By THOMAS L. FRIEDMAN
Traveling the country these past five months while writing a book, I’ve had my own opportunity to take the pulse, far from the campaign crowds. My own totally unscientific polling has left me feeling that if there is one overwhelming hunger in our country today it’s this: People want to do nation-building. They really do. But they want to do nation-building in America.
They are not only tired of nation-building in Iraq and in Afghanistan, with so little to show for it. They sense something deeper — that we’re just not that strong anymore. We’re borrowing money to shore up our banks from city-states called Dubai and Singapore. Our generals regularly tell us that Iran is subverting our efforts in Iraq, but they do nothing about it because we have no leverage — as long as our forces are pinned down in Baghdad and our economy is pinned to Middle East oil.
Our president’s latest energy initiative was to go to Saudi Arabia and beg King Abdullah to give us a little relief on gasoline prices. I guess there was some justice in that. When you, the president, after 9/11, tell the country to go shopping instead of buckling down to break our addiction to oil, it ends with you, the president, shopping the world for discount gasoline.
We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years.”
That’s why Donald Rumsfeld’s infamous defense of why he did not originally send more troops to Iraq is the mantra of our times: “You go to war with the army you have.” Hey, you march into the future with the country you have — not the one that you need, not the one you want, not the best you could have.
A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.
How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it’s because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world’s best talent — including Americans.
And us? Harvard’s president, Drew Faust, just told a Senate hearing that cutbacks in government research funds were resulting in “downsized labs, layoffs of post docs, slipping morale and more conservative science that shies away from the big research questions.” Today, she added, “China, India, Singapore ... have adopted biomedical research and the building of biotechnology clusters as national goals. Suddenly, those who train in America have significant options elsewhere.”
Much nonsense has been written about how Hillary Clinton is “toughening up” Barack Obama so he’ll be tough enough to withstand Republican attacks. Sorry, we don’t need a president who is tough enough to withstand the lies of his opponents. We need a president who is tough enough to tell the truth to the American people. Any one of the candidates can answer the Red Phone at 3 a.m. in the White House bedroom. I’m voting for the one who can talk straight to the American people on national TV — at 8 p.m. — from the White House East Room.
Who will tell the people? We are not who we think we are. We are living on borrowed time and borrowed dimes. We still have all the potential for greatness, but only if we get back to work on our country.
I don’t know if Barack Obama can lead that, but the notion that the idealism he has inspired in so many young people doesn’t matter is dead wrong. “Of course, hope alone is not enough,” says Tim Shriver, chairman of Special Olympics, “but it’s not trivial. It’s not trivial to inspire people to want to get up and do something with someone else.”
It is especially not trivial now, because millions of Americans are dying to be enlisted — enlisted to fix education, enlisted to research renewable energy, enlisted to repair our infrastructure, enlisted to help others. Look at the kids lining up to join Teach for America. They want our country to matter again. They want it to be about building wealth and dignity — big profits and big purposes. When we just do one, we are less than the sum of our parts. When we do both, said Shriver, “no one can touch us.”
http://www.nytimes.com/2008/05/04/opinion/04friedman.html?ei=5087&em=&en=86fe7eaa442ab3f2&ex=1210132800&exprod=myyahoo&pagewanted=print
Copyright 2008 The New York Times Company
Monday, May 5, 2008
Saturday, May 3, 2008
As Gas Costs Soar, Buyers Flock to Small Cars
By BILL VLASIC
May 2, 2008
DETROIT — Soaring gas prices have turned the steady migration by Americans to smaller cars into a stampede.In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car.
The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply.
In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.
“It’s easily the most dramatic segment shift I have witnessed in the market in my 31 years here,” said George Pipas, chief sales analyst for the Ford Motor Company.
The trend toward smaller and lighter vehicles with better mileage is a blow to Detroit automakers, which offer fewer such models than Asian carmakers like Toyota and Honda. Moreover, the decline of S.U.V.’s and pickups has curtailed the biggest source of profits for General Motors, Ford and Chrysler.
Once considered an unattractive and cheap alternative to large cars and S.U.V.’s, compacts have become the new star of the showroom at a time when overall industry sales are falling.
Sales of Toyota’s subcompact Yaris increased 46 percent, and Honda’s tiny Fit had a record month. Ford’s compact Focus model jumped 32 percent in April from a year earlier. All those models are rated at more than 30 miles per gallon for highway driving.
Dave Strom of South Boston, Va., recently bought a tiny Smart ForTwo Passion Coupe, made by Daimler, the German automaker.
Mr. Strom also owns a pickup truck, which he uses mainly to haul his boat. When he runs errands, he drives his Smart, which he says is getting 45 miles a gallon.
“I had to smile the other day when I filled my tank for $18 and the guy next to me had a Ford Explorer and the pump was clicking past $80,” said Mr. Strom, a 66-year-old retired manager of a Chevrolet dealership.
Previous spikes in sales of smaller cars were often a result of consumers trading down during tough economic conditions or gas-price increases. When the economy improved or fuel prices dropped again — as they did after the oil-price shocks in the 1970s eased — buyers invariably went back to bigger vehicles.
But with oil prices expected to remain high for years, auto industry executives are seeing a turning point.
“The era of the truck-based large S.U.V.’s is over,” said Michael Jackson, chief executive of AutoNation, the nation’s largest auto retailer.
Sales of traditional S.U.V.’s are down more than 25 percent this year. In April, for example, sales of G.M.’s Chevrolet Tahoe fell 35 percent.
Full-size pickup sales have fallen more than 15 percent this year, with Ford’s industry-leading F-Series pickup dropping 27 percent in April alone. Sales of pickups, though, are expected to strengthen with the economy, because of their use as commercial vehicles.
The rise in sales of more fuel-efficient vehicles occurred during one of the industry’s worst months in more than a decade. For the month, G.M. sales dropped 23 percent and Ford slid 19 percent, while Toyota fell by 5 percent. The figures were adjusted for the fact that this April had two more selling days than a year ago.
Another bright spot in the numbers were sales of so-called small crossovers — which look like little S.U.V.’s and are based on car underpinnings.
Like small cars, they also accounted for about 20 percent of the total industry sales for the month, according to the research firm J. D. Power & Associates.
The analysis by J. D. Power also showed that 42 percent of all vehicles sold in April were equipped with four-cylinder engines, compared with 38 percent for six-cylinder engines.
How the downsizing of America’s vehicle fleet will affect fuel consumption is still largely unknown. When gas prices rise, as they are now, many drivers simply drive less to save money.
But there are some indications that the trend toward smaller vehicles will reduce the nation’s fuel use. In California, motorists bought 4 percent less gasoline in January than they did the year before, a drop of more than 58 million gallons, according to the Oil Price Information Service.
“That is an incredible year-over-year drop,” said Tom Kloza, the organization’s chief oil analyst. “Some of it clearly has to do with changes in the vehicle fleet.”
Small cars have traditionally been favorites of young, first-time buyers attracted by their low prices. But sales have been creeping up since 2005, particularly among older baby-boomers whose children have grown.
Crossover vehicles have also drawn in empty-nesters who have less need for a large car, S.U.V. or minivan.
“The first of the baby boomers turned 62 this year, and they’ve started downsizing,” Mr. Pipas of Ford said.
The latest crop of small cars and crossovers also feature the creature comforts and safety features once found only in more expensive models.
Factor in the economic benefits of fuel-efficient engines, and small cars have not only become practical, but trendy as well.
“This shift appears to be a permanent situation,” said Jesse Toprak, chief industry analyst for the auto information Web site Edmunds.com. “These new products have become more fashionable, just like small, fuel-efficient cars are in Europe.”
The low prices on small cars are also luring consumers who are tightening their belts in an economic downturn.
“We wanted to have good fuel economy, but we were equally concerned about the price of the car,” said John Shelby of Phoenix, who recently purchased a Honda Fit for $15,600.
Smaller vehicles, though, mean smaller profit margins for automakers. The drop in pickup sales, because of the slowdown in the housing and construction industries, has been particularly painful for Detroit’s Big Three.
“It’s just a difficult truck market for everybody, ourselves included,” said Mark LaNeve, G.M.’s head of North American sales. “By and large, people are just staying out of that market.”
Automakers ignore the move to smaller vehicles at their own peril. G.M., for example, is playing catch-up by introducing a dozen new cars and crossovers in the next few model years.
With federal fuel-economy regulations increasing to 31.6 miles per gallon by 2015, car companies have another incentive to speed development of smaller vehicles.
“If you look at where the automakers are putting their resources into now, just about everything is going into small cars,” said Tom Libby, senior market analyst for J. D. Power.
http://www.nytimes.com/2008/05/02/business/02auto.html?ei=5087&em=&en=17baf3618132bab3&ex=1209960000&exprod=myyahoo&pagewanted=print
Copyright 2008 The New York Times Company
May 2, 2008
DETROIT — Soaring gas prices have turned the steady migration by Americans to smaller cars into a stampede.In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car.
The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply.
In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.
“It’s easily the most dramatic segment shift I have witnessed in the market in my 31 years here,” said George Pipas, chief sales analyst for the Ford Motor Company.
The trend toward smaller and lighter vehicles with better mileage is a blow to Detroit automakers, which offer fewer such models than Asian carmakers like Toyota and Honda. Moreover, the decline of S.U.V.’s and pickups has curtailed the biggest source of profits for General Motors, Ford and Chrysler.
Once considered an unattractive and cheap alternative to large cars and S.U.V.’s, compacts have become the new star of the showroom at a time when overall industry sales are falling.
Sales of Toyota’s subcompact Yaris increased 46 percent, and Honda’s tiny Fit had a record month. Ford’s compact Focus model jumped 32 percent in April from a year earlier. All those models are rated at more than 30 miles per gallon for highway driving.
Dave Strom of South Boston, Va., recently bought a tiny Smart ForTwo Passion Coupe, made by Daimler, the German automaker.
Mr. Strom also owns a pickup truck, which he uses mainly to haul his boat. When he runs errands, he drives his Smart, which he says is getting 45 miles a gallon.
“I had to smile the other day when I filled my tank for $18 and the guy next to me had a Ford Explorer and the pump was clicking past $80,” said Mr. Strom, a 66-year-old retired manager of a Chevrolet dealership.
Previous spikes in sales of smaller cars were often a result of consumers trading down during tough economic conditions or gas-price increases. When the economy improved or fuel prices dropped again — as they did after the oil-price shocks in the 1970s eased — buyers invariably went back to bigger vehicles.
But with oil prices expected to remain high for years, auto industry executives are seeing a turning point.
“The era of the truck-based large S.U.V.’s is over,” said Michael Jackson, chief executive of AutoNation, the nation’s largest auto retailer.
Sales of traditional S.U.V.’s are down more than 25 percent this year. In April, for example, sales of G.M.’s Chevrolet Tahoe fell 35 percent.
Full-size pickup sales have fallen more than 15 percent this year, with Ford’s industry-leading F-Series pickup dropping 27 percent in April alone. Sales of pickups, though, are expected to strengthen with the economy, because of their use as commercial vehicles.
The rise in sales of more fuel-efficient vehicles occurred during one of the industry’s worst months in more than a decade. For the month, G.M. sales dropped 23 percent and Ford slid 19 percent, while Toyota fell by 5 percent. The figures were adjusted for the fact that this April had two more selling days than a year ago.
Another bright spot in the numbers were sales of so-called small crossovers — which look like little S.U.V.’s and are based on car underpinnings.
Like small cars, they also accounted for about 20 percent of the total industry sales for the month, according to the research firm J. D. Power & Associates.
The analysis by J. D. Power also showed that 42 percent of all vehicles sold in April were equipped with four-cylinder engines, compared with 38 percent for six-cylinder engines.
How the downsizing of America’s vehicle fleet will affect fuel consumption is still largely unknown. When gas prices rise, as they are now, many drivers simply drive less to save money.
But there are some indications that the trend toward smaller vehicles will reduce the nation’s fuel use. In California, motorists bought 4 percent less gasoline in January than they did the year before, a drop of more than 58 million gallons, according to the Oil Price Information Service.
“That is an incredible year-over-year drop,” said Tom Kloza, the organization’s chief oil analyst. “Some of it clearly has to do with changes in the vehicle fleet.”
Small cars have traditionally been favorites of young, first-time buyers attracted by their low prices. But sales have been creeping up since 2005, particularly among older baby-boomers whose children have grown.
Crossover vehicles have also drawn in empty-nesters who have less need for a large car, S.U.V. or minivan.
“The first of the baby boomers turned 62 this year, and they’ve started downsizing,” Mr. Pipas of Ford said.
The latest crop of small cars and crossovers also feature the creature comforts and safety features once found only in more expensive models.
Factor in the economic benefits of fuel-efficient engines, and small cars have not only become practical, but trendy as well.
“This shift appears to be a permanent situation,” said Jesse Toprak, chief industry analyst for the auto information Web site Edmunds.com. “These new products have become more fashionable, just like small, fuel-efficient cars are in Europe.”
The low prices on small cars are also luring consumers who are tightening their belts in an economic downturn.
“We wanted to have good fuel economy, but we were equally concerned about the price of the car,” said John Shelby of Phoenix, who recently purchased a Honda Fit for $15,600.
Smaller vehicles, though, mean smaller profit margins for automakers. The drop in pickup sales, because of the slowdown in the housing and construction industries, has been particularly painful for Detroit’s Big Three.
“It’s just a difficult truck market for everybody, ourselves included,” said Mark LaNeve, G.M.’s head of North American sales. “By and large, people are just staying out of that market.”
Automakers ignore the move to smaller vehicles at their own peril. G.M., for example, is playing catch-up by introducing a dozen new cars and crossovers in the next few model years.
With federal fuel-economy regulations increasing to 31.6 miles per gallon by 2015, car companies have another incentive to speed development of smaller vehicles.
“If you look at where the automakers are putting their resources into now, just about everything is going into small cars,” said Tom Libby, senior market analyst for J. D. Power.
http://www.nytimes.com/2008/05/02/business/02auto.html?ei=5087&em=&en=17baf3618132bab3&ex=1209960000&exprod=myyahoo&pagewanted=print
Copyright 2008 The New York Times Company
20,000 Jobs Lost as U.S. Registers 4th Monthly Dip
By PETER S. GOODMAN and MICHAEL M. GRYNBAUM
The American economy lost 20,000 jobs in April, the fourth consecutive month of decline, in what many economists took as powerful evidence that the United States is almost certainly now ensnared in a recession.
But the number of jobs reported lost by the Labor Department on Friday was significantly smaller than most analysts had predicted, and the unemployment rate nudged down to 5 percent, raising hopes that the economy may not suffer as severely as once feared.
“It strongly argues that this downturn will be mild and short- lived,” said Mark Zandi, chief economist at Moody’s Economy.com. “As long as businesses hold the line on their layoffs, the economy will weaken, but it won’t unravel.”
On Wall Street, investors bought into that thinking, bidding stocks up sharply in morning trading before pulling back in the afternoon, pushing the Dow Jones industrial average up 0.4 percent for the day, to close at 13,058.40, a new high for 2008.
But economists emphasized that a substantial pullback in consumer spending could yet force American companies to lay off hundreds of thousands of workers in coming months if business prospects do not improve swiftly. The Federal Reserve increased its direct lending to financial institutions on Friday, in an effort to overcome the banks’ reluctance to lend money.
Despite the comparatively modest number of jobs lost last month, economists found clear signs of widening distress for millions of American workers.
Companies are cutting working hours, even as many avoid layoffs. The number of people working part time because of slack business or because they could not find full-time work swelled to 5.2 million in April from 4.9 million in March. In percentage terms, employees working part time involuntarily were the most since 1995.
The average weekly pay for rank-and-file workers — about 80 percent of the American work force — has risen by a mere 3 percent over the last year, to $602.56. But that increase has failed to keep pace with the rise in the cost of living, driven primarily by the soaring costs of food and energy. In inflation-adjusted terms, these weekly wages have slipped by 1.3 percent since late 2006.
“The punch line is that you don’t have to lose your job to get pinched in a recession,” said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington. “Understandably we focus on layoffs and job losses, but most people keep their jobs in a recession. People who held their jobs are losing ground both in terms of hours and hourly wages.”
The number of people on non-farm payrolls was lower in April than six months earlier. Over the last half-century, every time employment has dipped in such fashion, the economy has proved to be either in a recession or just emerging from one.
A private research organization, the National Bureau of Economic Research, determines whether a downturn qualifies as a recession, which it defines as a “significant decline in economic activity spread across the economy, lasting more than a few months.”
Several economists predicted the organization would eventually conclude that the nation entered a recession late last year or early this year, though the Commerce Department has reported overall economic activity has remained slightly positive.
“It’s kind of tough when you’ve got to tell your family that a lot of things are going to change and the things we’re used to are basically going to stop,” said Howard Dempsey, a worker at a Freightliner truck factory in Cleveland, N.C., who recently learned that he would lose his job next month, along with 1,500 other people — nearly half the work force.
“It’s hard to understand how all this happened so fast, when one day we’re building 200 trucks a day and the next day we’re down to 100,” he said.
Mr. Dempsey has worked at the plant for almost a decade and is paid $22.30 an hour, plus health insurance and other benefits. Those wages allowed him to buy a house, and plan for college for his two teenage daughters, both well-accustomed to shopping as a pastime.
“Now it’s going to be window- shopping,” Mr. Dempsey said. “We’ve got to rethink college and see how we’re going to pay for that.”
The layoffs at the Freightliner plant illustrate how troubles that began in real estate have filtered through the economy. As commerce has slowed in recent months, so has growth in over-the-road shipping, and so have orders for trucks.
“Tragically, there’s no indication from our primary customers that there’s going to be a change in their demand in the foreseeable future,” said Chris Patterson, president and chief executive of Daimler Trucks North America, which owns the Freightliner plant.
With oil prices above $115 a barrel, any business connected to fuel consumption is increasingly vulnerable. This week, in Central Point, Ore., Erickson Air-Crane, which makes helicopters for commercial use, laid off 35 production and support workers, with wages ranging from $12.75 to $38.19 an hour.
Over all, 46,000 manufacturing workers were laid off last month, and 326,000 such positions have been lost over the last year, the Labor Department reported. Construction remained the focus of contraction, losing 61,000 jobs. Retailers eliminated 26,800 jobs.
Health care continued to be a rare bright spot, adding nearly 37,000 jobs. Restaurants and bars added 18,000 jobs. Professional and business services, which includes accountants, architects and management consultants, added 39,000 jobs.
The unemployment rate, a source of some reassurance, is a flawed gauge: It is based on a survey of households and includes self-employed people, but it does not count people who have given up looking for work. These so-called discouraged workers swelled to 412,000 in April from 399,000 a year earlier.
In total, the household survey offered a counterpoint to the rest of the report, finding a net increase of 362,000 people employed in April.
Economists cautioned that the household survey is notoriously volatile from month to month. Over the last year, it has shown significant declines in those working. The relatively small number of job losses in April may support a theory that the current downturn will bring relatively few layoffs because hiring in recent years has been weak, leaving many companies lean.
“Companies are finding ways to cut their costs other than cutting lots of workers,” said Ed McKelvey, a senior economist at Goldman Sachs.
In Columbus, Neb., orders at Behlen Manufacturing Company for its pre-engineered metal buildings have slowed. So far, the company, which employs 1,100 people, has avoided layoffs, Tony Raimondo, the chairman, said.
Behlen plans to build up inventory and perhaps shift workers into busier areas, like building grain silos, while waiting for better days, he said. But if trends continue, about 50 workers would be vulnerable.
“We’re on the bubble,” Mr. Raimondo said. “The odds are against us that we will get through the summer without layoffs.”
David Leonhardt contributed reporting.
http://www.nytimes.com/2008/05/03/business/03econ.html?_r=1&exprod=myyahoo&pagewanted=print&oref=slogin
Copyright 2008 The New York Times Company
The American economy lost 20,000 jobs in April, the fourth consecutive month of decline, in what many economists took as powerful evidence that the United States is almost certainly now ensnared in a recession.
But the number of jobs reported lost by the Labor Department on Friday was significantly smaller than most analysts had predicted, and the unemployment rate nudged down to 5 percent, raising hopes that the economy may not suffer as severely as once feared.
“It strongly argues that this downturn will be mild and short- lived,” said Mark Zandi, chief economist at Moody’s Economy.com. “As long as businesses hold the line on their layoffs, the economy will weaken, but it won’t unravel.”
On Wall Street, investors bought into that thinking, bidding stocks up sharply in morning trading before pulling back in the afternoon, pushing the Dow Jones industrial average up 0.4 percent for the day, to close at 13,058.40, a new high for 2008.
But economists emphasized that a substantial pullback in consumer spending could yet force American companies to lay off hundreds of thousands of workers in coming months if business prospects do not improve swiftly. The Federal Reserve increased its direct lending to financial institutions on Friday, in an effort to overcome the banks’ reluctance to lend money.
Despite the comparatively modest number of jobs lost last month, economists found clear signs of widening distress for millions of American workers.
Companies are cutting working hours, even as many avoid layoffs. The number of people working part time because of slack business or because they could not find full-time work swelled to 5.2 million in April from 4.9 million in March. In percentage terms, employees working part time involuntarily were the most since 1995.
The average weekly pay for rank-and-file workers — about 80 percent of the American work force — has risen by a mere 3 percent over the last year, to $602.56. But that increase has failed to keep pace with the rise in the cost of living, driven primarily by the soaring costs of food and energy. In inflation-adjusted terms, these weekly wages have slipped by 1.3 percent since late 2006.
“The punch line is that you don’t have to lose your job to get pinched in a recession,” said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington. “Understandably we focus on layoffs and job losses, but most people keep their jobs in a recession. People who held their jobs are losing ground both in terms of hours and hourly wages.”
The number of people on non-farm payrolls was lower in April than six months earlier. Over the last half-century, every time employment has dipped in such fashion, the economy has proved to be either in a recession or just emerging from one.
A private research organization, the National Bureau of Economic Research, determines whether a downturn qualifies as a recession, which it defines as a “significant decline in economic activity spread across the economy, lasting more than a few months.”
Several economists predicted the organization would eventually conclude that the nation entered a recession late last year or early this year, though the Commerce Department has reported overall economic activity has remained slightly positive.
“It’s kind of tough when you’ve got to tell your family that a lot of things are going to change and the things we’re used to are basically going to stop,” said Howard Dempsey, a worker at a Freightliner truck factory in Cleveland, N.C., who recently learned that he would lose his job next month, along with 1,500 other people — nearly half the work force.
“It’s hard to understand how all this happened so fast, when one day we’re building 200 trucks a day and the next day we’re down to 100,” he said.
Mr. Dempsey has worked at the plant for almost a decade and is paid $22.30 an hour, plus health insurance and other benefits. Those wages allowed him to buy a house, and plan for college for his two teenage daughters, both well-accustomed to shopping as a pastime.
“Now it’s going to be window- shopping,” Mr. Dempsey said. “We’ve got to rethink college and see how we’re going to pay for that.”
The layoffs at the Freightliner plant illustrate how troubles that began in real estate have filtered through the economy. As commerce has slowed in recent months, so has growth in over-the-road shipping, and so have orders for trucks.
“Tragically, there’s no indication from our primary customers that there’s going to be a change in their demand in the foreseeable future,” said Chris Patterson, president and chief executive of Daimler Trucks North America, which owns the Freightliner plant.
With oil prices above $115 a barrel, any business connected to fuel consumption is increasingly vulnerable. This week, in Central Point, Ore., Erickson Air-Crane, which makes helicopters for commercial use, laid off 35 production and support workers, with wages ranging from $12.75 to $38.19 an hour.
Over all, 46,000 manufacturing workers were laid off last month, and 326,000 such positions have been lost over the last year, the Labor Department reported. Construction remained the focus of contraction, losing 61,000 jobs. Retailers eliminated 26,800 jobs.
Health care continued to be a rare bright spot, adding nearly 37,000 jobs. Restaurants and bars added 18,000 jobs. Professional and business services, which includes accountants, architects and management consultants, added 39,000 jobs.
The unemployment rate, a source of some reassurance, is a flawed gauge: It is based on a survey of households and includes self-employed people, but it does not count people who have given up looking for work. These so-called discouraged workers swelled to 412,000 in April from 399,000 a year earlier.
In total, the household survey offered a counterpoint to the rest of the report, finding a net increase of 362,000 people employed in April.
Economists cautioned that the household survey is notoriously volatile from month to month. Over the last year, it has shown significant declines in those working. The relatively small number of job losses in April may support a theory that the current downturn will bring relatively few layoffs because hiring in recent years has been weak, leaving many companies lean.
“Companies are finding ways to cut their costs other than cutting lots of workers,” said Ed McKelvey, a senior economist at Goldman Sachs.
In Columbus, Neb., orders at Behlen Manufacturing Company for its pre-engineered metal buildings have slowed. So far, the company, which employs 1,100 people, has avoided layoffs, Tony Raimondo, the chairman, said.
Behlen plans to build up inventory and perhaps shift workers into busier areas, like building grain silos, while waiting for better days, he said. But if trends continue, about 50 workers would be vulnerable.
“We’re on the bubble,” Mr. Raimondo said. “The odds are against us that we will get through the summer without layoffs.”
David Leonhardt contributed reporting.
http://www.nytimes.com/2008/05/03/business/03econ.html?_r=1&exprod=myyahoo&pagewanted=print&oref=slogin
Copyright 2008 The New York Times Company
Friday, May 2, 2008
Employers cut fewer jobs in April, jobless rate falls
By JEANNINE AVERSA, AP Economics Writer
05/02/08
Employers cut far fewer jobs in April than in recent months and the unemployment rate dropped to 5 percent, a better-than-expected showing that nonetheless reveals strains in the nation's labor market.
For the fourth month in a row, the economy lost jobs, the Labor Department reported Friday. But in April the losses totaled 20,000, an improvement from the 81,000 reductions in payrolls logged in March. Job losses for both February and March turned out to be a bit deeper than previously reported.
The latest snapshot of the nationwide employment conditions — while clearly still weak — was better than many economists were anticipating. They were bracing for job cuts of 75,000 and for the unemployment rate to climb to 5.2 percent.
The unemployment rate, derived from a different statistical survey than the payroll figures, fell to 5 percent from 5.1 percent in March. That survey showed more people finding employment than those who didn't.
Businesses are handing out pink slips as they cope with an economy that is teetering on the edge of a recession, or possibly in one already. A severe housing slump, harder-to-get credit and financial turmoil have forced people and businesses to be more cautious in their spending. And that has hurt the economy.
To help relieve credit problems, the Federal Reserve announced Friday that it would boost the availability of short-term loans to commercial banks to $150 billion in May from the $100 billion supplied in April. The goal is to supply a source of cash to squeezed banks so that they'll keep lending to customers.
The Fed took the action and several other moves to boost credit in coordination with the European Central Bank and the Swiss National Bank.
In other economic news, the Commerce Department reported that orders to U.S. factories rose a bigger-than-expected 1.4 percent in March, after two straight months of declines.
The fresh economic news lifted Wall Street. The Dow Jones industrials were up in afternoon trading.
On the jobs front, construction companies slashed 61,000 positions in April. Manufacturers cut 46,000 and retailers got rid of 27,000. Those losses were eclipsed by job gains in education and health care, professional and business services, the government and elsewhere.
The job losses came in areas hardest hit by the housing and credit debacles. The fact that fewer job cuts were ordered in April raised hopes that damages could be limited.
President Bush expressed hope Friday that the economic-stimulus rebates beginning to reach taxpayers this week will help lift activity. "This economy is going to come on. I'm confident it will," Bush said while visiting a technology plant in a St. Louis suburb.
Commerce Secretary Carlos Gutierrez, in an interview with The Associated Press, said the new job figures are "sort of bittersweet — better than expected but we're still going through a difficult first half."
Voters are keenly worried about the country's economic problems and so are politicians — in Congress, in the White House and on the campaign trail.
There were 7.6 million people unemployed as of April, up from 6.8 million a year earlier.
Workers with jobs saw scant wage gains.
Average hourly earnings for jobholders rose to $17.88 in April, a tiny 0.1 percent rise from the previous month. That was less than the 0.3 percent rise economists were forecasting. Over the last 12 months, wages have grown by 3.4 percent.
The weak labor market is making employers feel less generous with compensation.
Meanwhile, zooming energy and food prices are taking a bite out of paychecks. If the job market continues to falter, wage growth probably will slow, too, making people even less inclined to spend. That would spell further trouble for the economy.
The payrolls figure and the unemployment rate come from two different statistical surveys, which can provide — as in Friday's case — a somewhat conflicting picture of what is happening in the labor market.
The seasonally adjusted overall civilian unemployment rate — 5 percent in April — is based on a survey of 60,000 households. It showed that 362,000 people said they found employment last month, outpacing the number of people who couldn't find work.
Economists tend to put more stock, however, in the much broader business survey of 400,000 work sites that is used to calculate the payroll figures.
To limit damage to the economy, the Federal Reserve lowered interest rates on Wednesday, but signaled that its rate-cutting campaign could be drawing to a close.
The new employment report "will make the Fed feel more comfortable about the pause in rate cuts ... but can't be taken as a signal that the economy is out of the woods," said Nigel Gault, economist at Global Insight.
Fed officials and the Bush administration are hoping that the Fed's aggressive rate cuts since September plus the government's $168 billion stimulus package — including tax rebates that started hitting bank accounts this week — will lift the country out of its slump in the second half of this year.
Even if that happens, economists predict the unemployment rate will climb higher, hitting 6 percent early next year.
Employers often are reluctant to beef up hiring until they feel certain that any such recovery has staying power.
Democrats in Congress insist more relief needs to be provided, including additional unemployment benefits to cushion the pain of joblessness. The administration has resisted, saying the rebates and other stimulative efforts should be sufficient once they fully kick in.
Sen. Charles Schumer, D-N.Y., said he doesn't want the administration to view the new employment figures as a "green light" for not supporting more relief.
Fed Chairman Ben Bernanke and his colleagues acknowledged Wednesday the fragile state of the economy, saying hiring conditions "have softened further."
The economy advanced at a snail's pace of just 0.6 percent in the first three months of this year as people and businesses clamped down on their spending. It marked the second quarter in a row of such feeble growth.
A growing number of economists believe the economy is in a recession and is indeed contracting now.
Under one rough rule, if the economy contracts for six straight months it is considered to be in a recession. That didn't happen in the last recession — in 2001_ though. A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers. That finding is usually made well after the fact.
http://news.yahoo.com/s/ap/20080502/ap_on_bi_go_ec_fi/economy&printer=1;_ylt=AiGqL4NwQzcUNbnCDzJCznZv24cA
Copyright © 2008 The Associated Press.
05/02/08
Employers cut far fewer jobs in April than in recent months and the unemployment rate dropped to 5 percent, a better-than-expected showing that nonetheless reveals strains in the nation's labor market.
For the fourth month in a row, the economy lost jobs, the Labor Department reported Friday. But in April the losses totaled 20,000, an improvement from the 81,000 reductions in payrolls logged in March. Job losses for both February and March turned out to be a bit deeper than previously reported.
The latest snapshot of the nationwide employment conditions — while clearly still weak — was better than many economists were anticipating. They were bracing for job cuts of 75,000 and for the unemployment rate to climb to 5.2 percent.
The unemployment rate, derived from a different statistical survey than the payroll figures, fell to 5 percent from 5.1 percent in March. That survey showed more people finding employment than those who didn't.
Businesses are handing out pink slips as they cope with an economy that is teetering on the edge of a recession, or possibly in one already. A severe housing slump, harder-to-get credit and financial turmoil have forced people and businesses to be more cautious in their spending. And that has hurt the economy.
To help relieve credit problems, the Federal Reserve announced Friday that it would boost the availability of short-term loans to commercial banks to $150 billion in May from the $100 billion supplied in April. The goal is to supply a source of cash to squeezed banks so that they'll keep lending to customers.
The Fed took the action and several other moves to boost credit in coordination with the European Central Bank and the Swiss National Bank.
In other economic news, the Commerce Department reported that orders to U.S. factories rose a bigger-than-expected 1.4 percent in March, after two straight months of declines.
The fresh economic news lifted Wall Street. The Dow Jones industrials were up in afternoon trading.
On the jobs front, construction companies slashed 61,000 positions in April. Manufacturers cut 46,000 and retailers got rid of 27,000. Those losses were eclipsed by job gains in education and health care, professional and business services, the government and elsewhere.
The job losses came in areas hardest hit by the housing and credit debacles. The fact that fewer job cuts were ordered in April raised hopes that damages could be limited.
President Bush expressed hope Friday that the economic-stimulus rebates beginning to reach taxpayers this week will help lift activity. "This economy is going to come on. I'm confident it will," Bush said while visiting a technology plant in a St. Louis suburb.
Commerce Secretary Carlos Gutierrez, in an interview with The Associated Press, said the new job figures are "sort of bittersweet — better than expected but we're still going through a difficult first half."
Voters are keenly worried about the country's economic problems and so are politicians — in Congress, in the White House and on the campaign trail.
There were 7.6 million people unemployed as of April, up from 6.8 million a year earlier.
Workers with jobs saw scant wage gains.
Average hourly earnings for jobholders rose to $17.88 in April, a tiny 0.1 percent rise from the previous month. That was less than the 0.3 percent rise economists were forecasting. Over the last 12 months, wages have grown by 3.4 percent.
The weak labor market is making employers feel less generous with compensation.
Meanwhile, zooming energy and food prices are taking a bite out of paychecks. If the job market continues to falter, wage growth probably will slow, too, making people even less inclined to spend. That would spell further trouble for the economy.
The payrolls figure and the unemployment rate come from two different statistical surveys, which can provide — as in Friday's case — a somewhat conflicting picture of what is happening in the labor market.
The seasonally adjusted overall civilian unemployment rate — 5 percent in April — is based on a survey of 60,000 households. It showed that 362,000 people said they found employment last month, outpacing the number of people who couldn't find work.
Economists tend to put more stock, however, in the much broader business survey of 400,000 work sites that is used to calculate the payroll figures.
To limit damage to the economy, the Federal Reserve lowered interest rates on Wednesday, but signaled that its rate-cutting campaign could be drawing to a close.
The new employment report "will make the Fed feel more comfortable about the pause in rate cuts ... but can't be taken as a signal that the economy is out of the woods," said Nigel Gault, economist at Global Insight.
Fed officials and the Bush administration are hoping that the Fed's aggressive rate cuts since September plus the government's $168 billion stimulus package — including tax rebates that started hitting bank accounts this week — will lift the country out of its slump in the second half of this year.
Even if that happens, economists predict the unemployment rate will climb higher, hitting 6 percent early next year.
Employers often are reluctant to beef up hiring until they feel certain that any such recovery has staying power.
Democrats in Congress insist more relief needs to be provided, including additional unemployment benefits to cushion the pain of joblessness. The administration has resisted, saying the rebates and other stimulative efforts should be sufficient once they fully kick in.
Sen. Charles Schumer, D-N.Y., said he doesn't want the administration to view the new employment figures as a "green light" for not supporting more relief.
Fed Chairman Ben Bernanke and his colleagues acknowledged Wednesday the fragile state of the economy, saying hiring conditions "have softened further."
The economy advanced at a snail's pace of just 0.6 percent in the first three months of this year as people and businesses clamped down on their spending. It marked the second quarter in a row of such feeble growth.
A growing number of economists believe the economy is in a recession and is indeed contracting now.
Under one rough rule, if the economy contracts for six straight months it is considered to be in a recession. That didn't happen in the last recession — in 2001_ though. A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers. That finding is usually made well after the fact.
http://news.yahoo.com/s/ap/20080502/ap_on_bi_go_ec_fi/economy&printer=1;_ylt=AiGqL4NwQzcUNbnCDzJCznZv24cA
Copyright © 2008 The Associated Press.
Government cracks down on credit card industry practices
Government cracks down on credit card industry practices
By JIM ABRAMS, Associated Press Writer
1 hour, 44 minutes ago
The Federal Reserve and other regulators are moving Friday to crack down on "unfair and deceptive" practices in the credit card industry that have added billions in debt to people already struggling to cope with the economic downturn.
In the most far-reaching crackdown on the credit industry in decades, the Fed and two government agencies are proposing rules that would stop credit card companies from unfairly raising interest rates and make sure they give people enough time to pay their bills.
The banking industry is expected to fight the new rules.
Travis Plunkett, legislative director for the Consumer Federation of America, said that while he hadn't yet seen the details, the rules "appear to address some of the most significant abuses in the credit card marketplace right now."
Rep. Carolyn Maloney, D-N.Y., who has introduced legislation to protect consumers from credit card abuse, said in a statement that she was pleased the Fed had adopted some aspects of her legislation.
But she also expressed concern that "by the time the Fed gets around to finalizing these credit card reform proposals, they will be watered down and come too little too late for consumers who need relief now."
The Fed has been criticized for moving too slowly to respond to abuses leading to the subprime mortgage crisis.
The agencies said the new regulations could be finalized by the end of the year.
Plunkett said his group estimates that credit card debt is now about $850 billion, with households that don't pay their credit card bills in full every month owing an average $17,000.
The proposed new rules that would prohibit:
_Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay;
_Unfairly allocating payments among balances with different interest rates;
• Unfairly raising annual percentage rates on outstanding balances;
_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account;
_Unfairly computing balances;
_Unfairly adding security deposits and fees for issuing credit or making credit available;
_Making deceptive offers of credit.
In news releases, the agencies said the proposed rules also would require federal credit unions to give consumers a chance to opt out of an overdraft protection program. And they would prohibit those institutions from charging a fee for an overdraft caused by a hold placed on consumer's funds when a person uses a debit card.
The Fed, which is expected to vote Friday afternoon on its approval of the proposed rules, is acting in conjunction with the National Credit Union Administration and the Office of Thrift Supervision.
Ken Clayton, senior vice president of card policy for the American Bankers Association, said the industry will fight the new proposals, describing them as "aggressive regulatory intervention in the marketplace that will result in higher prices and less consumer credit."
He said the change "basically says that we can't price for risk" and that if higher risk borrowers don't bear the costs, those costs will be passed along to other consumers.
http://news.yahoo.com/s/ap/20080502/ap_on_bi_ge/credit_card_rules&printer=1;_ylt=Ahe7cIpYfc9r1J84hNMzqTNv24cA
Associated Press Writer Laurie Kellman contributed to this report.
The proposed rules will be available at 2:30 EDT at:
National Credit Union Administration: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs.html
Copyright © 2008 The Associated Press
By JIM ABRAMS, Associated Press Writer
1 hour, 44 minutes ago
The Federal Reserve and other regulators are moving Friday to crack down on "unfair and deceptive" practices in the credit card industry that have added billions in debt to people already struggling to cope with the economic downturn.
In the most far-reaching crackdown on the credit industry in decades, the Fed and two government agencies are proposing rules that would stop credit card companies from unfairly raising interest rates and make sure they give people enough time to pay their bills.
The banking industry is expected to fight the new rules.
Travis Plunkett, legislative director for the Consumer Federation of America, said that while he hadn't yet seen the details, the rules "appear to address some of the most significant abuses in the credit card marketplace right now."
Rep. Carolyn Maloney, D-N.Y., who has introduced legislation to protect consumers from credit card abuse, said in a statement that she was pleased the Fed had adopted some aspects of her legislation.
But she also expressed concern that "by the time the Fed gets around to finalizing these credit card reform proposals, they will be watered down and come too little too late for consumers who need relief now."
The Fed has been criticized for moving too slowly to respond to abuses leading to the subprime mortgage crisis.
The agencies said the new regulations could be finalized by the end of the year.
Plunkett said his group estimates that credit card debt is now about $850 billion, with households that don't pay their credit card bills in full every month owing an average $17,000.
The proposed new rules that would prohibit:
_Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay;
_Unfairly allocating payments among balances with different interest rates;
• Unfairly raising annual percentage rates on outstanding balances;
_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account;
_Unfairly computing balances;
_Unfairly adding security deposits and fees for issuing credit or making credit available;
_Making deceptive offers of credit.
In news releases, the agencies said the proposed rules also would require federal credit unions to give consumers a chance to opt out of an overdraft protection program. And they would prohibit those institutions from charging a fee for an overdraft caused by a hold placed on consumer's funds when a person uses a debit card.
The Fed, which is expected to vote Friday afternoon on its approval of the proposed rules, is acting in conjunction with the National Credit Union Administration and the Office of Thrift Supervision.
Ken Clayton, senior vice president of card policy for the American Bankers Association, said the industry will fight the new proposals, describing them as "aggressive regulatory intervention in the marketplace that will result in higher prices and less consumer credit."
He said the change "basically says that we can't price for risk" and that if higher risk borrowers don't bear the costs, those costs will be passed along to other consumers.
http://news.yahoo.com/s/ap/20080502/ap_on_bi_ge/credit_card_rules&printer=1;_ylt=Ahe7cIpYfc9r1J84hNMzqTNv24cA
Associated Press Writer Laurie Kellman contributed to this report.
The proposed rules will be available at 2:30 EDT at:
National Credit Union Administration: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs.html
Copyright © 2008 The Associated Press
McCain's Birth Abroad Stirs Legal Debate
His Eligibility for Presidency Is Questioned
By Michael Dobbs
Washington Post Staff Writer
Friday, May 2, 2008; A06
The Senate has unanimously declared John McCain a natural-born citizen, eligible to be president of the United States.
That is the good news for the presumptive Republican nominee, who was born nearly 72 years ago in a military hospital in the Panama Canal Zone, then under U.S. jurisdiction. The bad news is that the nonbinding Senate resolution passed Wednesday night is simply an opinion that has little bearing on an arcane constitutional debate that has preoccupied legal scholars for many weeks.
Article II of the Constitution states that "no person except a natural born citizen . . . shall be eligible to the office of president." The problem is that the Founding Fathers never defined exactly what they meant by "natural born citizen," and the matter has never been fully tested in court. At least three pending cases are challenging McCain's right to be sworn in as president.
Jurists on both sides of the political divide, consulted by the McCain campaign, insist that the issue is clear-cut. They argue that McCain is a natural-born citizen because the United States held sovereignty over the Panama Canal Zone at the time of his birth, on Aug. 29, 1936; because he was born on a U.S. military base; and because his parents were U.S. citizens.
But Sarah H. Duggin, an associate law professor at Catholic University who has studied the "natural born" issue in detail, said the question is "not so simple." While she said McCain would probably prevail in a determined legal challenge to his eligibility to be president, she added that the matter can be fully resolved only by a constitutional amendment or a Supreme Court decision.
"The Constitution is ambiguous," Duggin said. "The McCain side has some really good arguments, but ultimately there has never been any real resolution of this issue. Congress cannot legislatively change the meaning of the Constitution."
Senators sympathetic to McCain's position, including Democrats Claire McCaskill (Mo.) and Patrick J. Leahy (Vt.), dropped an earlier attempt to quell the eligibility controversy with legislation. McCaskill acknowledged in an interview that there is "no way" to completely resolve the question short of a constitutional amendment, a cumbersome process which could not be concluded before November.
She described the nonbinding resolution, which she sponsored, as "the quickest, clearest and most efficient" way for the Senate to send a message to the courts that McCain has the right to be president.
One person who disagrees with that premise is New Hampshire resident Fred Hollander, who has filed a suit in U.S. District Court claiming that the Republican candidate is "not a natural born citizen." In an attempt to prove his argument, the 49-year-old computer programmer filed a subpoena last month seeking McCain's birth certificate.
The Department of Homeland Security, which oversees citizenship services, declined to hand over copies of the document, saying the subpoena was improperly served.
In his autobiography, "Faith of My Fathers," McCain writes that he was born "in the Canal Zone" at the U.S. Naval Air Station in Coco Solo, which was under the command of his grandfather, John S. McCain Sr. The senator's father, John S. McCain Jr., was an executive officer on a submarine, also based in Coco Solo. His mother, Roberta McCain, now 96, has vivid memories of lying in bed listening to raucous celebrations of her son's birth from the nearby officers' club.
The birth was announced two days later in the English-language Panamanian American newspaper. A senior official of the McCain campaign showed a reporter a copy of the senator's birth certificate issued by Canal Zone health authorities, recording his birth in the Coco Solo "family hospital."
Curiously enough, there is no record of McCain's birth in the Panama Canal Zone Health Department's bound birth registers, which are publicly available at the National Archives in College Park. A search of the "Child Born Abroad" records of the U.S. consular service for August 1936 included many U.S. citizens born in the Canal Zone but did not turn up any mention of John McCain.
Possible discrepancies in the bureaucratic paperwork are of little concern to Laurence Tribe, a Harvard law professor who looked into the case at the McCain campaign's request. Tribe examined the issue along with Theodore B. Olson, his onetime nemesis in the 2000 Supreme Court case Bush v. Gore.
Tribe said it would be "astonishing if the recordkeeping practices of Canal Zone [officials] could have any bearing on eligibility for the U.S. presidency."
The key constitutional issue is whether the Canal Zone was part of the United States at the time of McCain's birth. In a memorandum, Tribe and Olson cite a 1986 Supreme Court ruling stating that the United States "exercised sovereignty" over the 10-mile-wide area between 1904 and 1979, when it was handed back to the Panamanians. Hollander and others challenging McCain's eligibility argue that the zone was never part of the United States.
Duggin, the constitutional law scholar, said the sovereignty question is "more complex" than Olson and Tribe concede. People born in some U.S. territories, such as American Samoa, are not recognized as citizens of the United States.
According to a State Department manual, U.S. military installations abroad cannot be considered "part of the United States" and "A child born on the premises of such a facility is not subject to the jurisdiction of the United States and does not acquire U.S. citizenship by reason of birth." Tribe said the manual is an "opinion" with no legal status.
There are few precedents for someone born outside the 50 states running for president, let alone becoming president. The best example the McCain camp has been able to come up with is Vice President Charles Curtis, who served under President Herbert Hoover and was born in the territory of Kansas in 1860, a year before it became a state. The 12th Amendment requires that vice presidents possess the same qualifications as presidents.
Several prominent politicians have run for the presidency without having been born in the United States, including Barry Goldwater, who was born in the territory of Arizona in 1909, three years before it became a state. Mitt Romney's father, George Romney, ran in 1968, even though he was born in Mexico. Since neither Goldwater nor Romney won the presidency, the "natural born" clause was never tested.
Duggin believes that Hollander and the other plaintiffs are likely to have a hard time establishing their own eligibility, or legal standing, to challenge McCain. She said it will be difficult for them to demonstrate that they have been "disenfranchised" because of the mere presence on the ballot of a candidate with debatable constitutional qualifications.
But she said the matter should be sorted out before the election, rather than afterward: "Imagine what would happen if the courts were to overturn an election simply based on eligibility. It would be a disaster. After what happened in 2000, people would completely lose faith in the electoral process."
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/01/AR2008050103224_pf.html
By Michael Dobbs
Washington Post Staff Writer
Friday, May 2, 2008; A06
The Senate has unanimously declared John McCain a natural-born citizen, eligible to be president of the United States.
That is the good news for the presumptive Republican nominee, who was born nearly 72 years ago in a military hospital in the Panama Canal Zone, then under U.S. jurisdiction. The bad news is that the nonbinding Senate resolution passed Wednesday night is simply an opinion that has little bearing on an arcane constitutional debate that has preoccupied legal scholars for many weeks.
Article II of the Constitution states that "no person except a natural born citizen . . . shall be eligible to the office of president." The problem is that the Founding Fathers never defined exactly what they meant by "natural born citizen," and the matter has never been fully tested in court. At least three pending cases are challenging McCain's right to be sworn in as president.
Jurists on both sides of the political divide, consulted by the McCain campaign, insist that the issue is clear-cut. They argue that McCain is a natural-born citizen because the United States held sovereignty over the Panama Canal Zone at the time of his birth, on Aug. 29, 1936; because he was born on a U.S. military base; and because his parents were U.S. citizens.
But Sarah H. Duggin, an associate law professor at Catholic University who has studied the "natural born" issue in detail, said the question is "not so simple." While she said McCain would probably prevail in a determined legal challenge to his eligibility to be president, she added that the matter can be fully resolved only by a constitutional amendment or a Supreme Court decision.
"The Constitution is ambiguous," Duggin said. "The McCain side has some really good arguments, but ultimately there has never been any real resolution of this issue. Congress cannot legislatively change the meaning of the Constitution."
Senators sympathetic to McCain's position, including Democrats Claire McCaskill (Mo.) and Patrick J. Leahy (Vt.), dropped an earlier attempt to quell the eligibility controversy with legislation. McCaskill acknowledged in an interview that there is "no way" to completely resolve the question short of a constitutional amendment, a cumbersome process which could not be concluded before November.
She described the nonbinding resolution, which she sponsored, as "the quickest, clearest and most efficient" way for the Senate to send a message to the courts that McCain has the right to be president.
One person who disagrees with that premise is New Hampshire resident Fred Hollander, who has filed a suit in U.S. District Court claiming that the Republican candidate is "not a natural born citizen." In an attempt to prove his argument, the 49-year-old computer programmer filed a subpoena last month seeking McCain's birth certificate.
The Department of Homeland Security, which oversees citizenship services, declined to hand over copies of the document, saying the subpoena was improperly served.
In his autobiography, "Faith of My Fathers," McCain writes that he was born "in the Canal Zone" at the U.S. Naval Air Station in Coco Solo, which was under the command of his grandfather, John S. McCain Sr. The senator's father, John S. McCain Jr., was an executive officer on a submarine, also based in Coco Solo. His mother, Roberta McCain, now 96, has vivid memories of lying in bed listening to raucous celebrations of her son's birth from the nearby officers' club.
The birth was announced two days later in the English-language Panamanian American newspaper. A senior official of the McCain campaign showed a reporter a copy of the senator's birth certificate issued by Canal Zone health authorities, recording his birth in the Coco Solo "family hospital."
Curiously enough, there is no record of McCain's birth in the Panama Canal Zone Health Department's bound birth registers, which are publicly available at the National Archives in College Park. A search of the "Child Born Abroad" records of the U.S. consular service for August 1936 included many U.S. citizens born in the Canal Zone but did not turn up any mention of John McCain.
Possible discrepancies in the bureaucratic paperwork are of little concern to Laurence Tribe, a Harvard law professor who looked into the case at the McCain campaign's request. Tribe examined the issue along with Theodore B. Olson, his onetime nemesis in the 2000 Supreme Court case Bush v. Gore.
Tribe said it would be "astonishing if the recordkeeping practices of Canal Zone [officials] could have any bearing on eligibility for the U.S. presidency."
The key constitutional issue is whether the Canal Zone was part of the United States at the time of McCain's birth. In a memorandum, Tribe and Olson cite a 1986 Supreme Court ruling stating that the United States "exercised sovereignty" over the 10-mile-wide area between 1904 and 1979, when it was handed back to the Panamanians. Hollander and others challenging McCain's eligibility argue that the zone was never part of the United States.
Duggin, the constitutional law scholar, said the sovereignty question is "more complex" than Olson and Tribe concede. People born in some U.S. territories, such as American Samoa, are not recognized as citizens of the United States.
According to a State Department manual, U.S. military installations abroad cannot be considered "part of the United States" and "A child born on the premises of such a facility is not subject to the jurisdiction of the United States and does not acquire U.S. citizenship by reason of birth." Tribe said the manual is an "opinion" with no legal status.
There are few precedents for someone born outside the 50 states running for president, let alone becoming president. The best example the McCain camp has been able to come up with is Vice President Charles Curtis, who served under President Herbert Hoover and was born in the territory of Kansas in 1860, a year before it became a state. The 12th Amendment requires that vice presidents possess the same qualifications as presidents.
Several prominent politicians have run for the presidency without having been born in the United States, including Barry Goldwater, who was born in the territory of Arizona in 1909, three years before it became a state. Mitt Romney's father, George Romney, ran in 1968, even though he was born in Mexico. Since neither Goldwater nor Romney won the presidency, the "natural born" clause was never tested.
Duggin believes that Hollander and the other plaintiffs are likely to have a hard time establishing their own eligibility, or legal standing, to challenge McCain. She said it will be difficult for them to demonstrate that they have been "disenfranchised" because of the mere presence on the ballot of a candidate with debatable constitutional qualifications.
But she said the matter should be sorted out before the election, rather than afterward: "Imagine what would happen if the courts were to overturn an election simply based on eligibility. It would be a disaster. After what happened in 2000, people would completely lose faith in the electoral process."
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/01/AR2008050103224_pf.html
Thursday, May 1, 2008
UT scientists discover key to an alternate fuel source
Cyanobacteria could replace current crops for ethanol farming
By: Lauren Winchester
Posted: 4/30/08
UT researchers have developed a way to make the production of ethanol more sustainable, less expensive and less laborious.
The University scientists discovered how to use photosynthetic organisms, known as cyanobacteria, to make ethanol, which is a type of alternative fuel.
Ethanol is made by fermenting sugars, such as glucose or sucrose. Most ethanol comes from corn starch, but other sources for the alternative fuel are wood, switchgrass and sugarcane.
Corn-based ethanol has caused problems regarding the overuse of agricultural land and rising crop prices, while extracting sugars from other sources is labor-intensive and costly. The production of sugarcane has also caused a depletion of Brazil's rainforests, said David Nobles Jr., a molecular genetics and microbiology research associate.
The cyanobacteria that the researchers have studied produce cellulose, glucose and sucrose using the energy of the sun. The sugars can be extracted from the
bacteria relatively easily and inexpensively. The cyanobacteria can also grow in deserts using salt water and thus would not take up agricultural land, the researchers said.
"Some cyanobacteria makes sugar directly," said R. Malcom Brown Jr., a molecular genetics and microbiology professor. "Why in the world would we use sugarcane when we can grow sugar in the desert?"
Cyanobacteria are a photosynthetic bacteria, which means they get energy from the sun and use the carbon dioxide in the atmosphere to convert it into organic components. On a large scale, the researchers said this could help reduce global warming.
"Cyanobacteria have been around for some 3.5 billion years and are responsible for all of the oxygen in the atmosphere," Nobles said. "Cyanobacteria changed the Earth once, and we're looking to make it change the Earth again."
The researchers said it would take about 820,000 square miles of land to produce all of the corn-based ethanol needed to fuel U.S. transportation. They hope the cyanobacteria will replace the ethanol from corn, wood, switchgrass and
sugarcane.
"Using food crops is going to stop at some point," Nobles said. "I think we will discontinue using food crops five to 10 years down the road."
The researchers would like to create an energy farm to grow the cyanobacteria on about 5,000 square miles of land in either West Texas, Nevada or Utah, which would sustain the U.S. need for transportation fuel.
Brown said he would love to see an undertaking similar to the scale of the Manhattan Project in the 1940s that would employ millions of Americans to start up the energy farms to produce ethanol.
"It would be a fantastic project," Brown said. "After Kennedy sent a man to the moon, U.S. high school kids became future engineers. We need a revitalization of that for the biofuels area."
Brown said the green revolution started in the U.S. and that the energy revolution will start in the U.S. as well.
"We have a unique opportunity here," he said. "We need to help make it go forward."
--------------------------------------------------------------------------------
© Copyright 2008 The Daily Texan
http://www.dailytexanonline.com/home/index.cfm?event=displayArticlePrinterFriendly&uStory_id=fd1faf66-7c50-4a1c-8c48-bea43f904e84
------------------------------------------------------------------------------------
Researchers Malcolm Brown and David Nobles show off a flask of cyanobacteria in a liquid culture in the growing room Tuesday. The UT professors have developed a way for cyanobacteria to be used to produce ethanol.
By: Lauren Winchester
Posted: 4/30/08
UT researchers have developed a way to make the production of ethanol more sustainable, less expensive and less laborious.
The University scientists discovered how to use photosynthetic organisms, known as cyanobacteria, to make ethanol, which is a type of alternative fuel.
Ethanol is made by fermenting sugars, such as glucose or sucrose. Most ethanol comes from corn starch, but other sources for the alternative fuel are wood, switchgrass and sugarcane.
Corn-based ethanol has caused problems regarding the overuse of agricultural land and rising crop prices, while extracting sugars from other sources is labor-intensive and costly. The production of sugarcane has also caused a depletion of Brazil's rainforests, said David Nobles Jr., a molecular genetics and microbiology research associate.
The cyanobacteria that the researchers have studied produce cellulose, glucose and sucrose using the energy of the sun. The sugars can be extracted from the
bacteria relatively easily and inexpensively. The cyanobacteria can also grow in deserts using salt water and thus would not take up agricultural land, the researchers said.
"Some cyanobacteria makes sugar directly," said R. Malcom Brown Jr., a molecular genetics and microbiology professor. "Why in the world would we use sugarcane when we can grow sugar in the desert?"
Cyanobacteria are a photosynthetic bacteria, which means they get energy from the sun and use the carbon dioxide in the atmosphere to convert it into organic components. On a large scale, the researchers said this could help reduce global warming.
"Cyanobacteria have been around for some 3.5 billion years and are responsible for all of the oxygen in the atmosphere," Nobles said. "Cyanobacteria changed the Earth once, and we're looking to make it change the Earth again."
The researchers said it would take about 820,000 square miles of land to produce all of the corn-based ethanol needed to fuel U.S. transportation. They hope the cyanobacteria will replace the ethanol from corn, wood, switchgrass and
sugarcane.
"Using food crops is going to stop at some point," Nobles said. "I think we will discontinue using food crops five to 10 years down the road."
The researchers would like to create an energy farm to grow the cyanobacteria on about 5,000 square miles of land in either West Texas, Nevada or Utah, which would sustain the U.S. need for transportation fuel.
Brown said he would love to see an undertaking similar to the scale of the Manhattan Project in the 1940s that would employ millions of Americans to start up the energy farms to produce ethanol.
"It would be a fantastic project," Brown said. "After Kennedy sent a man to the moon, U.S. high school kids became future engineers. We need a revitalization of that for the biofuels area."
Brown said the green revolution started in the U.S. and that the energy revolution will start in the U.S. as well.
"We have a unique opportunity here," he said. "We need to help make it go forward."
--------------------------------------------------------------------------------
© Copyright 2008 The Daily Texan
http://www.dailytexanonline.com/home/index.cfm?event=displayArticlePrinterFriendly&uStory_id=fd1faf66-7c50-4a1c-8c48-bea43f904e84
------------------------------------------------------------------------------------
Researchers Malcolm Brown and David Nobles show off a flask of cyanobacteria in a liquid culture in the growing room Tuesday. The UT professors have developed a way for cyanobacteria to be used to produce ethanol.
Subscribe to:
Posts (Atom)