By Susan Diesenhouse
Copyright © 2006, Chicago Tribune
Published September 23, 2006
So far the housing slump has been marked by slowing sales. Now there are signs that rapidly falling prices could be on the way.
Earlier this month a Chicago developer sold 150 condominiums in a two-hour lottery by discounting prices about 20 percent from what he would have asked last spring, an indication that industry observers say could signal widespread price reductions here and around the country.
For the first time in his 37 years as a developer, Nicholas S. Gouletas, chairman of Chicago-based American Invsco Corp., held a lottery to sell his condos, in this case 150 moderately priced residences in a 292-unit vintage high-rise at 182 W. Lake St. in the Loop.
Gouletas figures he still could make a 10 percent profit by cutting future carrying costs. He will avoid the expense of 2 1/2 years of mortgage interest payments, marketing, maintenance, insurance and taxes by not struggling to sell condos against the headwinds of a slowing housing market.
"We're responding to a dramatically changed market," said Gouletas, who plans to conduct lotteries to sell about 2,000 more units in nine other projects he is developing in Chicago, Las Vegas, Orlando and Boynton Beach, Fla. "Let's admit it's a buyer's market and what they want is the best price they can get."
For those anxious to assess how far the decelerating housing market will fall, a lottery sale like this could indicate a steeper decline in prices as veterans in an industry replete with optimists head for the exits to salvage profits and avoid big losses. If this becomes a broad trend it would generate a dynamic destined to ripple through the overall economy.
"I haven't heard of a lottery elsewhere, but I've been waiting for them," said Mark Zandi, chief economist for Moody's Economy.com, a research firm in West Chester, Pa. It could signal a change in attitude among sellers who so far have been "holding tough on prices," he added.
"The condo market is quickly unraveling and reeling nationwide, with sales down 15 percent and prices down about 3 percent," Zandi said. Since new housing is still being built he expects sales and prices to continue to fall for a year and to remain flat in 2008.
"As the overall housing correction intensifies, the broader economy will weaken further," Zandi said.
On the bright side, Zandi said, Chicago and other big cities with diversified economies will fare better than smaller ones in a national economy that will continue to grow, albeit weakly.
However, he forecasts that metropolitan Chicago will add only about 35,000 new jobs in 2007, down approximately 25 percent from this year. "In the best of times Chicago doesn't generate a lot of jobs," he said.
But the distress reflected by Gouletas' lottery here is not an isolated incident of one unlucky project in a so-so location. In New York and Washington other developers are abandoning plans to convert big apartment buildings into condos.
A day after Gouletas' lottery the nation's largest apartment real estate investment trust, Chicago-based Equity Residential, closed on a $96 million deal to buy a 256-unit apartment building in suburban Washington from a developer whose condo conversion plan evaporated. The REIT plans to close soon on the $200 million purchase of a 300-unit building in New York that met the same fate.
As the condo market reels, property values are falling, a double-edged sword that hurts some investors and helps others.
"A year ago, we couldn't have afforded these buildings," said David Neithercut, president and chief executive of Equity Residential, which owns 926 properties with 197,404 units that Wall Street values at about $14.4 billion.
Now that developers don't think they can make sufficiently profitable condo conversion deals, he added, "we intend to acquire several of these properties where condo conversions were planned that never happened."
Prices for these apartment buildings probably have fallen about 20 percent from their peak in the summer of 2005, said Jonathan Litt, senior real estate analyst for Citigroup Investment Research in New York.
Nationwide, profits for condo developers have fallen from 50 percent to "20 percent for some, and for many to zero or less," Litt noted.
Chicago condo developers face some rough times ahead, Litt added. "This has been on the radar screen for a couple of years because developers have brought on a lot of inventory," he said.
Speaking about Gouletas' lottery, Neithercut of Equity Residential commented, "I'm no expert, but what I hear is a savvy condo conversion guy that didn't want to get caught holding in a market he's worried about."
Equity Residential, which owns some properties in the metropolitan area but never had a strong presence in downtown Chicago, is "moving our investments to high-barrier [areas] like New York, Boston, South Florida and California," Neithercut said, meaning places where the development approval process is stringent, long and costly.
In Chicago, "this is the first time I've seen a two-hour sellout," said Gail Lissner, vice president of Appraisal Research Counselors Ltd. a Chicago-based consulting and appraisal firm. But she added: "American Invsco is a mass marketer that looks for volume sales. This is their style."
Lissner does not have third-quarter numbers for downtown condo sales but her informal tracking indicates sales are still slowing. She has yet to see prices drop, but has observed owner concessions rising and developers pulling back.
Appraisal Research predicted that approximately 10,000 condos would come on the market this year, but Lissner said, "We're definitely seeing projects delayed and units not coming on the market as fast as we anticipated."
In the second quarter, the most recent numbers available, sales contracts and reservations totaled 1,496, about one-third less than the historically strong first quarter, according to Appraisal Research.
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sdiesenhouse@tribune.com
Saturday, September 23, 2006
Wall St lower on further evidence of slowdow
Wall St lower on further evidence of slowdown
By John O’Doherty in New York
Copyright The Financial Times Limited 2006
Published: September 22 2006 13:37 | Last updated: September 22 2006 21:48
Wall Street finished the week lower on Friday, as investor relief over the Federal Reserve’s decision to leave interest rates unchanged was countered by fresh evidence of slowing economic growth.
Large-cap technology stocks made some of the most dramatic moves during the week. Yahoo slumped 13 per cent over the five days to $25.52, wiping out the previous eight weeks of gains. The company said third-quarter results would be at the bottom end of their previously forecast range due to slowing advertising revenue.
Oracle provided a counterweight to Yahoo’s slump, climbing 7.4 per cent to $17.54. On Wednesday, the software maker reported a 29 per cent increase in first quarter profits, as its chief executive said the company was gaining market share from German rival SAP.
Hewlett-Packard shed 3 per cent to $35.11 over the week as its controversial investigation into boardroom leaks to the media began to unnerve investors. News reports said that chief executive Mark Hurd may have had a greater role in the investigation than had previously been thought.
Microsoft dipped 0.7 per cent to $26.66. However, the stock has now gained 25 per cent since the middle of June and is back in positive territory for the year.
Media group Tribune, owner of the Los Angeles Times, surged 9.8 per cent to $33.99, its best week in more than two years, after it appointed a special committee to oversee a business review that might lead to a sale of some assets or a leveraged buyout of the group.
At the close, the S&P 500 was down 0.4 per cent for the week at 1,314.78, a loss on the day of 0.3 per cent, or 3.25 points. On Wednesday, the index briefly hit its highest level in more than five years. The Nasdaq Composite was 0.7 per cent lower on the week, losing 0.8 per cent, or 18.82 points, on the day to 2,218.93.
The Dow Jones Industrial Average finished the week down 0.5 per cent, a loss of 0.2 per cent, or 25.13 points, on the day at 11,508.10.
Stocks made a brief rally on Wednesday after the Federal Reserve left interest rates unchanged at 5.25 per cent. However, on Thursday the Philadelphia Federal Reserve’s manufacturing index fell sharply, increasing investor unease that economic growth was slowing faster than had been thought.
“The run-up to this point has been driven by an expectation that the Fed will stop raising rates and get the cooling in the economy they’re looking for,” said Joseph Battipaglia, chief market strategist at Ryan Beck.
“The price you’re paying for that is uncertainty about how much softening there will be in the economy. A soft landing is something that the Fed cannot engineer. It’s out of their hands.”
Fears of a slowdown in manufacturing affected Caterpillar, which sank 4.1 per cent to $62.77 – the week’s worst performance in the Dow. United Technologies, also suffered, losing 3.6 per cent to $62.30.
General Motors tumbled 3.3 per cent to $30.62 on reports that talks on a possible alliance with Nissan and Renault had made little progress.
Symbol Technologies, a maker of barcode scanners and mobile computers, surged 15.2 per cent to $14.64 after Motorola agreed to buy the company for $3.9bn.
Darden Restaurants leapt 9.3 per cent to $42.38 after its first quarter profits beat analyst estimates and it raised earnings guidance for 2006 on bullish forecasts for revenue from its Olive Garden chain of Italian-themed restaurants.
Home improvement retailer Home Depot suffered from the slowing housing market, sinking 3.4 per cent to $35.96. The stock has fallen 11 per cent since the beginning of the year.
Medical device maker Boston Scientific reported preliminary sales and earnings figures for the third quarter that came in below analyst estimates. Morgan Stanley cut its rating on the stock from “overweight” to “underweight”, and the shares tumbled 8.5 per cent to $14.85.
First Data, provider of electronic payment systems, sank 9.3 per cent to $40.49. Early in the week, its Western Union subsidiary – which the company plans to spin off – said income growth would be sluggish in coming years, as immigrants who use the service to send money to relatives grow concerned about government scrutiny of wire transfers.
By John O’Doherty in New York
Copyright The Financial Times Limited 2006
Published: September 22 2006 13:37 | Last updated: September 22 2006 21:48
Wall Street finished the week lower on Friday, as investor relief over the Federal Reserve’s decision to leave interest rates unchanged was countered by fresh evidence of slowing economic growth.
Large-cap technology stocks made some of the most dramatic moves during the week. Yahoo slumped 13 per cent over the five days to $25.52, wiping out the previous eight weeks of gains. The company said third-quarter results would be at the bottom end of their previously forecast range due to slowing advertising revenue.
Oracle provided a counterweight to Yahoo’s slump, climbing 7.4 per cent to $17.54. On Wednesday, the software maker reported a 29 per cent increase in first quarter profits, as its chief executive said the company was gaining market share from German rival SAP.
Hewlett-Packard shed 3 per cent to $35.11 over the week as its controversial investigation into boardroom leaks to the media began to unnerve investors. News reports said that chief executive Mark Hurd may have had a greater role in the investigation than had previously been thought.
Microsoft dipped 0.7 per cent to $26.66. However, the stock has now gained 25 per cent since the middle of June and is back in positive territory for the year.
Media group Tribune, owner of the Los Angeles Times, surged 9.8 per cent to $33.99, its best week in more than two years, after it appointed a special committee to oversee a business review that might lead to a sale of some assets or a leveraged buyout of the group.
At the close, the S&P 500 was down 0.4 per cent for the week at 1,314.78, a loss on the day of 0.3 per cent, or 3.25 points. On Wednesday, the index briefly hit its highest level in more than five years. The Nasdaq Composite was 0.7 per cent lower on the week, losing 0.8 per cent, or 18.82 points, on the day to 2,218.93.
The Dow Jones Industrial Average finished the week down 0.5 per cent, a loss of 0.2 per cent, or 25.13 points, on the day at 11,508.10.
Stocks made a brief rally on Wednesday after the Federal Reserve left interest rates unchanged at 5.25 per cent. However, on Thursday the Philadelphia Federal Reserve’s manufacturing index fell sharply, increasing investor unease that economic growth was slowing faster than had been thought.
“The run-up to this point has been driven by an expectation that the Fed will stop raising rates and get the cooling in the economy they’re looking for,” said Joseph Battipaglia, chief market strategist at Ryan Beck.
“The price you’re paying for that is uncertainty about how much softening there will be in the economy. A soft landing is something that the Fed cannot engineer. It’s out of their hands.”
Fears of a slowdown in manufacturing affected Caterpillar, which sank 4.1 per cent to $62.77 – the week’s worst performance in the Dow. United Technologies, also suffered, losing 3.6 per cent to $62.30.
General Motors tumbled 3.3 per cent to $30.62 on reports that talks on a possible alliance with Nissan and Renault had made little progress.
Symbol Technologies, a maker of barcode scanners and mobile computers, surged 15.2 per cent to $14.64 after Motorola agreed to buy the company for $3.9bn.
Darden Restaurants leapt 9.3 per cent to $42.38 after its first quarter profits beat analyst estimates and it raised earnings guidance for 2006 on bullish forecasts for revenue from its Olive Garden chain of Italian-themed restaurants.
Home improvement retailer Home Depot suffered from the slowing housing market, sinking 3.4 per cent to $35.96. The stock has fallen 11 per cent since the beginning of the year.
Medical device maker Boston Scientific reported preliminary sales and earnings figures for the third quarter that came in below analyst estimates. Morgan Stanley cut its rating on the stock from “overweight” to “underweight”, and the shares tumbled 8.5 per cent to $14.85.
First Data, provider of electronic payment systems, sank 9.3 per cent to $40.49. Early in the week, its Western Union subsidiary – which the company plans to spin off – said income growth would be sluggish in coming years, as immigrants who use the service to send money to relatives grow concerned about government scrutiny of wire transfers.
Economic sentiment undermined by double whammy
Economic sentiment undermined by double whammy
By Tony Tassell
Copyright The Financial Times Limited 2006
Published: September 23 2006 03:00 | Last updated: September 23 2006 03:00
Investor sentiment was jolted this week by a revival of two key market risks - a hard landing for the US economy and emerging market instability triggered by political crises.
Just as risk appetite appeared to have fully bounced back from the turmoil that unfolded in May, investors' nerves were unsettled by fresh evidence of a US economic slowdown and political troubles from Thailand to Hungary to Brazil.
The emergence of big losses suffered by US hedge fund Amaranth also underlined the risk of large, leveraged investors caught out by adverse market moves.
US Treasuries had their best week in 17 months, benefiting from safe haven buying and a dispelling of fears that the US Federal Reserve might be forced to raise interest rates to contain inflation. A sharp fall in oil prices towards the $60 a barrel market further eased inflationary fears as the Fed maintained its pause in adjusting interest rates at a monetary policy meeting on Wednesday.
Emerging market assets - shares, currencies and bonds - suffered a big sell-off in reaction to a turbulent week marked by the coup in Thailand, riots in Hungary, a corruption scandal in Brazil and the collapse of the coalition ruling Poland. In South Africa, the dropping of a corruption case against Jacob Zuma, a former deputy president and popular leftist, raised talk of him becoming the country's next leader.
"Investors have underestimated political risks in emerging markets," said Kingsmill Bond, strategist at Deutsche Bank.
Emerging markets were also weighed down by concerns over their sensitivity to a US economic slowdown. Some analysts said emerging market assets had been hit by investors taking "risk off the table" ahead of the month and quarter-end on September 30. Hungary was one of the hardest hit after the scandal over an admission by Prime Minister Ferenc Gyurcsány that he had lied to voters. The country's stock market benchmark, the BUX index, fell by 6.56 per cent while the currency dropped 2.2 per cent.
Thailand was more resilient, with investors seeming to buy into weakness. The SET index fell 2.7 per cent after re-opening from Thursday. The baht lost 0.3 per cent. In Turkey the ISE 100 index lost 4.6 per cent over the week and the lira 3.8 per cent.
Lars Christensen, senior analyst at Danske Bank, said emerging markets might be in for a new sell-off that could be as severe as May's.
He said the risks looked largest in central and eastern Europe, where political uncertainties have risen sharply and external economic balances were relatively weak. Exposure should also be reduced to high-volatility markets like South Africa and Turkey.
However, he said there was no reason for a sell-off in Asian emerging markets where external balances looked robust, even in Indonesia.
"Asian emerging markets could be seen as a safe-haven in these volatile times," he said.
Philip Poole, strategist at HSBC, said emerging markets faced two competing factors. One was was the increased risk from a slowing of the US economy. However, they also benefited from the lower bond yields that resulted from this as they would increase the appeal of carry trades - borrowing in low-yield currencies to invest in higher return assets elsewhere.
The evidence of the US economic slowdown came starkly in the Philadelphia Federal Reserve's August business conditions index that showed its first negative reading for three years.
This helped Treasuries surge over the week with investors starting to look to cuts in US interest rates next year. Yields on the 10-year note fell by 18 basis points to 4.61 per cent.
The economic gloom put US equities under pressure. By mid-afternoon on Wall Street, the S&P 500 index was down 0.5 per cent on the week; the Nasdaq 1 per cent and the Dow Jones Industrial Average 0.6 per cent.
Europe was relatively resilient, boosted by takeover activity. After hitting a four-month high on Thursday, the FTSE Eurofirst 300 index ended down 0.2 per cent over the week.
By Tony Tassell
Copyright The Financial Times Limited 2006
Published: September 23 2006 03:00 | Last updated: September 23 2006 03:00
Investor sentiment was jolted this week by a revival of two key market risks - a hard landing for the US economy and emerging market instability triggered by political crises.
Just as risk appetite appeared to have fully bounced back from the turmoil that unfolded in May, investors' nerves were unsettled by fresh evidence of a US economic slowdown and political troubles from Thailand to Hungary to Brazil.
The emergence of big losses suffered by US hedge fund Amaranth also underlined the risk of large, leveraged investors caught out by adverse market moves.
US Treasuries had their best week in 17 months, benefiting from safe haven buying and a dispelling of fears that the US Federal Reserve might be forced to raise interest rates to contain inflation. A sharp fall in oil prices towards the $60 a barrel market further eased inflationary fears as the Fed maintained its pause in adjusting interest rates at a monetary policy meeting on Wednesday.
Emerging market assets - shares, currencies and bonds - suffered a big sell-off in reaction to a turbulent week marked by the coup in Thailand, riots in Hungary, a corruption scandal in Brazil and the collapse of the coalition ruling Poland. In South Africa, the dropping of a corruption case against Jacob Zuma, a former deputy president and popular leftist, raised talk of him becoming the country's next leader.
"Investors have underestimated political risks in emerging markets," said Kingsmill Bond, strategist at Deutsche Bank.
Emerging markets were also weighed down by concerns over their sensitivity to a US economic slowdown. Some analysts said emerging market assets had been hit by investors taking "risk off the table" ahead of the month and quarter-end on September 30. Hungary was one of the hardest hit after the scandal over an admission by Prime Minister Ferenc Gyurcsány that he had lied to voters. The country's stock market benchmark, the BUX index, fell by 6.56 per cent while the currency dropped 2.2 per cent.
Thailand was more resilient, with investors seeming to buy into weakness. The SET index fell 2.7 per cent after re-opening from Thursday. The baht lost 0.3 per cent. In Turkey the ISE 100 index lost 4.6 per cent over the week and the lira 3.8 per cent.
Lars Christensen, senior analyst at Danske Bank, said emerging markets might be in for a new sell-off that could be as severe as May's.
He said the risks looked largest in central and eastern Europe, where political uncertainties have risen sharply and external economic balances were relatively weak. Exposure should also be reduced to high-volatility markets like South Africa and Turkey.
However, he said there was no reason for a sell-off in Asian emerging markets where external balances looked robust, even in Indonesia.
"Asian emerging markets could be seen as a safe-haven in these volatile times," he said.
Philip Poole, strategist at HSBC, said emerging markets faced two competing factors. One was was the increased risk from a slowing of the US economy. However, they also benefited from the lower bond yields that resulted from this as they would increase the appeal of carry trades - borrowing in low-yield currencies to invest in higher return assets elsewhere.
The evidence of the US economic slowdown came starkly in the Philadelphia Federal Reserve's August business conditions index that showed its first negative reading for three years.
This helped Treasuries surge over the week with investors starting to look to cuts in US interest rates next year. Yields on the 10-year note fell by 18 basis points to 4.61 per cent.
The economic gloom put US equities under pressure. By mid-afternoon on Wall Street, the S&P 500 index was down 0.5 per cent on the week; the Nasdaq 1 per cent and the Dow Jones Industrial Average 0.6 per cent.
Europe was relatively resilient, boosted by takeover activity. After hitting a four-month high on Thursday, the FTSE Eurofirst 300 index ended down 0.2 per cent over the week.
Economy gets traction as election issue - Many voters say rising prices cut into their income.
Economy gets traction as election issue - Statistics indicate times are good, with low unemployment and high productivity. But many voters say rising prices cut into their income.
By Jill Zuckman
Copyright © 2006, Chicago Tribune
Published September 23, 2006
BRISTOL, Pa. -- Richard Vallejo's gift shop lost money for two years in a row before he finally shut it down last Christmas. Now he's trying to sell the building that houses his antique store, which also is losing money as his customers cut back on buying Hummel figurines and other luxury items.
"I keep listening to our president, who keeps saying the economy is good, and I don't know what he's talking about," said Vallejo, 63, alone all day in his quiet shop except for the company of Killer, his miniature pinscher. "I'm further in debt now than I was 10 years ago."
In the collar suburbs of Philadelphia, where statewide elections are won or lost, voters are confronting an economic conundrum. Most statistics say the nation's economy is flourishing, with low unemployment, high productivity and new jobs.
But many people who live here along the Delaware River and elsewhere across the nation say they are struggling to get by. They say their salaries stay the same but the costs of health care, gasoline, heating oil and college tuition go up, taking bigger and bigger bites out of their take-home pay.
"In the early '90s in Pennsylvania, the big deal was losing your job," said Terry Madonna, director of the Keystone Poll at Franklin and Marshall College. "Now the concern is you have your job, you're working a lot harder and you're making less."
With less than seven weeks until Election Day, polls show the economy has begun to draw even with or edge out Iraq as the top issue of concern to voters, prompting some campaigns to shift their emphasis.
"The economy is getting progressively worse and worse and I do believe it's getting to be more and more of an issue," said Patrick Murphy, the Democratic Iraq war veteran challenging Republican Rep. Michael Fitzpatrick to represent this Bucks County district.
Most recently, the Jones New York apparel plant here announced that it was cutting 323 jobs. Statewide, nearly 200,000 manufacturing jobs have disappeared since 2001.
Emphasis on `good news'
Fitzpatrick, however, describes the economy as "a good-news, bad-news story."
"I'm one who's prepared and excited to talk about the economy's good news," said Fitzpatrick, who is completing his first term in Congress. "But even in a strong economy, people's increase in wages is being reduced by the spiraling cost of health care."
Some such costs have lessened in recent weeks as gasoline prices have plunged, although they still are high by comparison with previous years.
According to the Kaiser Family Foundation, a non-partisan research center for health care, health insurance premiums for family coverage have risen 67 percent since 2000.
Neither candidate in the 8th Congressional District race thinks much of the other's approach. Murphy complains that Fitzpatrick's vote for a Central American free-trade bill known as CAFTA will cost the state more jobs. Fitzpatrick accuses Murphy of planning to raise taxes and undermine recent economic gains, a common Republican attack on Democratic challengers around the country.
In Washington, President Bush and Democratic leaders also are sparring over the nation's economic health.
"We've overcome recession, attacks, hurricanes, scandals, and the economy is growing. Four-point-seven unemployment rate. It's been a strong economy," Bush said last week.
House Democratic leader Nancy Pelosi of California, however, called the president's economic policies "woeful."
"The middle class is being squeezed as more Americans are living paycheck to paycheck," said Pelosi, calling for a minimum-wage increase.
Historically, voters have paid close attention to their pocketbooks, and in most cases, personal financial issues have played a key role in elections. But this year, many candidates kicked off their campaigns with a heavy focus on the war in Iraq. In recent weeks, the White House has sought to shift the dialogue to the war on terror.
But according to a recent CNN poll, voters are more concerned about the economy than Iraq. And a new Pew Research Center poll found that voters believe Democrats would do better than Republicans on the economy by a 14-point margin.
"It seems like almost the forgotten issue of this election," said Christopher Borick, an associate professor of political science at Muhlenberg College in Allentown. "What history tells us [is] it's often the great determining factor in elections' outcomes. It's one of the driving forces in how people turn out on Election Day."
In 1992, for example, the Clinton campaign hit voters over and over with its mantra, "It's the economy, stupid." Even though economic indicators were showing an improvement in the economy's performance, voters still felt beleaguered and held President George H.W. Bush accountable.
"Politically, it's a failure not to be in touch with people's feelings," said Sal Russo, a Republican strategist and former adviser to President Ronald Reagan. "The first President Bush kept saying the economy was doing well and people felt he was disconnected."
Nevertheless, in Pennsylvania's Senate race, Republican incumbent Rick Santorum is touting gains in the state's economy, with 124,800 new jobs created since January 2003. It's a statistic also cited by the Democratic governor, Ed Rendell, as he seeks re-election.
Santorum's Democratic challenger, Bob Casey, on the other hand, talks about the poor economy hurting Pennsylvania's middle class in almost every television commercial he airs as he calls for Congress to balance the budget, eliminate tax cuts for multimillionaires and modify trade agreements to keep jobs in the U.S.
"Bob Casey believes the first step is to turn the economy around," said one ad. Another slaps Santorum for writing that most families could afford to have one parent stay home with their children: "I would like Rick Santorum to come to my house at the end of the month when we're doing our bills and tell me how we can live on one income," said Debbie Balcik, identified as a wife and working mother.
In response, the Santorum campaign denounces Casey as someone who refuses to acknowledge the reality of a robust economy.
"Bob Casey's delusional on the issue of jobs. It's as if he doesn't want to admit that Pennsylvania has increased jobs and the economy is growing," said Virginia Davis, Santorum's spokeswoman. "He's trying to create a dismal picture for his own political gain."
Union sees an opening
The AFL-CIO is trying to take advantage of the economic issues in Pennsylvania and 20 other states, expanding its political program to reach 12.4 million voters with phone calls, neighborhood walks, workplace contacts and e-mails.
In Pennsylvania, union voters and their families who cast ballots in 2004 made up 30 percent of the electorate, a 4-percentage-point increase over the previous election. This year, union officials are hoping for another increase in that percentage to propel their endorsed candidates--Rendell, Casey, Lois Murphy in the 6th Congressional District and Joe Sestak in the 7th--to victory.
Still, voters in Bristol say they haven't decided whom they will vote for, despite restiveness about their economic prospects.
"I think people are afraid to spend money," said Vallejo, owner of The Other Time Antiques. "They're afraid of taxes, of whether they're going to have a job next month and the cost of gas."
Although he's a Democrat, Vallejo has voted for Santorum as well as for Reagan. In 2004, he couldn't bring himself to vote for either the president or the Democratic nominee, Sen. John Kerry of Massachusetts.
This year, he hasn't made up his mind how he will vote.
"I loved Clinton, I loved Reagan and I made lots of money with them," Vallejo said. "It's been terrible ever since."
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jzuckman@tribune.com
By Jill Zuckman
Copyright © 2006, Chicago Tribune
Published September 23, 2006
BRISTOL, Pa. -- Richard Vallejo's gift shop lost money for two years in a row before he finally shut it down last Christmas. Now he's trying to sell the building that houses his antique store, which also is losing money as his customers cut back on buying Hummel figurines and other luxury items.
"I keep listening to our president, who keeps saying the economy is good, and I don't know what he's talking about," said Vallejo, 63, alone all day in his quiet shop except for the company of Killer, his miniature pinscher. "I'm further in debt now than I was 10 years ago."
In the collar suburbs of Philadelphia, where statewide elections are won or lost, voters are confronting an economic conundrum. Most statistics say the nation's economy is flourishing, with low unemployment, high productivity and new jobs.
But many people who live here along the Delaware River and elsewhere across the nation say they are struggling to get by. They say their salaries stay the same but the costs of health care, gasoline, heating oil and college tuition go up, taking bigger and bigger bites out of their take-home pay.
"In the early '90s in Pennsylvania, the big deal was losing your job," said Terry Madonna, director of the Keystone Poll at Franklin and Marshall College. "Now the concern is you have your job, you're working a lot harder and you're making less."
With less than seven weeks until Election Day, polls show the economy has begun to draw even with or edge out Iraq as the top issue of concern to voters, prompting some campaigns to shift their emphasis.
"The economy is getting progressively worse and worse and I do believe it's getting to be more and more of an issue," said Patrick Murphy, the Democratic Iraq war veteran challenging Republican Rep. Michael Fitzpatrick to represent this Bucks County district.
Most recently, the Jones New York apparel plant here announced that it was cutting 323 jobs. Statewide, nearly 200,000 manufacturing jobs have disappeared since 2001.
Emphasis on `good news'
Fitzpatrick, however, describes the economy as "a good-news, bad-news story."
"I'm one who's prepared and excited to talk about the economy's good news," said Fitzpatrick, who is completing his first term in Congress. "But even in a strong economy, people's increase in wages is being reduced by the spiraling cost of health care."
Some such costs have lessened in recent weeks as gasoline prices have plunged, although they still are high by comparison with previous years.
According to the Kaiser Family Foundation, a non-partisan research center for health care, health insurance premiums for family coverage have risen 67 percent since 2000.
Neither candidate in the 8th Congressional District race thinks much of the other's approach. Murphy complains that Fitzpatrick's vote for a Central American free-trade bill known as CAFTA will cost the state more jobs. Fitzpatrick accuses Murphy of planning to raise taxes and undermine recent economic gains, a common Republican attack on Democratic challengers around the country.
In Washington, President Bush and Democratic leaders also are sparring over the nation's economic health.
"We've overcome recession, attacks, hurricanes, scandals, and the economy is growing. Four-point-seven unemployment rate. It's been a strong economy," Bush said last week.
House Democratic leader Nancy Pelosi of California, however, called the president's economic policies "woeful."
"The middle class is being squeezed as more Americans are living paycheck to paycheck," said Pelosi, calling for a minimum-wage increase.
Historically, voters have paid close attention to their pocketbooks, and in most cases, personal financial issues have played a key role in elections. But this year, many candidates kicked off their campaigns with a heavy focus on the war in Iraq. In recent weeks, the White House has sought to shift the dialogue to the war on terror.
But according to a recent CNN poll, voters are more concerned about the economy than Iraq. And a new Pew Research Center poll found that voters believe Democrats would do better than Republicans on the economy by a 14-point margin.
"It seems like almost the forgotten issue of this election," said Christopher Borick, an associate professor of political science at Muhlenberg College in Allentown. "What history tells us [is] it's often the great determining factor in elections' outcomes. It's one of the driving forces in how people turn out on Election Day."
In 1992, for example, the Clinton campaign hit voters over and over with its mantra, "It's the economy, stupid." Even though economic indicators were showing an improvement in the economy's performance, voters still felt beleaguered and held President George H.W. Bush accountable.
"Politically, it's a failure not to be in touch with people's feelings," said Sal Russo, a Republican strategist and former adviser to President Ronald Reagan. "The first President Bush kept saying the economy was doing well and people felt he was disconnected."
Nevertheless, in Pennsylvania's Senate race, Republican incumbent Rick Santorum is touting gains in the state's economy, with 124,800 new jobs created since January 2003. It's a statistic also cited by the Democratic governor, Ed Rendell, as he seeks re-election.
Santorum's Democratic challenger, Bob Casey, on the other hand, talks about the poor economy hurting Pennsylvania's middle class in almost every television commercial he airs as he calls for Congress to balance the budget, eliminate tax cuts for multimillionaires and modify trade agreements to keep jobs in the U.S.
"Bob Casey believes the first step is to turn the economy around," said one ad. Another slaps Santorum for writing that most families could afford to have one parent stay home with their children: "I would like Rick Santorum to come to my house at the end of the month when we're doing our bills and tell me how we can live on one income," said Debbie Balcik, identified as a wife and working mother.
In response, the Santorum campaign denounces Casey as someone who refuses to acknowledge the reality of a robust economy.
"Bob Casey's delusional on the issue of jobs. It's as if he doesn't want to admit that Pennsylvania has increased jobs and the economy is growing," said Virginia Davis, Santorum's spokeswoman. "He's trying to create a dismal picture for his own political gain."
Union sees an opening
The AFL-CIO is trying to take advantage of the economic issues in Pennsylvania and 20 other states, expanding its political program to reach 12.4 million voters with phone calls, neighborhood walks, workplace contacts and e-mails.
In Pennsylvania, union voters and their families who cast ballots in 2004 made up 30 percent of the electorate, a 4-percentage-point increase over the previous election. This year, union officials are hoping for another increase in that percentage to propel their endorsed candidates--Rendell, Casey, Lois Murphy in the 6th Congressional District and Joe Sestak in the 7th--to victory.
Still, voters in Bristol say they haven't decided whom they will vote for, despite restiveness about their economic prospects.
"I think people are afraid to spend money," said Vallejo, owner of The Other Time Antiques. "They're afraid of taxes, of whether they're going to have a job next month and the cost of gas."
Although he's a Democrat, Vallejo has voted for Santorum as well as for Reagan. In 2004, he couldn't bring himself to vote for either the president or the Democratic nominee, Sen. John Kerry of Massachusetts.
This year, he hasn't made up his mind how he will vote.
"I loved Clinton, I loved Reagan and I made lots of money with them," Vallejo said. "It's been terrible ever since."
----------
jzuckman@tribune.com
Bush seeks immunity for violating War Crimes Act
Bush seeks immunity for violating War Crimes Act
BY ELIZABETH HOLTZMAN
September 23, 2006
Copyright by the Chicago Sun Times
Thirty-two years ago, President Gerald Ford created a political firestorm by pardoning former President Richard Nixon of all crimes he may have committed in Watergate -- and lost his election as a result. Now, President Bush, to avoid a similar public outcry, is quietly trying to pardon himself of any crimes connected with the torture and mistreatment of U.S. detainees.
The ''pardon'' is buried in Bush's proposed legislation to create a new kind of military tribunal for cases involving top al-Qaida operatives. The ''pardon'' provision has nothing to do with the tribunals. Instead, it guts the War Crimes Act of 1996, a federal law that makes it a crime, in some cases punishable by death, to mistreat detainees in violation of the Geneva Conventions and makes the new, weaker terms of the War Crimes Act retroactive to 9/11.
Press accounts of the provision have described it as providing immunity for CIA interrogators. But its terms cover the president and other top officials because the act applies to any U.S. national.
Avoiding prosecution under the War Crimes Act has been an obsession of this administration since shortly after 9/11. In a January 2002 memorandum to the president, then-White House Counsel Alberto Gonzales pointed out the problem of prosecution for detainee mistreatment under the War Crimes Act. He notes that given the vague language of the statute, no one could predict what future ''prosecutors and independent counsels'' might do if they decided to bring charges under the act. As an author of the 1978 special prosecutor statute, I know that independent counsels (who used to be called ''special prosecutors'' prior to the statute's reauthorization in 1994) aren't for low-level government officials such as CIA interrogators, but for the president and his Cabinet. It is clear that Gonzales was concerned about top administration officials.
Gonzales also understood that the specter of prosecution could hang over top administration officials involved in detainee mistreatment throughout their lives. Because there is no statute of limitations in cases where death resulted from the mistreatment, prosecutors far into the future, not appointed by Bush or beholden to him, would be making the decisions whether to prosecute.
To ''reduce the threat of domestic criminal prosecution under the War Crimes Act,'' Gonzales recommended that Bush not apply the Geneva Conventions to al-Qaida and the Taliban. Since the War Crimes Act carried out the Geneva Conventions, Gonzales reasoned that if the Conventions didn't apply, neither did the War Crimes Act. Bush implemented the recommendation on Feb. 7, 2002.
When the Supreme Court recently decided that the Conventions did apply to al-Qaida and Taliban detainees, the possibility of criminal liability for high-level administration officials reared its ugly head again.
What to do? The administration has apparently decided to secure immunity from prosecution through legislation. Under cover of the controversy involving the military tribunals and whether they could use hearsay or coerced evidence, the administration is trying to pardon itself, hoping that no one will notice. The urgent timetable has to do more than anything with the possibility that the next Congress may be controlled by Democrats, who will not permit such a provision to be adopted.
Creating immunity retroactively for violating the law sets a terrible precedent. The president takes an oath of office to uphold the Constitution; that document requires him to obey the laws, not violate them. A president who knowingly and deliberately violates U.S. criminal laws should not be able to use stealth tactics to immunize himself from liability, and Congress should not go along.
Elizabeth Holtzman, a former New York congresswoman, is co-author with Cynthia L. Cooper of The Impeachment of George W. Bush: A Practical Guide for Concerned Citizens.
BY ELIZABETH HOLTZMAN
September 23, 2006
Copyright by the Chicago Sun Times
Thirty-two years ago, President Gerald Ford created a political firestorm by pardoning former President Richard Nixon of all crimes he may have committed in Watergate -- and lost his election as a result. Now, President Bush, to avoid a similar public outcry, is quietly trying to pardon himself of any crimes connected with the torture and mistreatment of U.S. detainees.
The ''pardon'' is buried in Bush's proposed legislation to create a new kind of military tribunal for cases involving top al-Qaida operatives. The ''pardon'' provision has nothing to do with the tribunals. Instead, it guts the War Crimes Act of 1996, a federal law that makes it a crime, in some cases punishable by death, to mistreat detainees in violation of the Geneva Conventions and makes the new, weaker terms of the War Crimes Act retroactive to 9/11.
Press accounts of the provision have described it as providing immunity for CIA interrogators. But its terms cover the president and other top officials because the act applies to any U.S. national.
Avoiding prosecution under the War Crimes Act has been an obsession of this administration since shortly after 9/11. In a January 2002 memorandum to the president, then-White House Counsel Alberto Gonzales pointed out the problem of prosecution for detainee mistreatment under the War Crimes Act. He notes that given the vague language of the statute, no one could predict what future ''prosecutors and independent counsels'' might do if they decided to bring charges under the act. As an author of the 1978 special prosecutor statute, I know that independent counsels (who used to be called ''special prosecutors'' prior to the statute's reauthorization in 1994) aren't for low-level government officials such as CIA interrogators, but for the president and his Cabinet. It is clear that Gonzales was concerned about top administration officials.
Gonzales also understood that the specter of prosecution could hang over top administration officials involved in detainee mistreatment throughout their lives. Because there is no statute of limitations in cases where death resulted from the mistreatment, prosecutors far into the future, not appointed by Bush or beholden to him, would be making the decisions whether to prosecute.
To ''reduce the threat of domestic criminal prosecution under the War Crimes Act,'' Gonzales recommended that Bush not apply the Geneva Conventions to al-Qaida and the Taliban. Since the War Crimes Act carried out the Geneva Conventions, Gonzales reasoned that if the Conventions didn't apply, neither did the War Crimes Act. Bush implemented the recommendation on Feb. 7, 2002.
When the Supreme Court recently decided that the Conventions did apply to al-Qaida and Taliban detainees, the possibility of criminal liability for high-level administration officials reared its ugly head again.
What to do? The administration has apparently decided to secure immunity from prosecution through legislation. Under cover of the controversy involving the military tribunals and whether they could use hearsay or coerced evidence, the administration is trying to pardon itself, hoping that no one will notice. The urgent timetable has to do more than anything with the possibility that the next Congress may be controlled by Democrats, who will not permit such a provision to be adopted.
Creating immunity retroactively for violating the law sets a terrible precedent. The president takes an oath of office to uphold the Constitution; that document requires him to obey the laws, not violate them. A president who knowingly and deliberately violates U.S. criminal laws should not be able to use stealth tactics to immunize himself from liability, and Congress should not go along.
Elizabeth Holtzman, a former New York congresswoman, is co-author with Cynthia L. Cooper of The Impeachment of George W. Bush: A Practical Guide for Concerned Citizens.
A Tortured Debate By Molly Ivins
A Tortured Debate By Molly Ivins
Copyright by AlterNet.
Posted September 22, 2006.
Some country is about to have a Senate debate on a bill to legalize torture. How weird is that?
I'd like to thank Sens. John McCain, Lindsay Graham -- a former military lawyer -- and John Warner of Virginia. I will always think fondly of John Warner for this one reason: Forty years ago, this country was involved in an unprovoked and unnecessary war. It ended so badly the vets finally had to hold their own homecoming parade, years after they came home. The only member of Congress who attended was John Warner.
A debate on torture. I don't know -- what do you think? I guess we have to define it, first. The White House has already specified "water boarding," making some guy think he's drowning for long periods, as a perfectly good interrogation technique. Maybe, but it was also a great favorite of the Gestapo and has been described and condemned in thousands of memoirs and novels in highly unpleasant terms.
I don't think we can give it a good name again, and I personally kind of don't like being identified with the Gestapo. How icky. (Somewhere inside me, a small voice is shrieking, "Are you insane?")
The safe position is, "Torture doesn't work."
Well, actually, it works to this extent -- anybody can be tortured into telling anything that's true and anything that's not true. The more people are tortured, the more they make up to please the torturer. Then the torturer has to figure out when the vic started lying. Since our torturers are, in George Bush's immortal phrase, "professionals" and this whole legislative fight is over making torture legal so the "professionals" can't later be charged with breaking the Geneva Conventions, Bush has vowed to end "the program" completely if he doesn't get what he wants. (The same thin voice is shrieking, "Professional torturers trained with my tax money?")
Bush's problem is that despite repeated warnings, he went ahead with "the program" without waiting for Congress to provide a fig leaf of legality. Actually, we have been torturing prisoners at Gitmo, prisons in Eastern Europe and Afghanistan for years.
Since only seven of the several hundred prisoners at Gitmo have ever been charged with anything, we face the unhappy prospect that the rest of them are innocent. And will sue. That's going to be quite an expensive settlement. The Canadian upon whom we practiced "rendition," sending him to Syria for 10 months of torture, will doubtlessly be first on the legal docket. I wonder how high up the chain of command a civil suit can go? Any old war criminals wandering around?
I was interested to find that the Rev. Louis Sheldon of the Traditional Values Coalition is so in favor of torture he told McCain that the senator either supports the torture bill or he can forget about the evangelical Christian vote. I'd like to see an evangelical vote on that one. I don't know how Sheldon defines traditional values, but deliberately inflicting terrible physical pain or stress on someone who is completely helpless strikes me as ... well, torture. And, um, wrong.
And I've smoked dope! Boy, everything those conservatives tell us about the terrible moral values of us liberals must be true after all. Now, in addition to the slightly surreal awakening to find we live in a country that's having a serious debate on a torture bill, can we do anything about it? The answer is: We better.
We better do something about it. Now, right away. What do we do? The answer is: anything ... phone, fax, e-mail, mail, demonstrate -- go stand outside their offices or the nearest federal building in the cold and sing hymns or shout rude slogans, chant or make a speech, or start attacking federal property, like a postal box, so they have to arrest you. Gather peacefully and make a lot of noise. Get publicity, too.
How will you feel if you didn't do something? "Well, honey, when the United States decided to adopt torture as an official policy, I was dipping the dog for ticks."
As Ann Richards used to say, "I don't want my tombstone to read: 'She kept a clean house.'"
Molly Ivins writes about politics, Texas and other bizarre happenings.
Copyright by AlterNet.
Posted September 22, 2006.
Some country is about to have a Senate debate on a bill to legalize torture. How weird is that?
I'd like to thank Sens. John McCain, Lindsay Graham -- a former military lawyer -- and John Warner of Virginia. I will always think fondly of John Warner for this one reason: Forty years ago, this country was involved in an unprovoked and unnecessary war. It ended so badly the vets finally had to hold their own homecoming parade, years after they came home. The only member of Congress who attended was John Warner.
A debate on torture. I don't know -- what do you think? I guess we have to define it, first. The White House has already specified "water boarding," making some guy think he's drowning for long periods, as a perfectly good interrogation technique. Maybe, but it was also a great favorite of the Gestapo and has been described and condemned in thousands of memoirs and novels in highly unpleasant terms.
I don't think we can give it a good name again, and I personally kind of don't like being identified with the Gestapo. How icky. (Somewhere inside me, a small voice is shrieking, "Are you insane?")
The safe position is, "Torture doesn't work."
Well, actually, it works to this extent -- anybody can be tortured into telling anything that's true and anything that's not true. The more people are tortured, the more they make up to please the torturer. Then the torturer has to figure out when the vic started lying. Since our torturers are, in George Bush's immortal phrase, "professionals" and this whole legislative fight is over making torture legal so the "professionals" can't later be charged with breaking the Geneva Conventions, Bush has vowed to end "the program" completely if he doesn't get what he wants. (The same thin voice is shrieking, "Professional torturers trained with my tax money?")
Bush's problem is that despite repeated warnings, he went ahead with "the program" without waiting for Congress to provide a fig leaf of legality. Actually, we have been torturing prisoners at Gitmo, prisons in Eastern Europe and Afghanistan for years.
Since only seven of the several hundred prisoners at Gitmo have ever been charged with anything, we face the unhappy prospect that the rest of them are innocent. And will sue. That's going to be quite an expensive settlement. The Canadian upon whom we practiced "rendition," sending him to Syria for 10 months of torture, will doubtlessly be first on the legal docket. I wonder how high up the chain of command a civil suit can go? Any old war criminals wandering around?
I was interested to find that the Rev. Louis Sheldon of the Traditional Values Coalition is so in favor of torture he told McCain that the senator either supports the torture bill or he can forget about the evangelical Christian vote. I'd like to see an evangelical vote on that one. I don't know how Sheldon defines traditional values, but deliberately inflicting terrible physical pain or stress on someone who is completely helpless strikes me as ... well, torture. And, um, wrong.
And I've smoked dope! Boy, everything those conservatives tell us about the terrible moral values of us liberals must be true after all. Now, in addition to the slightly surreal awakening to find we live in a country that's having a serious debate on a torture bill, can we do anything about it? The answer is: We better.
We better do something about it. Now, right away. What do we do? The answer is: anything ... phone, fax, e-mail, mail, demonstrate -- go stand outside their offices or the nearest federal building in the cold and sing hymns or shout rude slogans, chant or make a speech, or start attacking federal property, like a postal box, so they have to arrest you. Gather peacefully and make a lot of noise. Get publicity, too.
How will you feel if you didn't do something? "Well, honey, when the United States decided to adopt torture as an official policy, I was dipping the dog for ticks."
As Ann Richards used to say, "I don't want my tombstone to read: 'She kept a clean house.'"
Molly Ivins writes about politics, Texas and other bizarre happenings.
Friday, September 22, 2006
New York Times Editorial - Tinsel on the defense budget
New York Times Editorial - Tinsel on the defense budget
Copyright by The New York Times
Published: September 21, 2006
Taxpayers may find it hard to believe that the must-pass $500 billion defense budget could be held hostage to a mischievous amendment empowering evangelical military chaplains to speak in the name of Jesus at nonreligious military gatherings. But that is the case in the U.S. Congress, where hard-right Republicans have held up passage of the defense bill in an attempt to license zealot chaplains to violate policies of religious tolerance at secular ceremonies.
Despite the firm opposition of the Pentagon and ecumenical chaplain groups, Republicans in the House of Representatives have been defending this egregious pro-evangelical thumb on the scale in negotiations with the Senate.
We expect the Senate, mindful of the nation's multidenominational legions fighting in Iraq and Afghanistan, to reject the fine-print travesty. At its heart is religious intolerance - not respect of chaplains' consciences - and a naked attempt to elevate evangelical beliefs to primacy in the ranks.
These very abuses caused a scandal at the Air Force Academy two years ago after cadets complained that ranking officers tolerated evangelical chaplains' proselytizing and discriminating on campus.
Proponents hope to exploit the urgency of passing the defense bill - part of the annual attempt to make a "Christmas tree" of the measure by weighting it with nonessential favors for political patrons.
Another controversial amendment aims at allowing war veterans to introduce hunting to a pristine part of the Channel Islands National Park off the coast of California. A spokesman for Representative Duncan Hunter, a Republican from California, said the proposal would "preserve the herds" and provide veterans from Iraq and Afghanistan with "the experience of a lifetime." Surely the Senate will oppose such a wacky exploitation of veterans as just another sop to the gun lobby.
Defense conferees who were truly conscientious would act to control predatory insurance salesmen at the gates of military bases. And they would force the Pentagon to end its awarding of unearned "bonus" payments to favored defense contractors. Government investigators found the Air Force's F- 22A Raptor plane 20 months late and 42 percent over budget, yet contractors reaped $849 million in bonuses.
Voters should wonder what in the name of (fill in deity) is going on in Congress.
Copyright by The New York Times
Published: September 21, 2006
Taxpayers may find it hard to believe that the must-pass $500 billion defense budget could be held hostage to a mischievous amendment empowering evangelical military chaplains to speak in the name of Jesus at nonreligious military gatherings. But that is the case in the U.S. Congress, where hard-right Republicans have held up passage of the defense bill in an attempt to license zealot chaplains to violate policies of religious tolerance at secular ceremonies.
Despite the firm opposition of the Pentagon and ecumenical chaplain groups, Republicans in the House of Representatives have been defending this egregious pro-evangelical thumb on the scale in negotiations with the Senate.
We expect the Senate, mindful of the nation's multidenominational legions fighting in Iraq and Afghanistan, to reject the fine-print travesty. At its heart is religious intolerance - not respect of chaplains' consciences - and a naked attempt to elevate evangelical beliefs to primacy in the ranks.
These very abuses caused a scandal at the Air Force Academy two years ago after cadets complained that ranking officers tolerated evangelical chaplains' proselytizing and discriminating on campus.
Proponents hope to exploit the urgency of passing the defense bill - part of the annual attempt to make a "Christmas tree" of the measure by weighting it with nonessential favors for political patrons.
Another controversial amendment aims at allowing war veterans to introduce hunting to a pristine part of the Channel Islands National Park off the coast of California. A spokesman for Representative Duncan Hunter, a Republican from California, said the proposal would "preserve the herds" and provide veterans from Iraq and Afghanistan with "the experience of a lifetime." Surely the Senate will oppose such a wacky exploitation of veterans as just another sop to the gun lobby.
Defense conferees who were truly conscientious would act to control predatory insurance salesmen at the gates of military bases. And they would force the Pentagon to end its awarding of unearned "bonus" payments to favored defense contractors. Government investigators found the Air Force's F- 22A Raptor plane 20 months late and 42 percent over budget, yet contractors reaped $849 million in bonuses.
Voters should wonder what in the name of (fill in deity) is going on in Congress.
Wall Street curse claims billions, again
Wall Street curse claims billions, again
By Heather Timmons
Copyright by The New York Times
Published: September 21, 2006
LONDON The big losses at the hedge fund Amaranth Advisors have their roots in a Wall Street curse that seems to strike at least once a decade: high-flying trader takes outsized risks and makes ridiculous paycheck, then implodes, possibly dragging the firm down with him.
But the events at Amaranth could be repeated much more often in coming years, veteran fund mangers say, thanks to hedge funds' recent love affair with the fast-moving commodities markets, and the "youthful aggression" of many traders.
Amaranth racked up some $5 billion of losses at the hands of a 32-year-old natural gas trader named Brian Hunter.
On Wednesday, Amaranth sold its energy portfolio - which holds what remains of its disastrous trades on price differences in the natural gas market - to J.P. Morgan and Citadel Investment Group, according to two people briefed on the negotiations. The sale leaves Amaranth, once a well-regarded $9.25 billion hedge fund, with $3.5 billion to $4 billion, a person involved in the negotiations said.
But there's a lot more aggressive new money out there in the volatile sector: Nearly $60 billion was invested by energy-related hedge funds in these markets, the Energy Hedge Fund Center estimates. Commodity indexes have $85 billion in assets, up from single digits just a few years ago.
Not all of these funds, or even most of them, have made bad bets, of course, and there is no guarantee that oil or natural gas prices will not soar again.
Still, veteran traders say the commodity markets are full of Brian Hunters: traders in their late 20s or early 30s who have never traded through severe conditions like the gasoline crisis of the 1970s, or the plunge in oil prices in the 1980s. Instead, they have watched as natural gas prices, as well as those of many other commodities, rose - unevenly, but with clear annual gains - since 2001. (The trading desk Hunter ran at Deutsche Bank suffered losses in 2003, but he maintains that he personally made money for the firm that year.)
He has not commented publicly since the losses were disclosed by Amaranth.
Where more experienced traders in commodities have pulled out of the market in recent months, or made long- term bets that these historically cyclical investments would fall, younger traders may have been convinced that the market could keep going up, say their peers. Emerging market demand for commodities and fears about petroleum supplies has created what traders refer to as a "super cycle," one that has driven prices higher, for longer, than ever.
Most people investing in commodities are "investing on the sustainability of the cycle, on things going higher," said Louis Gargour a former RAB Capital fund manager who recently founded his own fund, LNG Capital. Because so many people are buying and not selling, the short-term volatility has increased, which can particularly hurt people who are highly leveraged, as commodity traders are. "When the market retreats, it is vicious," Gargour said.
"The young guys just keep on buying and buying, and say, 'Who are you Grandpa, to say what value is?,'" said Gargour, who is 42.
Amaranth's losses came after Hunter bet that the spread between the prices of natural gas in March 2007 and April 2007 would increase because April's price would rise, but they declined instead.
While finance jobs like investment banking or equity trading are open to a vast range of ages and experience, trading in general, and commodities trading in particular, is generally staffed by young employees, which can exacerbate the big risk taking.
"Trading commodities has always been a youthful game, because it takes a certain youthful aggression" to make the bold decisions necessary, said Jay Levine, principal of enerjay, a broker and consultant. "In general, these young bucks have a certain knack of getting in and out of the market."
Commodities also appeal to younger traders because of their heavy leverage: only a limited amount of money is required upfront to trade. And because prices are very volatile, there's an element of instant gratification that also appeals. "Why sit in a stock for years waiting for it to appreciate when you can buy and sell something in hours?" Levine asked.
What younger traders often lack is a strategy to unwind their trades if the market goes against them. "Anyone that tells you they don't make a bad trade is a bold-faced liar," Levine said. What separates good managers from the bad ones is "how you recover from it, financially."
It may seem odd that Amaranth, which had several experienced risk managers on staff and bragged about its number of employees with doctorates, allowed Hunter to take such big bets without having such a strategy. But the problem is endemic to the industry, fund managers and traders say.
Hedge funds, particularly fast-growing ones, are particularly susceptible to the charms of a big risk-taker like Hunter, because they are under pressure to keep up their annual returns.
"The dirty secret of a lot of larger hedge funds is that returns fall off as assets grow," said one manager of a small hedge fund in New York who did not want to be quoted by name because he was insulting his peers. Often, "they turn into mutual funds in drag to some extent," he said, by going to multiple strategies, and taking lots of smaller positions to reduce risk. "It is harder to find valuation anomalies to put billions to work in," he said.
Having on board a trader like Hunter who has historically taken big bets and made huge profits helps to keep the returns up where they were when the fund was smaller, when he's making the right calls.
"All hedge fund managers are greedy, that's why they are in the game," said the New York manager. "If they have a 'star' they give them a lot of latitude," he said. "Often, skill and luck get confused."
Nassim Nicholas Taleb wrote "Fooled By Randomness," a book on Wall Street that claims luck has as much to do with success in the markets as skill.
"When you're a hot trader, people are afraid of not laughing at your jokes," Taleb said.
"When you make a lot of money at a firm, you can start owning the firm," he said. "That's the biggest risk when you hire someone who is very successful - you end up working for him."
Gargour adds, "No one listens to the risk managers until it is too late."
Veteran traders are bracing themselves for more implosions in the commodities sector.
"We've had a big buildup of a lot of risk, without a big blowup," Taleb said. Commodities are more vulnerable to impact from rare events than others sectors, he said, and the markets are very local, both of which increases the chance for volatility. Commodity spreads are very likely to be squeezed, "and these squeezes are very vicious," he said.
Amaranth is no different from any other hedge fund, said Taleb, who shared an office with the Amaranth founder, Nicholas Maounis, in Greenwich, Connecticut, for several years. "They're probably not much better, and they are certainly not worse," he said. "People are playing Russian roulette, and someone has to be on the losing side."
By Heather Timmons
Copyright by The New York Times
Published: September 21, 2006
LONDON The big losses at the hedge fund Amaranth Advisors have their roots in a Wall Street curse that seems to strike at least once a decade: high-flying trader takes outsized risks and makes ridiculous paycheck, then implodes, possibly dragging the firm down with him.
But the events at Amaranth could be repeated much more often in coming years, veteran fund mangers say, thanks to hedge funds' recent love affair with the fast-moving commodities markets, and the "youthful aggression" of many traders.
Amaranth racked up some $5 billion of losses at the hands of a 32-year-old natural gas trader named Brian Hunter.
On Wednesday, Amaranth sold its energy portfolio - which holds what remains of its disastrous trades on price differences in the natural gas market - to J.P. Morgan and Citadel Investment Group, according to two people briefed on the negotiations. The sale leaves Amaranth, once a well-regarded $9.25 billion hedge fund, with $3.5 billion to $4 billion, a person involved in the negotiations said.
But there's a lot more aggressive new money out there in the volatile sector: Nearly $60 billion was invested by energy-related hedge funds in these markets, the Energy Hedge Fund Center estimates. Commodity indexes have $85 billion in assets, up from single digits just a few years ago.
Not all of these funds, or even most of them, have made bad bets, of course, and there is no guarantee that oil or natural gas prices will not soar again.
Still, veteran traders say the commodity markets are full of Brian Hunters: traders in their late 20s or early 30s who have never traded through severe conditions like the gasoline crisis of the 1970s, or the plunge in oil prices in the 1980s. Instead, they have watched as natural gas prices, as well as those of many other commodities, rose - unevenly, but with clear annual gains - since 2001. (The trading desk Hunter ran at Deutsche Bank suffered losses in 2003, but he maintains that he personally made money for the firm that year.)
He has not commented publicly since the losses were disclosed by Amaranth.
Where more experienced traders in commodities have pulled out of the market in recent months, or made long- term bets that these historically cyclical investments would fall, younger traders may have been convinced that the market could keep going up, say their peers. Emerging market demand for commodities and fears about petroleum supplies has created what traders refer to as a "super cycle," one that has driven prices higher, for longer, than ever.
Most people investing in commodities are "investing on the sustainability of the cycle, on things going higher," said Louis Gargour a former RAB Capital fund manager who recently founded his own fund, LNG Capital. Because so many people are buying and not selling, the short-term volatility has increased, which can particularly hurt people who are highly leveraged, as commodity traders are. "When the market retreats, it is vicious," Gargour said.
"The young guys just keep on buying and buying, and say, 'Who are you Grandpa, to say what value is?,'" said Gargour, who is 42.
Amaranth's losses came after Hunter bet that the spread between the prices of natural gas in March 2007 and April 2007 would increase because April's price would rise, but they declined instead.
While finance jobs like investment banking or equity trading are open to a vast range of ages and experience, trading in general, and commodities trading in particular, is generally staffed by young employees, which can exacerbate the big risk taking.
"Trading commodities has always been a youthful game, because it takes a certain youthful aggression" to make the bold decisions necessary, said Jay Levine, principal of enerjay, a broker and consultant. "In general, these young bucks have a certain knack of getting in and out of the market."
Commodities also appeal to younger traders because of their heavy leverage: only a limited amount of money is required upfront to trade. And because prices are very volatile, there's an element of instant gratification that also appeals. "Why sit in a stock for years waiting for it to appreciate when you can buy and sell something in hours?" Levine asked.
What younger traders often lack is a strategy to unwind their trades if the market goes against them. "Anyone that tells you they don't make a bad trade is a bold-faced liar," Levine said. What separates good managers from the bad ones is "how you recover from it, financially."
It may seem odd that Amaranth, which had several experienced risk managers on staff and bragged about its number of employees with doctorates, allowed Hunter to take such big bets without having such a strategy. But the problem is endemic to the industry, fund managers and traders say.
Hedge funds, particularly fast-growing ones, are particularly susceptible to the charms of a big risk-taker like Hunter, because they are under pressure to keep up their annual returns.
"The dirty secret of a lot of larger hedge funds is that returns fall off as assets grow," said one manager of a small hedge fund in New York who did not want to be quoted by name because he was insulting his peers. Often, "they turn into mutual funds in drag to some extent," he said, by going to multiple strategies, and taking lots of smaller positions to reduce risk. "It is harder to find valuation anomalies to put billions to work in," he said.
Having on board a trader like Hunter who has historically taken big bets and made huge profits helps to keep the returns up where they were when the fund was smaller, when he's making the right calls.
"All hedge fund managers are greedy, that's why they are in the game," said the New York manager. "If they have a 'star' they give them a lot of latitude," he said. "Often, skill and luck get confused."
Nassim Nicholas Taleb wrote "Fooled By Randomness," a book on Wall Street that claims luck has as much to do with success in the markets as skill.
"When you're a hot trader, people are afraid of not laughing at your jokes," Taleb said.
"When you make a lot of money at a firm, you can start owning the firm," he said. "That's the biggest risk when you hire someone who is very successful - you end up working for him."
Gargour adds, "No one listens to the risk managers until it is too late."
Veteran traders are bracing themselves for more implosions in the commodities sector.
"We've had a big buildup of a lot of risk, without a big blowup," Taleb said. Commodities are more vulnerable to impact from rare events than others sectors, he said, and the markets are very local, both of which increases the chance for volatility. Commodity spreads are very likely to be squeezed, "and these squeezes are very vicious," he said.
Amaranth is no different from any other hedge fund, said Taleb, who shared an office with the Amaranth founder, Nicholas Maounis, in Greenwich, Connecticut, for several years. "They're probably not much better, and they are certainly not worse," he said. "People are playing Russian roulette, and someone has to be on the losing side."
CDC recommends routine HIV testing during visits to doctor, ER
CDC recommends routine HIV testing during visits to doctor, ER
By Jeremy Manier
Copyright © 2006, Chicago Tribune
Published September 22, 2006
Testing for HIV should be a routine part of doctor appointments and emergency-room visits for all patients between ages 13 and 64, according to new federal guidelines designed to identify AIDS patients before they develop life-threatening symptoms.
The policy may be difficult to implement, especially in Illinois, where the law sets tight standards for how doctors must obtain consent for HIV tests and how they can inform patients of the results.
Supporters of the new recommendations, released Thursday by the federal Centers for Disease Control and Prevention, said more widespread testing would improve care for the estimated 250,000 Americans who don't know they're infected. It also could help reduce the spread of the disease by up to 30 percent, since studies show that carriers of HIV cut back on high-risk behavior, such as unprotected sex, once they learn of the infection.
"People with HIV have a right to know that they are infected," said CDC director Dr. Julie Gerberding.
In essence, the non-binding guidelines would have health-care providers test for HIV much as they already screen routinely for conditions such as diabetes or high blood pressure.
But the effort to treat HIV as just another disease may collide with entrenched cultural attitudes and laws that have set the ailment apart.
The special handling of AIDS emerged in an era when the disease was a virtual death sentence and an intense stigma around the virus inspired efforts to protect patients' privacy. Experts believed then that testing everyone would yield little benefit, since there was no good treatment. Until now, recommendations have called for testing people at high risk for HIV, such as drug users, health-care workers and homosexual men.
But attitudes about whom to test changed starting in the mid-1990s, when new treatments made the disease manageable, though still potentially deadly. Tests also have fallen in price, to about $8 for an ordinary test or up to $20 for a rapid test. Now, the CDC believes, the benefits of early treatment make routine testing imperative.
Implementing all of the CDC's recommendations may be nearly impossible under Illinois law. Illinois requires that patients be informed of HIV test results face-to-face, which can be difficult to accommodate with patients' work schedules. The law also prescribes pre-test counseling, which the CDC wants to keep to a minimum to allow the widest possible use of tests.
"Illinois has some of the more restrictive laws in the country," Bernard Branson, lead author of the CDC recommendations, said in an interview.
Many advocates for privacy and patients' rights say Illinois' restrictions are necessary. Ann Fisher, executive director of the AIDS Legal Council of Chicago, said her group has "grave reservations" about the policy, mostly because of its recommendation that doctors and states loosen their standards of informed consent for HIV tests.
"What they really want is not so much routine testing as what I call stealth testing," Fisher said.
The CDC guidelines propose testing patients on an "opt out" basis, meaning it would be a routine part of a typical medical visit, but patients could choose not to have the test. That's a change from current practices, in which patients often must sign a form giving specific consent for an HIV test. Illinois requires written consent for any HIV test.
Advocates of the revised approach say it would make testing patients easier and remove any stigma of being singled out for an HIV test.
Fisher agreed with Branson about the legal problems the CDC rules would face here. "These guidelines cannot currently be implemented in Illinois," she said.
Illinois health officials will take the new guidelines under review, said Melaney Arnold, a spokeswoman for the Illinois Department of Public Health. The agency could change its regulations or recommend a change in law by the state legislature, depending on input from the community and medical experts, Arnold said.
Testing all patients could have a pronounced effect in Chicago and other urban areas, which tend to have the highest concentration of HIV patients and undiagnosed carriers of the virus.
Branson of the CDC said some of the inspiration for the new recommendations came from recent studies of routine HIV testing at Stroger Hospital of Cook County and other public health-care centers. Those studies have found that about half of the patients who tested positive had no risk factors that would have prompted doctors to give them HIV tests under the old guidelines.
----------
jmanier@tribune.com
- - -
The new guidelines
- All patients between ages 13 and 64 should be screened for HIV routinely when they visit hospitals or doctors' offices. People at high risk for HIV should be tested at least once a year.
- Testing should be done on a "voluntary, opt-out" basis--meaning that it's routine, but patients can choose not to be tested. The U.S. Centers for Disease Control and Prevention recommends that HIV screening be incorporated into general consent forms for medical care; separate written consent is not recommended.
- Prevention counseling should not be required with HIV diagnostic testing or as part of HIV screening programs. CDC officials said such counseling might discourage doctors or patients from making the tests routine.
For more information, visit the CDC's Web site at www.cdc.gov/hiv/topics/testing/resources/factsheets/healthcare.htm
By Jeremy Manier
Copyright © 2006, Chicago Tribune
Published September 22, 2006
Testing for HIV should be a routine part of doctor appointments and emergency-room visits for all patients between ages 13 and 64, according to new federal guidelines designed to identify AIDS patients before they develop life-threatening symptoms.
The policy may be difficult to implement, especially in Illinois, where the law sets tight standards for how doctors must obtain consent for HIV tests and how they can inform patients of the results.
Supporters of the new recommendations, released Thursday by the federal Centers for Disease Control and Prevention, said more widespread testing would improve care for the estimated 250,000 Americans who don't know they're infected. It also could help reduce the spread of the disease by up to 30 percent, since studies show that carriers of HIV cut back on high-risk behavior, such as unprotected sex, once they learn of the infection.
"People with HIV have a right to know that they are infected," said CDC director Dr. Julie Gerberding.
In essence, the non-binding guidelines would have health-care providers test for HIV much as they already screen routinely for conditions such as diabetes or high blood pressure.
But the effort to treat HIV as just another disease may collide with entrenched cultural attitudes and laws that have set the ailment apart.
The special handling of AIDS emerged in an era when the disease was a virtual death sentence and an intense stigma around the virus inspired efforts to protect patients' privacy. Experts believed then that testing everyone would yield little benefit, since there was no good treatment. Until now, recommendations have called for testing people at high risk for HIV, such as drug users, health-care workers and homosexual men.
But attitudes about whom to test changed starting in the mid-1990s, when new treatments made the disease manageable, though still potentially deadly. Tests also have fallen in price, to about $8 for an ordinary test or up to $20 for a rapid test. Now, the CDC believes, the benefits of early treatment make routine testing imperative.
Implementing all of the CDC's recommendations may be nearly impossible under Illinois law. Illinois requires that patients be informed of HIV test results face-to-face, which can be difficult to accommodate with patients' work schedules. The law also prescribes pre-test counseling, which the CDC wants to keep to a minimum to allow the widest possible use of tests.
"Illinois has some of the more restrictive laws in the country," Bernard Branson, lead author of the CDC recommendations, said in an interview.
Many advocates for privacy and patients' rights say Illinois' restrictions are necessary. Ann Fisher, executive director of the AIDS Legal Council of Chicago, said her group has "grave reservations" about the policy, mostly because of its recommendation that doctors and states loosen their standards of informed consent for HIV tests.
"What they really want is not so much routine testing as what I call stealth testing," Fisher said.
The CDC guidelines propose testing patients on an "opt out" basis, meaning it would be a routine part of a typical medical visit, but patients could choose not to have the test. That's a change from current practices, in which patients often must sign a form giving specific consent for an HIV test. Illinois requires written consent for any HIV test.
Advocates of the revised approach say it would make testing patients easier and remove any stigma of being singled out for an HIV test.
Fisher agreed with Branson about the legal problems the CDC rules would face here. "These guidelines cannot currently be implemented in Illinois," she said.
Illinois health officials will take the new guidelines under review, said Melaney Arnold, a spokeswoman for the Illinois Department of Public Health. The agency could change its regulations or recommend a change in law by the state legislature, depending on input from the community and medical experts, Arnold said.
Testing all patients could have a pronounced effect in Chicago and other urban areas, which tend to have the highest concentration of HIV patients and undiagnosed carriers of the virus.
Branson of the CDC said some of the inspiration for the new recommendations came from recent studies of routine HIV testing at Stroger Hospital of Cook County and other public health-care centers. Those studies have found that about half of the patients who tested positive had no risk factors that would have prompted doctors to give them HIV tests under the old guidelines.
----------
jmanier@tribune.com
- - -
The new guidelines
- All patients between ages 13 and 64 should be screened for HIV routinely when they visit hospitals or doctors' offices. People at high risk for HIV should be tested at least once a year.
- Testing should be done on a "voluntary, opt-out" basis--meaning that it's routine, but patients can choose not to be tested. The U.S. Centers for Disease Control and Prevention recommends that HIV screening be incorporated into general consent forms for medical care; separate written consent is not recommended.
- Prevention counseling should not be required with HIV diagnostic testing or as part of HIV screening programs. CDC officials said such counseling might discourage doctors or patients from making the tests routine.
For more information, visit the CDC's Web site at www.cdc.gov/hiv/topics/testing/resources/factsheets/healthcare.htm
Exploitation of 9/11 was shameful BY ANDREW GREELEY
Exploitation of 9/11 was shameful BY ANDREW GREELEY
September 22, 2006
Copyright by The Chicago Sun Times
The remembrance of the World Trade Center last week was an unbearably ugly event, a national disgrace, another blot on the integrity of the country. Under the deft direction of the administration and the supine cooperation of television, it was turned into an event for the Republican congressional campaign, whether the individual candidates wanted such help or not. The imagery was designed to stir up anger and the desire for revenge. What ought to have been a national liturgy of reconciliation and rededication became an exercise in opening old wounds and pouring salt on them. In its wake, those who disagree with President Bush -- even senators of his own party -- become allies of the terrorists.
Do he and his advisers have no shame at all?
Most obnoxious was the exploitation of the grief of the survivors. Anniversaries are always difficult for the bereaved. They should be permitted to suffer in privacy, supported by their faith and their families. Long ago, however, those behind the TV cameras lost all taste and sensibility. Grief, like sex, is no longer a private matter. The pain must be emblazoned across the television screen so a voyeuristic public can revel in it. Have TV journalists no shame at all?
In the wake of the attack, we were told that everything had changed, that America would never be the same again, that the threat of death and destruction would forever hang over us. We must smoke out the terrorists and get rid of them, but they would always be out there waiting for us. We must get even with them but we must always be afraid of them. The response to this doomsday rhetoric was a mixture of sadness, fear and a deep need for revenge. The administration, not able to find Osama bin Laden, now plans to drag some of his henchmen -- tortured and illegally imprisoned -- before kangaroo military courts to prove how tough on terrorists it really is before the election.
Do the marketers of such propaganda have no shame at all?
The memorialization of death and destruction contributes to the ambient self-pity and self-righteousness that often paralyzes the nation. New York, where for a long time there has been a plenitude of both these vices, now has extra reasons to indulge in them. After five years of unseemly squabbling, its citizenry has been unable to agree on a replacement for the World Trade Center. Do the battling partisans of different plans in the Big Apple have no shame at all?
The various experts in Washington tell us that the terrorists will be back. Homeland Security Secretary Michael Chertoff and Vice President Dick Cheney warn us often that they are out there waiting, and we must not let down our guard. They do not explain why not a single person in this country has died because of terrorist action in the last five years. Having it both ways, they claim that their secrecy has prevented more terror and that there still is an overwhelming danger -- hence, we must prevent known terrorist sympathizers from entering the United States and expel those who are already here. When one asks what triumphs we've had so far because of their vigilance, their routine answer is that they can't answer for reasons of national security.
Have Messrs. Cheney and Chertoff and their fellow criers of "wolf" no shame at all?
We have been told often since the attack and we heard it ad nauseam on the anniversary celebration that America will never be the same again. Rarely does anyone examine this sick cliché -- which promotes the self-pity -- to see if it corresponds to reality. However, the Wall Street Journal (in its news section) did re-examine it last week and found that it did not correspond with reality. The American economy has bumbled along and American consumers continue to consume. Only the airline industry suffers, and that in part because of the fiendish harassment of its customers by a government that apparently takes satisfaction in treating every passenger as a potential terrorist. Do the cliché mongers and the passenger harassers have no shame at all?
September 22, 2006
Copyright by The Chicago Sun Times
The remembrance of the World Trade Center last week was an unbearably ugly event, a national disgrace, another blot on the integrity of the country. Under the deft direction of the administration and the supine cooperation of television, it was turned into an event for the Republican congressional campaign, whether the individual candidates wanted such help or not. The imagery was designed to stir up anger and the desire for revenge. What ought to have been a national liturgy of reconciliation and rededication became an exercise in opening old wounds and pouring salt on them. In its wake, those who disagree with President Bush -- even senators of his own party -- become allies of the terrorists.
Do he and his advisers have no shame at all?
Most obnoxious was the exploitation of the grief of the survivors. Anniversaries are always difficult for the bereaved. They should be permitted to suffer in privacy, supported by their faith and their families. Long ago, however, those behind the TV cameras lost all taste and sensibility. Grief, like sex, is no longer a private matter. The pain must be emblazoned across the television screen so a voyeuristic public can revel in it. Have TV journalists no shame at all?
In the wake of the attack, we were told that everything had changed, that America would never be the same again, that the threat of death and destruction would forever hang over us. We must smoke out the terrorists and get rid of them, but they would always be out there waiting for us. We must get even with them but we must always be afraid of them. The response to this doomsday rhetoric was a mixture of sadness, fear and a deep need for revenge. The administration, not able to find Osama bin Laden, now plans to drag some of his henchmen -- tortured and illegally imprisoned -- before kangaroo military courts to prove how tough on terrorists it really is before the election.
Do the marketers of such propaganda have no shame at all?
The memorialization of death and destruction contributes to the ambient self-pity and self-righteousness that often paralyzes the nation. New York, where for a long time there has been a plenitude of both these vices, now has extra reasons to indulge in them. After five years of unseemly squabbling, its citizenry has been unable to agree on a replacement for the World Trade Center. Do the battling partisans of different plans in the Big Apple have no shame at all?
The various experts in Washington tell us that the terrorists will be back. Homeland Security Secretary Michael Chertoff and Vice President Dick Cheney warn us often that they are out there waiting, and we must not let down our guard. They do not explain why not a single person in this country has died because of terrorist action in the last five years. Having it both ways, they claim that their secrecy has prevented more terror and that there still is an overwhelming danger -- hence, we must prevent known terrorist sympathizers from entering the United States and expel those who are already here. When one asks what triumphs we've had so far because of their vigilance, their routine answer is that they can't answer for reasons of national security.
Have Messrs. Cheney and Chertoff and their fellow criers of "wolf" no shame at all?
We have been told often since the attack and we heard it ad nauseam on the anniversary celebration that America will never be the same again. Rarely does anyone examine this sick cliché -- which promotes the self-pity -- to see if it corresponds to reality. However, the Wall Street Journal (in its news section) did re-examine it last week and found that it did not correspond with reality. The American economy has bumbled along and American consumers continue to consume. Only the airline industry suffers, and that in part because of the fiendish harassment of its customers by a government that apparently takes satisfaction in treating every passenger as a potential terrorist. Do the cliché mongers and the passenger harassers have no shame at all?
Feds probe gov's fund-raising trips
Feds probe gov's fund-raising trips
BY CHRIS FUSCO, DAVE MCKINNEY AND NATASHA KORECKI Staff Reporters
September 22, 2006
Copyright by the Chicago Sun Times
The feds are investigating two New York political fund-raising trips made by Gov. Blagojevich to see if East Coast donors were illegally nudged ahead in line for state business, sources told the Chicago Sun-Times.
This is the first indication the government is zeroing in on face-to-face discussions Blagojevich had with donors as it probes alleged corruption in his administration and the Teachers' Retirement System of Illinois.
An 'exclusive club'
A source familiar with the investigation said the feds are looking at three law firms placed on a preferred list of outside lawyers that TRS could hire. The three firms have donated more than $120,000 to the governor, including donations that came at the New York events.
"They were admitted to a very exclusive club, and one case could make you millions," the source said.
Blagojevich, his fund-raisers, the law firms and others who attended the October 2003 and December 2003 fund-raisers have not been accused of wrongdoing.
The governor's campaign confirmed Blagojevich met with several well-known, deep-pocketed Democrats during his travels but insisted there was no connection between pension business and donations to the governor.
"The governor has no role in what law firms TRS chooses to do business with," campaign spokeswoman Sheila Nix said.
The firms are top-notch, class-action litigators, with "a long history of giving to Democrats nationally, including Hillary Clinton and Barack Obama," Nix said.
None of the law firms have made any money at TRS since landing on the list because they only get paid if they win or favorably settle lucrative class-action lawsuits on the pension system's behalf.
A spokesman for the U.S. attorney's office declined to comment.
The case initially caught the feds' attention because both New York trips were partially financed by former TRS board member Stuart Levine, who is cooperating with the government and will enter a guilty plea next month.
In October 2003 and December 2003, Levine paid for flights aboard private planes to get Blagojevich and supporters to the East Coast, state records show. Once there, Blagojevich met lawyers, investment bankers and media executives -- many of whom wrote checks to his campaign fund.
On Oct. 29, 2003, Blagojevich huddled at New York's exclusive Harvard Club with lawyer Leonard Barrack, the former finance chair of the Democratic National Committee, and ex-Sen. Robert Torricelli (D-N.J.), a consultant for Barrack's law firm, according to a copy of the governor's office schedule obtained by the Sun-Times.
Torricelli's political career ended in tatters in 2002 after he was reprimanded by the Senate Ethics Committee for improperly accepting gifts from a campaign donor.
On Nov. 3, 2003, Barrack's law firm -- Barrack Rodos & Bacine -- and Torricelli each gave Blagojevich $10,000. On Feb. 20, 2004 the TRS board voted to put the law firm on its select list of class-action lawyers.
Torricelli could not be reached. Barrack, whose firm also gave $5,000 to Blagojevich in 2002, did not return a message.
In another instance, lawyer Melvyn Weiss paid $5,000 toward lodging, meals and entertainment for Blagojevich's entourage during its December 2003 trip to New York.
Weiss, his law firm and its attorneys also donated $45,000 to the Blagojevich campaign, including $10,000 on May 13, 2004. Twelve days later, the TRS board voted to place Weiss' law firm on its list of outside litigators.
Last May, Weiss' law firm and two of his partners were indicted by a federal grand jury in a kickback scheme. Weiss did not return a message left at his New York office.
TRS says it used search
A third law firm tied to the fund-raising trip was Bernstein Liebhard and Lifshitz, which gave the governor $45,210 in cash and services, state records show. A call to the firm was not returned.
The New York firm donated $10,000 during the October 2003 fund-raiser and gave another $25,000 at the December event, where it also helped cover the cost of a fund-raising breakfast.
Bernstein Liebhard wound up being voted onto the system's preferred lawyer list after a February 2004 vote by the TRS board.
TRS released a statement Thursday night stating the three firms were placed on its list after a national search. The agency "thoroughly reviewed the qualifications of these firms, and they were selected based on their experience and qualifications."
Levine's lawyer could not be reached for comment.
cfusco@suntimes.com
dmckinney@suntimes.com
nkorecki@suntimes.com
BY CHRIS FUSCO, DAVE MCKINNEY AND NATASHA KORECKI Staff Reporters
September 22, 2006
Copyright by the Chicago Sun Times
The feds are investigating two New York political fund-raising trips made by Gov. Blagojevich to see if East Coast donors were illegally nudged ahead in line for state business, sources told the Chicago Sun-Times.
This is the first indication the government is zeroing in on face-to-face discussions Blagojevich had with donors as it probes alleged corruption in his administration and the Teachers' Retirement System of Illinois.
An 'exclusive club'
A source familiar with the investigation said the feds are looking at three law firms placed on a preferred list of outside lawyers that TRS could hire. The three firms have donated more than $120,000 to the governor, including donations that came at the New York events.
"They were admitted to a very exclusive club, and one case could make you millions," the source said.
Blagojevich, his fund-raisers, the law firms and others who attended the October 2003 and December 2003 fund-raisers have not been accused of wrongdoing.
The governor's campaign confirmed Blagojevich met with several well-known, deep-pocketed Democrats during his travels but insisted there was no connection between pension business and donations to the governor.
"The governor has no role in what law firms TRS chooses to do business with," campaign spokeswoman Sheila Nix said.
The firms are top-notch, class-action litigators, with "a long history of giving to Democrats nationally, including Hillary Clinton and Barack Obama," Nix said.
None of the law firms have made any money at TRS since landing on the list because they only get paid if they win or favorably settle lucrative class-action lawsuits on the pension system's behalf.
A spokesman for the U.S. attorney's office declined to comment.
The case initially caught the feds' attention because both New York trips were partially financed by former TRS board member Stuart Levine, who is cooperating with the government and will enter a guilty plea next month.
In October 2003 and December 2003, Levine paid for flights aboard private planes to get Blagojevich and supporters to the East Coast, state records show. Once there, Blagojevich met lawyers, investment bankers and media executives -- many of whom wrote checks to his campaign fund.
On Oct. 29, 2003, Blagojevich huddled at New York's exclusive Harvard Club with lawyer Leonard Barrack, the former finance chair of the Democratic National Committee, and ex-Sen. Robert Torricelli (D-N.J.), a consultant for Barrack's law firm, according to a copy of the governor's office schedule obtained by the Sun-Times.
Torricelli's political career ended in tatters in 2002 after he was reprimanded by the Senate Ethics Committee for improperly accepting gifts from a campaign donor.
On Nov. 3, 2003, Barrack's law firm -- Barrack Rodos & Bacine -- and Torricelli each gave Blagojevich $10,000. On Feb. 20, 2004 the TRS board voted to put the law firm on its select list of class-action lawyers.
Torricelli could not be reached. Barrack, whose firm also gave $5,000 to Blagojevich in 2002, did not return a message.
In another instance, lawyer Melvyn Weiss paid $5,000 toward lodging, meals and entertainment for Blagojevich's entourage during its December 2003 trip to New York.
Weiss, his law firm and its attorneys also donated $45,000 to the Blagojevich campaign, including $10,000 on May 13, 2004. Twelve days later, the TRS board voted to place Weiss' law firm on its list of outside litigators.
Last May, Weiss' law firm and two of his partners were indicted by a federal grand jury in a kickback scheme. Weiss did not return a message left at his New York office.
TRS says it used search
A third law firm tied to the fund-raising trip was Bernstein Liebhard and Lifshitz, which gave the governor $45,210 in cash and services, state records show. A call to the firm was not returned.
The New York firm donated $10,000 during the October 2003 fund-raiser and gave another $25,000 at the December event, where it also helped cover the cost of a fund-raising breakfast.
Bernstein Liebhard wound up being voted onto the system's preferred lawyer list after a February 2004 vote by the TRS board.
TRS released a statement Thursday night stating the three firms were placed on its list after a national search. The agency "thoroughly reviewed the qualifications of these firms, and they were selected based on their experience and qualifications."
Levine's lawyer could not be reached for comment.
cfusco@suntimes.com
dmckinney@suntimes.com
nkorecki@suntimes.com
Feds seize county hiring records
Feds seize county hiring records
BY ABDON M. PALLASCH, STEVE PATTERSON AND NATASHA KORECKI Staff Reporters
September 22, 2006
COPYRIGHT BY THE CHICAGO SUN TIMES
FBI agents raided at least seven Cook County offices Thursday morning looking for evidence that officials were illegally doctoring tests or otherwise cheating to give government jobs and promotions to politically connected applicants.
"Step away from the computers," one of the 25 FBI agents who massed at the county's Human Resources Department told employees. The agents arrived at 9 a.m. and stayed long past dark poring through records, taking some with them.
The raids came a month after a Sun-Times story quoted county department heads as saying former Cook County Board President John Stroger's patronage chief Gerald Nichols pressured them to hire clouted people for jobs in which political hiring was prohibited. And the raids followed several years of news reports detailing alleged corruption, mismanagement and patronage hiring in county agencies.
FBI agents also appeared at Stroger Hospital, Oak Forest Hospital, the downtown Cook County Forest Preserve offices, Provident Hospital, Cermak Hospital and the Cook County Juvenile Detention Center to serve subpoenas for records.
The subpoena served on the Forest Preserve District requested information on employees whose hires were supposed to be free from political influence, said spokesman Steve Mayberry.
County attorney Laura Lechowicz Felicione said the other subpoenas and the search warrant served on the Human Resources Department sought the same information, though she refused to provide copies.
Feds made house calls, too
But sources said the raids and the federal investigation center around Nichols and allegations of corrupt hiring and promotion practices under him. Nichols couldn't be reached for comment.
"We're looking for possible evidence of a crime," said FBI spokesman Ross Rice. The search warrant is tied to a criminal affidavit that is under seal.
In an Aug. 21 Sun-Times story, Eric Petraitis, a mid-level county Highway Department boss, said Nichols called him after Petraitis interviewed two candidates for a job and Nichols told him to hire the one who got the lowest score. That employee, Dwayne Robinson, is a close friend of Ald. Todd Stroger (8th), the Democratic nominee to succeed his father as County Board president.
Petraitis said he had been coached in earlier interviews with former Ald. William Krystiniak (23rd) -- personnel chief for the Highway Department -- to fudge test scores for the clouted, so Petraitis dummied up a new evaluation form for Robinson with higher marks. Robinson got the job. The story quoted other unnamed current and former county officials saying Nichols had made similar calls to them.
One county employee recently interviewed by federal agents said they asked questions about Nichols and his role in hiring. Questions also involved patronage allegations raised in recent newspaper stories, the employee said, but Nichols "was definitely the center of their attention."
Federal agents also visited some county employees at home Wednesday night, handing them subpoenas, sources said.
Many employees sent home
The feds also dropped a subpoena at the Juvenile Detention Center, where youthful offenders are held. Detainees claim they have been beaten by workers there. Critics say the facility is overseen by unqualified political appointees.
Late last month, County Board President Bobbie Steele moved Nichols out of her office, then put him on administrative leave pending an internal investigation, allowing him to continue to draw his $114,000-a-year salary.
Attorney Michael Shakman asked a federal judge to appoint a monitor to oversee county hiring, saying the Sun-Times story on Nichols and an earlier one last year on a "clout list" of county hires produced by Commissioner Roberto Maldonado's office proved the county was violating the "Shakman decree" against political hiring. Maldonado did not return calls Thursday.
County Human Resources Director Mark Kilgallon called employees into a staff meeting after FBI agents arrived and told most of them they could go home for the day. Since John Stroger suffered a stroke in March, Kilgallon has jointly overseen county hiring with John Stroger's niece, county budget director Donna Dunnings.
Nichols at work for Stroger
Kilgallon, of Morton Grove, has given almost $3,000 to support the 8th Ward's political activities, while giving more than $4,000 more to support the political campaigns of John and Todd Stroger. A seven-year county employee who makes $141,725 a year, Kilgallon declined comment while escorting a federal agent from one personnel office to another. Kilgallon has been active in John Stroger's political campaigns and once shared office space with Nichols.
Todd Stroger tried hard Thursday to distance himself from Nichols, a longtime friend and neighbor who has been active in Todd Stroger's campaign.
Nichols still serves as secretary of the 8th Ward Regular Democratic Organization John Stroger headed for years. Asked who's running the organization now that John Stroger suffered a stroke and moved out of the ward, Todd Stroger said "that would be me at this point," though he said because he's busy with his campaign, state Rep. Marlowe Colvin is leading many of the efforts.
"I haven't spoken to Gerald in a real long time," Todd Stroger said. "He's not been involved in the organization since his administrative leave."
But Nichols was at the 8th Ward office Thursday morning calling supporters to sell them fund-raiser tickets to an upcoming event, Todd Stroger's campaign confirmed.
Peraica: Stroger is lying
Todd Stroger's Republican opponent Tony Peraica says it's "a lie" that Nichols isn't helping Todd Stroger's campaign, pointing to Nichols' public appearances with Todd Stroger at the Bud Billiken Parade, the Independent Voters of Illinois endorsement session and other political events.
Peraica said federal investigators will find "a criminal conspiracy to deny the rights of well-qualified persons and applicants jobs that were instead given to the politically connected. ... Test scores were rigged. Applications were falsified in order to allow hiring of clearly unqualified individuals, some with criminal histories."
The federal investigation of Cook County hiring could have implications not just for Todd Stroger's ward but for other clout-heavy wards such as Illinois House Speaker Mike Madigan's 13th Ward, the Lipinski family's 23rd Ward, county Commissioner John Daley's 11th Ward organizations and others that have had success placing people on the county payroll.
As federal investigators pursue similar investigations of corruption in the city and state governments, they also have focused on Tony Rezko, a major donor to John Stroger's campaigns who has several relatives on the Cook County payroll.
Contributing: Rummana Hussain and Fran Spielman
BY ABDON M. PALLASCH, STEVE PATTERSON AND NATASHA KORECKI Staff Reporters
September 22, 2006
COPYRIGHT BY THE CHICAGO SUN TIMES
FBI agents raided at least seven Cook County offices Thursday morning looking for evidence that officials were illegally doctoring tests or otherwise cheating to give government jobs and promotions to politically connected applicants.
"Step away from the computers," one of the 25 FBI agents who massed at the county's Human Resources Department told employees. The agents arrived at 9 a.m. and stayed long past dark poring through records, taking some with them.
The raids came a month after a Sun-Times story quoted county department heads as saying former Cook County Board President John Stroger's patronage chief Gerald Nichols pressured them to hire clouted people for jobs in which political hiring was prohibited. And the raids followed several years of news reports detailing alleged corruption, mismanagement and patronage hiring in county agencies.
FBI agents also appeared at Stroger Hospital, Oak Forest Hospital, the downtown Cook County Forest Preserve offices, Provident Hospital, Cermak Hospital and the Cook County Juvenile Detention Center to serve subpoenas for records.
The subpoena served on the Forest Preserve District requested information on employees whose hires were supposed to be free from political influence, said spokesman Steve Mayberry.
County attorney Laura Lechowicz Felicione said the other subpoenas and the search warrant served on the Human Resources Department sought the same information, though she refused to provide copies.
Feds made house calls, too
But sources said the raids and the federal investigation center around Nichols and allegations of corrupt hiring and promotion practices under him. Nichols couldn't be reached for comment.
"We're looking for possible evidence of a crime," said FBI spokesman Ross Rice. The search warrant is tied to a criminal affidavit that is under seal.
In an Aug. 21 Sun-Times story, Eric Petraitis, a mid-level county Highway Department boss, said Nichols called him after Petraitis interviewed two candidates for a job and Nichols told him to hire the one who got the lowest score. That employee, Dwayne Robinson, is a close friend of Ald. Todd Stroger (8th), the Democratic nominee to succeed his father as County Board president.
Petraitis said he had been coached in earlier interviews with former Ald. William Krystiniak (23rd) -- personnel chief for the Highway Department -- to fudge test scores for the clouted, so Petraitis dummied up a new evaluation form for Robinson with higher marks. Robinson got the job. The story quoted other unnamed current and former county officials saying Nichols had made similar calls to them.
One county employee recently interviewed by federal agents said they asked questions about Nichols and his role in hiring. Questions also involved patronage allegations raised in recent newspaper stories, the employee said, but Nichols "was definitely the center of their attention."
Federal agents also visited some county employees at home Wednesday night, handing them subpoenas, sources said.
Many employees sent home
The feds also dropped a subpoena at the Juvenile Detention Center, where youthful offenders are held. Detainees claim they have been beaten by workers there. Critics say the facility is overseen by unqualified political appointees.
Late last month, County Board President Bobbie Steele moved Nichols out of her office, then put him on administrative leave pending an internal investigation, allowing him to continue to draw his $114,000-a-year salary.
Attorney Michael Shakman asked a federal judge to appoint a monitor to oversee county hiring, saying the Sun-Times story on Nichols and an earlier one last year on a "clout list" of county hires produced by Commissioner Roberto Maldonado's office proved the county was violating the "Shakman decree" against political hiring. Maldonado did not return calls Thursday.
County Human Resources Director Mark Kilgallon called employees into a staff meeting after FBI agents arrived and told most of them they could go home for the day. Since John Stroger suffered a stroke in March, Kilgallon has jointly overseen county hiring with John Stroger's niece, county budget director Donna Dunnings.
Nichols at work for Stroger
Kilgallon, of Morton Grove, has given almost $3,000 to support the 8th Ward's political activities, while giving more than $4,000 more to support the political campaigns of John and Todd Stroger. A seven-year county employee who makes $141,725 a year, Kilgallon declined comment while escorting a federal agent from one personnel office to another. Kilgallon has been active in John Stroger's political campaigns and once shared office space with Nichols.
Todd Stroger tried hard Thursday to distance himself from Nichols, a longtime friend and neighbor who has been active in Todd Stroger's campaign.
Nichols still serves as secretary of the 8th Ward Regular Democratic Organization John Stroger headed for years. Asked who's running the organization now that John Stroger suffered a stroke and moved out of the ward, Todd Stroger said "that would be me at this point," though he said because he's busy with his campaign, state Rep. Marlowe Colvin is leading many of the efforts.
"I haven't spoken to Gerald in a real long time," Todd Stroger said. "He's not been involved in the organization since his administrative leave."
But Nichols was at the 8th Ward office Thursday morning calling supporters to sell them fund-raiser tickets to an upcoming event, Todd Stroger's campaign confirmed.
Peraica: Stroger is lying
Todd Stroger's Republican opponent Tony Peraica says it's "a lie" that Nichols isn't helping Todd Stroger's campaign, pointing to Nichols' public appearances with Todd Stroger at the Bud Billiken Parade, the Independent Voters of Illinois endorsement session and other political events.
Peraica said federal investigators will find "a criminal conspiracy to deny the rights of well-qualified persons and applicants jobs that were instead given to the politically connected. ... Test scores were rigged. Applications were falsified in order to allow hiring of clearly unqualified individuals, some with criminal histories."
The federal investigation of Cook County hiring could have implications not just for Todd Stroger's ward but for other clout-heavy wards such as Illinois House Speaker Mike Madigan's 13th Ward, the Lipinski family's 23rd Ward, county Commissioner John Daley's 11th Ward organizations and others that have had success placing people on the county payroll.
As federal investigators pursue similar investigations of corruption in the city and state governments, they also have focused on Tony Rezko, a major donor to John Stroger's campaigns who has several relatives on the Cook County payroll.
Contributing: Rummana Hussain and Fran Spielman
It's not the labour market, stupid
It's not the labour market, stupid
By Samuel Brittan
Copyright The Financial Times Limited 2006
Published: September 22 2006 03:00 | Last updated: September 22 2006 03:00
Bill Clinton fought the 1992 US presidential election on the slogan "It's the economy, stupid". This slogan, misguided though it was, has prompted me to think of another: "It's not the labour market, stupid".
Although people obsessed with financial markets do not always realise it, the labour market has long been the driving force behind macroeconomic policy and analysis in the developed world. It went through several phases.
The first I will call call phase zero. This was when inflation was assumed to be the product of institutional forces, principally trade unions pushing for more. There was supposed to be nothing finance ministers could do about it except to bribe or force trade unions to settle for less.
Phase one brought the realisation that the labour market was important. This was the era of the Phillips curve, after an economist at the London School of Economics. He promoted a chart in which the unemployment rate was plotted against the wage or inflation rates: it showed that the tighter the labour markets, the higher the rate of inflation. This phase came to an end in the 1970s, coinciding
with the first oil price explosion and the arrival of double-digit inflation,
in spite of high unemployment.
The second phase dawned when it was realised that this inflation/unemployment trade-off could only be temporary. When wage earners got wise to inflation they would insist on higher settlements. There was therefore nothing much to lose by making low inflation the ultimate objective of monetary policy. There was also no way in which finance ministers and central bankers could spend their way into desired levels of employment. In time these doctrines became highly respectable. But instead of talking about unemployment rates, governments and central bankers used the more anodyne term "output gap". This second phase was symbolised by the spread of inflation targets and central bank independence.
At any one time there are numerous knock-on or knock-off influences on the rate at which prices are rising, such as import price changes, changes in indirect tax and so on. But the ultimate influence was seen to be the state of the labour market. Look at the reports of any major central bank. They are all preoccupied with whether the core rate of inflation is going to be raised by catch-up pay increases.
This second phase is also fading away. Signs include the numerous occasions in which large knock-on price increases, or even accelerated growth of the money supply, have failed to trigger the feared inflation. If the US Federal Reserve or the Bank of England allows demand to rise too quickly, the impact is no longer mainly on wages and prices but on the flow of immigrants and/or the volume of imports.
I am not suggesting that inflation targets, which have worked surprisingly well, should be abandoned. If it's not broke, don't mend it. But if you can see some cracks in the machine, look for ways of strengthening it. So I will close with a few policy pointers.
The time for a worldwide labour market approach has not arrived. One big obstacle is lack of reliable information. Some observers believe that there is a reservoir of several hundred million able-bodied Chinese waiting to be drawn into international labour markets. Others believe that a shortage of people with the right attitude and skills has already triggered substantial pay increases for Chinese workers in the coastal belt.
Meanwhile, western policymakers have to pick up what clues and policy pointers they can find.
First, policymakers need to ase their own domestic decisionson the international as well as domestic economic environment.
Second, the financial indicators that our Victorian forebears looked at need to be taken seriously again. For instance, commodity prices (nowadays, of course, including oil), the gold price and asset prices including property and equities.
Third, in view of the greater frequency of so-called shocks, the inflation targets need to be pursued over an average of several years rather than immediately. In the heyday of the gold standard there were years when the consumer price index would rise by 5 or 6 per cent or more. What was different from the 20th century was that these price changes were not projected forwards and there was a belief that a pound or dollar in 25 or 50 years' time would be worth about the same as a pound or dollar today. Mervyn King, the Bank of England governor, has shown signs of sympathising with this approach: he has looked forward to writing a letter to the chancellor of the exchequeron why inflation is more than 1 per cent above or below the 2 per cent target.
Fourth, there is no longer any need to throw out the old concern with employment and output stabilisation, so long as it is not pursued at the expense of letting inflation take off.
Finally, to show that these new attitudes do not mean that we have gone soft on inflation, the eventual target should perhaps be lowered to
1 per cent, or even just "stable prices".
By Samuel Brittan
Copyright The Financial Times Limited 2006
Published: September 22 2006 03:00 | Last updated: September 22 2006 03:00
Bill Clinton fought the 1992 US presidential election on the slogan "It's the economy, stupid". This slogan, misguided though it was, has prompted me to think of another: "It's not the labour market, stupid".
Although people obsessed with financial markets do not always realise it, the labour market has long been the driving force behind macroeconomic policy and analysis in the developed world. It went through several phases.
The first I will call call phase zero. This was when inflation was assumed to be the product of institutional forces, principally trade unions pushing for more. There was supposed to be nothing finance ministers could do about it except to bribe or force trade unions to settle for less.
Phase one brought the realisation that the labour market was important. This was the era of the Phillips curve, after an economist at the London School of Economics. He promoted a chart in which the unemployment rate was plotted against the wage or inflation rates: it showed that the tighter the labour markets, the higher the rate of inflation. This phase came to an end in the 1970s, coinciding
with the first oil price explosion and the arrival of double-digit inflation,
in spite of high unemployment.
The second phase dawned when it was realised that this inflation/unemployment trade-off could only be temporary. When wage earners got wise to inflation they would insist on higher settlements. There was therefore nothing much to lose by making low inflation the ultimate objective of monetary policy. There was also no way in which finance ministers and central bankers could spend their way into desired levels of employment. In time these doctrines became highly respectable. But instead of talking about unemployment rates, governments and central bankers used the more anodyne term "output gap". This second phase was symbolised by the spread of inflation targets and central bank independence.
At any one time there are numerous knock-on or knock-off influences on the rate at which prices are rising, such as import price changes, changes in indirect tax and so on. But the ultimate influence was seen to be the state of the labour market. Look at the reports of any major central bank. They are all preoccupied with whether the core rate of inflation is going to be raised by catch-up pay increases.
This second phase is also fading away. Signs include the numerous occasions in which large knock-on price increases, or even accelerated growth of the money supply, have failed to trigger the feared inflation. If the US Federal Reserve or the Bank of England allows demand to rise too quickly, the impact is no longer mainly on wages and prices but on the flow of immigrants and/or the volume of imports.
I am not suggesting that inflation targets, which have worked surprisingly well, should be abandoned. If it's not broke, don't mend it. But if you can see some cracks in the machine, look for ways of strengthening it. So I will close with a few policy pointers.
The time for a worldwide labour market approach has not arrived. One big obstacle is lack of reliable information. Some observers believe that there is a reservoir of several hundred million able-bodied Chinese waiting to be drawn into international labour markets. Others believe that a shortage of people with the right attitude and skills has already triggered substantial pay increases for Chinese workers in the coastal belt.
Meanwhile, western policymakers have to pick up what clues and policy pointers they can find.
First, policymakers need to ase their own domestic decisionson the international as well as domestic economic environment.
Second, the financial indicators that our Victorian forebears looked at need to be taken seriously again. For instance, commodity prices (nowadays, of course, including oil), the gold price and asset prices including property and equities.
Third, in view of the greater frequency of so-called shocks, the inflation targets need to be pursued over an average of several years rather than immediately. In the heyday of the gold standard there were years when the consumer price index would rise by 5 or 6 per cent or more. What was different from the 20th century was that these price changes were not projected forwards and there was a belief that a pound or dollar in 25 or 50 years' time would be worth about the same as a pound or dollar today. Mervyn King, the Bank of England governor, has shown signs of sympathising with this approach: he has looked forward to writing a letter to the chancellor of the exchequeron why inflation is more than 1 per cent above or below the 2 per cent target.
Fourth, there is no longer any need to throw out the old concern with employment and output stabilisation, so long as it is not pursued at the expense of letting inflation take off.
Finally, to show that these new attitudes do not mean that we have gone soft on inflation, the eventual target should perhaps be lowered to
1 per cent, or even just "stable prices".
Wal-Mart move intensifies generic drugs price war
Wal-Mart move intensifies generic drugs price war
By Christopher Bowe and Jonathan Birchall in New York
Copyright The Financial Times Limited 2006
Published: September 22 2006 03:00 | Last updated: September 22 2006 03:00
Wal-Mart, the largest US retailer, yesterday shook up the US healthcare industry by saying it would slash the prices of nearly 300 generic drugs sold at its in-store pharmacies by as much as 60per cent.
Bill Simon, who oversees the retailer's pharmacy unit, said the company would start charging only $4 for a month's supply of some of the most widely used generics - copies of branded drugs whose patents have expired.
The move reflects growing scrutiny of generic drug prices, the retail prices of which often contain a large mark-up for middlemen including pharmacies and distributors.
Mr Simon said the programme, initially launched at 65 stores in Florida, would extend across the state by January next year, and then be extended to the retailer's nationwide network of more than 3,000 stores. Wal-Mart's $4 price for a 30-day supply of metformin, the most widely used entry-level diabetes drug, will be 49 per cent lower than the branded drug price. A similar $4 supply of lisinopril, a high-blood pressure medicine, was 67 per cent lower than brand prices.
Even with the planned reductions, he said Wal-Mart would not be selling the drugs at a loss, and that the company was not pressuring manufacturers for price cuts. Wal-Mart's move also comes on the heels of a crackdown on some generic drug pricing by UnitedHealth Group, the second-largest US health insurer. UnitedHealth has challenged the belief that generics are always cheaper, moving to discourage the use of 27 generic medicines because they were more expensive to the insurer than deeply discounted branded alternatives.
The leading US drug store chains, who make most of their profits from generic sales, saw their shares fall yesterday on the news. CVS was down 9 per cent to $32.27, while Walgreens fell 6 per cent, to $46.96, and RiteAid 6.5 per cent, to $4.45.
The US generic market faces increasing pricing pressure as more and more competition enters the lucrative market. This competition is pressuring manufacturers' margins, and moves such as Wal-Mart's adds to this pressure, according to David Maris, Bank of America analyst.
Wal-Mart this summer launched a marketing campaign focused on its pharmacy business, which it hopes can attract more customers and increase overall sales across its stores. Mr Simon said the pharmacies "are geared up to deal with significant volume increase" as a result of the new prices.
Over the past year, Wal-Mart has responded to political criticism of its healthcare provision for its own workers by saying it is committed to reducing overall healthcare costs. It is expanding a network of walk-in clinics in its stores, which offer lower cost care for basic medical issues.
By Christopher Bowe and Jonathan Birchall in New York
Copyright The Financial Times Limited 2006
Published: September 22 2006 03:00 | Last updated: September 22 2006 03:00
Wal-Mart, the largest US retailer, yesterday shook up the US healthcare industry by saying it would slash the prices of nearly 300 generic drugs sold at its in-store pharmacies by as much as 60per cent.
Bill Simon, who oversees the retailer's pharmacy unit, said the company would start charging only $4 for a month's supply of some of the most widely used generics - copies of branded drugs whose patents have expired.
The move reflects growing scrutiny of generic drug prices, the retail prices of which often contain a large mark-up for middlemen including pharmacies and distributors.
Mr Simon said the programme, initially launched at 65 stores in Florida, would extend across the state by January next year, and then be extended to the retailer's nationwide network of more than 3,000 stores. Wal-Mart's $4 price for a 30-day supply of metformin, the most widely used entry-level diabetes drug, will be 49 per cent lower than the branded drug price. A similar $4 supply of lisinopril, a high-blood pressure medicine, was 67 per cent lower than brand prices.
Even with the planned reductions, he said Wal-Mart would not be selling the drugs at a loss, and that the company was not pressuring manufacturers for price cuts. Wal-Mart's move also comes on the heels of a crackdown on some generic drug pricing by UnitedHealth Group, the second-largest US health insurer. UnitedHealth has challenged the belief that generics are always cheaper, moving to discourage the use of 27 generic medicines because they were more expensive to the insurer than deeply discounted branded alternatives.
The leading US drug store chains, who make most of their profits from generic sales, saw their shares fall yesterday on the news. CVS was down 9 per cent to $32.27, while Walgreens fell 6 per cent, to $46.96, and RiteAid 6.5 per cent, to $4.45.
The US generic market faces increasing pricing pressure as more and more competition enters the lucrative market. This competition is pressuring manufacturers' margins, and moves such as Wal-Mart's adds to this pressure, according to David Maris, Bank of America analyst.
Wal-Mart this summer launched a marketing campaign focused on its pharmacy business, which it hopes can attract more customers and increase overall sales across its stores. Mr Simon said the pharmacies "are geared up to deal with significant volume increase" as a result of the new prices.
Over the past year, Wal-Mart has responded to political criticism of its healthcare provision for its own workers by saying it is committed to reducing overall healthcare costs. It is expanding a network of walk-in clinics in its stores, which offer lower cost care for basic medical issues.
Germany pressed to arrest CIA agents
Germany pressed to arrest CIA agents
By Hugh Williamson in Berlin
Copyright The Financial Times Limited 2006
Published: September 21 2006 18:12 | Last updated: September 21 2006 18:12
German authorities were under mounting pressure on Thursday night to issue arrest warrants for US agents working for the CIA who allegedly kidnapped and detained a German national for four months in 2004.
August Stern, a Munich-based prosecutor, confirmed that he had received a list of about 20 names of people believed to have been involved in the kidnapping in Macedonia in December 2003 of Khaled el-Masri, a Lebanese-born German, who was held in a US-run prison in Afghanistan until May 2004.
The kidnapping of Mr Masri sparked outrage in Germany last year, leading to tensions in US-German relations and the formation of a parliamentary inquiry earlier this year. Mr Stern’s comments followed German media reports that at least three of the alleged kidnappers had been identified as pilots living in North Carolina and employed by Aero Contractors, a company linked to the CIA.
The men – using the aliases Eric Fain, James Fairing and Kirk James Bird – had been among a group of 13 alleged CIA agents who are claimed to have stayed in a hotel in Mallorca on their way to Macedonia in late 2003, according to an investigation by the ARD, Germany’s main public television channel. ARD in recent weeks claimed to have located the men and asked for statements, but were turned down.
Passport copies and other information about the men were obtained in 2004 by Spanish police, but have only recently been requested and received by German investigators. Mr Stern insisted on Thursday that his investigation still needed more time before arrests warrants could be issued.
Opposition politicians on Thursday attacked the delays, and called on the German government to take action to help track down the alleged kidnappers. Max Stadler of the liberal Free Democrats said: “Concerning these secret CIA flights, we must not give the impression that Germany is not interested in a full investigation.”
In contrast to Germany, an alleged CIA abduction in Italy has led to the issuing of arrest warrants against 22 CIA agents.
In a fresh embarrassing twist for Berlin, a senior police official on Thursday told the parliamentary inquiry on Mr Masri’s case that the latter had been shadowed by German investigators in Germany in the months before he was kidnapped, and information was passed to the US. Germany has said repeatedly that it had no involvement in Mr Masri’s seizure. Government officials refused to comment on Thursday.
By Hugh Williamson in Berlin
Copyright The Financial Times Limited 2006
Published: September 21 2006 18:12 | Last updated: September 21 2006 18:12
German authorities were under mounting pressure on Thursday night to issue arrest warrants for US agents working for the CIA who allegedly kidnapped and detained a German national for four months in 2004.
August Stern, a Munich-based prosecutor, confirmed that he had received a list of about 20 names of people believed to have been involved in the kidnapping in Macedonia in December 2003 of Khaled el-Masri, a Lebanese-born German, who was held in a US-run prison in Afghanistan until May 2004.
The kidnapping of Mr Masri sparked outrage in Germany last year, leading to tensions in US-German relations and the formation of a parliamentary inquiry earlier this year. Mr Stern’s comments followed German media reports that at least three of the alleged kidnappers had been identified as pilots living in North Carolina and employed by Aero Contractors, a company linked to the CIA.
The men – using the aliases Eric Fain, James Fairing and Kirk James Bird – had been among a group of 13 alleged CIA agents who are claimed to have stayed in a hotel in Mallorca on their way to Macedonia in late 2003, according to an investigation by the ARD, Germany’s main public television channel. ARD in recent weeks claimed to have located the men and asked for statements, but were turned down.
Passport copies and other information about the men were obtained in 2004 by Spanish police, but have only recently been requested and received by German investigators. Mr Stern insisted on Thursday that his investigation still needed more time before arrests warrants could be issued.
Opposition politicians on Thursday attacked the delays, and called on the German government to take action to help track down the alleged kidnappers. Max Stadler of the liberal Free Democrats said: “Concerning these secret CIA flights, we must not give the impression that Germany is not interested in a full investigation.”
In contrast to Germany, an alleged CIA abduction in Italy has led to the issuing of arrest warrants against 22 CIA agents.
In a fresh embarrassing twist for Berlin, a senior police official on Thursday told the parliamentary inquiry on Mr Masri’s case that the latter had been shadowed by German investigators in Germany in the months before he was kidnapped, and information was passed to the US. Germany has said repeatedly that it had no involvement in Mr Masri’s seizure. Government officials refused to comment on Thursday.
White House in deal on CIA prisons
White House in deal on CIA prisons
By Caroline Daniel in Washington
Copyright The Financial Times Limited 2006
Published: September 22 2006 01:19 | Last updated: September 22 2006 01:19
The White House on Thursday ended the impasse over its interrogation and detention policies when it agreed to compromise with a group of influential Republican senators, and said it would not seek to amend the terms of the Geneva Conventions.
President George W. Bush hailed the deal as meeting his goal of allowing the tougher interrogation of terrorist suspects at secret prisons run by the Central Intelligence Agency, and prosecution of them using a new form of military tribunals.
“I’m pleased to say that this agreement preserves the most potent tool we have in protecting America and foiling terrorist attacks, and that is the CIA programme to question the world’s most dangerous terrorists and to get their secrets.”
However, the compromise, struck on Thursday after six hours of intense negotiations, marks a second moral victory for Senator John McCain, who last year took on the White House over the Detainee Treatment Act, which prohibits cruel or inhumane treatment of prisoners, and Senator Lindsey Graham and Senator John Warner.
“The agreement that we’ve entered into gives the president the tools he needs to continue to fight the war on terror and bring these evil people to justice,” said Mr McCain, who has made interrogations a signature issue and who has earned credibility on the issue after his years of being tortured in Vietnam. “There’s no doubt that the integrity and letter and spirit of the Geneva Conventions have been preserved.”
The battle had threatened to undermine both the Republican effort to show unity on national security issues and make that a cornerstone of party re-election efforts.
White House negotiators had also faced heavy criticism that they were undermining the Geneva Conventions, governing the rights of wartime detainees, by their insistence that they wanted to clarify the terms of Article 3. Although the new language was not made public, it did not now include changes to the convention, officials said.
The compromise language will be introduced as an amendment next week, when the bill could be brought to the Senate floor. Mr Bush on Thursday urged Congress to send him legislation before it wraps up business next week.
If the bill passes, it will also allow the creation of controversial military tribunals.
“The agreement clears the way to do what the American people expect us to do, to capture terrorists, to detain terrorists, to question terrorists, and then to try them,” said Mr Bush.
By Caroline Daniel in Washington
Copyright The Financial Times Limited 2006
Published: September 22 2006 01:19 | Last updated: September 22 2006 01:19
The White House on Thursday ended the impasse over its interrogation and detention policies when it agreed to compromise with a group of influential Republican senators, and said it would not seek to amend the terms of the Geneva Conventions.
President George W. Bush hailed the deal as meeting his goal of allowing the tougher interrogation of terrorist suspects at secret prisons run by the Central Intelligence Agency, and prosecution of them using a new form of military tribunals.
“I’m pleased to say that this agreement preserves the most potent tool we have in protecting America and foiling terrorist attacks, and that is the CIA programme to question the world’s most dangerous terrorists and to get their secrets.”
However, the compromise, struck on Thursday after six hours of intense negotiations, marks a second moral victory for Senator John McCain, who last year took on the White House over the Detainee Treatment Act, which prohibits cruel or inhumane treatment of prisoners, and Senator Lindsey Graham and Senator John Warner.
“The agreement that we’ve entered into gives the president the tools he needs to continue to fight the war on terror and bring these evil people to justice,” said Mr McCain, who has made interrogations a signature issue and who has earned credibility on the issue after his years of being tortured in Vietnam. “There’s no doubt that the integrity and letter and spirit of the Geneva Conventions have been preserved.”
The battle had threatened to undermine both the Republican effort to show unity on national security issues and make that a cornerstone of party re-election efforts.
White House negotiators had also faced heavy criticism that they were undermining the Geneva Conventions, governing the rights of wartime detainees, by their insistence that they wanted to clarify the terms of Article 3. Although the new language was not made public, it did not now include changes to the convention, officials said.
The compromise language will be introduced as an amendment next week, when the bill could be brought to the Senate floor. Mr Bush on Thursday urged Congress to send him legislation before it wraps up business next week.
If the bill passes, it will also allow the creation of controversial military tribunals.
“The agreement clears the way to do what the American people expect us to do, to capture terrorists, to detain terrorists, to question terrorists, and then to try them,” said Mr Bush.
Musharraf deflects question on alleged US threat
Musharraf deflects question on alleged US threat
By Caroline Daniel in Washington
Copyright The Financial Times Limited 2006
Published: September 22 2006 17:44 | Last updated: September 22 2006 17:44
Pervez Musharraf, the president of Pakistan, on Friday transformed a White House news conference into a personal book promotion when he refused to answer a question about whether the US had threatened to bomb Pakistan “into the Stone Age,” citing his book contract.
In an interview with CBS that airs this Sunday to coincide with the publication of his memoirs, Mr Musharraf claims that Richard Armitage, former deputy secretary of state, threatened Pakistan after 9/11 if it refused to help in the war in Afghanistan. “Be prepared to be bombed. Be prepared to go back to the Stone Age,” he recalls Mr Armitage saying.
Setting a new precedent for a non-answer on a question of international diplomacy at a White House press conference, Mr Musharraf said: “I am launching my book on the 25th, and I am honor-bound to Simon & Schuster not to comment on the book before that day” That prompted President George W Bush to interject, “In other words, “Buy the book,” is what he’s saying.”
Mr Bush denied he had known of the threat and conceded that was “taken aback by the harshness of the words.” He strongly defended the actions of Mr Musharraf after the attacks of 9/11 noting that he was “one of the first leaders to step up and say that the stakes have changed.”
The laughter, however, underlined continued tension in the relationship between the US and Pakistan, further highlighted by revived concerns about whether the US could strike at Osama Bin Laden in Pakistani territory, and doubts about the peace agreement Mr Musharraf has struck with tribal leaders on the border of Afghanistan, an area allegedly used by Taliban forces.
Although John Abizaid, commander of the US forces in the region, expressed skepticism about that agreement, Mr Bush emphasized his trust in his relationship with Mr Musharaff. “When the president looks me in the eye and says the tribal deal is intended to reject the Talibanization of the people and that there won’t be a Taliban and there won’t be Al Qaida, I believe him.”
Both leaders side-stepped concerns about targeting the al Qaeda leader, with Mr Musharaff dismissing the debate as about “the semantics of the tactics…. We are in the hunt together.”
Richard Haass, president of the Council of Foreign Relations, “Pakistan poses the most complicated a difficult long term foreign policy challenge on the US agenda. They have 110m people, an arsenal of nuclear weapons and are in a position to affect not simply Afghanistan’s future but that of global terrorism.”
Pakistan’s role in Afghanistan will dominate discussions next Wednesday when Mr Musharraf returns to the White House for a joint meeting with Hamid Karzai, president of Afghanistan.
By Caroline Daniel in Washington
Copyright The Financial Times Limited 2006
Published: September 22 2006 17:44 | Last updated: September 22 2006 17:44
Pervez Musharraf, the president of Pakistan, on Friday transformed a White House news conference into a personal book promotion when he refused to answer a question about whether the US had threatened to bomb Pakistan “into the Stone Age,” citing his book contract.
In an interview with CBS that airs this Sunday to coincide with the publication of his memoirs, Mr Musharraf claims that Richard Armitage, former deputy secretary of state, threatened Pakistan after 9/11 if it refused to help in the war in Afghanistan. “Be prepared to be bombed. Be prepared to go back to the Stone Age,” he recalls Mr Armitage saying.
Setting a new precedent for a non-answer on a question of international diplomacy at a White House press conference, Mr Musharraf said: “I am launching my book on the 25th, and I am honor-bound to Simon & Schuster not to comment on the book before that day” That prompted President George W Bush to interject, “In other words, “Buy the book,” is what he’s saying.”
Mr Bush denied he had known of the threat and conceded that was “taken aback by the harshness of the words.” He strongly defended the actions of Mr Musharraf after the attacks of 9/11 noting that he was “one of the first leaders to step up and say that the stakes have changed.”
The laughter, however, underlined continued tension in the relationship between the US and Pakistan, further highlighted by revived concerns about whether the US could strike at Osama Bin Laden in Pakistani territory, and doubts about the peace agreement Mr Musharraf has struck with tribal leaders on the border of Afghanistan, an area allegedly used by Taliban forces.
Although John Abizaid, commander of the US forces in the region, expressed skepticism about that agreement, Mr Bush emphasized his trust in his relationship with Mr Musharaff. “When the president looks me in the eye and says the tribal deal is intended to reject the Talibanization of the people and that there won’t be a Taliban and there won’t be Al Qaida, I believe him.”
Both leaders side-stepped concerns about targeting the al Qaeda leader, with Mr Musharaff dismissing the debate as about “the semantics of the tactics…. We are in the hunt together.”
Richard Haass, president of the Council of Foreign Relations, “Pakistan poses the most complicated a difficult long term foreign policy challenge on the US agenda. They have 110m people, an arsenal of nuclear weapons and are in a position to affect not simply Afghanistan’s future but that of global terrorism.”
Pakistan’s role in Afghanistan will dominate discussions next Wednesday when Mr Musharraf returns to the White House for a joint meeting with Hamid Karzai, president of Afghanistan.
Did you ever wonder how much it costs a drug company for the active ingredient in prescription medications?
Sharon L. Davis, Budget Analyst-U.S. Department of Commerce, Washington, DC office spoke recently against rising drug prices and why you should shop at COSTCO for your medications.
Did you ever wonder how much it costs a drug company for the active ingredient in prescription medications? Some people think it must cost a lot, since many drugs sell for more than $2.00 per tablet. Ms Davis did a search of offshore chemical synthesizers that supply the active ingredients found in drugs approved by the FDA. As she has revealed in past issues of Life Extension, a significant percentage of drugs sold in the United States contain active ingredients made in other countries. In her independent investigation of how much profit drug companies really make, she obtained the actual price of active ingredients used in some of the most popular drugs sold in America.
The data below speaks for itself.
Celebrex: 100 mg
Consumer price (100 tablets): $130.27
Cost of general active ingredients: $ 0.60
Percent markup: 21,712%
Claritin: 1 0 mg
Consumer Price (100 tablets): $215.17
Cost of general active ingredients: $0.71
Percent markup: 30,306%
Keflex: 250 mg
Consumer Price (100 tablets): $157.39
Cost of general active ingredients: $1.88
Percent markup: 8,372%
Lipitor: 20 mg
Consumer Price (100 tablets): $272.37
Cost of general active ingredients: $5.80
Percent markup: 4,696%
Norvasc: 10 mg Consumer price (100 tablets): $188.29
Cost of general active ingredients: $0.14 Percent markup: 134,493% Paxil: 20 mg Consumer price (100 tablets): $220.27 Cost of general active ingredients: $7.60 Percent markup: 2,898% Prevacid: 30 mg Consumer price (100 tablets): $44.77 Cost of general active ingredients: $1.01 Percent markup: 34,136% Prozac: 20 mg Consumer price (100 tablets): $247.47 Cost of general active ingredients: $0.11 Percent markup: 224,973% Tenormin: 50 mg Consumer price (100 tablets): $104.47 Cost of general active ingredients: $0.13 Percent markup: 80,362% Vasotec: 10 mg Consumer price (100 tablets): $102.37 Cost of general active ingredients: $0.20 Percent markup: 51,185%
Xanax: 1 mg Consumer price (100 tablets) : $136.79 Cost of general active ingredients: $0.024 Percent markup: 569,958%
Zestril: 20 mg Consumer price (100 tablets) $89.89 Cost of general active ingredients $3.20 Percent markup: 2,809 Zithromax: 600 mg Consumer price (100 tablets): $1,482.19 Cost of general active ingredients: $18.78 Percent markup: 7,892%
Zocor: 40 mg Consumer price (100 tablets): $350.27 Cost of general active ingredients: $8.63 Percent markup: 4,059% Zoloft: 50 mg Consumer price: $206.87 Cost of general active ingredients: $1.75 Percent markup: 11,821% Since the cost of prescription drugs is so outrageous, I thought everyone should know about this.
Please read the following and pass it on.
It pays to shop around.
This helps to solve the mystery as to why they can afford to put a Walgreen's on every corner. Steve Wilson, an investigative reporter for Channel 7 News in Detroit, did a story on generic drug price gouging by pharmacies. He found in his investigation, that some of these generic drugs were marked up as much as 3,000% or more. Yes, that's not a typo.....three thousand percent! So often, we blame the drug companies for the high cost of drugs, and usually rightfully so. But in this case, the fault clearly lies with the pharmacies themselves. For example, if you had to buy a prescription drug, and bought the name brand, you might pay $100 for 100 pills. The pharmacist might tell you that if you get the generic equivalent, they would only cost $80, making you think you are "saving" $20. What the pharmacist is not telling you is that those 100 generic pills may have only cost him $10! At the end of the report, one of the anchors asked Mr. Wilson whether or not there were any pharmacies that did not adhere to this practice, and he said that Costco consistently charged little over their cost for the generic drugs. Although Costco is a "membership" type store, you do NOT have to be a member to buy prescriptions there, as it is a federally regulated substance. You just tell them at the door that you wish to use the pharmacy, and they will let you in. Just try it, by law they HAVE to let you in.
I can speak from my own experience: HIV MEDS are much cheaper at Costco.
Kaletra goes for over $800 at CVS and the same 120 tablets of the 200-50mg sell for $670 at Costco. Viread 300mg 30 tablets goes for over $600 at CVS and goes for $446 at Costco.
Epzicon 30- tablets goes for over $1000 at CVS and $721 at Costco.
Fluconazole (Diflucan) 100 mg the generic sells at Cosctco for $16.36 (from the $300 cost of Diflucan) For Hytrin's generic, Terazosin, 30 pills at CVS is over $30 and at Costco is $7.85 The generic form of Halcion's generic, Triazolam, 0.25mg 30 tabs goes for $40 at CVS and for $8.25 at Costco You do the math!!!! For more information contact:
Sharon L. Davis Budget Analyst U.S . Department of Commerce Room 6839 Office Ph: 202-482-4458 Office Fax: 202-482-5480
E-mail Address: sdavis@doc.gov
Norvasc: 10 mg Consumer price (100 tablets): $188.29
Cost of general active ingredients: $0.14 Percent markup: 134,493% Paxil: 20 mg Consumer price (100 tablets): $220.27 Cost of general active ingredients: $7.60 Percent markup: 2,898% Prevacid: 30 mg Consumer price (100 tablets): $44.77 Cost of general active ingredients: $1.01 Percent markup: 34,136% Prozac: 20 mg Consumer price (100 tablets): $247.47 Cost of general active ingredients: $0.11 Percent markup: 224,973% Tenormin: 50 mg Consumer price (100 tablets): $104.47 Cost of general active ingredients: $0.13 Percent markup: 80,362% Vasotec: 10 mg Consumer price (100 tablets): $102.37 Cost of general active ingredients: $0.20 Percent markup: 51,185%
Xanax: 1 mg Consumer price (100 tablets) : $136.79 Cost of general active ingredients: $0.024 Percent markup: 569,958%
Zestril: 20 mg Consumer price (100 tablets) $89.89 Cost of general active ingredients $3.20 Percent markup: 2,809 Zithromax: 600 mg Consumer price (100 tablets): $1,482.19 Cost of general active ingredients: $18.78 Percent markup: 7,892%
Zocor: 40 mg Consumer price (100 tablets): $350.27 Cost of general active ingredients: $8.63 Percent markup: 4,059% Zoloft: 50 mg Consumer price: $206.87 Cost of general active ingredients: $1.75 Percent markup: 11,821% Since the cost of prescription drugs is so outrageous, I thought everyone should know about this.
Please read the following and pass it on.
It pays to shop around.
This helps to solve the mystery as to why they can afford to put a Walgreen's on every corner. Steve Wilson, an investigative reporter for Channel 7 News in Detroit, did a story on generic drug price gouging by pharmacies. He found in his investigation, that some of these generic drugs were marked up as much as 3,000% or more. Yes, that's not a typo.....three thousand percent! So often, we blame the drug companies for the high cost of drugs, and usually rightfully so. But in this case, the fault clearly lies with the pharmacies themselves. For example, if you had to buy a prescription drug, and bought the name brand, you might pay $100 for 100 pills. The pharmacist might tell you that if you get the generic equivalent, they would only cost $80, making you think you are "saving" $20. What the pharmacist is not telling you is that those 100 generic pills may have only cost him $10! At the end of the report, one of the anchors asked Mr. Wilson whether or not there were any pharmacies that did not adhere to this practice, and he said that Costco consistently charged little over their cost for the generic drugs. Although Costco is a "membership" type store, you do NOT have to be a member to buy prescriptions there, as it is a federally regulated substance. You just tell them at the door that you wish to use the pharmacy, and they will let you in. Just try it, by law they HAVE to let you in.
I can speak from my own experience: HIV MEDS are much cheaper at Costco.
Kaletra goes for over $800 at CVS and the same 120 tablets of the 200-50mg sell for $670 at Costco. Viread 300mg 30 tablets goes for over $600 at CVS and goes for $446 at Costco.
Epzicon 30- tablets goes for over $1000 at CVS and $721 at Costco.
Fluconazole (Diflucan) 100 mg the generic sells at Cosctco for $16.36 (from the $300 cost of Diflucan) For Hytrin's generic, Terazosin, 30 pills at CVS is over $30 and at Costco is $7.85 The generic form of Halcion's generic, Triazolam, 0.25mg 30 tabs goes for $40 at CVS and for $8.25 at Costco You do the math!!!! For more information contact:
Sharon L. Davis Budget Analyst U.S . Department of Commerce Room 6839 Office Ph: 202-482-4458 Office Fax: 202-482-5480
E-mail Address: sdavis@doc.gov
Thursday, September 21, 2006
Six reasons to attend Kim Clak's fundraiser at Sidetrack on October 18, 2006 at 6PM
I am a host for a fund-raiser to be held on Wednesday, October 18th to help support Kim Clark in his run for Congress in the 6th district of Michigan. Please put this date on your calendar now and I will provide a more formal invitation and additional information shortly.
You may be asking why you should attend a fund-raiser for a candidate running in Michigan (other than the obvious that I have invited you and it will be held at Sidetrack, where they have cosmos, margaritas and slushy drinks on tap)? Let me tell you. I plan on bending his ear on the following important positions:
Changing the national anthem to Gloria Gaynor's "I Am What I Am",
Requiring all employers to provide the Monday following Pride Day as a paid day off,
Mandating that all baseball players must play shirtless,
Quadruple the Fashion Police's annual budget,
Change the Blue State/Red State concept to Aquamarine State/Raspberry State, and finally,
Not only make the Cosmopolitan the national drink, but pink the national color.
I hope you will feel these issues are well worth your time and will come to the fund-raiser. In addition, you can also expect to hear directly from Kim on his political views.
Carlos T Mock, MD
You may be asking why you should attend a fund-raiser for a candidate running in Michigan (other than the obvious that I have invited you and it will be held at Sidetrack, where they have cosmos, margaritas and slushy drinks on tap)? Let me tell you. I plan on bending his ear on the following important positions:
Changing the national anthem to Gloria Gaynor's "I Am What I Am",
Requiring all employers to provide the Monday following Pride Day as a paid day off,
Mandating that all baseball players must play shirtless,
Quadruple the Fashion Police's annual budget,
Change the Blue State/Red State concept to Aquamarine State/Raspberry State, and finally,
Not only make the Cosmopolitan the national drink, but pink the national color.
I hope you will feel these issues are well worth your time and will come to the fund-raiser. In addition, you can also expect to hear directly from Kim on his political views.
Carlos T Mock, MD
Chicago Sun Times Editorial - Is county ready for this kind of reform?
Chicago Sun Times Editorial - Is county ready for this kind of reform?
Copyright by The Chicago Sun Times
September 21, 2006
It was with some surprise -- oh, let's be honest and say our jaws dropped -- to read that Mike Quigley, the reformer on the Cook County Board, the man who always questioned the way former president John Stroger did business, was throwing support to Stroger's son, Todd, in his bid to become the next County Board president. Sun-Times political columnist Carol Marin detailed the whole business in her column on Wednesday, noting that Quigley's chief of staff, Jennifer Koehler, is being seconded to work for Stroger's campaign. With Quigley's blessings.
"Would this be the same Mike Quigley who, beginning with his election in 1998, was the loneliest commissioner on the whole board?" Marin asked. "The guy crying for reform from a back bench? The lone vote for the longest time on cutting the bloated budget and confronting the endless corruption?"
Yes, indeed. One wonders about Quigley's motives, particularly when he tells Marin he would look "ridiculous" directly endorsing Stroger so he has sent him "the best and brightest" of his staff. Quigley says he needs to help Democrat Stroger, because the race for Cook County Board president has become a "grim choice" between Stroger and Republican Commissioner Tony Peraica. He adds that he hopes Stroger is being honest about wanting reform. Amen. It can only be said that politics makes strange bedfellows.
Copyright by The Chicago Sun Times
September 21, 2006
It was with some surprise -- oh, let's be honest and say our jaws dropped -- to read that Mike Quigley, the reformer on the Cook County Board, the man who always questioned the way former president John Stroger did business, was throwing support to Stroger's son, Todd, in his bid to become the next County Board president. Sun-Times political columnist Carol Marin detailed the whole business in her column on Wednesday, noting that Quigley's chief of staff, Jennifer Koehler, is being seconded to work for Stroger's campaign. With Quigley's blessings.
"Would this be the same Mike Quigley who, beginning with his election in 1998, was the loneliest commissioner on the whole board?" Marin asked. "The guy crying for reform from a back bench? The lone vote for the longest time on cutting the bloated budget and confronting the endless corruption?"
Yes, indeed. One wonders about Quigley's motives, particularly when he tells Marin he would look "ridiculous" directly endorsing Stroger so he has sent him "the best and brightest" of his staff. Quigley says he needs to help Democrat Stroger, because the race for Cook County Board president has become a "grim choice" between Stroger and Republican Commissioner Tony Peraica. He adds that he hopes Stroger is being honest about wanting reform. Amen. It can only be said that politics makes strange bedfellows.
Chicago Sun Times Editorial - More must be done to help Mexicans succeed here
Chicago Sun Times Editorial - More must be done to help Mexicans succeed here
Copyright by The Chicago Sun Times
September 21, 2006
When it comes to Mexicans in the Chicago region's melting pot, we may need to do a little stirring. That's the conclusion of a task force sponsored by the Chicago Council on Global Relations. It argues persuasively that because the number of Mexicans in the region is so big, and growing so rapidly, the area's future will be tied to our ability to integrate them into society and our economy. In other words, we can't afford to let them fail, because if they do, so will the region.
The task force's report didn't cover the immigration debate -- although the council has previously supported immigration reform similar to that pushed by President Bush and the Senate. Rather, it was more concerned about studying immigrants who are already here, determining how they fit into the region and looking for ways to improve the integration process.
It notes that 1.3 million Mexicans (defined as someone of Mexican descent, regardless of citizenship) live in the region, about one-sixth of the total population. The number is expected to double by 2030. That makes Mexicans by far the region's biggest ethnic group.
There are some key differences between Mexicans and the waves of Germans, Irish, Poles and other ethnic groups that built early Chicago. This is the first time, for instance, that the area has integrated such a large group in such a short time. And low-skill industrial jobs, which aided earlier groups, are vanishing, being replaced by service sector jobs that require more skill and more education. Finally, the task force argues, the fast pace of global economic change means Chicago must work quickly to keep its work force -- a work force with a a great number of Mexicans -- up to speed.
The study notes that Mexican integration has been hampered by many problems, including a lack of English proficiency, limited connections to the wider community and low levels of education. It makes a variety of recommendations aimed at overcoming those hurdles, calling on business and civic leaders, unions, educators, politicians and the Mexican community to cooperate to achieve them.
Those include supporting Mexican entrepreneurship, promoting job training, increasing financial literacy, improving bilingual education, raising academic expectations, strengthening parental involvement in schools, fostering Mexican participation in civic groups, promoting citizenship, voting and coalition-building, improving access to health care and health insurance, and creating "welcoming centers" to help immigrants adjust to life here.
It's a tall order. Many of the proposals will cost no small amount of money. But it's an investment that will pay dividends in the future.
This represents the consensus of the Sun-Times News Group of 100 papers in metro Chicago.
Copyright by The Chicago Sun Times
September 21, 2006
When it comes to Mexicans in the Chicago region's melting pot, we may need to do a little stirring. That's the conclusion of a task force sponsored by the Chicago Council on Global Relations. It argues persuasively that because the number of Mexicans in the region is so big, and growing so rapidly, the area's future will be tied to our ability to integrate them into society and our economy. In other words, we can't afford to let them fail, because if they do, so will the region.
The task force's report didn't cover the immigration debate -- although the council has previously supported immigration reform similar to that pushed by President Bush and the Senate. Rather, it was more concerned about studying immigrants who are already here, determining how they fit into the region and looking for ways to improve the integration process.
It notes that 1.3 million Mexicans (defined as someone of Mexican descent, regardless of citizenship) live in the region, about one-sixth of the total population. The number is expected to double by 2030. That makes Mexicans by far the region's biggest ethnic group.
There are some key differences between Mexicans and the waves of Germans, Irish, Poles and other ethnic groups that built early Chicago. This is the first time, for instance, that the area has integrated such a large group in such a short time. And low-skill industrial jobs, which aided earlier groups, are vanishing, being replaced by service sector jobs that require more skill and more education. Finally, the task force argues, the fast pace of global economic change means Chicago must work quickly to keep its work force -- a work force with a a great number of Mexicans -- up to speed.
The study notes that Mexican integration has been hampered by many problems, including a lack of English proficiency, limited connections to the wider community and low levels of education. It makes a variety of recommendations aimed at overcoming those hurdles, calling on business and civic leaders, unions, educators, politicians and the Mexican community to cooperate to achieve them.
Those include supporting Mexican entrepreneurship, promoting job training, increasing financial literacy, improving bilingual education, raising academic expectations, strengthening parental involvement in schools, fostering Mexican participation in civic groups, promoting citizenship, voting and coalition-building, improving access to health care and health insurance, and creating "welcoming centers" to help immigrants adjust to life here.
It's a tall order. Many of the proposals will cost no small amount of money. But it's an investment that will pay dividends in the future.
This represents the consensus of the Sun-Times News Group of 100 papers in metro Chicago.
The Out & Equal Workplace Summit, as reported from Chicago
CHICAGO FREE PRESS
CONFERENCE HELPS CREATE CHANGE IN THE WORKPLACE
By Louis Weisberg, Staff Writer
Copyright by The Chicago Free Press
September 20, 2006
Gay and lesbian workers have transformed the sensibilities of corporate America in recent years. Working quietly behind the scenes through employee groups, they've convinced the nation's boardrooms that equality in the workplace is good business -- helping to attract the best workers as well as to build marketplace loyalty among GLBT consumers. As a result, more than half of the Fortune 500 companies now offer domestic partner benefits to their gay and lesbian employees.
About 1,500 grassroots advocates for GLBT workplace rights gathered at Hyatt Regency Chicago Sept. 14-16 to learn from past victories and strategize for the future. The Out & Equal 2006 Workplace Summit was the largest in the annual event's eight-year history and it demonstrated the growing momentum of the movement, said Selisse Berry, executive director Out & Equal Workplace Advocates.
"The power of this conference really has changed people's lives," she said. "Many of these (attendees) are trying to do (advocacy) work within their company and trying to figure out how to get domestic partner benefits and create gay-friendly policies. Usually it's just a case of them not having the information. We give them the information and the tools."
Sometimes attendees are able to make a persuasive case to their companies simply by showing them the conference's program book, Berry said. "Their executives see who else is at the table," she said. "They might have seven direct competitors who are our sponsors."
That's often enough to prompt a positive response, she said.
This year's sponsors form an impressive list that includes Glaxo Smith Kline, Wal-Mart, Citigroup, Booz Allen Hamilton, Hewlett Packard, IBM, Aetna, GM, Kodak, Chubb, Motorola and many others.
The way that Wal-Mart developed an awareness of GLBT workplace issues is typical of a process that Berry calls, "the power of one."
"One Wal-Mart employee came to the conference two years ago," she said. "The next year he brought four of his gay colleagues. This year there were 43 attendees from Wal-Mart."
With workplace rights and protections becoming increasingly accepted nationally, the conference this year focused on expanding corporate policies to include perks that are commonplace for heterosexual workers, such as providing moving expenses for spouses of relocated workers. Another prominent topic this year was getting American companies to extend GLBT workplace policies to their overseas subsidiaries. This strategy is to create role models for corporate interests in Asia, Latin America and elsewhere in the world where GLBT acceptance lags behind.
Transgender rights also were a central focus of this year's event.
"In the beginnings, our transgender workshops were all about how to get over the bathroom issue," Berry said. "Now they're more sophisticated. We're advocating for expanding EEO (Equal Employment Opportunity) policies to include gender identity as well as sexual orientation."
But Berry said her group's biggest focus at this time is leadership development. "We want to create a pipeline by working with employees who are out and are going to stay out and need specific career tracking to help them develop their careers," she said.
The goal is to ensure there are top-level GLBT executives and corporate officers in place to act as role models and progressive leaders of the future.
WINDY CITY TIMES
CHICAGO HOSTS OUT & EQUAL CONFERENCE
By Andrew Davis and Amy Wooten
Copyright by The Windy City Times
September 20, 2006
Seminars, LGBTA business leaders and networking opportunities were all around as more than 1,500 individuals took part in the 16th annual Out & Equal Workplace Summit, held Sept. 13-16 at the Hyatt Regency in Chicago.
The summit—whose $2 million budget was provided solely through corporate sponsors—brought together LGBT employees; straight allies; and human resource and diversity professionals to educate, offer resources and address workplace trends that affect the LGBT community.
Rooms on several levels of the vast hotel were utilized for the event—a reflection of how much the conference has mushroomed over recent years. To compare, in 2001 there were only 250 attendees. ( Interestingly, more than 17 percent of the participants identified themselves as heterosexual.)
Something that was important to the organizers of the summit was that every component of the LGBT community was part of the summit. “We’ve never been just a gay and lesbian event,” Out & Equal Workplace Advocates Executive Director Selisse Berry said during a media briefing. Proving this point, the conference featured forums such as “B & T: The Silent Letters in LGBT,” “The Cost of Transgender Health Benefits” and “Why Bi? Understanding Bisexuality as a Workplace Issue,” while also offering networking options such as a reception for transgender people.
However, the aforementioned seminars were far from the only interesting or instructional ones. Other forums and workshops dealt with everything from the “down low” to the changing LGBT presence in Hollywood. A seminar on gay marketing trends revealed some eyebrow-raising information as speakers addressed selling products to families, seniors and lesbians. For example, Sabrina Riddle of Olivia Cruises disclosed that 58 percent of its own customers ( according to a survey ) earn over $100,000 annually—a key factor that marketers would be wise to consider. Also, lesbians—who want their gender considered before their orientation, according to Riddle—comprise about 42 percent of the U.S. gay population (about 8 million women).
The impressive roster of summit keynote speakers included actor and activist George Takei ( TV’s Star Trek ) ; entertainment powerhouse Nina Jacobsen; writer Richard Florida ( Rise of the Creative Class ) ; and Yolanda King, daughter of Martin Luther and Coretta Scott King.
Takei moved many with his speech at the breakfast/plenary session that took place on Sept. 14, which involved him drawing among various similarities between the past and the present. During one humorous interlude, he talked about what the technology on Star Trek had in common with what people use today: “We had an astounding sci-fi device on Star Trek that we all wore on our hips. We walked around all over with it. Whenever we wanted to talk with someone, we would get it, flip it open and start talking—loudly. But now it’s become a very real nuisance.”
However, he used a hard-hitting example to illustrate what the LGBT community faces: “Sixty-five years ago, when I was a boy, I looked out on the world behind the barbed-wire fences of U.S. interment camps. Pearl Harbor was fought and overnight, American citizens of Japanese ancestry were looked at as the enemy because we looked like the people who bombed Pearl Harbor. President Franklin D. Roosevelt signed an executive order that ordered all Japanese Americans on the West Coast be summarily rounded up—with no trial or due process—and imprisoned in barbed-wire interment camps in some of the most God-forsaken places in the country. I still remember that scary day when U.S. soldiers with bayoneted rifles came to our home to force us out. ... It became normal for me to [ do things ] such as begin the school day with the pledge of allegiance; I could see the barbed wires as I recited the words “and liberty and justice for all.” ... [ However, ] I still see an invisible barbed-wire fence separating me and my partner and another group of Americans from a normal life.”
Also present at this particular event was Marty St. Clair of GlaxoSmithKline ( GSK ) . St. Clair, a virologist at GSK and an inventor of the use of AZT in treating AIDS, told the crowd that she was proud of her company’s role in HIV research and of her company’s pro-diversity stance as well as its “very active LGBT network.”
Another featured speaker was author Richard Florida, who spoke to a large early morning crowd at the Out & Equal summit on Sept. 15. The Rise of the Creative class examines creativity and its effect on economic development. Florida revealed that jobs come to innovative, warm and welcoming communities that house a “creative class” of people. Of interest to those in the crowd, Florida’s theory means that jobs also seek areas that are welcoming to openly GLBT people.
Florida, who is heterosexual, never expected the backlash that would occur from his 2002 bestselling book. “When we reported this finding, I was not ready for what was about to happen,” he said, adding that he suddenly had a difficult time obtaining funding for his research. The backlash came from conservative Republicans and liberal Democrats alike.
The incredible resistance showed Florida “how important it is what we do—gays and lesbians and straight allies—on the frontline.”
The professor and economist went on sabbatical to Harvard to study economic growth. During his stay, he wondered why companies were relocating to cities that already had a pool of creative, talented and entrepreneurial people. He posed the question to his young students, who replied that when they seek jobs, they want to go to cities that are diverse, energetic, creative and integrated. One student even said that seeing gay and lesbian couples holding hands in public would be a reason to go to that community.
A light bulb went off in Florida’s head. “Right now we are in a shift from an industrial to a creative economy. It comes from one source—us,” he said. “When the economy is powered by creative communities, everything changes.”
This new shift greatly benefits the GLBT community across the U.S. “In order to be creative, we have to be ‘out.’ We have to be able to self-express,” Florida added. That is because, he said, creativity requires diversity. Cities must be diverse, open and actively inclusive in order to grow economically and attract the good jobs.
Participants on all levels felt that the summit was particularly helpful and even fun. Several people took time to tell Windy City Times what they liked in particular about the conference. Reflecting on the summit, Jim Freeman, president of Out & Equal Workplace’s board of directors, told Windy City Times that among his favorite parts of the conference were Takei’s speech—which he called “poignant” and “powerful”—and spending time with his friends. Berry mentioned Takei’s and Jacobsen’s speeches but she also enjoyed how people have talked about how the summit has changed their lives. Greg Rohner, a summit co-chair, liked put the leadership techniques he has learned over the years to be put into play. However, Lori Fox, a transgender activist who was a workshop presenter, liked the bonding: “The connections you make are amazing. This is truly family.”
CONFERENCE HELPS CREATE CHANGE IN THE WORKPLACE
By Louis Weisberg, Staff Writer
Copyright by The Chicago Free Press
September 20, 2006
Gay and lesbian workers have transformed the sensibilities of corporate America in recent years. Working quietly behind the scenes through employee groups, they've convinced the nation's boardrooms that equality in the workplace is good business -- helping to attract the best workers as well as to build marketplace loyalty among GLBT consumers. As a result, more than half of the Fortune 500 companies now offer domestic partner benefits to their gay and lesbian employees.
About 1,500 grassroots advocates for GLBT workplace rights gathered at Hyatt Regency Chicago Sept. 14-16 to learn from past victories and strategize for the future. The Out & Equal 2006 Workplace Summit was the largest in the annual event's eight-year history and it demonstrated the growing momentum of the movement, said Selisse Berry, executive director Out & Equal Workplace Advocates.
"The power of this conference really has changed people's lives," she said. "Many of these (attendees) are trying to do (advocacy) work within their company and trying to figure out how to get domestic partner benefits and create gay-friendly policies. Usually it's just a case of them not having the information. We give them the information and the tools."
Sometimes attendees are able to make a persuasive case to their companies simply by showing them the conference's program book, Berry said. "Their executives see who else is at the table," she said. "They might have seven direct competitors who are our sponsors."
That's often enough to prompt a positive response, she said.
This year's sponsors form an impressive list that includes Glaxo Smith Kline, Wal-Mart, Citigroup, Booz Allen Hamilton, Hewlett Packard, IBM, Aetna, GM, Kodak, Chubb, Motorola and many others.
The way that Wal-Mart developed an awareness of GLBT workplace issues is typical of a process that Berry calls, "the power of one."
"One Wal-Mart employee came to the conference two years ago," she said. "The next year he brought four of his gay colleagues. This year there were 43 attendees from Wal-Mart."
With workplace rights and protections becoming increasingly accepted nationally, the conference this year focused on expanding corporate policies to include perks that are commonplace for heterosexual workers, such as providing moving expenses for spouses of relocated workers. Another prominent topic this year was getting American companies to extend GLBT workplace policies to their overseas subsidiaries. This strategy is to create role models for corporate interests in Asia, Latin America and elsewhere in the world where GLBT acceptance lags behind.
Transgender rights also were a central focus of this year's event.
"In the beginnings, our transgender workshops were all about how to get over the bathroom issue," Berry said. "Now they're more sophisticated. We're advocating for expanding EEO (Equal Employment Opportunity) policies to include gender identity as well as sexual orientation."
But Berry said her group's biggest focus at this time is leadership development. "We want to create a pipeline by working with employees who are out and are going to stay out and need specific career tracking to help them develop their careers," she said.
The goal is to ensure there are top-level GLBT executives and corporate officers in place to act as role models and progressive leaders of the future.
WINDY CITY TIMES
CHICAGO HOSTS OUT & EQUAL CONFERENCE
By Andrew Davis and Amy Wooten
Copyright by The Windy City Times
September 20, 2006
Seminars, LGBTA business leaders and networking opportunities were all around as more than 1,500 individuals took part in the 16th annual Out & Equal Workplace Summit, held Sept. 13-16 at the Hyatt Regency in Chicago.
The summit—whose $2 million budget was provided solely through corporate sponsors—brought together LGBT employees; straight allies; and human resource and diversity professionals to educate, offer resources and address workplace trends that affect the LGBT community.
Rooms on several levels of the vast hotel were utilized for the event—a reflection of how much the conference has mushroomed over recent years. To compare, in 2001 there were only 250 attendees. ( Interestingly, more than 17 percent of the participants identified themselves as heterosexual.)
Something that was important to the organizers of the summit was that every component of the LGBT community was part of the summit. “We’ve never been just a gay and lesbian event,” Out & Equal Workplace Advocates Executive Director Selisse Berry said during a media briefing. Proving this point, the conference featured forums such as “B & T: The Silent Letters in LGBT,” “The Cost of Transgender Health Benefits” and “Why Bi? Understanding Bisexuality as a Workplace Issue,” while also offering networking options such as a reception for transgender people.
However, the aforementioned seminars were far from the only interesting or instructional ones. Other forums and workshops dealt with everything from the “down low” to the changing LGBT presence in Hollywood. A seminar on gay marketing trends revealed some eyebrow-raising information as speakers addressed selling products to families, seniors and lesbians. For example, Sabrina Riddle of Olivia Cruises disclosed that 58 percent of its own customers ( according to a survey ) earn over $100,000 annually—a key factor that marketers would be wise to consider. Also, lesbians—who want their gender considered before their orientation, according to Riddle—comprise about 42 percent of the U.S. gay population (about 8 million women).
The impressive roster of summit keynote speakers included actor and activist George Takei ( TV’s Star Trek ) ; entertainment powerhouse Nina Jacobsen; writer Richard Florida ( Rise of the Creative Class ) ; and Yolanda King, daughter of Martin Luther and Coretta Scott King.
Takei moved many with his speech at the breakfast/plenary session that took place on Sept. 14, which involved him drawing among various similarities between the past and the present. During one humorous interlude, he talked about what the technology on Star Trek had in common with what people use today: “We had an astounding sci-fi device on Star Trek that we all wore on our hips. We walked around all over with it. Whenever we wanted to talk with someone, we would get it, flip it open and start talking—loudly. But now it’s become a very real nuisance.”
However, he used a hard-hitting example to illustrate what the LGBT community faces: “Sixty-five years ago, when I was a boy, I looked out on the world behind the barbed-wire fences of U.S. interment camps. Pearl Harbor was fought and overnight, American citizens of Japanese ancestry were looked at as the enemy because we looked like the people who bombed Pearl Harbor. President Franklin D. Roosevelt signed an executive order that ordered all Japanese Americans on the West Coast be summarily rounded up—with no trial or due process—and imprisoned in barbed-wire interment camps in some of the most God-forsaken places in the country. I still remember that scary day when U.S. soldiers with bayoneted rifles came to our home to force us out. ... It became normal for me to [ do things ] such as begin the school day with the pledge of allegiance; I could see the barbed wires as I recited the words “and liberty and justice for all.” ... [ However, ] I still see an invisible barbed-wire fence separating me and my partner and another group of Americans from a normal life.”
Also present at this particular event was Marty St. Clair of GlaxoSmithKline ( GSK ) . St. Clair, a virologist at GSK and an inventor of the use of AZT in treating AIDS, told the crowd that she was proud of her company’s role in HIV research and of her company’s pro-diversity stance as well as its “very active LGBT network.”
Another featured speaker was author Richard Florida, who spoke to a large early morning crowd at the Out & Equal summit on Sept. 15. The Rise of the Creative class examines creativity and its effect on economic development. Florida revealed that jobs come to innovative, warm and welcoming communities that house a “creative class” of people. Of interest to those in the crowd, Florida’s theory means that jobs also seek areas that are welcoming to openly GLBT people.
Florida, who is heterosexual, never expected the backlash that would occur from his 2002 bestselling book. “When we reported this finding, I was not ready for what was about to happen,” he said, adding that he suddenly had a difficult time obtaining funding for his research. The backlash came from conservative Republicans and liberal Democrats alike.
The incredible resistance showed Florida “how important it is what we do—gays and lesbians and straight allies—on the frontline.”
The professor and economist went on sabbatical to Harvard to study economic growth. During his stay, he wondered why companies were relocating to cities that already had a pool of creative, talented and entrepreneurial people. He posed the question to his young students, who replied that when they seek jobs, they want to go to cities that are diverse, energetic, creative and integrated. One student even said that seeing gay and lesbian couples holding hands in public would be a reason to go to that community.
A light bulb went off in Florida’s head. “Right now we are in a shift from an industrial to a creative economy. It comes from one source—us,” he said. “When the economy is powered by creative communities, everything changes.”
This new shift greatly benefits the GLBT community across the U.S. “In order to be creative, we have to be ‘out.’ We have to be able to self-express,” Florida added. That is because, he said, creativity requires diversity. Cities must be diverse, open and actively inclusive in order to grow economically and attract the good jobs.
Participants on all levels felt that the summit was particularly helpful and even fun. Several people took time to tell Windy City Times what they liked in particular about the conference. Reflecting on the summit, Jim Freeman, president of Out & Equal Workplace’s board of directors, told Windy City Times that among his favorite parts of the conference were Takei’s speech—which he called “poignant” and “powerful”—and spending time with his friends. Berry mentioned Takei’s and Jacobsen’s speeches but she also enjoyed how people have talked about how the summit has changed their lives. Greg Rohner, a summit co-chair, liked put the leadership techniques he has learned over the years to be put into play. However, Lori Fox, a transgender activist who was a workshop presenter, liked the bonding: “The connections you make are amazing. This is truly family.”
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